May 19, 2010
PARLIAMENT
New en bloc rules passed to protect owners' interests
By Jessica Cheam
TIGHTER rules that will give greater clarity to the process for the collective sale of homes were passed by Parliament yesterday.
One major change is that after the first failed attempt at a collective sale, subsequent attempts face more stringent requirements.
For instance, it will be tougher to set up a sales committee for a second try as a higher requisition level of 50 per cent - either by share value or total number of owners - will be needed.
Still, before the Bill to amend the Land Titles (Strata) Act was passed, several MPs argued that it could be improved further.
They suggested that the age and state of a building should be considered when deciding the level of consent required for a sale.
They also wanted a reduction in the requisition level.
Replying, Law Minister K. Shanmugam said the Government's task was to protect the interests of all strata unit owners, regardless of whether they were for or against the sale.
Also, it should not 'micro-manage the process and prescribe too many requirements', he added.
The new law to streamline the collective sale process was unveiled for debate last month.
It includes: a 60-day window for the Strata Titles Board (STB) to mediate in a sale, failing which it cangive the parties the option to seek redress in the High Court; and stricter rules for the members of the sales committee to declare potential conflict of interest.
The law can be expected to take effect next month.
During the hour-long debate, Ms Ellen Lee (Sembawang GRC) asked if such sales had led to more new homes being built in prime areas and older properties being rejuvenated at the 'personal cost to citizens'.
Mr Shanmugam pointed out there were 462 collective sales between 2005 and last year. Of these, half, or 217 properties, had been redeveloped or are being redeveloped. The 217 projects had about 12,000 units, but after redevelopment, the number shot up to more than 26,000 units, he said.
Ms Lee and Nominated MP Paulin Tay Straughan also highlighted a recent National University of Singapore study on the negative impact of collective sales on the elderly. These folk experienced 'social and spatial displacement' after they were forced to move.
Associate Professor Straughan suggested the ministry set up a resource unit, possibly at the STB, 'to mitigate stress and negative consequences of relocation, especially for vulnerable home owners'.
She also called for a booklet to be published for people, setting out clearly key concepts such as owners' share values and minority owners' rights.
Mr Shanmugam said his ministry had been working with the Singapore Institute of Surveyors and Valuers to provide guidelines on the apportionment methods used in the sales process.
He pledged that his ministry would look into 'how we can put out more information'.
The minister also explained why some suggestions, like banning owners from serving on both management corporations and sale committees, were not adopted. Each development, he said, had its own set of unique circumstances and, in some cases, there were not enough owners willing to serve in each committee.
He also rejected the call for scrapping the five-day cooling off period after an owner had signed the collective sale agreement (CSA) as well as the need for owners to sign the CSA in the presence of a lawyer.
Such requirements are necessary because the 'importance of ensuring the integrity of transaction outweighs the administrative issues of having a lawyer present for each owner's signature'.
Wednesday, May 19, 2010
ST Forum : Property checks: The authorities have a role too
May 19, 2010
Property checks: The authorities have a role too
IN ITS reply on Monday, ('Do your checks before investing in land abroad'), the Singapore Accredited Estate Agencies (SAEA) gave a good description of the mode of operation of land banking schemes.
The reply described how 200 people lost out on their investments after buying plots of land in rural Britain through a Singapore subsidiary of a company which was shut down by the British government in 2008.
While investors should follow the SAEA advice in making proper checks before investing in property abroad, there is also a need for the relevant agency here to play its part. When the seller knowingly misrepresents a product that is sold to the public, it can be considered as 'cheating'. When this involves a lot of money and many victims, the authority should investigate the complaints and act accordingly. It is hard for the public to be savvy in detecting misrepresentations in documents or advertisements.
We read about similar cases in other countries where there is official redress. There is also adequate media publicity to warn the public about these operations.
The relevant agency here should take appropriate action to prevent more people from being caught in these schemes.
Tan Kin Lian
Property checks: The authorities have a role too
IN ITS reply on Monday, ('Do your checks before investing in land abroad'), the Singapore Accredited Estate Agencies (SAEA) gave a good description of the mode of operation of land banking schemes.
The reply described how 200 people lost out on their investments after buying plots of land in rural Britain through a Singapore subsidiary of a company which was shut down by the British government in 2008.
While investors should follow the SAEA advice in making proper checks before investing in property abroad, there is also a need for the relevant agency here to play its part. When the seller knowingly misrepresents a product that is sold to the public, it can be considered as 'cheating'. When this involves a lot of money and many victims, the authority should investigate the complaints and act accordingly. It is hard for the public to be savvy in detecting misrepresentations in documents or advertisements.
We read about similar cases in other countries where there is official redress. There is also adequate media publicity to warn the public about these operations.
The relevant agency here should take appropriate action to prevent more people from being caught in these schemes.
Tan Kin Lian
ST : Fewer given PR status or citizenship in past 12 months
May 19, 2010
Fewer given PR status or citizenship in past 12 months
By Sue-Ann Chia
FEWER foreigners were granted permanent residency or citizenship here since the Government tightened eligibility requirement late last year.
Fresh figures released by Senior Minister of State (Home Affairs and Law) Ho Peng Kee in Parliament yesterday showed that there has been a slowdown in the past 12 months.
Between April last year and the end of March this year, there were 46,300 new PRs and 19,300 new citizens.
The numbers that Associate Professor Ho provided to the House were lower when seen against previously released figures of the number of applications approved for the whole of last year.
Those figures showed there were 59,500 new PRs approved last year, down from 79,200 in 2008. As for new citizens, the figure last year was 19,900 compared to 20,500 for the whole of 2008.
Explaining the reasons for taking in a larger number of foreigners in the last few years, he said that it was 'to catch the wind of growth to propel our economy forward'.
'The growth in the number of new immigrants in recent years was because we wanted to take advantage of the strong economy to attract and retain suitable foreigners to sink roots here, and to augment our population,' he added.
But the Government also recognised and understood the concerns and sentiments of Singaporeans over the rapid increase in numbers and had reviewed the immigration framework to 'better manage the pace and overall numbers' of foreigners here, he said.
Prof Ho was responding to Ms Ellen Lee (Sembawang GRC) who asked whether the rejection of PR and citizenship applications was due to the strong sentiments expressed by Singaporeans about there being too many foreigners here.
He said that as eligibility requirements had been made more stringent since the final quarter of last year, some applicants did not meet the new criteria. 'Others, even though they meet the new criteria, may take a longer time before they are granted PR or citizenship as the residency requirement has been stretched out in the new framework,' he explained.
For citizens whose foreign dependants did not yet qualify for PR or citizenship, they could apply for long-term visit passes (LTVP) to remain here.
From 2005 to last year, the Immigration and Checkpoints Authority processed an average of 15,400 LTVPs and 9,900 PR applications annually from foreign spouses of Singaporeans. Of these, 2,200 pass applications and 4,500 PR applications were not successful, he said to a separate question from Ms Denise Phua (Jalan Besar GRC).
Fewer given PR status or citizenship in past 12 months
By Sue-Ann Chia
FEWER foreigners were granted permanent residency or citizenship here since the Government tightened eligibility requirement late last year.
Fresh figures released by Senior Minister of State (Home Affairs and Law) Ho Peng Kee in Parliament yesterday showed that there has been a slowdown in the past 12 months.
Between April last year and the end of March this year, there were 46,300 new PRs and 19,300 new citizens.
The numbers that Associate Professor Ho provided to the House were lower when seen against previously released figures of the number of applications approved for the whole of last year.
Those figures showed there were 59,500 new PRs approved last year, down from 79,200 in 2008. As for new citizens, the figure last year was 19,900 compared to 20,500 for the whole of 2008.
Explaining the reasons for taking in a larger number of foreigners in the last few years, he said that it was 'to catch the wind of growth to propel our economy forward'.
'The growth in the number of new immigrants in recent years was because we wanted to take advantage of the strong economy to attract and retain suitable foreigners to sink roots here, and to augment our population,' he added.
But the Government also recognised and understood the concerns and sentiments of Singaporeans over the rapid increase in numbers and had reviewed the immigration framework to 'better manage the pace and overall numbers' of foreigners here, he said.
Prof Ho was responding to Ms Ellen Lee (Sembawang GRC) who asked whether the rejection of PR and citizenship applications was due to the strong sentiments expressed by Singaporeans about there being too many foreigners here.
He said that as eligibility requirements had been made more stringent since the final quarter of last year, some applicants did not meet the new criteria. 'Others, even though they meet the new criteria, may take a longer time before they are granted PR or citizenship as the residency requirement has been stretched out in the new framework,' he explained.
For citizens whose foreign dependants did not yet qualify for PR or citizenship, they could apply for long-term visit passes (LTVP) to remain here.
From 2005 to last year, the Immigration and Checkpoints Authority processed an average of 15,400 LTVPs and 9,900 PR applications annually from foreign spouses of Singaporeans. Of these, 2,200 pass applications and 4,500 PR applications were not successful, he said to a separate question from Ms Denise Phua (Jalan Besar GRC).
ST : 700 new flats in Yishun likely
May 19, 2010
700 new flats in Yishun likely
Top bidder promises mostly 3- and 4-room units if awarded contract
By Joyce Teo
THE top bidder in a tender for a premium public housing site in Yishun said yesterday it would build 700 flats there, mainly three-room and four-room units, if it is awarded the contract.
A joint venture between Guthrie (DBP) and SK Land emerged as the top bidder with an offer of $148.89 million or $179.80 per sq ft (psf) of gross floor area.
The tender, under the Housing Board's (HDB) Design, Build and Sell Scheme, had attracted six bidders when the tender closed yesterday.
The scheme allows private developers to design, build and sell HDB flats directly to buyers. The last one was The Peak at Toa Payoh, released in April last year.
Yesterday's top bid was within analysts' expectations of $132 million to $166 million, or $160 psf to $200 psf of gross floor area.
The offer was about 5 per cent above the second highest bid from a consortium of Hoi Hup Realty, Sunway Developments and Hoi Hup J.V. Development. It had put in a bid of $142.3 million or $171.85 psf of gross floor area.
Other bidders included Sim Lian Land and Chip Eng Seng's CEL Development.
The Yishun plot, which has a maximum allowable gross floor area of 76,926 sq m, is at the junction of Yishun Avenue 11 and Yishun Central.
The top offer could translate to a break-even level of at least $400 psf, said ERA Asia-Pacific associate director Eugene Lim.
Ngee Ann Polytechnic real estate lecturer Nicholas Mak is projecting a lower break-even level of $360 psf to $400 psf.
The final selling price could start from about $300,000 for a three-room flat, $400,000 to $500,000 for a four-room flat, and $480,000 to $600,000 for a five-room unit, property experts said.
On a psf basis, prices could average $450 to $470, they said.
Nearby, four-room flats that are more than 10 years old are going for about $350,000 to $360,000 in the resale market, said Mr Lim.
Said Mr Michael Leong, managing director of Guthrie Properties, which owns the bigger share in the top-bidding joint venture: 'We are entering a rather challenging but relatively safe market segment as we are targeting first-timers and upgraders.'
SK Land is related to Santarli Construction, a contractor with experience in building HDB flats.
HDB said it will evaluate the tender bids and announce the tender results within a fortnight.
joyceteo@sph.com.sg
700 new flats in Yishun likely
Top bidder promises mostly 3- and 4-room units if awarded contract
By Joyce Teo
THE top bidder in a tender for a premium public housing site in Yishun said yesterday it would build 700 flats there, mainly three-room and four-room units, if it is awarded the contract.
A joint venture between Guthrie (DBP) and SK Land emerged as the top bidder with an offer of $148.89 million or $179.80 per sq ft (psf) of gross floor area.
The tender, under the Housing Board's (HDB) Design, Build and Sell Scheme, had attracted six bidders when the tender closed yesterday.
The scheme allows private developers to design, build and sell HDB flats directly to buyers. The last one was The Peak at Toa Payoh, released in April last year.
Yesterday's top bid was within analysts' expectations of $132 million to $166 million, or $160 psf to $200 psf of gross floor area.
The offer was about 5 per cent above the second highest bid from a consortium of Hoi Hup Realty, Sunway Developments and Hoi Hup J.V. Development. It had put in a bid of $142.3 million or $171.85 psf of gross floor area.
Other bidders included Sim Lian Land and Chip Eng Seng's CEL Development.
The Yishun plot, which has a maximum allowable gross floor area of 76,926 sq m, is at the junction of Yishun Avenue 11 and Yishun Central.
The top offer could translate to a break-even level of at least $400 psf, said ERA Asia-Pacific associate director Eugene Lim.
Ngee Ann Polytechnic real estate lecturer Nicholas Mak is projecting a lower break-even level of $360 psf to $400 psf.
The final selling price could start from about $300,000 for a three-room flat, $400,000 to $500,000 for a four-room flat, and $480,000 to $600,000 for a five-room unit, property experts said.
On a psf basis, prices could average $450 to $470, they said.
Nearby, four-room flats that are more than 10 years old are going for about $350,000 to $360,000 in the resale market, said Mr Lim.
Said Mr Michael Leong, managing director of Guthrie Properties, which owns the bigger share in the top-bidding joint venture: 'We are entering a rather challenging but relatively safe market segment as we are targeting first-timers and upgraders.'
SK Land is related to Santarli Construction, a contractor with experience in building HDB flats.
HDB said it will evaluate the tender bids and announce the tender results within a fortnight.
joyceteo@sph.com.sg
BT : New survey shows buyers positive about property
Business Times - 19 May 2010
New survey shows buyers positive about property
75% of active property seekers hope to buy a home within next 2 years
By UMA SHANKARI
THREE out of four potential home-buyers feel that the prices of private homes and resale HDB flats in Singapore are too high, a new survey has found. But this has not put them off; 75 per cent of active property seekers still hope to buy a home within the next two years.
The survey, which was commissioned by property website PropertyGuru, also found that 58 per cent of the more than 2,200 people surveyed feel that the government is not doing enough to keep property prices in Singapore affordable.
Steve Melhuish, chief executive and co-founder of PropertyGuru, said that this was 'surprising' as the survey was conducted in April and May this year - after two sets of cooling measures were already introduced by the government in September 2009 and late February this year.
Overall, the survey showed that investor confidence in the property market remains strong after a bullish 2009.
Some 75 per cent of respondents feel that Singapore properties are too expensive. But buying activity will continue in spite of this, if the findings are to be believed.
Answers from a sub-set of 657 active property seekers found that 75 per cent are looking to buy a property in the next 24 months. And 10 per cent plan to buy two or more properties.
'The survey shows that the majority of consumers feel positive about the property market and intend to buy at least one property within the next two years. However, they also think the real estate is too expensive and would prefer the government to take further action to cool prices,' Mr Melhuish said.
He speculated that potential buyers could be looking to pick up properties as they expect prices to climb further in the future. The survey found that prices of private homes and HDB flats are expected to climb over the next 12 months.
Most respondents expect HDB resale prices and private property prices to rise 6-10 per cent over the coming year.
The survey also found that 50 per cent of the 657 respondents who planned to buy a property within the next two years are going to pick it up for investment and to generate rental income. The majority of these type of buyer are at least 35 years old.
But 39 per cent of buyers - a large proportion of whom are in the 25-34 years age group - are buying their first property for their own living.
Another 8 per cent of buyers are purchasing property for their extended family (parents or children). Most of these buyers were also at least 35 years old.
The survey, conducted between April 1 and May 12 this year, was commissioned by PropertyGuru and managed by research agency Pulse group. A total of 2,280 respondents comprising PropertyGuru's users as well as people from Pulse's Singapore database were surveyed.
Mr Melhuish said that his company wants to create a quarterly consumer sentiment survey to better understand property buyers' intentions. The survey will be conducted every quarter.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
New survey shows buyers positive about property
75% of active property seekers hope to buy a home within next 2 years
By UMA SHANKARI
THREE out of four potential home-buyers feel that the prices of private homes and resale HDB flats in Singapore are too high, a new survey has found. But this has not put them off; 75 per cent of active property seekers still hope to buy a home within the next two years.
The survey, which was commissioned by property website PropertyGuru, also found that 58 per cent of the more than 2,200 people surveyed feel that the government is not doing enough to keep property prices in Singapore affordable.
Steve Melhuish, chief executive and co-founder of PropertyGuru, said that this was 'surprising' as the survey was conducted in April and May this year - after two sets of cooling measures were already introduced by the government in September 2009 and late February this year.
Overall, the survey showed that investor confidence in the property market remains strong after a bullish 2009.
Some 75 per cent of respondents feel that Singapore properties are too expensive. But buying activity will continue in spite of this, if the findings are to be believed.
Answers from a sub-set of 657 active property seekers found that 75 per cent are looking to buy a property in the next 24 months. And 10 per cent plan to buy two or more properties.
'The survey shows that the majority of consumers feel positive about the property market and intend to buy at least one property within the next two years. However, they also think the real estate is too expensive and would prefer the government to take further action to cool prices,' Mr Melhuish said.
He speculated that potential buyers could be looking to pick up properties as they expect prices to climb further in the future. The survey found that prices of private homes and HDB flats are expected to climb over the next 12 months.
Most respondents expect HDB resale prices and private property prices to rise 6-10 per cent over the coming year.
The survey also found that 50 per cent of the 657 respondents who planned to buy a property within the next two years are going to pick it up for investment and to generate rental income. The majority of these type of buyer are at least 35 years old.
But 39 per cent of buyers - a large proportion of whom are in the 25-34 years age group - are buying their first property for their own living.
Another 8 per cent of buyers are purchasing property for their extended family (parents or children). Most of these buyers were also at least 35 years old.
The survey, conducted between April 1 and May 12 this year, was commissioned by PropertyGuru and managed by research agency Pulse group. A total of 2,280 respondents comprising PropertyGuru's users as well as people from Pulse's Singapore database were surveyed.
Mr Melhuish said that his company wants to create a quarterly consumer sentiment survey to better understand property buyers' intentions. The survey will be conducted every quarter.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
BT : More expatriates here paid local rates
Business Times - 19 May 2010
More expatriates here paid local rates
By TEH SHI NING
EXPATRIATE pay packages could shrink as more multinational companies in Singapore benchmark them against local and foreign rates instead of salaries back home, according to a survey by HR consultancy ECA International.
Just over a fifth of expats said that they were on packages based on the Singapore market - either local rates or what other expats here get. This was six percentage points up from the 15 per cent who accepted what the consultancy calls 'host-based compensation' a year ago.
The Singapore specific results were released yesterday, but come from ECA International's latest poll of 200 companies with 8,000 expatriates worldwide in Q3 last year.
Hong Kong registered a similar spike in the proportion of companies choosing to benchmark expat pay locally, from 16 per cent to 25 per cent. This compared with the Asian average of 8 per cent and global average of 11 per cent.
Lee Quane, Hong Kong-based Asia regional director of ECA International, thinks that more companies are choosing local benchmarks to decide expat pay, partly to cut costs in the downturn but also because they now assign workers to Singapore on longer-term contracts.
'With the strong growth in Asia, the expansion needs of companies are longer-term and tend to require more foreign staff to be posted here on a permanent basis,' he said.
Expat contracts here are now longer also because the need for expats is now driven less by the quality of Singapore's workforce and more by the tight labour market companies face, Mr Quane said.
The latest survey also found that net local salaries in Singapore are about 80 per cent of those of expats, which means that any adjustment would not be too drastic.
But, 'home-based compensation' remains the dominant expat pay model. Some 60 per cent of expats here accepted pay packages tied to rates back home, and Mr Quane does not expect more than a quarter of expat pay packages to be Singapore-based even in the long run.
The pay packages measured in the survey include any cost of living, hardship and relocation allowances but exclude additional benefits such as housing and children's education, though Mr Quane said that these have fallen over the years too.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
More expatriates here paid local rates
By TEH SHI NING
EXPATRIATE pay packages could shrink as more multinational companies in Singapore benchmark them against local and foreign rates instead of salaries back home, according to a survey by HR consultancy ECA International.
Just over a fifth of expats said that they were on packages based on the Singapore market - either local rates or what other expats here get. This was six percentage points up from the 15 per cent who accepted what the consultancy calls 'host-based compensation' a year ago.
The Singapore specific results were released yesterday, but come from ECA International's latest poll of 200 companies with 8,000 expatriates worldwide in Q3 last year.
Hong Kong registered a similar spike in the proportion of companies choosing to benchmark expat pay locally, from 16 per cent to 25 per cent. This compared with the Asian average of 8 per cent and global average of 11 per cent.
Lee Quane, Hong Kong-based Asia regional director of ECA International, thinks that more companies are choosing local benchmarks to decide expat pay, partly to cut costs in the downturn but also because they now assign workers to Singapore on longer-term contracts.
'With the strong growth in Asia, the expansion needs of companies are longer-term and tend to require more foreign staff to be posted here on a permanent basis,' he said.
Expat contracts here are now longer also because the need for expats is now driven less by the quality of Singapore's workforce and more by the tight labour market companies face, Mr Quane said.
The latest survey also found that net local salaries in Singapore are about 80 per cent of those of expats, which means that any adjustment would not be too drastic.
But, 'home-based compensation' remains the dominant expat pay model. Some 60 per cent of expats here accepted pay packages tied to rates back home, and Mr Quane does not expect more than a quarter of expat pay packages to be Singapore-based even in the long run.
The pay packages measured in the survey include any cost of living, hardship and relocation allowances but exclude additional benefits such as housing and children's education, though Mr Quane said that these have fallen over the years too.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
BT : OUE to launch Twin Peaks next month
Business Times - 19 May 2010
OUE to launch Twin Peaks next month
Pricing flagged at $2,700-3,200 psf, with one-bedders going for $1.5m
By EMILYN YAP
OVERSEAS Union Enterprise (OUE) will launch Twin Peaks - a project at the site of The Grangeford - next month.
The property group is also looking to boost its residential portfolio and is in talks for some development projects.
OUE CEO Thio Gim Hock shared these updates with BT yesterday. Apartments at the 99-year Twin Peaks at Leonie Hill Road will be fully furnished and the group will launch them at 'market rates', Mr Thio said.
A source flagged the possible selling price at $2,700-3,200 per square foot, and estimated that a one-bedroom unit could cost around $1.5 million.
One-bedders at 550-570 square feet will make up 60 per cent of the 462-unit project. The remaining units will comprise two-bedders measuring 1,060 sq ft, and three-bedders at 1,400-1,900 sq ft.
The said prices are comparable to those at projects nearby. Caveats lodged with the authorities show a unit at Grange Infinite changing hands for $2,862 psf last month.
Official records also note that back in August 2007, five units at The Lumos were sold for a median price of $3,334 psf.
Property consultants felt that Twin Peaks would attract some buyers despite the relatively high psf price. DTZ executive director (consulting) Ong Choon Fah noted that the location is attractive. She added that with more one-bedders available, the absolute outlay is more affordable.
Knight Frank managing director of residential services Peter Ow also said that investors who wish to lease out their apartments straightaway will benefit from the furnishings.
Buyers can choose from a list of furnishings, which include Herman Miller chairs and Foscarini lamps. OUE is able to get discounts on these items through bulk purchase - a Herman Miller chair can cost some 40 per cent less than the retail price.
It is not clear how much the furnishings add to development costs. According to a Rider Levett Bucknall report in March, a luxury quality condominium can cost $334-465 psf of gross floor area to build. The unit land price for The Grangeford was reported to be $1,810 psf per plot ratio.
OUE will have fully furnished units at other projects if there is good reception for Twin Peaks, Mr Thio said. Twin Peaks is OUE's only residential site now, but 'we have some development projects we are negotiating', he said.
More launches are slated to come in the next few weeks. Allgreen will have a preview for The Cascadia, a freehold project at Bukit Timah, this weekend. BT understands that selling prices will range from $1,400 psf to $1,600 psf.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Fully furnished: One-bedders at 550-570 square feet will make up 60 per cent of the 462-unit project
OUE to launch Twin Peaks next month
Pricing flagged at $2,700-3,200 psf, with one-bedders going for $1.5m
By EMILYN YAP
OVERSEAS Union Enterprise (OUE) will launch Twin Peaks - a project at the site of The Grangeford - next month.
The property group is also looking to boost its residential portfolio and is in talks for some development projects.
OUE CEO Thio Gim Hock shared these updates with BT yesterday. Apartments at the 99-year Twin Peaks at Leonie Hill Road will be fully furnished and the group will launch them at 'market rates', Mr Thio said.
A source flagged the possible selling price at $2,700-3,200 per square foot, and estimated that a one-bedroom unit could cost around $1.5 million.
One-bedders at 550-570 square feet will make up 60 per cent of the 462-unit project. The remaining units will comprise two-bedders measuring 1,060 sq ft, and three-bedders at 1,400-1,900 sq ft.
The said prices are comparable to those at projects nearby. Caveats lodged with the authorities show a unit at Grange Infinite changing hands for $2,862 psf last month.
Official records also note that back in August 2007, five units at The Lumos were sold for a median price of $3,334 psf.
Property consultants felt that Twin Peaks would attract some buyers despite the relatively high psf price. DTZ executive director (consulting) Ong Choon Fah noted that the location is attractive. She added that with more one-bedders available, the absolute outlay is more affordable.
Knight Frank managing director of residential services Peter Ow also said that investors who wish to lease out their apartments straightaway will benefit from the furnishings.
Buyers can choose from a list of furnishings, which include Herman Miller chairs and Foscarini lamps. OUE is able to get discounts on these items through bulk purchase - a Herman Miller chair can cost some 40 per cent less than the retail price.
It is not clear how much the furnishings add to development costs. According to a Rider Levett Bucknall report in March, a luxury quality condominium can cost $334-465 psf of gross floor area to build. The unit land price for The Grangeford was reported to be $1,810 psf per plot ratio.
OUE will have fully furnished units at other projects if there is good reception for Twin Peaks, Mr Thio said. Twin Peaks is OUE's only residential site now, but 'we have some development projects we are negotiating', he said.
More launches are slated to come in the next few weeks. Allgreen will have a preview for The Cascadia, a freehold project at Bukit Timah, this weekend. BT understands that selling prices will range from $1,400 psf to $1,600 psf.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Fully furnished: One-bedders at 550-570 square feet will make up 60 per cent of the 462-unit project
BT : Changes to en bloc rules passed by Parliament
Business Times - 19 May 2010
Changes to en bloc rules passed by Parliament
Stricter conditions for owners trying to restart en bloc sales after failing earlier
By CHUANG PECK MING
(SINGAPORE) Parliament yesterday passed changes to improve the rules on en bloc sales, but some of the proposals pushed by interested parties were excluded.
With the green light given to the Land Titles (Strata) (Amendment) Bill, the Strata Titles Board which currently look into en bloc sale can concentrate more on its mediatory role.
The amended Land Titles (Strata) Act will also impose stricter requirements on owners for restarting en bloc sale attempts, after failing earlier.
And owners standing for election to a collective sale committee must make more disclosure of their interests - they now must disclose the extent of ownership they have in the strata development and any ownership interests held by 'connected persons'.
Other changes include:
· A sale committee has up to one year to prepare its collective sales agreement and to get the first signature for the agreement;
· A general meeting called for an en bloc sale can't proceed if the meeting quorum is not met within an hour of the designated start time of the meeting;
· Instead of holding general meetings, simple meetings are to be held to keep owners updated on a collective sale.
In moving the bill, Law Minister K Shanmugam said the government's approach - the last time it amended the Act was in 2007 - has been to do what it believed was right as between competing interests.
'Each owner has the right to live undisturbed in his flat and has the right to decide whether to sell or not to sell his flat,' he said. 'At the same time, majority views on whether there should be a sale of the development should be recognised as well. And there is public interest in intensifying developments and rejuvenating older developments.'
Mr Shanmugam said these different interests need to be balanced. The latest changes seek to achieve that balance better.
Yesterday's amendments left out several notable suggestions made by interested parties and industry players: barring management corporation members from serving as sale committee members at the same time; removing the 5-day cooling off period after a collective sales agreement is signed; and doing away with the presence of a lawyer when the collective sales agreement is inked.
Explaining why the government rejected the first suggestion, Mr Shanmugam said en bloc property has 'its own unique set of circumstances'. So decisions on who should be eligible to stand for election to the sale committee are best left to the owners of each development.
On the need for a lawyer's presence, Mr Shanmugam said the en bloc property might be a very significant asset for the owners - and they need to understand the collective sale agreement to 'avoid arguments as to what was or was not said to them'.
'The importance of ensuring the integrity of transaction outweighs the administrative issues of having a lawyer present for each owner's signature,' he said.
The cooling off period is also helpful to ensure the consent an owner gives in signing the collective sale agreement is 'informed, genuine consent', according to Mr Shanmugam.
'Owners will be contracting to sell their flats in multi-million dollar transactions,' he said. 'In that context, it is appropriate to give them a few days to reflect on their decision after they have signed.'
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Changes to en bloc rules passed by Parliament
Stricter conditions for owners trying to restart en bloc sales after failing earlier
By CHUANG PECK MING
(SINGAPORE) Parliament yesterday passed changes to improve the rules on en bloc sales, but some of the proposals pushed by interested parties were excluded.
With the green light given to the Land Titles (Strata) (Amendment) Bill, the Strata Titles Board which currently look into en bloc sale can concentrate more on its mediatory role.
The amended Land Titles (Strata) Act will also impose stricter requirements on owners for restarting en bloc sale attempts, after failing earlier.
And owners standing for election to a collective sale committee must make more disclosure of their interests - they now must disclose the extent of ownership they have in the strata development and any ownership interests held by 'connected persons'.
Other changes include:
· A sale committee has up to one year to prepare its collective sales agreement and to get the first signature for the agreement;
· A general meeting called for an en bloc sale can't proceed if the meeting quorum is not met within an hour of the designated start time of the meeting;
· Instead of holding general meetings, simple meetings are to be held to keep owners updated on a collective sale.
In moving the bill, Law Minister K Shanmugam said the government's approach - the last time it amended the Act was in 2007 - has been to do what it believed was right as between competing interests.
'Each owner has the right to live undisturbed in his flat and has the right to decide whether to sell or not to sell his flat,' he said. 'At the same time, majority views on whether there should be a sale of the development should be recognised as well. And there is public interest in intensifying developments and rejuvenating older developments.'
Mr Shanmugam said these different interests need to be balanced. The latest changes seek to achieve that balance better.
Yesterday's amendments left out several notable suggestions made by interested parties and industry players: barring management corporation members from serving as sale committee members at the same time; removing the 5-day cooling off period after a collective sales agreement is signed; and doing away with the presence of a lawyer when the collective sales agreement is inked.
Explaining why the government rejected the first suggestion, Mr Shanmugam said en bloc property has 'its own unique set of circumstances'. So decisions on who should be eligible to stand for election to the sale committee are best left to the owners of each development.
On the need for a lawyer's presence, Mr Shanmugam said the en bloc property might be a very significant asset for the owners - and they need to understand the collective sale agreement to 'avoid arguments as to what was or was not said to them'.
'The importance of ensuring the integrity of transaction outweighs the administrative issues of having a lawyer present for each owner's signature,' he said.
The cooling off period is also helpful to ensure the consent an owner gives in signing the collective sale agreement is 'informed, genuine consent', according to Mr Shanmugam.
'Owners will be contracting to sell their flats in multi-million dollar transactions,' he said. 'In that context, it is appropriate to give them a few days to reflect on their decision after they have signed.'
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
BT : Call to release office sites to avert supply crunch
Business Times - 19 May 2010
Call to release office sites to avert supply crunch
By KALPANA RASHIWALA
THE time is ripe for government to introduce some sites for office development in the second half 2010 confirmed list to avert a potential supply crunch in future, suggest property consultants.
However, while some think these new office sites should be in prime CBD areas such as Marina Bay, others suggest the government could also be looking at city-fringe locations as well as land near the Paya Lebar and Jurong East MRT Stations which has been earmarked for development into new commercial hubs.
'We'll need to be ahead of the curve by getting land through the confirmed list in H2 2010, bearing in mind that it can take up to four years from inception to completing a new building,' says CB Richard Ellis executive director of office services Moray Armstrong.
'We could be facing a relative shortage of new office space completion in 2013-2014, assuming the current surge in positive occupier demand continues. Slightly more than 50 per cent of the 5 million sq ft-plus of Grade A new office space completing in 2010-2012 is already pre-let.'
'Strong Singapore GDP growth anticipated this year will underpin continued healthy take-up to 2011 and 2012. There are lots of positive employment pointers leading to expansion in office demand. Banks are recruiting vigorously, especially in the private wealth and asset management sectors,' he added.
DTZ South-east Asian head of occupational and development markets Angela Tan also points to the danger of an escalation in office rentals again, if the government does not sell office sites soon given that there's a limited number of new large office developments completing post- 2012. 'It's prudent for government to try and balance business costs as real estate is one of the components of business costs that government can help to contain,' she added.
Jones Lang LaSalle's head of markets Chris Archibold says that future supply that could be generated on any sites sold towards end-2010 would be ready for occupation only around 2015. And the current supply of new office space being developed will be leased well before that.
Mr Armstrong suggests that the government should seriously consider selling land for office development in the Marina Bay area as part of its H2 2010 confirmed list as 'they might as well capitalise on the success of the Marina Bay Financial Centre'.
While agreeing with this, Mr Archibold also acknowledges the merits of government selling land in other locations.
'There's currently a lack of fringe CBD and non-CBD office space coming to the market either for back office operations or for companies who do not need a core CBD location. Therefore further land releases in these areas that bring new supply to the market in a few years' time should also see good demand,' Mr Archibold says.
Cushman & Wakefield managing director Donald Han predicts that the white site at Ophir/Rochor roads currently on the reserve list could be moved to the confirmed list for the H2 2010 state land sales programme. The Jurong East and Paya Lebar locations are also likely possible locations for office sites to be offered in H2, he added.
Many office industry players have declared that Singapore office rentals effectively bottomed out in Q4 2009/Q1 2010 and are predicting a 5-10 per cent rise in Grade A rents this year. Landlords in projects under construction have already upped asking rents.
'Forward precommitment rents have probably moved up 15 to 20 per cent above the market bottom in Q4 2009,' says Mr Armstrong.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Call to release office sites to avert supply crunch
By KALPANA RASHIWALA
THE time is ripe for government to introduce some sites for office development in the second half 2010 confirmed list to avert a potential supply crunch in future, suggest property consultants.
However, while some think these new office sites should be in prime CBD areas such as Marina Bay, others suggest the government could also be looking at city-fringe locations as well as land near the Paya Lebar and Jurong East MRT Stations which has been earmarked for development into new commercial hubs.
'We'll need to be ahead of the curve by getting land through the confirmed list in H2 2010, bearing in mind that it can take up to four years from inception to completing a new building,' says CB Richard Ellis executive director of office services Moray Armstrong.
'We could be facing a relative shortage of new office space completion in 2013-2014, assuming the current surge in positive occupier demand continues. Slightly more than 50 per cent of the 5 million sq ft-plus of Grade A new office space completing in 2010-2012 is already pre-let.'
'Strong Singapore GDP growth anticipated this year will underpin continued healthy take-up to 2011 and 2012. There are lots of positive employment pointers leading to expansion in office demand. Banks are recruiting vigorously, especially in the private wealth and asset management sectors,' he added.
DTZ South-east Asian head of occupational and development markets Angela Tan also points to the danger of an escalation in office rentals again, if the government does not sell office sites soon given that there's a limited number of new large office developments completing post- 2012. 'It's prudent for government to try and balance business costs as real estate is one of the components of business costs that government can help to contain,' she added.
Jones Lang LaSalle's head of markets Chris Archibold says that future supply that could be generated on any sites sold towards end-2010 would be ready for occupation only around 2015. And the current supply of new office space being developed will be leased well before that.
Mr Armstrong suggests that the government should seriously consider selling land for office development in the Marina Bay area as part of its H2 2010 confirmed list as 'they might as well capitalise on the success of the Marina Bay Financial Centre'.
While agreeing with this, Mr Archibold also acknowledges the merits of government selling land in other locations.
'There's currently a lack of fringe CBD and non-CBD office space coming to the market either for back office operations or for companies who do not need a core CBD location. Therefore further land releases in these areas that bring new supply to the market in a few years' time should also see good demand,' Mr Archibold says.
Cushman & Wakefield managing director Donald Han predicts that the white site at Ophir/Rochor roads currently on the reserve list could be moved to the confirmed list for the H2 2010 state land sales programme. The Jurong East and Paya Lebar locations are also likely possible locations for office sites to be offered in H2, he added.
Many office industry players have declared that Singapore office rentals effectively bottomed out in Q4 2009/Q1 2010 and are predicting a 5-10 per cent rise in Grade A rents this year. Landlords in projects under construction have already upped asking rents.
'Forward precommitment rents have probably moved up 15 to 20 per cent above the market bottom in Q4 2009,' says Mr Armstrong.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
BT : The complex role of an agent
Business Times - 19 May 2010
The complex role of an agent
By TAN CHENG HAN
THE complexities and demands of life mean that people rely on others a great deal to get things done. We sometimes ask or are asked by family members or friends to obtain information, make appointments, purchase items, babysit children, and do other everyday things. In a sense, we are all accustomed to being 'agents' for others.
The law, however, has a more technical understanding of the word 'agent'. In law, an agent is a person who has been authorised by his principal to perform an act that has the power to affect the principal's legal relations with a third party. The paradigm agency situation involves an agent being empowered by his principal to enter into a binding contract with a third party. Through the intermediation of the agent, the principal's legal relations will be altered because the agent's acts will bring the principal into a contractual relationship with the third party.
Based on this definition of agency, some who describe themselves as 'agents' are not true agents in a legal sense. Many 'sole agents' for example do not sell goods on behalf of the manufacturer but sell on their own account, making a profit from whatever mark-up they manage to obtain. And 'estate agents' in most cases cannot commit the vendor to a sale; their role is simply to introduce potential purchasers to the property and transmit offers to the vendor.
The law of agency is of some antiquity as businesspeople frequently act through agents, particularly where the business is of some scale. The rise of the corporation as the preferred business vehicle has also contributed to the importance of the law of agency as the corporation, being an artificial entity, can only act through human individuals. The use of agents, it has been said, allows a person (or corporation) to multiply his presence across geographical boundaries.
In determining the scope of the agent's power to affect the principal's legal relations with third parties, the starting point is to ascertain the agent's actual authority. Such authority can arise where the principal has expressly authorised the agent either orally or in writing to act in a certain way, or where the authority is implied because such authority, though not expressly conferred, is necessary for the agent to fulfill the mandate given to him. One instance of implied authority arises where an agent is appointed to a particular position or office without any detailed instructions as to the scope of the agent's duties.
For instance, a managing director's contract of employment may simply state that the managing director shall be responsible for the day to day management of the company. In such circumstances, the law will imply that he will have such authority as is usual or necessary for a managing director in such a company to be able to manage the company effectively.
The law of agency would not be unduly complex if the law only allowed a principal to be bound where the agent acted within the scope of the actual authority expressly or impliedly conferred. However, a principal can be bound even where the agent had exceeded his authority if the third party reasonably believed, as a result of what the principal had represented to the third party, that the agent was so authorised. Thus a principal may have used loose language to give the third party the reasonable impression that the agent had authority larger than what the principal had conferred. Alternatively, the principal may have placed the agent in a position that would usually carry with it implied actual authority but which the principal has restricted without informing the third party. The latter therefore reasonably assumed that the agent did have such implied authority.
In such circumstances, fairness dictates that because the appearance of authority was fostered by the acts or words of the principal, the principal should be bound by what the agent did - notwithstanding the absence of real authority. This form of authority is known as apparent authority and is frequently a source of contention, as was the case in the recent High Court decision of Skandinaviska Enskilda Banken v Asia Pacific Breweries (Singapore) Pte Ltd which the Court of Appeal will hear soon. An appeal against the decision has since been heard and the Court of Appeal has reserved judgment.
In that case, one of the main points of dispute was whether APB's finance manager had apparent authority to enter into various banking facilities. If he did have such authority, APB would be bound notwithstanding that the finance manager was acting fraudulently. The High Court had held that there was no such authority.
Apparent authority is relied upon by third parties who wish to hold the principal to the transaction even though the agent may not have been authorised. Where it is the principal who wishes to benefit from the agent's unauthorised acts, the principal must ratify what the agent has done. Such ratification is allowed to have retrospective effect so that the agent is deemed to have been clothed with authority from the outset.
Astonishingly, the law allows ratification to be effective even where the third party has purported to withdraw from the transaction prior to ratification. This is unlike the position in civil law jurisdictions which allows the third party to withdraw as long as ratification has not taken place.
Obviously such a state taken to its logical conclusion places the third party in a vulnerable position. Until the principal ratifies, the third party will not know whether he is bound or not and that places the full burden of commercial uncertainty on the third party. Towards this end, the common law has to develop compensating mechanisms such as requiring ratification to take place within a reasonable time, and disallowing ratification where property rights have already passed to some other person.
One other aspect of the law of agency that even today is controversial is that it allows an agent to act for an undisclosed principal. That could bind a third party to such principal even though the third party was completely unaware of the existence of such principal and thought he was contracting with the agent as a principal.
Civil law jurisdictions do not recognise such a concept and even lawyers in the Anglo-American common law tradition have difficulty articulating a principled basis for such a doctrine. It is often justified on utilitarian reasons as fostering commercial convenience since principals sometimes do not want others to know that they are the ultimate contracting parties, or the agents themselves do not want their counterparties to know that they are acting for others for fear that the counterparties may try to bypass them in future.
However, as the third party may have contracted with the agent for specific reasons, such as the agent's particular skill and expertise, in some circumstances the undisclosed principal is prohibited from taking the benefit of the transaction.
The foregoing illustrates the delicate process that the law has put in place to balance the interests of all the actors in an agency relationship and this balancing exercise accounts for much of the law's complexity. The law here, as elsewhere, is in service to society and needs always to strike an optimal balance between many legitimate competing interests. Law, after all, is to society what medicine is to the body.
The writer is the Dean of the Faculty of Law at National University of Singapore. His forthcoming book, The Law of Agency, will be available in July from Academy Publishing
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
The complex role of an agent
By TAN CHENG HAN
THE complexities and demands of life mean that people rely on others a great deal to get things done. We sometimes ask or are asked by family members or friends to obtain information, make appointments, purchase items, babysit children, and do other everyday things. In a sense, we are all accustomed to being 'agents' for others.
The law, however, has a more technical understanding of the word 'agent'. In law, an agent is a person who has been authorised by his principal to perform an act that has the power to affect the principal's legal relations with a third party. The paradigm agency situation involves an agent being empowered by his principal to enter into a binding contract with a third party. Through the intermediation of the agent, the principal's legal relations will be altered because the agent's acts will bring the principal into a contractual relationship with the third party.
Based on this definition of agency, some who describe themselves as 'agents' are not true agents in a legal sense. Many 'sole agents' for example do not sell goods on behalf of the manufacturer but sell on their own account, making a profit from whatever mark-up they manage to obtain. And 'estate agents' in most cases cannot commit the vendor to a sale; their role is simply to introduce potential purchasers to the property and transmit offers to the vendor.
The law of agency is of some antiquity as businesspeople frequently act through agents, particularly where the business is of some scale. The rise of the corporation as the preferred business vehicle has also contributed to the importance of the law of agency as the corporation, being an artificial entity, can only act through human individuals. The use of agents, it has been said, allows a person (or corporation) to multiply his presence across geographical boundaries.
In determining the scope of the agent's power to affect the principal's legal relations with third parties, the starting point is to ascertain the agent's actual authority. Such authority can arise where the principal has expressly authorised the agent either orally or in writing to act in a certain way, or where the authority is implied because such authority, though not expressly conferred, is necessary for the agent to fulfill the mandate given to him. One instance of implied authority arises where an agent is appointed to a particular position or office without any detailed instructions as to the scope of the agent's duties.
For instance, a managing director's contract of employment may simply state that the managing director shall be responsible for the day to day management of the company. In such circumstances, the law will imply that he will have such authority as is usual or necessary for a managing director in such a company to be able to manage the company effectively.
The law of agency would not be unduly complex if the law only allowed a principal to be bound where the agent acted within the scope of the actual authority expressly or impliedly conferred. However, a principal can be bound even where the agent had exceeded his authority if the third party reasonably believed, as a result of what the principal had represented to the third party, that the agent was so authorised. Thus a principal may have used loose language to give the third party the reasonable impression that the agent had authority larger than what the principal had conferred. Alternatively, the principal may have placed the agent in a position that would usually carry with it implied actual authority but which the principal has restricted without informing the third party. The latter therefore reasonably assumed that the agent did have such implied authority.
In such circumstances, fairness dictates that because the appearance of authority was fostered by the acts or words of the principal, the principal should be bound by what the agent did - notwithstanding the absence of real authority. This form of authority is known as apparent authority and is frequently a source of contention, as was the case in the recent High Court decision of Skandinaviska Enskilda Banken v Asia Pacific Breweries (Singapore) Pte Ltd which the Court of Appeal will hear soon. An appeal against the decision has since been heard and the Court of Appeal has reserved judgment.
In that case, one of the main points of dispute was whether APB's finance manager had apparent authority to enter into various banking facilities. If he did have such authority, APB would be bound notwithstanding that the finance manager was acting fraudulently. The High Court had held that there was no such authority.
Apparent authority is relied upon by third parties who wish to hold the principal to the transaction even though the agent may not have been authorised. Where it is the principal who wishes to benefit from the agent's unauthorised acts, the principal must ratify what the agent has done. Such ratification is allowed to have retrospective effect so that the agent is deemed to have been clothed with authority from the outset.
Astonishingly, the law allows ratification to be effective even where the third party has purported to withdraw from the transaction prior to ratification. This is unlike the position in civil law jurisdictions which allows the third party to withdraw as long as ratification has not taken place.
Obviously such a state taken to its logical conclusion places the third party in a vulnerable position. Until the principal ratifies, the third party will not know whether he is bound or not and that places the full burden of commercial uncertainty on the third party. Towards this end, the common law has to develop compensating mechanisms such as requiring ratification to take place within a reasonable time, and disallowing ratification where property rights have already passed to some other person.
One other aspect of the law of agency that even today is controversial is that it allows an agent to act for an undisclosed principal. That could bind a third party to such principal even though the third party was completely unaware of the existence of such principal and thought he was contracting with the agent as a principal.
Civil law jurisdictions do not recognise such a concept and even lawyers in the Anglo-American common law tradition have difficulty articulating a principled basis for such a doctrine. It is often justified on utilitarian reasons as fostering commercial convenience since principals sometimes do not want others to know that they are the ultimate contracting parties, or the agents themselves do not want their counterparties to know that they are acting for others for fear that the counterparties may try to bypass them in future.
However, as the third party may have contracted with the agent for specific reasons, such as the agent's particular skill and expertise, in some circumstances the undisclosed principal is prohibited from taking the benefit of the transaction.
The foregoing illustrates the delicate process that the law has put in place to balance the interests of all the actors in an agency relationship and this balancing exercise accounts for much of the law's complexity. The law here, as elsewhere, is in service to society and needs always to strike an optimal balance between many legitimate competing interests. Law, after all, is to society what medicine is to the body.
The writer is the Dean of the Faculty of Law at National University of Singapore. His forthcoming book, The Law of Agency, will be available in July from Academy Publishing
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
BT : The attractiveness of Asian real estate
Business Times - 19 May 2010
The attractiveness of Asian real estate
Investors are drawn to region's underlying economic growth, stable yields, expansion of diverse market segments
By NIEL THASSIM
POST-RECESSION, international property investors are turning their attention to Asia in pursuit of new investment opportunities.
Benefiting from the lessons learnt during the 1997 crisis, Asia was relatively less impacted by the global credit crisis of 2008 and 2009. Today, the region is an exciting investment destination. Relatively stronger fundamentals and a lack of dependence on foreign demand have helped mitigate the impact of the severe recession that has hit much of the rest of the world.
Today, we are seeing a growing trend of institutional and private investor capital flowing into the region's real estate markets. Investors are lured by the underlying economic growth, stable yields, expansion of diverse market segments, as well as the need to broaden their investment portfolios.
Asia's huge demographic shifts, with strong urbanisation and a rising middle class, also present opportunities for developers in diverse sectors ranging from housing, retail, commercial, industrial as well as leisure and tourism. The trend in commercial real estate perhaps best illustrates the point. While global commercial real estate transaction volumes have bottomed, property demand in Asia has visibly risen.
Rising property demand
The average Asian has a higher propensity to save compared to their Western counterparts and given the current low yields on fixed income products and the high volatility of equity markets, this presents a strong motivation for Asians to be attracted to the relative value-benefits of real estate investing.
In addition, succession planning is often a key factor in investment decision-making in Asia where family-controlled businesses are prevalent. The current climate has encouraged many to invest in property markets, which can allow for a more orderly transfer of assets and wealth from one generation to the next.
Asia has relatively well-capitalised financial systems: its banks have not required massive bailouts, and consumer and bank debt levels are lower than in the US, UK and Europe. Under these conditions, investors and businesses have been more willing to borrow, lend and spend.
In recent months, Singapore, Hong Kong and China have witnessed high transaction volumes and pricing, largely fuelled by low interest rates. In some countries, cooling measures have been undertaken to ensure price growth is in line with the rate of economic expansion.
In Singapore, the private property market continues to show resilience with close to 4,000 private homes sold in the first quarter of 2010, according to statistics from CB Richard Ellis (CBRE) . Similarly, Urban Redevelopment Authority data showed that demand for private homes in prime areas continued to be strong in the first quarter of the year
In Hong Kong, real estate prices reached a 12-year high in the first quarter of this year after increasing 7.5 per cent from the end of last year. According to a housing index compiled by Centaline Property Agency, this was largely due to a combination of low interest rates, limited supply and increasing confidence in Hong Kong's economic recovery. Office rents in Hong Kong climbed 5.1 per cent in Q1, exhibiting the largest percentage increase out of 25 Asia-Pacific cities, according to Colliers International, which expects rents in Hong Kong to surge 20 per cent in the next 12 months due to the limited supply of new stock in core locations.
The Seoul office market is one of the best positioned office markets in Asia to ride out the downturn. South Korea benefits from the strong economic ties with the world's fastest growing countries/regions such as China, Asean, Hong Kong and Latin America, which account for nearly half of the South Korean exports.
The economic growth translates into demand for Seoul's office space, particularly the expansion needs from those corporations that have strong business ties with China and other fast growing emerging countries. The structurally stable rental growth (which normally benchmarks to inflation) and the relatively attractive yield of 6.0-6.5 per cent set Seoul office market apart from the high growth but volatile emerging markets (for example, China, Hong Kong) and the stable but low growth markets (for example, Japan, Australia).
Japan, and in particular the Tokyo office market, continues to play a significant role in real estate investment in the region. Tokyo, behind only London, led all cities worldwide in the volume of commercial real estate transactions closed last year. After posting a steep decline in economic activity last year, with a contraction of 5.2 per cent, Deutsche Bank economists expect a rebound of the Tokyo economy with a 2.8 per cent growth rate this year. With the significant amount of short term debt and CMBS rollovers, coupled with high commercial yield spreads, the Tokyo office market will continue to present attractive buying opportunities over the coming 12-24 months.
That being said, countries such as Indonesia and Vietnam are upcoming markets to look out for.
Indonesia is the largest property market in South-east Asia. Although traditionally a closed market, the government has plans to further deregulate the industry. This move will allow foreigners to purchase homes and commercial real estate with direct ownership
Vietnam's growth story in recent years is second only to China in Asia. The property market, particularly in the mass to mid-tier residential market, is largely driven by strong demographic factors. These include the growing rural to urban migration, almost two-thirds of its population being under 35 and higher income levels.
Ho Chi Minh City and Hanoi are also expected to see a doubling of population over the next decade. Similarly, a relaxation in property ownership rules to extend the tenure of foreign buyers from 50 to 70 years will further provide incentives for residential projects of higher quality by overseas developers
In the case of Malaysia, office rentals in Kuala Lumpur continue to fall as more supply will come on-stream over the next three years. But foreign investors have gradually begun to flow in, thanks to the Malaysian government's market liberalisation initiatives made last year.
While China did not come out of the 2008 global recession unscathed, early government intervention and lower levels of debt compared to its western counterparts have helped it weather the storm better than most.
Today, it remains an attractive investment destination for investors due to the sheer size of the country, its strong real estate fundamentals, substantial urbanisation rates, growing middle class and its rise as an economic powerhouse.
Rapid recovery
Since October 2008, the Chinese government has implemented aggressive macro-economic expansion policies, along with fiscal stimulus packages and monetary expansion. These policies have led to the rapid recovery of the domestic market and also signs of a recovery in investment.
The rapid growth in the China economy has led to a 8.7 per cent annual economic growth rate last year. Among the world's major economies, China is surging at an unmatched pace with a nearly 12 per cent growth rate in the first quarter of this year.
Furthermore the number of high net-worth individuals is increasing in China. The number of people with a personal wealth of more than one billion yuan (S$204 million) has risen rapidly since 2004. At that time, there were 100, but as of last year, the number has expanded to 1,000.
Coupled with rising income levels of the middle class, this spells significant opportunities for the real estate sector to grow. Corporate investment and the increase of private sector investment in real estate will also support this growth and sustain the next phase of recovery. The recent approval of domestic insurance companies to invest in real estate as well as the expectation of the development of a China Reit market will continue to foster the institutionalisation of real estate in China.
Undoubtedly, the rise of China will be one of the greatest macro trends of the 21st century. Today, we are already witnessing China's economic growth and its transformative implications across Asia and around the world. I am sure future decades will see an even greater increase in Chinese influence.
The rate of development in Asia today, combined with increasing economic growth and the expanding depth, maturity and diversity of its real estate markets will naturally translate to greater opportunities to come.
The writer is the chairman of the Cityscape Asia Conference 2010, the world's largest B2B real estate investment and development exhibition and conference. Cityscape Asia is taking place from May 18-20, 2010 at Suntec City, Singapore
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Road to prosperity: A model of a property development at the 5th China (Shenzhen) Real Estate Fair. Rapid growth and rising wealth in the country spell significant opportunities for the real estate sector to grow
The attractiveness of Asian real estate
Investors are drawn to region's underlying economic growth, stable yields, expansion of diverse market segments
By NIEL THASSIM
POST-RECESSION, international property investors are turning their attention to Asia in pursuit of new investment opportunities.
Benefiting from the lessons learnt during the 1997 crisis, Asia was relatively less impacted by the global credit crisis of 2008 and 2009. Today, the region is an exciting investment destination. Relatively stronger fundamentals and a lack of dependence on foreign demand have helped mitigate the impact of the severe recession that has hit much of the rest of the world.
Today, we are seeing a growing trend of institutional and private investor capital flowing into the region's real estate markets. Investors are lured by the underlying economic growth, stable yields, expansion of diverse market segments, as well as the need to broaden their investment portfolios.
Asia's huge demographic shifts, with strong urbanisation and a rising middle class, also present opportunities for developers in diverse sectors ranging from housing, retail, commercial, industrial as well as leisure and tourism. The trend in commercial real estate perhaps best illustrates the point. While global commercial real estate transaction volumes have bottomed, property demand in Asia has visibly risen.
Rising property demand
The average Asian has a higher propensity to save compared to their Western counterparts and given the current low yields on fixed income products and the high volatility of equity markets, this presents a strong motivation for Asians to be attracted to the relative value-benefits of real estate investing.
In addition, succession planning is often a key factor in investment decision-making in Asia where family-controlled businesses are prevalent. The current climate has encouraged many to invest in property markets, which can allow for a more orderly transfer of assets and wealth from one generation to the next.
Asia has relatively well-capitalised financial systems: its banks have not required massive bailouts, and consumer and bank debt levels are lower than in the US, UK and Europe. Under these conditions, investors and businesses have been more willing to borrow, lend and spend.
In recent months, Singapore, Hong Kong and China have witnessed high transaction volumes and pricing, largely fuelled by low interest rates. In some countries, cooling measures have been undertaken to ensure price growth is in line with the rate of economic expansion.
In Singapore, the private property market continues to show resilience with close to 4,000 private homes sold in the first quarter of 2010, according to statistics from CB Richard Ellis (CBRE) . Similarly, Urban Redevelopment Authority data showed that demand for private homes in prime areas continued to be strong in the first quarter of the year
In Hong Kong, real estate prices reached a 12-year high in the first quarter of this year after increasing 7.5 per cent from the end of last year. According to a housing index compiled by Centaline Property Agency, this was largely due to a combination of low interest rates, limited supply and increasing confidence in Hong Kong's economic recovery. Office rents in Hong Kong climbed 5.1 per cent in Q1, exhibiting the largest percentage increase out of 25 Asia-Pacific cities, according to Colliers International, which expects rents in Hong Kong to surge 20 per cent in the next 12 months due to the limited supply of new stock in core locations.
The Seoul office market is one of the best positioned office markets in Asia to ride out the downturn. South Korea benefits from the strong economic ties with the world's fastest growing countries/regions such as China, Asean, Hong Kong and Latin America, which account for nearly half of the South Korean exports.
The economic growth translates into demand for Seoul's office space, particularly the expansion needs from those corporations that have strong business ties with China and other fast growing emerging countries. The structurally stable rental growth (which normally benchmarks to inflation) and the relatively attractive yield of 6.0-6.5 per cent set Seoul office market apart from the high growth but volatile emerging markets (for example, China, Hong Kong) and the stable but low growth markets (for example, Japan, Australia).
Japan, and in particular the Tokyo office market, continues to play a significant role in real estate investment in the region. Tokyo, behind only London, led all cities worldwide in the volume of commercial real estate transactions closed last year. After posting a steep decline in economic activity last year, with a contraction of 5.2 per cent, Deutsche Bank economists expect a rebound of the Tokyo economy with a 2.8 per cent growth rate this year. With the significant amount of short term debt and CMBS rollovers, coupled with high commercial yield spreads, the Tokyo office market will continue to present attractive buying opportunities over the coming 12-24 months.
That being said, countries such as Indonesia and Vietnam are upcoming markets to look out for.
Indonesia is the largest property market in South-east Asia. Although traditionally a closed market, the government has plans to further deregulate the industry. This move will allow foreigners to purchase homes and commercial real estate with direct ownership
Vietnam's growth story in recent years is second only to China in Asia. The property market, particularly in the mass to mid-tier residential market, is largely driven by strong demographic factors. These include the growing rural to urban migration, almost two-thirds of its population being under 35 and higher income levels.
Ho Chi Minh City and Hanoi are also expected to see a doubling of population over the next decade. Similarly, a relaxation in property ownership rules to extend the tenure of foreign buyers from 50 to 70 years will further provide incentives for residential projects of higher quality by overseas developers
In the case of Malaysia, office rentals in Kuala Lumpur continue to fall as more supply will come on-stream over the next three years. But foreign investors have gradually begun to flow in, thanks to the Malaysian government's market liberalisation initiatives made last year.
While China did not come out of the 2008 global recession unscathed, early government intervention and lower levels of debt compared to its western counterparts have helped it weather the storm better than most.
Today, it remains an attractive investment destination for investors due to the sheer size of the country, its strong real estate fundamentals, substantial urbanisation rates, growing middle class and its rise as an economic powerhouse.
Rapid recovery
Since October 2008, the Chinese government has implemented aggressive macro-economic expansion policies, along with fiscal stimulus packages and monetary expansion. These policies have led to the rapid recovery of the domestic market and also signs of a recovery in investment.
The rapid growth in the China economy has led to a 8.7 per cent annual economic growth rate last year. Among the world's major economies, China is surging at an unmatched pace with a nearly 12 per cent growth rate in the first quarter of this year.
Furthermore the number of high net-worth individuals is increasing in China. The number of people with a personal wealth of more than one billion yuan (S$204 million) has risen rapidly since 2004. At that time, there were 100, but as of last year, the number has expanded to 1,000.
Coupled with rising income levels of the middle class, this spells significant opportunities for the real estate sector to grow. Corporate investment and the increase of private sector investment in real estate will also support this growth and sustain the next phase of recovery. The recent approval of domestic insurance companies to invest in real estate as well as the expectation of the development of a China Reit market will continue to foster the institutionalisation of real estate in China.
Undoubtedly, the rise of China will be one of the greatest macro trends of the 21st century. Today, we are already witnessing China's economic growth and its transformative implications across Asia and around the world. I am sure future decades will see an even greater increase in Chinese influence.
The rate of development in Asia today, combined with increasing economic growth and the expanding depth, maturity and diversity of its real estate markets will naturally translate to greater opportunities to come.
The writer is the chairman of the Cityscape Asia Conference 2010, the world's largest B2B real estate investment and development exhibition and conference. Cityscape Asia is taking place from May 18-20, 2010 at Suntec City, Singapore
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Road to prosperity: A model of a property development at the 5th China (Shenzhen) Real Estate Fair. Rapid growth and rising wealth in the country spell significant opportunities for the real estate sector to grow
BT : Beijing takes hard line on graft in property sector
Business Times - 19 May 2010
Beijing takes hard line on graft in property sector
(BEIJING) China's ruling communists are cracking down on official corruption in the real estate market, warning of stiff penalties for anyone caught trying to cash in on the property boom, state media said.
The government is trying to rein in soaring real estate prices and damp down social unrest over land grabs and forced evictions seen by the public as the result of collusion between unscrupulous officials and property developers.
The Communist Party's central disciplinary committee has defined 39 punishable offences for officials at government agencies and state-owned companies, the Xinhua news agency reported.
Officials will face punishment if they are found to have engaged in graft related to bidding on construction projects, the transfer of land and mining rights, real estate development and city planning, it said, without detailing the penalties.
'Party officials' interfering in construction projects . . . has severely impaired public interests, affected relations between the party and the people . . . and undermined social harmony,' Xinhua said in a special commentary.
The agency said that such behaviour had triggered a 'strong public backlash', adding that the party planned to 'firmly address and rectify' the problem.
Last month, a party official in the central province of Henan ordered that a protester be run over with a dump truck during a land dispute, killing him, in the latest case of violent confrontations triggered by land seizures.
The country's top leaders have repeatedly said that rampant official corruption has threatened the party's ability to rule. -- AFP
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Beijing takes hard line on graft in property sector
(BEIJING) China's ruling communists are cracking down on official corruption in the real estate market, warning of stiff penalties for anyone caught trying to cash in on the property boom, state media said.
The government is trying to rein in soaring real estate prices and damp down social unrest over land grabs and forced evictions seen by the public as the result of collusion between unscrupulous officials and property developers.
The Communist Party's central disciplinary committee has defined 39 punishable offences for officials at government agencies and state-owned companies, the Xinhua news agency reported.
Officials will face punishment if they are found to have engaged in graft related to bidding on construction projects, the transfer of land and mining rights, real estate development and city planning, it said, without detailing the penalties.
'Party officials' interfering in construction projects . . . has severely impaired public interests, affected relations between the party and the people . . . and undermined social harmony,' Xinhua said in a special commentary.
The agency said that such behaviour had triggered a 'strong public backlash', adding that the party planned to 'firmly address and rectify' the problem.
Last month, a party official in the central province of Henan ordered that a protester be run over with a dump truck during a land dispute, killing him, in the latest case of violent confrontations triggered by land seizures.
The country's top leaders have repeatedly said that rampant official corruption has threatened the party's ability to rule. -- AFP
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
ST : UK real estate body to set up S'pore branch
May 18, 2010
UK real estate body to set up S'pore branch
By Lee Zhi Xin
SINGAPORE'S booming property market has prompted a leading international body to establish a branch here.
The Royal Institution of Chartered Surveyors (Rics) launched its Singapore branch at a ceremony at the official residence of the British High Commissioner yesterday. About 30 representatives of the real estate community, government organisations and academic bodies attended the event.
London-based Rics is the world's leading professional body for qualifications and standards in land, property and construction, according to its website.
'We provide members with a network into the property community and a ticket of entry to international firms,' said Rics Singapore chairman Iain Mackenzie at the launch.
'What distinguishes Rics is the broad spectrum we cover, with members specialising in fields from land surveying to property construction and evaluation.'
The local office is due to be set up by the end of this year.
The organisation prides itself on awarding an internationally recognised accreditation to property professionals worldwide. Globally, it has more than 140,000 members, of whom more than 600 are in Singapore. All are certified to have fulfilled its educational and training standards.
For example, members are required to upgrade their skills constantly. Rics also gives talks on property development. It has published more than 500 research papers, which are currently available in its online archives.
Robust regional growth, particularly in Singapore with the opening of Resorts World Sentosa and Marina Bay Sands, has ignited interest in the property market here, said Rics global president Max Crofts.
A person wishing to become a member typically needs to have a property-related degree and two years' experience with an employer, followed by an interview with Rics.
'We hope to attract more members of the younger generation, aiming to recruit at least 20 per cent of each graduating batch,' said Mr Mackenzie, emphasising the importance of keeping up with evolving workplace trends by having more fresh voices, to keep Rics standards relevant.
UK real estate body to set up S'pore branch
By Lee Zhi Xin
SINGAPORE'S booming property market has prompted a leading international body to establish a branch here.
The Royal Institution of Chartered Surveyors (Rics) launched its Singapore branch at a ceremony at the official residence of the British High Commissioner yesterday. About 30 representatives of the real estate community, government organisations and academic bodies attended the event.
London-based Rics is the world's leading professional body for qualifications and standards in land, property and construction, according to its website.
'We provide members with a network into the property community and a ticket of entry to international firms,' said Rics Singapore chairman Iain Mackenzie at the launch.
'What distinguishes Rics is the broad spectrum we cover, with members specialising in fields from land surveying to property construction and evaluation.'
The local office is due to be set up by the end of this year.
The organisation prides itself on awarding an internationally recognised accreditation to property professionals worldwide. Globally, it has more than 140,000 members, of whom more than 600 are in Singapore. All are certified to have fulfilled its educational and training standards.
For example, members are required to upgrade their skills constantly. Rics also gives talks on property development. It has published more than 500 research papers, which are currently available in its online archives.
Robust regional growth, particularly in Singapore with the opening of Resorts World Sentosa and Marina Bay Sands, has ignited interest in the property market here, said Rics global president Max Crofts.
A person wishing to become a member typically needs to have a property-related degree and two years' experience with an employer, followed by an interview with Rics.
'We hope to attract more members of the younger generation, aiming to recruit at least 20 per cent of each graduating batch,' said Mr Mackenzie, emphasising the importance of keeping up with evolving workplace trends by having more fresh voices, to keep Rics standards relevant.
ST : Sales of private homes surge in April
May 18, 2010
Sales of private homes surge in April
But bumper figures not expected to repeat soon due to market caution
By Joyce Teo
PRIVATE home sales hit a near-record last month - but that might have been as good as it is going to get for a while, given the economic storm clouds over Europe and the plunging share markets.
Some 2,207 units were moved in April - up from 1,761 in March and 1,202 in February - to make it the second-highest monthly sales achieved since such data started being released by the Urban Redevelopment Authority (URA) in mid-2007.
The highest level was clocked last July, when 2,772 units were sold.
April's bumper figures showed the 'resilience' of residential demand despite recent measures introduced by the Government, said CBRE Research executive director Li Hiaw Ho.
Still, Government measures and constant monitoring will help to ensure a sustainable demand, he said.
Developers launched 2,084 private homes - landed and non-landed - last month, up from 1,790 units in March, according to URA data yesterday.
New home sales for the first four months this year are at 6,587 units, about 45 per cent of last year's sales.
Two new launches stole the limelight last month.
The 616-unit Waterbank at Dakota in Dakota Crescent was the top seller with an impressive 573 units sold at a median price of $1,178 psf, or $885-$1,443 per sq ft. Only a handful of units are left.
And the 429-unit Treehouse in Chestnut Avenue racked up strong sales of 374 units at a median price of $835 psf.
The Interlace in Alexandra Road, launched last year, also did well last month, with 144 units sold at a median price of $1,067 psf.
Nearly half of the units sold in April were in the city fringes, or what URA calls the rest of central region. That was largely thanks to the sales at Waterbank and The Interlace.
Sales in suburban areas accounted for about 35 per cent of the total. Sales in the city centre were encouraging as previously launched units continued to be absorbed by the market, experts noted.
Cushman & Wakefield managing director Donald Han told The Straits Times: 'I suspect the current market will continue to see high demand from the mass market, and prices will still go up, but albeit at a slower pace than the 5.6 per cent rise in the first quarter,'
But Mr Han and other experts expect to see lower sales this month. There have been few launches, though Flamingo Valley has just sold 36 units at a weekend preview. Prices are from $900-$1,580 psf.
'Fewer launches are expected this month. There is also a lot of caution in the market now because of the Greek crisis, the languishing stock market and also because the property market has moved too fast in too short a time,' he said.
Colliers International's director for research and advisory, Ms Tay Huey Ying, suggested that some buyers may prefer to wait for future launches from the recent spate of government land sales.
Jones Lang LaSalle's head of research for South-east Asia, Dr Chua Yang Liang, added: 'The 2,000-plus level is of concern as to whether it is a sustainable level of demand.'
The sovereign debt crisis unfolding in Greece threatens to bring on a contagion effect in the eurozone, which may hit the nascent recovery for the global economy.
Sentiments have thus weakened, with buyers taking a more cautious approach in the past few weeks, he said.
The market is likely to pull back to a more sustainable level of around 1,000 units per month for the rest of the year, with total volume likely to be between 13,000 and 16,000 units, Dr Chua added.
Affordability is likely to remain a concern given that projects now doing well have a lower price quantum, he said.
Ms Tay said the concentration of purchases priced up to $1,500 psf and the dip in deals priced above that level could be early signs of buyer resistance towards pricier non-landed homes.
joyceteo@sph.com.sg
Sales of private homes surge in April
But bumper figures not expected to repeat soon due to market caution
By Joyce Teo
PRIVATE home sales hit a near-record last month - but that might have been as good as it is going to get for a while, given the economic storm clouds over Europe and the plunging share markets.
Some 2,207 units were moved in April - up from 1,761 in March and 1,202 in February - to make it the second-highest monthly sales achieved since such data started being released by the Urban Redevelopment Authority (URA) in mid-2007.
The highest level was clocked last July, when 2,772 units were sold.
April's bumper figures showed the 'resilience' of residential demand despite recent measures introduced by the Government, said CBRE Research executive director Li Hiaw Ho.
Still, Government measures and constant monitoring will help to ensure a sustainable demand, he said.
Developers launched 2,084 private homes - landed and non-landed - last month, up from 1,790 units in March, according to URA data yesterday.
New home sales for the first four months this year are at 6,587 units, about 45 per cent of last year's sales.
Two new launches stole the limelight last month.
The 616-unit Waterbank at Dakota in Dakota Crescent was the top seller with an impressive 573 units sold at a median price of $1,178 psf, or $885-$1,443 per sq ft. Only a handful of units are left.
And the 429-unit Treehouse in Chestnut Avenue racked up strong sales of 374 units at a median price of $835 psf.
The Interlace in Alexandra Road, launched last year, also did well last month, with 144 units sold at a median price of $1,067 psf.
Nearly half of the units sold in April were in the city fringes, or what URA calls the rest of central region. That was largely thanks to the sales at Waterbank and The Interlace.
Sales in suburban areas accounted for about 35 per cent of the total. Sales in the city centre were encouraging as previously launched units continued to be absorbed by the market, experts noted.
Cushman & Wakefield managing director Donald Han told The Straits Times: 'I suspect the current market will continue to see high demand from the mass market, and prices will still go up, but albeit at a slower pace than the 5.6 per cent rise in the first quarter,'
But Mr Han and other experts expect to see lower sales this month. There have been few launches, though Flamingo Valley has just sold 36 units at a weekend preview. Prices are from $900-$1,580 psf.
'Fewer launches are expected this month. There is also a lot of caution in the market now because of the Greek crisis, the languishing stock market and also because the property market has moved too fast in too short a time,' he said.
Colliers International's director for research and advisory, Ms Tay Huey Ying, suggested that some buyers may prefer to wait for future launches from the recent spate of government land sales.
Jones Lang LaSalle's head of research for South-east Asia, Dr Chua Yang Liang, added: 'The 2,000-plus level is of concern as to whether it is a sustainable level of demand.'
The sovereign debt crisis unfolding in Greece threatens to bring on a contagion effect in the eurozone, which may hit the nascent recovery for the global economy.
Sentiments have thus weakened, with buyers taking a more cautious approach in the past few weeks, he said.
The market is likely to pull back to a more sustainable level of around 1,000 units per month for the rest of the year, with total volume likely to be between 13,000 and 16,000 units, Dr Chua added.
Affordability is likely to remain a concern given that projects now doing well have a lower price quantum, he said.
Ms Tay said the concentration of purchases priced up to $1,500 psf and the dip in deals priced above that level could be early signs of buyer resistance towards pricier non-landed homes.
joyceteo@sph.com.sg
BT : Hillview Terrace site up for collective sale
Business Times - 18 May 2010
Hillview Terrace site up for collective sale
(SINGAPORE) A smallish site in Hillview Terrace is up for collective sale with unanimous consent from the owners.
The site - which covers numbers 12 to 24, even numbers only - is expected to fetch almost $49 million, or $617 per sq ft per plot ratio.
A Development Charge payable, based on March 2010 rates, is estimated at $15.2 million.
Marketing agent DTZ says the property, off Hillview Avenue, is being sold through a tender that closes on June 22 at 3 pm.
The freehold site covers 4,567.5 sq metres (49,164 sq ft). According to the Master Plan 2008, it can be developed into a 10-storey condominium with a gross plot ratio of 1.92. This translates into total gross floor area of 103,835 sq ft including additional 10 per cent balcony area, or about 100 apartments averaging 900 sq ft.
Shaun Poh, DTZ's senior director for investment advisory services and auction, said: 'We expect that the property will attract developers keen to develop a boutique condominium project. In today's market, it is rare for freehold residential land of this size to be available in popular areas.
'The property's appeal also lies in its excellent location, surrounded by lush greenery of the Bukit Batok Town Park and Little Guilin.'
The sale site can be accessed through Hillview Avenue, Upper Bukit Timah Road, Dairy Farm Road, the Pan Island Expressway and the Bukit Timah Expressway.
The Bukit Batok and Bukit Gombak MRT stations are close by. The area will also be served by Hillview and Beauty World MRT stations on the Downtown Line when it starts operating in 2015.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Hillview Terrace site up for collective sale
(SINGAPORE) A smallish site in Hillview Terrace is up for collective sale with unanimous consent from the owners.
The site - which covers numbers 12 to 24, even numbers only - is expected to fetch almost $49 million, or $617 per sq ft per plot ratio.
A Development Charge payable, based on March 2010 rates, is estimated at $15.2 million.
Marketing agent DTZ says the property, off Hillview Avenue, is being sold through a tender that closes on June 22 at 3 pm.
The freehold site covers 4,567.5 sq metres (49,164 sq ft). According to the Master Plan 2008, it can be developed into a 10-storey condominium with a gross plot ratio of 1.92. This translates into total gross floor area of 103,835 sq ft including additional 10 per cent balcony area, or about 100 apartments averaging 900 sq ft.
Shaun Poh, DTZ's senior director for investment advisory services and auction, said: 'We expect that the property will attract developers keen to develop a boutique condominium project. In today's market, it is rare for freehold residential land of this size to be available in popular areas.
'The property's appeal also lies in its excellent location, surrounded by lush greenery of the Bukit Batok Town Park and Little Guilin.'
The sale site can be accessed through Hillview Avenue, Upper Bukit Timah Road, Dairy Farm Road, the Pan Island Expressway and the Bukit Timah Expressway.
The Bukit Batok and Bukit Gombak MRT stations are close by. The area will also be served by Hillview and Beauty World MRT stations on the Downtown Line when it starts operating in 2015.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
BT : Australia's weak population growth may hit rentals
Business Times - 18 May 2010
Australia's weak population growth may hit rentals
(SYDNEY) A slowdown in Australia's population growth, as long-term visitors leaving outnumber those arriving, could ease pressure on rental markets and lead to a 'relatively benign interest rate environment', BIS Shrapnel senior economist Jason Anderson said.
Population growth will slow to about 1.5 per cent in the 2011 fiscal year and to 1.3 per cent in 2012, on the exit of visitors holding student and business visas of about four years, Sydney-based Mr Anderson said in an emailed statement. Those visa holders arrived over the past three years, he said.
'Overall, a few years of weakening population growth will have some mixed effects on the economy,' Mr Anderson said. 'It will lead to more moderate growth in household spending, at a time when the income gains from the commodity cycle will already be boosting national income.'
The nation's population increased 2.1 per cent in the year to September 2009, the fastest expansion since the mid-1960s and three quarters of a percentage point quicker than the average for the past 20 years, according to the Reserve Bank of Australia.
Net migration jumped 34 per cent from a year earlier, statistics bureau data show, as a labour shortage and low unemployment pushed up the number of people coming on long-term visitor visas.
Moderate employment growth as population growth slows will result in less inflationary pressures and only two rate increases in 2011, Mr Anderson said. -- Bloomberg
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Australia's weak population growth may hit rentals
(SYDNEY) A slowdown in Australia's population growth, as long-term visitors leaving outnumber those arriving, could ease pressure on rental markets and lead to a 'relatively benign interest rate environment', BIS Shrapnel senior economist Jason Anderson said.
Population growth will slow to about 1.5 per cent in the 2011 fiscal year and to 1.3 per cent in 2012, on the exit of visitors holding student and business visas of about four years, Sydney-based Mr Anderson said in an emailed statement. Those visa holders arrived over the past three years, he said.
'Overall, a few years of weakening population growth will have some mixed effects on the economy,' Mr Anderson said. 'It will lead to more moderate growth in household spending, at a time when the income gains from the commodity cycle will already be boosting national income.'
The nation's population increased 2.1 per cent in the year to September 2009, the fastest expansion since the mid-1960s and three quarters of a percentage point quicker than the average for the past 20 years, according to the Reserve Bank of Australia.
Net migration jumped 34 per cent from a year earlier, statistics bureau data show, as a labour shortage and low unemployment pushed up the number of people coming on long-term visitor visas.
Moderate employment growth as population growth slows will result in less inflationary pressures and only two rate increases in 2011, Mr Anderson said. -- Bloomberg
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
BT : Owning home ranks above marriage in UK
Business Times - 18 May 2010
Owning home ranks above marriage in UK
(LONDON) Britons looking to buy a new home believe that owning their own property is a higher priority in life than getting married or starting a family, according to a ComRes Ltd poll.
Asked to rate the importance of home ownership, 71 per cent of those polled scored it as at least eight on a scale of 10, compared with 46 per cent for marriage and 44 per cent for having children, according to the poll, which was carried out for the UK's biggest homebuilder, Barratt Developments plc.
'These results demonstrate that the economic problems of the last three years have not diminished the huge appetite for home ownership in Britain,' Barratt chief executive officer Mark Clare said in a statement.
The polling agency surveyed 2,905 prospective homebuyers from March 19 to March 25 who registered with Barratt Homes's website in the last nine months.
Taking holidays abroad and having an active social life were at the bottom of the scale of priorities, polling 24 per cent and 27 per cent, respectively.
ComRes also conducted polls for the UK's May 6 general election and counts the Independent on Sunday newspaper, Lloyd's Banking Group plc and the British Red Cross among its clients, according to the company's website\. \-- Bloomberg
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Top priority: In the poll, 71% scored home ownership as at least eight on a scale of 10, compared with 46% for marriage and 44% for having children
Owning home ranks above marriage in UK
(LONDON) Britons looking to buy a new home believe that owning their own property is a higher priority in life than getting married or starting a family, according to a ComRes Ltd poll.
Asked to rate the importance of home ownership, 71 per cent of those polled scored it as at least eight on a scale of 10, compared with 46 per cent for marriage and 44 per cent for having children, according to the poll, which was carried out for the UK's biggest homebuilder, Barratt Developments plc.
'These results demonstrate that the economic problems of the last three years have not diminished the huge appetite for home ownership in Britain,' Barratt chief executive officer Mark Clare said in a statement.
The polling agency surveyed 2,905 prospective homebuyers from March 19 to March 25 who registered with Barratt Homes's website in the last nine months.
Taking holidays abroad and having an active social life were at the bottom of the scale of priorities, polling 24 per cent and 27 per cent, respectively.
ComRes also conducted polls for the UK's May 6 general election and counts the Independent on Sunday newspaper, Lloyd's Banking Group plc and the British Red Cross among its clients, according to the company's website\. \-- Bloomberg
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Top priority: In the poll, 71% scored home ownership as at least eight on a scale of 10, compared with 46% for marriage and 44% for having children
BT : Developers brace for muted May after active April
Business Times - 18 May 2010
Developers brace for muted May after active April
Private home sales rose 25.3%, highest monthly figure in nine months
By KALPANA RASHIWALA
(SINGAPORE) April was a good month for developers, with private homes sales surging 25.3 per cent month-on-month to a higher-than-expected 2,207 units. This is the highest monthly figure in nine months and takes the sales tally for the first four months of this year to 6,587 units, nearly 45 per cent of the figure for the whole of last year.
But far from opening the bubbly, industry players are watching how home buyers react to ongoing stock market jitters and fears about a contagion effect in Europe from Greece's problems.
Developers' sales activity is expected to fall in May as there have been few launches so far this month. But projects such as The Minton in Hougang are expected to be launched next week. Allgreen is also previewing The Cascadia at Bukit Timah this week to retail buyers, after selling 187 of the project's 536 units to two funds a few years ago.
Last week, Frasers Centrepoint began sales of Flamingo Valley at an average price of about $1,200 psf to former owners of the site as well as to some of its loyal customers, and will soft launch the freehold project this weekend.
'There'a wait-and-see approach because of Greece but the economic fundamentals of Singapore and the region like China and India are still very strong,' says Frasers Centrepoint Homes chief operating officer Cheang Kok Kheong.
Knight Frank managing director of residential services Peter Ow says another reason developers here have not been active with project launches this month is that they may not have obtained all the approvals for launch, or their showflats or promotional materials are not ready.
Once such hurdles have been cleared, developers with mass-market projects will likely proceed to launch them as 'there's demand in this segment', Mr Ow suggests.
'Those with high-end projects may be more cautious as fears of a contagion effect from the Greece crisis tend to affect this segment more,' he added.
Knight Frank's Mr Ow and DTZ's South-east Asia research head Chua Chor Hoon both reckon developers' private homes sales in May could still cross the 1,000-unit level.
Mr Ow's full-year 2010 forecast is 10,000-12,000 units and Ms Chua predicts the number will 'exceed 10,000 units'. The figure for the whole of last year was 14,688 units.
The 2,207 unit-home sales by developers in April is the second highest level since Urban Redevelopment Authority began releasing monthly developer homes sales data in June 2007. The highest sales volume was 2,772 units in July last year.
The strong sales in April were a function of the surge in launches. Developers launched a total 2,084 homes last month, up 16.4 per cent from March.
Colliers International director Tay Huey Ying observed that 82 per cent of units sold last month were in the '$1,500 psf and below' range, a higher proportion than in the preceding six months.
Besides attributing this trend to a prevalence of units launched in this price band last month, she suggests that it could be an early sign of price resistance.
Urban Redevelopment Authority's figures released yesterday show that 47 per cent or 1,044 units of the 2,207 units sold last month were in Rest of Central Region. Take-up in the location was buoyed by the successful launch of Waterbank at Dakota by UOL Group and new units released at The Interlace.
Sales in the Outside Central Region (771 units) was driven by City Developments Ltd's launch of Tree House condo at Chestnut Avenue.
Islandwide, the top three selling projects in the primary market last month were Waterbank at Dakota (573 units sold at a median price of $1,178 psf), Tree House (374 units at a median price of $835 psf) and The Interlace (144 units at $1,067 psf median price).
'In the high-end segment, 31 units of Marina Bay Suites were sold at the median price of $2,678 psf. Goodwood Residence reported 29 units sold at a median price of $2,488 psf while The Laurels sold another 22 units at $2,904 psf. At the top of the range, one unit of The Orchard Residences was sold at $4,207 psf, followed by a unit in Scotts Square at $3,670 psf and two units in (Hong Leong Holdings') Sage at Nassim Road at $3,205 psf,' says CBRE Research executive director Li Hiaw Ho.
BT understands The Orchard Residences unit sold last month was a four-bedroom apartment above the 40th level while the Scotts Square unit is a two-bedder on a low floor.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Freehold project: Frasers Centrepoint will soft launch Flamingo Valley this weekend
Developers brace for muted May after active April
Private home sales rose 25.3%, highest monthly figure in nine months
By KALPANA RASHIWALA
(SINGAPORE) April was a good month for developers, with private homes sales surging 25.3 per cent month-on-month to a higher-than-expected 2,207 units. This is the highest monthly figure in nine months and takes the sales tally for the first four months of this year to 6,587 units, nearly 45 per cent of the figure for the whole of last year.
But far from opening the bubbly, industry players are watching how home buyers react to ongoing stock market jitters and fears about a contagion effect in Europe from Greece's problems.
Developers' sales activity is expected to fall in May as there have been few launches so far this month. But projects such as The Minton in Hougang are expected to be launched next week. Allgreen is also previewing The Cascadia at Bukit Timah this week to retail buyers, after selling 187 of the project's 536 units to two funds a few years ago.
Last week, Frasers Centrepoint began sales of Flamingo Valley at an average price of about $1,200 psf to former owners of the site as well as to some of its loyal customers, and will soft launch the freehold project this weekend.
'There'a wait-and-see approach because of Greece but the economic fundamentals of Singapore and the region like China and India are still very strong,' says Frasers Centrepoint Homes chief operating officer Cheang Kok Kheong.
Knight Frank managing director of residential services Peter Ow says another reason developers here have not been active with project launches this month is that they may not have obtained all the approvals for launch, or their showflats or promotional materials are not ready.
Once such hurdles have been cleared, developers with mass-market projects will likely proceed to launch them as 'there's demand in this segment', Mr Ow suggests.
'Those with high-end projects may be more cautious as fears of a contagion effect from the Greece crisis tend to affect this segment more,' he added.
Knight Frank's Mr Ow and DTZ's South-east Asia research head Chua Chor Hoon both reckon developers' private homes sales in May could still cross the 1,000-unit level.
Mr Ow's full-year 2010 forecast is 10,000-12,000 units and Ms Chua predicts the number will 'exceed 10,000 units'. The figure for the whole of last year was 14,688 units.
The 2,207 unit-home sales by developers in April is the second highest level since Urban Redevelopment Authority began releasing monthly developer homes sales data in June 2007. The highest sales volume was 2,772 units in July last year.
The strong sales in April were a function of the surge in launches. Developers launched a total 2,084 homes last month, up 16.4 per cent from March.
Colliers International director Tay Huey Ying observed that 82 per cent of units sold last month were in the '$1,500 psf and below' range, a higher proportion than in the preceding six months.
Besides attributing this trend to a prevalence of units launched in this price band last month, she suggests that it could be an early sign of price resistance.
Urban Redevelopment Authority's figures released yesterday show that 47 per cent or 1,044 units of the 2,207 units sold last month were in Rest of Central Region. Take-up in the location was buoyed by the successful launch of Waterbank at Dakota by UOL Group and new units released at The Interlace.
Sales in the Outside Central Region (771 units) was driven by City Developments Ltd's launch of Tree House condo at Chestnut Avenue.
Islandwide, the top three selling projects in the primary market last month were Waterbank at Dakota (573 units sold at a median price of $1,178 psf), Tree House (374 units at a median price of $835 psf) and The Interlace (144 units at $1,067 psf median price).
'In the high-end segment, 31 units of Marina Bay Suites were sold at the median price of $2,678 psf. Goodwood Residence reported 29 units sold at a median price of $2,488 psf while The Laurels sold another 22 units at $2,904 psf. At the top of the range, one unit of The Orchard Residences was sold at $4,207 psf, followed by a unit in Scotts Square at $3,670 psf and two units in (Hong Leong Holdings') Sage at Nassim Road at $3,205 psf,' says CBRE Research executive director Li Hiaw Ho.
BT understands The Orchard Residences unit sold last month was a four-bedroom apartment above the 40th level while the Scotts Square unit is a two-bedder on a low floor.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Freehold project: Frasers Centrepoint will soft launch Flamingo Valley this weekend
BT : Smaller developers post strong results too
Business Times - 18 May 2010
Smaller developers post strong results too
By JAMIE LEE
SEVERAL smaller property companies followed in the footsteps of their bigger peers, posting strong results in the latest quarter ended March.
Property and hotel operator Fragrance Group posted a 42.6 per cent surge in its first-quarter net profit to $14.4 million, thanks in part to higher selling prices of its units. It registered a higher gross profit margin of 42.2 per cent, up from 23.6 per cent recorded in the same period a year ago. The increase in net profit came despite a 17.7 per cent drop in revenue to $41.8 million, dragged by lower sales in the property development division, which made up nearly 80 per cent of total revenue. It contributed $32.6 million in sales, down 23.8 per cent from a year ago, which largely came from the sale of units at 138-unit project Parc Imperial that would soon be completed. The fall in revenue was partly offset by higher sales in its hotel division under its Fragrance Hotel chain. This rose 15 per cent to $9.23 million. This month, it placed the highest bid of $16.3 million for a private residential plot along Tampines Road, or about 700m from Kovan MRT Station.
Orchard Parade Holdings - a subsidiary of Far East Organization - also posted sterling numbers. Net profit for the developer - which runs Orchard Parade Hotel - stood at $9.3 million, up from $107,000 a year ago. This was thanks to firmer sales and a fair-value gain on its investment properties, as opposed to a revaluation loss posted a year ago. Revenue more than doubled to $28.1 million from $11.7 million mainly due to sale of units of the residential project Floridian, which it is developing with Wing Tai Holdings. Revaluation of its investment properties also reaped a gain of $1.56 million, contrasting with a loss of $3.05 million a year ago.
Lee Kim Tah Holdings - which owns 50 per cent of Jurong Point Shopping Mall - said net profit for the first quarter jumped 84.5 per cent to $9.53 million, thanks to a surge in sales. The company posted a more than tripling in revenue to $40.8 million from $12.6 million a year ago, largely due to the sales from the completed residential development in Neutral Bay, Australia.
Hiap Hoe bucked the trend despite higher revenue, dragged by a slow recognition of sales from one of its residential projects. It reported a 43.5 per cent plunge in net profit to $3.9 million for Q1. Sales, however, were up 68.7 per cent to $26 million. Due to huge marketing costs for Waterscape at Cavenagh - which was launched in that quarter - the group's selling and distribution expenses surged to $6.5 million from $21,000 a year ago.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Smaller developers post strong results too
By JAMIE LEE
SEVERAL smaller property companies followed in the footsteps of their bigger peers, posting strong results in the latest quarter ended March.
Property and hotel operator Fragrance Group posted a 42.6 per cent surge in its first-quarter net profit to $14.4 million, thanks in part to higher selling prices of its units. It registered a higher gross profit margin of 42.2 per cent, up from 23.6 per cent recorded in the same period a year ago. The increase in net profit came despite a 17.7 per cent drop in revenue to $41.8 million, dragged by lower sales in the property development division, which made up nearly 80 per cent of total revenue. It contributed $32.6 million in sales, down 23.8 per cent from a year ago, which largely came from the sale of units at 138-unit project Parc Imperial that would soon be completed. The fall in revenue was partly offset by higher sales in its hotel division under its Fragrance Hotel chain. This rose 15 per cent to $9.23 million. This month, it placed the highest bid of $16.3 million for a private residential plot along Tampines Road, or about 700m from Kovan MRT Station.
Orchard Parade Holdings - a subsidiary of Far East Organization - also posted sterling numbers. Net profit for the developer - which runs Orchard Parade Hotel - stood at $9.3 million, up from $107,000 a year ago. This was thanks to firmer sales and a fair-value gain on its investment properties, as opposed to a revaluation loss posted a year ago. Revenue more than doubled to $28.1 million from $11.7 million mainly due to sale of units of the residential project Floridian, which it is developing with Wing Tai Holdings. Revaluation of its investment properties also reaped a gain of $1.56 million, contrasting with a loss of $3.05 million a year ago.
Lee Kim Tah Holdings - which owns 50 per cent of Jurong Point Shopping Mall - said net profit for the first quarter jumped 84.5 per cent to $9.53 million, thanks to a surge in sales. The company posted a more than tripling in revenue to $40.8 million from $12.6 million a year ago, largely due to the sales from the completed residential development in Neutral Bay, Australia.
Hiap Hoe bucked the trend despite higher revenue, dragged by a slow recognition of sales from one of its residential projects. It reported a 43.5 per cent plunge in net profit to $3.9 million for Q1. Sales, however, were up 68.7 per cent to $26 million. Due to huge marketing costs for Waterscape at Cavenagh - which was launched in that quarter - the group's selling and distribution expenses surged to $6.5 million from $21,000 a year ago.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
BT : Vacant homes aplenty but building goes on in Vegas
Business Times - 18 May 2010
Vacant homes aplenty but building goes on in Vegas
City trying to fuel recovery by building, which creates more jobs
(LAS VEGAS) In a plastic tent under a glorious desert sky, Richard Lee preached the gospel of the second chance.
The chance to make money on the next housing boom 'is like it's never been', Mr Lee, a real estate promoter, assured a crowd of agents, investors and bankers. 'We're going to come back like you've never seen us before.'
Home prices in Las Vegas are down by 60 per cent from 2006 in one of the steepest descents in modern times. There are 9,517 spanking new houses sitting empty. An additional 5,600 homes were repossessed by lenders in the first three months of this year and could soon be for sale.
Yet builders here are putting up 1,100 homes, and they are frantically buying lots for even more.
Las Vegas is trying to recover by building what it does not need. It is an unlikely pattern being repeated in many of the areas where the housing crash was most severe.
'There's a surprising rebound in the hardest-hit markets,' said Brad Hunter, chief economist with the consultant Metrostudy. 'People are buying again.'
From the recession's lows, construction has nearly doubled in Las Vegas, Phoenix and Tucson. It is up 74 per cent in inland Southern California and soaring in Florida.
Some of the demand is coming from families that are getting shut out of the bidding for foreclosures by syndicates that pay in cash, and some is from investors who are back on the prowl.
Land and labour costs have fallen significantly, so the newest homes are competitively priced. Some of the boom-era homes, meanwhile, are in developments that feel like ghost towns. And many Americans will always believe the latest model of something is their only option, an attitude that builders are doing their utmost to reinforce.
In Phoenix, a billboard for Fulton Homes summed up the builders' marketing approach. 'Does your foreclosure have tenants?' it asks, next to a picture of a mammoth cockroach.
Brent Anderson, a marketing executive with another Southwest builder, Meritage Homes, said that it bought 713 lots in stricken Arizona last year, and was on the verge of starting construction in a new Phoenix community called Lyon's Gate.
'We're building them because we're selling them,' Mr Anderson said. 'Our customers wouldn't care if there were 50 homes in an established neighbourhood of 1980 or 1990 vintage, all foreclosed, empty and for sale at US$10,000 less. They want new. And what are we going to do, let someone else build it?'
All of this goes contrary to conventional wisdom, which suggests an improved market for builders is years away. Nationwide, new home sales at the beginning of this year plunged to a level below any recorded since 1963, when the figures were first officially tabulated.
Simply put, the country already has too many houses, the legacy of wide-scale overbuilding during the boom. The Census Bureau says that there are two million vacant homes for sale, about double the historical level. Fewer new households, moreover, are being formed as families double up for economic reasons, putting a further brake on demand.
Even some builders agree with the pessimists when it comes to Las Vegas. Meritage Homes, for example, has largely withdrawn from the city. 'We don't think it will come back for a long time,' Mr Anderson said.
American West is betting the opposite is true. The developer, which is privately held and is based here, builds nowhere else. The evening under the tent with Mr Lee was the official start of American West's new community, called Reserve at Coronado Ranch.
Before it opened, buyers began putting down money for the houses, which sell for under US$300,000. 'For the first time in three or four years, we have pent-up demand,' said American West's vice-president for sales, Jeff Canarelli.
Disregard what you may have heard about how hard times may usher in an era of restraint. 'With our buyers, they always want bigger,' Mr Canarelli said. An American West home introduced during the recession comes equipped with an elevator.
There is a benefit to the seeming madness in places like Las Vegas. Building homes is the traditional fuel of a recovery. 'Housing is construction. It's tables. It's paint. It's couches. It's toilets,' said Sally Taylor, a specialist in liquor and gambling establishments who attended the American West festivities. 'If we build more houses, we're creating more jobs.'
Across the street from Reserve's three model homes is a new strip mall. Only one building is occupied, a gambling parlour. Others will start to be filled when more buyers join Snider and Hallman finds a renter.
Analysts have calculated that it could take as long as a decade for inventories to return to their pre-crash levels and for demand to once again exceed supply. That is a grim prospect for any owner who hopes to accrue equity through rising prices.
A few experts, however, are starting to think the path to a better market will be much shorter. Stephen Auth, chief investment officer at financial services company Federated Investors, is a housing bull.
He says he does not believe that many extended families will end up all living in one place.
'That's an unsustainable environment - Grandma coming home, Johnny moving back in with his new wife,' Mr Auth said. 'They're going to move back out. The great housing depression is nearly over.'
New-home sales in March rose 27 per cent. But most analysts attributed the jump to the pending expiration of yet another government incentive, a tax credit for buyers, and said that sales would quickly slump again. -- NYT
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
No takers: Bank-owned homes in the Silverado neighbourhood of Las Vegas. The US has too many houses, the legacy of wide-scale overbuilding during the boom
Vacant homes aplenty but building goes on in Vegas
City trying to fuel recovery by building, which creates more jobs
(LAS VEGAS) In a plastic tent under a glorious desert sky, Richard Lee preached the gospel of the second chance.
The chance to make money on the next housing boom 'is like it's never been', Mr Lee, a real estate promoter, assured a crowd of agents, investors and bankers. 'We're going to come back like you've never seen us before.'
Home prices in Las Vegas are down by 60 per cent from 2006 in one of the steepest descents in modern times. There are 9,517 spanking new houses sitting empty. An additional 5,600 homes were repossessed by lenders in the first three months of this year and could soon be for sale.
Yet builders here are putting up 1,100 homes, and they are frantically buying lots for even more.
Las Vegas is trying to recover by building what it does not need. It is an unlikely pattern being repeated in many of the areas where the housing crash was most severe.
'There's a surprising rebound in the hardest-hit markets,' said Brad Hunter, chief economist with the consultant Metrostudy. 'People are buying again.'
From the recession's lows, construction has nearly doubled in Las Vegas, Phoenix and Tucson. It is up 74 per cent in inland Southern California and soaring in Florida.
Some of the demand is coming from families that are getting shut out of the bidding for foreclosures by syndicates that pay in cash, and some is from investors who are back on the prowl.
Land and labour costs have fallen significantly, so the newest homes are competitively priced. Some of the boom-era homes, meanwhile, are in developments that feel like ghost towns. And many Americans will always believe the latest model of something is their only option, an attitude that builders are doing their utmost to reinforce.
In Phoenix, a billboard for Fulton Homes summed up the builders' marketing approach. 'Does your foreclosure have tenants?' it asks, next to a picture of a mammoth cockroach.
Brent Anderson, a marketing executive with another Southwest builder, Meritage Homes, said that it bought 713 lots in stricken Arizona last year, and was on the verge of starting construction in a new Phoenix community called Lyon's Gate.
'We're building them because we're selling them,' Mr Anderson said. 'Our customers wouldn't care if there were 50 homes in an established neighbourhood of 1980 or 1990 vintage, all foreclosed, empty and for sale at US$10,000 less. They want new. And what are we going to do, let someone else build it?'
All of this goes contrary to conventional wisdom, which suggests an improved market for builders is years away. Nationwide, new home sales at the beginning of this year plunged to a level below any recorded since 1963, when the figures were first officially tabulated.
Simply put, the country already has too many houses, the legacy of wide-scale overbuilding during the boom. The Census Bureau says that there are two million vacant homes for sale, about double the historical level. Fewer new households, moreover, are being formed as families double up for economic reasons, putting a further brake on demand.
Even some builders agree with the pessimists when it comes to Las Vegas. Meritage Homes, for example, has largely withdrawn from the city. 'We don't think it will come back for a long time,' Mr Anderson said.
American West is betting the opposite is true. The developer, which is privately held and is based here, builds nowhere else. The evening under the tent with Mr Lee was the official start of American West's new community, called Reserve at Coronado Ranch.
Before it opened, buyers began putting down money for the houses, which sell for under US$300,000. 'For the first time in three or four years, we have pent-up demand,' said American West's vice-president for sales, Jeff Canarelli.
Disregard what you may have heard about how hard times may usher in an era of restraint. 'With our buyers, they always want bigger,' Mr Canarelli said. An American West home introduced during the recession comes equipped with an elevator.
There is a benefit to the seeming madness in places like Las Vegas. Building homes is the traditional fuel of a recovery. 'Housing is construction. It's tables. It's paint. It's couches. It's toilets,' said Sally Taylor, a specialist in liquor and gambling establishments who attended the American West festivities. 'If we build more houses, we're creating more jobs.'
Across the street from Reserve's three model homes is a new strip mall. Only one building is occupied, a gambling parlour. Others will start to be filled when more buyers join Snider and Hallman finds a renter.
Analysts have calculated that it could take as long as a decade for inventories to return to their pre-crash levels and for demand to once again exceed supply. That is a grim prospect for any owner who hopes to accrue equity through rising prices.
A few experts, however, are starting to think the path to a better market will be much shorter. Stephen Auth, chief investment officer at financial services company Federated Investors, is a housing bull.
He says he does not believe that many extended families will end up all living in one place.
'That's an unsustainable environment - Grandma coming home, Johnny moving back in with his new wife,' Mr Auth said. 'They're going to move back out. The great housing depression is nearly over.'
New-home sales in March rose 27 per cent. But most analysts attributed the jump to the pending expiration of yet another government incentive, a tax credit for buyers, and said that sales would quickly slump again. -- NYT
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
No takers: Bank-owned homes in the Silverado neighbourhood of Las Vegas. The US has too many houses, the legacy of wide-scale overbuilding during the boom
BT : Bringing bids in govt residential land tenders down to earth
Business Times - 18 May 2010
NEWS ANALYSIS
Bringing bids in govt residential land tenders down to earth
To encourage more rational bids and impose greater discipline on developers, close tenders for several sites at the same time, suggests KALPANA RASHIWALA
GOVERNMENT land tenders for private residential land are seeing an anomaly of sorts. As the state launches more sites, land keeps getting sold at higher prices with each successive tender closing.
Behind this is a short-term supply crunch created by the low volume of suburban housing land released and bought at state tenders over the past few years vis-a-vis strong home buying demand since last year. (Please see supply chart from Credo Real Estate.)
Some market observers suggest the escalation in winning bids is also being caused by the current system of tender closings, with just one site offered per tender. What's happening now is that each time a tender closes for a site and it attracts say 14 bids, only one party clinches the plot and some of the other 13 unsuccessful bidders go back and sharpen their pencils for the next tender, pushing up land bids with each consecutive tender.
Nudging developers to rationality
Perhaps tweaking tender closings could nudge developers to make more rational bids.
Rather than having one tender closing for a single site at a time, the authorities could try reverting to the system we had in 1997, for instance, when tenders for several sites (up to five) closed at the same time. This may impose greater discipline on developers when formulating their bids as there is a danger of them ending up with all the sites on offer if they bid too aggressively for everything. They'll have to narrow down which plot they really want.
'The current system of a tender closing for one site at a time, if it's having the effect of sites being awarded at successively higher prices, does help the state to maximise land revenues. But government then can't complain if the finished product prices are higher,' said a developer.
The current surge in top bids at state tenders, if read by government as a sign of strong demand for land, would prompt it to step up supply. However, if the market suddenly turns, this could potentially create a massive oversupply in the mass-market private housing segment (for which state land sales is the major source of supply).
For now at least, an increase in state land supply for private housing in H2 2010 is a foregone conclusion. Strong housing sales, rising end-unit prices and bullish top bids for state land sales amid high participation rates by developers are all creating the impetus for government to release more land as well as a greater variety of sites to try and contain a housing bubble.
The trick for the government will be in gauging just how much it needs to boost supply. This will entail taking into account a host of factors including intake of new permanent residents/citizens, while managing supply-side risks that could emanate if the market suddenly turns, given that there is increasing danger of this happening as prices continue to surge.
According to one school of thought, there's actually enough supply right now.
As at the end of Q1 this year, there were 34,233 private homes (including exec condos) that had yet to be sold in projects with planning approval.
Land sold by the state so far this year as well as sites whose tenders are scheduled to close in May and June can yield a further 6,270 private homes. Adding this figure to the 34,233 units, the total supply of 40,503 units could be sufficient to last three to four years, depending on demand.
It is notewothy that the 40,503-unit supply number is not far off from the recent peak of 43,414 units in Q4 2008 when sentiment in the property market plummeted following the collapse of Lehman Brothers. The lowest the supply number has been is 29,754 units - in Q4 2005.
Faster turnaround
Another trend these days is the relatively quick turnaround time between a developer clinching a site at a state tender and launching a project on it. UOL Group managed to release its Waterbank at Dakota condo in April, just seven months after it was awarded the plot.
It makes sense for developers to launch projects quickly on pricey sites to recoup their investments quickly. The idea is to catch the market while it's still hot. Such a strategy alleviates risks for developers and also allows them to cater to strong demand from home buyers. However, this may also introduce a surge in launches of mass-market projects that could precipitate a market turn in this segment.
So there's a case for government adopting a measured approach in land sales for H2 2010.
Let's look at the other side of the coin.
While the supply of 40,503 units seems ample for now, this number can be whittled down quite quickly if home sales continue to be strong. Already in the first four months of this year, developers sold 6,587 homes and industry forecasts of full-year sales are at about 10,000 to 14,000 units - supported by low interest rates, improving economic outlook and keen interest by foreign buyers in the local property market.
Developers may also not be willing to release everything in their landbank anytime soon. Those with substantial supply in a single location would want to stagger the launch of projects over several phases to maximise selling prices. There are also many projects on sites acquired at peakish prices and whose developers are banking on further price appreciation before launching them. Most developers have the financial muscle for such a strategy.
With developers tending to hold back some projects in their landbanks, there is a role for the state to inject further supply.
One could ask how strong demand really is. Yes there is a lot of genuine buying, from upgraders and others, driven by low interest rates and other factors. But there is also anecdotal evidence of people who are buying second, third or more 'investment' properties with a view to making quick gains. They may not be bothered if rents come down. Then there are foreign buyers, an important source of demand especially in the high end but who can vaporise overnight when things become uncertain as seen during the recent global financial crisis.
With economic and property cycles shrinking, assessing how much land to release is hardly a cut-and-dried affair. And that's not even counting the political and social dimensions of this issue, such as balancing the needs of younger citizens who lament that property prices are beyond reach with potential negative equity pressures that some home owners could face from banks if the values of their homes drop.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
The supply factor: Strong housing sales, rising end-unit prices and bullish top bids for state land sales amid high participation rates by developers are all creating the impetus for govt to release more land to try and contain a housing bubble
NEWS ANALYSIS
Bringing bids in govt residential land tenders down to earth
To encourage more rational bids and impose greater discipline on developers, close tenders for several sites at the same time, suggests KALPANA RASHIWALA
GOVERNMENT land tenders for private residential land are seeing an anomaly of sorts. As the state launches more sites, land keeps getting sold at higher prices with each successive tender closing.
Behind this is a short-term supply crunch created by the low volume of suburban housing land released and bought at state tenders over the past few years vis-a-vis strong home buying demand since last year. (Please see supply chart from Credo Real Estate.)
Some market observers suggest the escalation in winning bids is also being caused by the current system of tender closings, with just one site offered per tender. What's happening now is that each time a tender closes for a site and it attracts say 14 bids, only one party clinches the plot and some of the other 13 unsuccessful bidders go back and sharpen their pencils for the next tender, pushing up land bids with each consecutive tender.
Nudging developers to rationality
Perhaps tweaking tender closings could nudge developers to make more rational bids.
Rather than having one tender closing for a single site at a time, the authorities could try reverting to the system we had in 1997, for instance, when tenders for several sites (up to five) closed at the same time. This may impose greater discipline on developers when formulating their bids as there is a danger of them ending up with all the sites on offer if they bid too aggressively for everything. They'll have to narrow down which plot they really want.
'The current system of a tender closing for one site at a time, if it's having the effect of sites being awarded at successively higher prices, does help the state to maximise land revenues. But government then can't complain if the finished product prices are higher,' said a developer.
The current surge in top bids at state tenders, if read by government as a sign of strong demand for land, would prompt it to step up supply. However, if the market suddenly turns, this could potentially create a massive oversupply in the mass-market private housing segment (for which state land sales is the major source of supply).
For now at least, an increase in state land supply for private housing in H2 2010 is a foregone conclusion. Strong housing sales, rising end-unit prices and bullish top bids for state land sales amid high participation rates by developers are all creating the impetus for government to release more land as well as a greater variety of sites to try and contain a housing bubble.
The trick for the government will be in gauging just how much it needs to boost supply. This will entail taking into account a host of factors including intake of new permanent residents/citizens, while managing supply-side risks that could emanate if the market suddenly turns, given that there is increasing danger of this happening as prices continue to surge.
According to one school of thought, there's actually enough supply right now.
As at the end of Q1 this year, there were 34,233 private homes (including exec condos) that had yet to be sold in projects with planning approval.
Land sold by the state so far this year as well as sites whose tenders are scheduled to close in May and June can yield a further 6,270 private homes. Adding this figure to the 34,233 units, the total supply of 40,503 units could be sufficient to last three to four years, depending on demand.
It is notewothy that the 40,503-unit supply number is not far off from the recent peak of 43,414 units in Q4 2008 when sentiment in the property market plummeted following the collapse of Lehman Brothers. The lowest the supply number has been is 29,754 units - in Q4 2005.
Faster turnaround
Another trend these days is the relatively quick turnaround time between a developer clinching a site at a state tender and launching a project on it. UOL Group managed to release its Waterbank at Dakota condo in April, just seven months after it was awarded the plot.
It makes sense for developers to launch projects quickly on pricey sites to recoup their investments quickly. The idea is to catch the market while it's still hot. Such a strategy alleviates risks for developers and also allows them to cater to strong demand from home buyers. However, this may also introduce a surge in launches of mass-market projects that could precipitate a market turn in this segment.
So there's a case for government adopting a measured approach in land sales for H2 2010.
Let's look at the other side of the coin.
While the supply of 40,503 units seems ample for now, this number can be whittled down quite quickly if home sales continue to be strong. Already in the first four months of this year, developers sold 6,587 homes and industry forecasts of full-year sales are at about 10,000 to 14,000 units - supported by low interest rates, improving economic outlook and keen interest by foreign buyers in the local property market.
Developers may also not be willing to release everything in their landbank anytime soon. Those with substantial supply in a single location would want to stagger the launch of projects over several phases to maximise selling prices. There are also many projects on sites acquired at peakish prices and whose developers are banking on further price appreciation before launching them. Most developers have the financial muscle for such a strategy.
With developers tending to hold back some projects in their landbanks, there is a role for the state to inject further supply.
One could ask how strong demand really is. Yes there is a lot of genuine buying, from upgraders and others, driven by low interest rates and other factors. But there is also anecdotal evidence of people who are buying second, third or more 'investment' properties with a view to making quick gains. They may not be bothered if rents come down. Then there are foreign buyers, an important source of demand especially in the high end but who can vaporise overnight when things become uncertain as seen during the recent global financial crisis.
With economic and property cycles shrinking, assessing how much land to release is hardly a cut-and-dried affair. And that's not even counting the political and social dimensions of this issue, such as balancing the needs of younger citizens who lament that property prices are beyond reach with potential negative equity pressures that some home owners could face from banks if the values of their homes drop.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
The supply factor: Strong housing sales, rising end-unit prices and bullish top bids for state land sales amid high participation rates by developers are all creating the impetus for govt to release more land to try and contain a housing bubble
ST Forum : Do your checks before investing in land abroad
May 17, 2010
Do your checks before investing in land abroad
I REFER to last Friday's report, '200 lose $6m in British land deals', which revealed that 200 persons have, at various times since 2006, purchased plots of land in rural places like Swindon and Gatwick in Britain through Land International (Far East), a Singapore company which is the subsidiary of parent Land International, shut down by the British government in 2008.
These 200 persons had been promised high returns with regular payouts for three years.
Singapore investors may wish to know that Britain's Land Registry published a guide in 2008 on 'land banking schemes' to alert the public on schemes often touted as offering huge returns on investment. Apparently, land sold in such schemes is usually in areas protected from development by planning law - that is, land in the 'green belt' or agricultural land where no development is ever likely to be permitted.
According to the guide, known in short as Public21, such land is first acquired at a low price and divided into smaller plots. The plots are then offered for sale (even online) to the public on the premise that when planning permission is secured in the future for the site for housing, the plots will be more valuable. Potential investors may be misled about the prospects of obtaining planning permission or redevelopment and this in turn may lead them into thinking that they will have the opportunity to sell the plots at even greater profit to developers in the future.
The guide mentions that those operating land banking schemes often claim that they have well-known banks, other lending institutions and established developers as their partners in the schemes when this may not be the case. In some extreme cases, forged Land Registry letters have been produced to suggest that there is official Land Registry planning approval.
Singapore investors keen on land in Britain should at least peruse such a guide, and make inquiries with the Land Registry or a credible international property firm based in Singapore with overseas networks in those countries of interest to them. Singapore Accredited Estate Agencies agrees with the Consumers Association of Singapore that due diligence and background checks of both the locally registered land banking company and its parent or counterpart in the country of origin must be stringent before investors part with their monies.
Dr Tan Tee Khoon
Chief Executive Officer
Singapore Accredited Estate Agencies
Do your checks before investing in land abroad
I REFER to last Friday's report, '200 lose $6m in British land deals', which revealed that 200 persons have, at various times since 2006, purchased plots of land in rural places like Swindon and Gatwick in Britain through Land International (Far East), a Singapore company which is the subsidiary of parent Land International, shut down by the British government in 2008.
These 200 persons had been promised high returns with regular payouts for three years.
Singapore investors may wish to know that Britain's Land Registry published a guide in 2008 on 'land banking schemes' to alert the public on schemes often touted as offering huge returns on investment. Apparently, land sold in such schemes is usually in areas protected from development by planning law - that is, land in the 'green belt' or agricultural land where no development is ever likely to be permitted.
According to the guide, known in short as Public21, such land is first acquired at a low price and divided into smaller plots. The plots are then offered for sale (even online) to the public on the premise that when planning permission is secured in the future for the site for housing, the plots will be more valuable. Potential investors may be misled about the prospects of obtaining planning permission or redevelopment and this in turn may lead them into thinking that they will have the opportunity to sell the plots at even greater profit to developers in the future.
The guide mentions that those operating land banking schemes often claim that they have well-known banks, other lending institutions and established developers as their partners in the schemes when this may not be the case. In some extreme cases, forged Land Registry letters have been produced to suggest that there is official Land Registry planning approval.
Singapore investors keen on land in Britain should at least peruse such a guide, and make inquiries with the Land Registry or a credible international property firm based in Singapore with overseas networks in those countries of interest to them. Singapore Accredited Estate Agencies agrees with the Consumers Association of Singapore that due diligence and background checks of both the locally registered land banking company and its parent or counterpart in the country of origin must be stringent before investors part with their monies.
Dr Tan Tee Khoon
Chief Executive Officer
Singapore Accredited Estate Agencies
ST : 2010 still likely a banner year for private property
May 17, 2010
DESPITE SLOWDOWN...
2010 still likely a banner year for private property
Number of new homes sold in 1st quarter suggests return to near boom levels
By Joyce Teo
THE private homes market has slowed in the past fortnight but experts feel 2010 will still emerge as a banner year for the sector.
They say sales of new private homes will come close to matching levels seen in the boom days of 2007, but transaction values are likely to be higher given the rise in prices.
According to a report by consultant CB Richard Ellis (CBRE), the total value of new home sales this year is expected to reach a level between the $16.22 billion transacted in 2007 and the $23.52 billion recorded last year.
CBRE's executive director for residential properties, Mr Joseph Tan, said in the report that the residential market at the start of this year reflected 'a follow-through of the momentum begun last year'.
The numbers so far certainly point to a similar boom-time result.
Developers sold 4,380 new homes - landed and non-landed - in the first quarter. That suggests momentum for similar full-year transactions of around 14,000 achieved last year and in 2007, the report said.
A record was set in 2007 when 14,811 new private homes were sold, although 2009 came close with 14,688 changing hands.
Mr Tan noted: 'Prices are generally higher in 2010, with demand remaining robust. Thus, the total value at the end of the year should be higher than that in 2009.'
In the first three months of this year, caveats lodged in the primary market accounted for about $4.2 billion, or 26 per cent, of last year's total transaction value, said CBRE.
'On a like-for-like basis, if we sold the same number of units or even slightly fewer this year, the value would still be higher than that seen last year,' Mr Tan said.
The slowdown in recent weeks could just be the market taking a breather, say experts.
'In every cycle, there are some hitches and hurdles. We have been on a smooth ride and now we have hit a bump. But we are not even a month into the situation,' said Mr Tan.
More people have turned cautious because of fears over a possible fallout from the Greek debt crisis, though there were already signs of slowing last month, said DTZ head of South-east Asia research Chua Chor Hoon.
That was when the resale market began to quieten, though new launches were still taking place and doing fairly well in general.
Waterbank at Dakota, for instance, saw strong demand last month when it was released for sale and, now, only a handful of units are left at the 99-year leasehold, 616-unit condo.
But there have been no new launches to excite people so far this month, said Ms Chua, although some are being held over the coming weeks.
Property developers have also been busy since March marketing projects overseas, mostly those launched in the past year that still have a significant amount of unsold units.
'When the market was active last year, there was hardly any time to do overseas exhibitions,' said Mr Tan.
Still, property experts say it is too soon to tell if the market is really hitting the brakes.
'It's early days. The quietness may just be a knee-jerk reaction. We are still getting quite good inquiries on suburban projects, so it all boils down to pricing,' Mr Tan told The Straits Times.
'There is enough support from the upgraders' market itself. If sales don't hit the level we predicted, they may still reach 12,000 units. I don't see them falling below 10,000 units.'
Ms Chua concurred: 'The economy is growing. Unless there are major shocks, the property market should do fairly well this year. Sales (of new homes) could easily reach 10,000 units - which already exceeds the yearly average of around 9,000 units over the past 10 years.'
An industry source who declined to be named said the market seemed to have slowed because developers were not ready to launch their projects.
'Either their brochures or their showflats weren't ready. Or they hadn't got all the planning approvals,' he said. But condo previews were to start again the past weekend, with Flamingo Valley, he noted.
Volumes are unlikely to exceed levels seen last year as prices have since risen and some buyer resistance would have set in, he added.
But transaction values should rise as most of the upcoming launches will be in the mid- to high-tier segment.
Apart from Flamingo Valley in Siglap, new condo releases expected this month include The Cascadia in Bukit Timah and The Minton in Hougang. Waterfront Gold at Bedok Reservoir and Grangeford in Orchard may be released late this month or next month.
The 1,145-unit Minton, with an indicative pricing of around $900 per sq ft, is the only mass-market project on the launch pad.
joyceteo@sph.com.sg
DESPITE SLOWDOWN...
2010 still likely a banner year for private property
Number of new homes sold in 1st quarter suggests return to near boom levels
By Joyce Teo
THE private homes market has slowed in the past fortnight but experts feel 2010 will still emerge as a banner year for the sector.
They say sales of new private homes will come close to matching levels seen in the boom days of 2007, but transaction values are likely to be higher given the rise in prices.
According to a report by consultant CB Richard Ellis (CBRE), the total value of new home sales this year is expected to reach a level between the $16.22 billion transacted in 2007 and the $23.52 billion recorded last year.
CBRE's executive director for residential properties, Mr Joseph Tan, said in the report that the residential market at the start of this year reflected 'a follow-through of the momentum begun last year'.
The numbers so far certainly point to a similar boom-time result.
Developers sold 4,380 new homes - landed and non-landed - in the first quarter. That suggests momentum for similar full-year transactions of around 14,000 achieved last year and in 2007, the report said.
A record was set in 2007 when 14,811 new private homes were sold, although 2009 came close with 14,688 changing hands.
Mr Tan noted: 'Prices are generally higher in 2010, with demand remaining robust. Thus, the total value at the end of the year should be higher than that in 2009.'
In the first three months of this year, caveats lodged in the primary market accounted for about $4.2 billion, or 26 per cent, of last year's total transaction value, said CBRE.
'On a like-for-like basis, if we sold the same number of units or even slightly fewer this year, the value would still be higher than that seen last year,' Mr Tan said.
The slowdown in recent weeks could just be the market taking a breather, say experts.
'In every cycle, there are some hitches and hurdles. We have been on a smooth ride and now we have hit a bump. But we are not even a month into the situation,' said Mr Tan.
More people have turned cautious because of fears over a possible fallout from the Greek debt crisis, though there were already signs of slowing last month, said DTZ head of South-east Asia research Chua Chor Hoon.
That was when the resale market began to quieten, though new launches were still taking place and doing fairly well in general.
Waterbank at Dakota, for instance, saw strong demand last month when it was released for sale and, now, only a handful of units are left at the 99-year leasehold, 616-unit condo.
But there have been no new launches to excite people so far this month, said Ms Chua, although some are being held over the coming weeks.
Property developers have also been busy since March marketing projects overseas, mostly those launched in the past year that still have a significant amount of unsold units.
'When the market was active last year, there was hardly any time to do overseas exhibitions,' said Mr Tan.
Still, property experts say it is too soon to tell if the market is really hitting the brakes.
'It's early days. The quietness may just be a knee-jerk reaction. We are still getting quite good inquiries on suburban projects, so it all boils down to pricing,' Mr Tan told The Straits Times.
'There is enough support from the upgraders' market itself. If sales don't hit the level we predicted, they may still reach 12,000 units. I don't see them falling below 10,000 units.'
Ms Chua concurred: 'The economy is growing. Unless there are major shocks, the property market should do fairly well this year. Sales (of new homes) could easily reach 10,000 units - which already exceeds the yearly average of around 9,000 units over the past 10 years.'
An industry source who declined to be named said the market seemed to have slowed because developers were not ready to launch their projects.
'Either their brochures or their showflats weren't ready. Or they hadn't got all the planning approvals,' he said. But condo previews were to start again the past weekend, with Flamingo Valley, he noted.
Volumes are unlikely to exceed levels seen last year as prices have since risen and some buyer resistance would have set in, he added.
But transaction values should rise as most of the upcoming launches will be in the mid- to high-tier segment.
Apart from Flamingo Valley in Siglap, new condo releases expected this month include The Cascadia in Bukit Timah and The Minton in Hougang. Waterfront Gold at Bedok Reservoir and Grangeford in Orchard may be released late this month or next month.
The 1,145-unit Minton, with an indicative pricing of around $900 per sq ft, is the only mass-market project on the launch pad.
joyceteo@sph.com.sg
BT : Homebuyers reeling from Beijing property measures
Business Times - 17 May 2010
Homebuyers reeling from Beijing property measures
One such measure is barring people who have not paid taxes
(BEIJING) Accountant Jiao Yurong carefully organised her family's finances to put her son through university in the United States.
Now that he has the coveted degree, she has been saving to buy him a flat.
But soaring property prices in China - and a series of moves by the government to rein them in - are throwing a spanner in the 50-year-old mother's plans, and she admits she does not know how to proceed. 'Just when we had saved enough for a down payment, prices surged,' Ms Jiao, a Beijing resident, told AFP.
'The policy is so unstable . . . I'm so confused.' Ms Jiao is not alone. Prospective home buyers are reeling from a series of measures put in place by the Chinese government to curb rocketing prices amid persistent fears about a ballooning bubble in the real estate sector.
Authorities have tightened restrictions nationwide on advance sales of new property developments, introduced new curbs on loans for third home purchases and raised minimum down payments for second homes.
The Beijing city government has gone even further, limiting families to one new apartment purchase and barring people who have not paid taxes or made social security contributions in the city for one year from getting home loans. 'Sellers have started to lower the prices,' said Hu Jinghui, vice-general manager of 5i5j, a real estate agency chain that has around 600 outlets in eight cities across China. 'But the buyers are still waiting.'
At the Beijing Real Estate Expo last month, the average price of a new apartment in the city was around 21,164 yuan (S$4,302.7) per square metre, double that of last year, state media said. That means a 90-square-metre apartment in Beijing would cost 1.9 million yuan, compared with the average per capita income of 26,738 yuan in 2009.
Since the capital put in place austerity measures on April 30, prices have dropped an average 10-15 per cent, with the number of home purchases slumping by 50 per cent, according to Mr Hu.
Jack Guan, a securities firm executive from the coastal city of Qingdao, searched last year on the outskirts of Beijing for his first home, but said he could not make a deal as prices 'went insane'.
'I am going to wait and see. I think this is an approach that many people have adopted as now there is a possibility for a price cut,' said the 27-year-old. 'It will not cost me much if I wait for another two years.'
In 2008, China also introduced a range of policies to dampen the market frenzy, but a government stimulus package to prop up the economy during the financial crisis quickly negated any progress made.
The new measures so far seemed to have had a limited effect, as official data showed last Tuesday that prices in major Chinese cities rose 12.8 per cent in April, a double-digit rise for the third straight month.
Analysts also said the rules contained apparent loopholes that could be exploited by speculators.
China lacks a nationwide database on property sales, which means banks have no way of checking if mortgage applicants already own apartments in other cities. And higher down payments will have little impact on speculators who mostly pay the full value of properties in cash.
State media reported last Friday that people are even briefly resorting to divorce to acquire a second property, taking advantage of lower down payment and interest rate benefits offered to first-time buyers before remarrying.
Ms Jiao said she was often told the properties she was interested in were sold out, leading her to suspect the developers were hoarding to keep prices high.
'The government has always been saying they would keep the policy unchanged. But they changed it whenever they wanted. We ordinary people just cannot do anything,' she said.
Mr Hu however, said he believed the government was more determined this time around to hold firm, as prices had become so out of reach for many ordinary Chinese that the measures were needed to keep a lid on social discontent.
Lina Wong, managing director for east and south-west China of real estate firm Colliers International, said even more tough measures could be expected as curbing price rises had become a 'political task' for the ruling Communists. -- AFP
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Homebuyers reeling from Beijing property measures
One such measure is barring people who have not paid taxes
(BEIJING) Accountant Jiao Yurong carefully organised her family's finances to put her son through university in the United States.
Now that he has the coveted degree, she has been saving to buy him a flat.
But soaring property prices in China - and a series of moves by the government to rein them in - are throwing a spanner in the 50-year-old mother's plans, and she admits she does not know how to proceed. 'Just when we had saved enough for a down payment, prices surged,' Ms Jiao, a Beijing resident, told AFP.
'The policy is so unstable . . . I'm so confused.' Ms Jiao is not alone. Prospective home buyers are reeling from a series of measures put in place by the Chinese government to curb rocketing prices amid persistent fears about a ballooning bubble in the real estate sector.
Authorities have tightened restrictions nationwide on advance sales of new property developments, introduced new curbs on loans for third home purchases and raised minimum down payments for second homes.
The Beijing city government has gone even further, limiting families to one new apartment purchase and barring people who have not paid taxes or made social security contributions in the city for one year from getting home loans. 'Sellers have started to lower the prices,' said Hu Jinghui, vice-general manager of 5i5j, a real estate agency chain that has around 600 outlets in eight cities across China. 'But the buyers are still waiting.'
At the Beijing Real Estate Expo last month, the average price of a new apartment in the city was around 21,164 yuan (S$4,302.7) per square metre, double that of last year, state media said. That means a 90-square-metre apartment in Beijing would cost 1.9 million yuan, compared with the average per capita income of 26,738 yuan in 2009.
Since the capital put in place austerity measures on April 30, prices have dropped an average 10-15 per cent, with the number of home purchases slumping by 50 per cent, according to Mr Hu.
Jack Guan, a securities firm executive from the coastal city of Qingdao, searched last year on the outskirts of Beijing for his first home, but said he could not make a deal as prices 'went insane'.
'I am going to wait and see. I think this is an approach that many people have adopted as now there is a possibility for a price cut,' said the 27-year-old. 'It will not cost me much if I wait for another two years.'
In 2008, China also introduced a range of policies to dampen the market frenzy, but a government stimulus package to prop up the economy during the financial crisis quickly negated any progress made.
The new measures so far seemed to have had a limited effect, as official data showed last Tuesday that prices in major Chinese cities rose 12.8 per cent in April, a double-digit rise for the third straight month.
Analysts also said the rules contained apparent loopholes that could be exploited by speculators.
China lacks a nationwide database on property sales, which means banks have no way of checking if mortgage applicants already own apartments in other cities. And higher down payments will have little impact on speculators who mostly pay the full value of properties in cash.
State media reported last Friday that people are even briefly resorting to divorce to acquire a second property, taking advantage of lower down payment and interest rate benefits offered to first-time buyers before remarrying.
Ms Jiao said she was often told the properties she was interested in were sold out, leading her to suspect the developers were hoarding to keep prices high.
'The government has always been saying they would keep the policy unchanged. But they changed it whenever they wanted. We ordinary people just cannot do anything,' she said.
Mr Hu however, said he believed the government was more determined this time around to hold firm, as prices had become so out of reach for many ordinary Chinese that the measures were needed to keep a lid on social discontent.
Lina Wong, managing director for east and south-west China of real estate firm Colliers International, said even more tough measures could be expected as curbing price rises had become a 'political task' for the ruling Communists. -- AFP
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
ST : Suburban condo plots are red-hot
May 16, 2010
Suburban condo plots are red-hot
Developers and buyers are keenly eyeing heartland condos, possibly pushing prices to $1,000 psf again
By Joyce Teo
Can condos and HDB flats co-exist happily?
Property developers certainly think so, going by their high bids for state land for private housing, even if the plots are smack in the middle of an HDB estate.
Going by recent tender results, developers have no qualms paying a lot more, if the sites in these established or up-and-coming HDB estates are near MRT stations. Just last week, a tender for a plot in Simei Street 3 closed with an impressive 18 bids. Chip Eng Seng topped all rivals with an offer of $523 per sq ft (psf) per plot ratio.
This means, at that price, Singapore will likely see another suburban condo selling at or near the $1,000 psf mark, previously thought to be a resistance level.
Property experts said a key attraction of the Simei site - in the middle of an HDB estate - is its proximity to an MRT station and amenities. The land is just across the road from Simei MRT station and Eastpoint Mall.
'Actually, land next to MRT stations has always commanded higher prices than those that are not,' said Mr Nicholas Mak, a real estate lecturer at Ngee Ann Polytechnic. He said there were few attractive private sites for sale in the past 15 months. This is why many developers are competing hard in the Government's land sales tenders.
Said DTZ's head of South-east Asia research, Ms Chua Chor Hoon: 'Developers need to have a portfolio of sites to continually develop to maintain operations. So those with a smaller land bank would bid more aggressively to secure sites.' Also, developers are scrambling for suburban land because there is money to be made. Sales of mass market homes have remained strong since February last year, Mr Mak said.
Mass market launches, such as Caspian in Jurong, Double Bay Residences in Simei, Optima @ Tanah Merah and Trevista in Toa Payoh, met with strong demand last year. At Trevista, some units were sold for more than $1,000 psf.
'Rising prices of new mass market launches give confidence to developers to bid higher for government sites, especially attractive ones,' he added. Hence, the fact that the plot is located within an HDB estate is not a disadvantage when the market is hot.
This was not so in the 1980s to perhaps the early 1990s, when buyers did not see living in a condo in an HDB estate as moving up the social ladder.
'In the past, HDB estates were not as nice and HDB prices were low. People were not too happy to be too near them, if they could afford a private property,' said a property expert.
Ms Chua concurred: 'People weren't keen to buy a private condo next to an HDB estate unless it was priced low.' So, when a developer tries to test the market by launching a project that is not priced as low as expected, there would be 'disbelief and some resistance', she said. 'When the second one is launched, and there's good demand, then it becomes more accepted. That's how new trends start,' she added.
Times have changed. Old HDB estates have been spruced up or had some blocks torn down for rebuilding, while new HDB estates have more whistles and bells, experts said. HDB flats are in hot demand these days, with resale prices at record highs. HDB data showed that resale prices rose 2.8 per cent in the first quarter over the previous one, lifting it to yet another high.
Those living in upper-mid to high-end projects will still prefer more exclusive sites, experts said. But if they are buying and eyeing the rental market, a condo in an HDB estate brings attributes that tenants want. 'There are more expats employed on local terms, with less generous housing budgets. They usually have no cars and thus prefer to stay near MRT stations,' said Mr Mak.
joyceteo@sph.com.sg
Suburban condo plots are red-hot
Developers and buyers are keenly eyeing heartland condos, possibly pushing prices to $1,000 psf again
By Joyce Teo
Can condos and HDB flats co-exist happily?
Property developers certainly think so, going by their high bids for state land for private housing, even if the plots are smack in the middle of an HDB estate.
Going by recent tender results, developers have no qualms paying a lot more, if the sites in these established or up-and-coming HDB estates are near MRT stations. Just last week, a tender for a plot in Simei Street 3 closed with an impressive 18 bids. Chip Eng Seng topped all rivals with an offer of $523 per sq ft (psf) per plot ratio.
This means, at that price, Singapore will likely see another suburban condo selling at or near the $1,000 psf mark, previously thought to be a resistance level.
Property experts said a key attraction of the Simei site - in the middle of an HDB estate - is its proximity to an MRT station and amenities. The land is just across the road from Simei MRT station and Eastpoint Mall.
'Actually, land next to MRT stations has always commanded higher prices than those that are not,' said Mr Nicholas Mak, a real estate lecturer at Ngee Ann Polytechnic. He said there were few attractive private sites for sale in the past 15 months. This is why many developers are competing hard in the Government's land sales tenders.
Said DTZ's head of South-east Asia research, Ms Chua Chor Hoon: 'Developers need to have a portfolio of sites to continually develop to maintain operations. So those with a smaller land bank would bid more aggressively to secure sites.' Also, developers are scrambling for suburban land because there is money to be made. Sales of mass market homes have remained strong since February last year, Mr Mak said.
Mass market launches, such as Caspian in Jurong, Double Bay Residences in Simei, Optima @ Tanah Merah and Trevista in Toa Payoh, met with strong demand last year. At Trevista, some units were sold for more than $1,000 psf.
'Rising prices of new mass market launches give confidence to developers to bid higher for government sites, especially attractive ones,' he added. Hence, the fact that the plot is located within an HDB estate is not a disadvantage when the market is hot.
This was not so in the 1980s to perhaps the early 1990s, when buyers did not see living in a condo in an HDB estate as moving up the social ladder.
'In the past, HDB estates were not as nice and HDB prices were low. People were not too happy to be too near them, if they could afford a private property,' said a property expert.
Ms Chua concurred: 'People weren't keen to buy a private condo next to an HDB estate unless it was priced low.' So, when a developer tries to test the market by launching a project that is not priced as low as expected, there would be 'disbelief and some resistance', she said. 'When the second one is launched, and there's good demand, then it becomes more accepted. That's how new trends start,' she added.
Times have changed. Old HDB estates have been spruced up or had some blocks torn down for rebuilding, while new HDB estates have more whistles and bells, experts said. HDB flats are in hot demand these days, with resale prices at record highs. HDB data showed that resale prices rose 2.8 per cent in the first quarter over the previous one, lifting it to yet another high.
Those living in upper-mid to high-end projects will still prefer more exclusive sites, experts said. But if they are buying and eyeing the rental market, a condo in an HDB estate brings attributes that tenants want. 'There are more expats employed on local terms, with less generous housing budgets. They usually have no cars and thus prefer to stay near MRT stations,' said Mr Mak.
joyceteo@sph.com.sg
ST : Expats leaving HK for 'cleaner' pastures
May 16, 2010
Expats leaving HK for 'cleaner' pastures
Worsening air pollution driving finance professionals to S'pore
By Sherry Lee
When financial analyst Terry Dunne looks at Hong Kong's smoggy skies these days, he thinks of his toddler son - and of packing up and moving his family to another city.
Worsening air pollution is cited as the main push factor for hundreds of expatriate bankers, stock analysts and other finance professionals leaving Hong Kong each year for 'cleaner' and not just greener pastures elsewhere.
Experts find this outflow of expatriate expertise a worrying trend that could threaten Hong Kong's status as a regional financial centre in the long term.
Noting that many of the expatriates move on to new jobs in Singapore, the experts express concern that Hong Kong's loss would be Singapore's gain.
Mr Ben Tyrell, whose company Relocasia handles about 2,000 expatriate moves annually, said the number of expatriates who left Hong Kong citing its air pollution has risen sharply in the past 10 years - from 20 per cent a decade ago to 60 per cent, or 1,200.
'Pollution is among the top three reasons,' said Mr Tyrell, adding that better career prospects and personal reasons are the other two.
He notes that in pollution-triggered cases, the deciding factor for expatriates is often the health of their children.
'Singapore is attracting senior expatriate families because it is cleaner and provides a better living environment,' said Mr Tyrell.
Last month alone, his company packed off 50 expatriates who cited air pollution as a factor.
Entire financial firms are also pulling out of Hong Kong, said Mr Tyrell.
And such anecdotes, said political analyst Michael DeGolyer, are just 'the tip of the iceberg'.
About one in five people in the city of seven million is considering leaving because of its air pollution, according to his 2008 report on air pollution, Hong Kong's Silent Epidemic, and this group consists mostly of high-income earners, professionals and managers.
'Worsening pollution tends to drive out those with young children, those with higher education and more marketable skills, and the older but more experienced employees,' said Professor DeGolyer, director of the Hong Kong Transition Project at Baptist University.
Last month, the city's leading authority on air quality, Mr Anthony Hedley, was forced to leave Hong Kong for health reasons.
The 69-year-old Briton, who created the Hedley Environmental Index, had campaigned for radical measures to fight the city's pollution for two decades.
Prof DeGolyer said he believed that Hong Kong's pollution woes, if left unchecked, could undermine its leading position as a financial hub to China as well as the region.
An Environment Bureau spokesman did not comment, but the Hong Kong government said it has adopted a multi-pronged strategy to cut emissions. It attaches great importance to improving air quality, 'both for our citizens' health and for our city's competitiveness', said a spokesman.
Dr Raymond So Wai Man of the finance department at the Chinese University of Hong Kong notes that for those who want to leave Hong Kong but wish to continue working in the region, Singapore will be an obvious choice.
'Hong Kong will be affected especially if financial talent goes to Singapore, another financial hub,' he said, adding that major international fund managers are increasingly using Singapore as their base.
'Then Singapore will become the 'brain', the part that brings in revenue, and Hong Kong will be just the 'limbs', handling front-line deals.'
Hong Kong also faces increasing competition from Shanghai, which is shaping up as China's financial centre.
'When that time comes, the 'brain' will be in Singapore, and the operational front lines and financial deals will go to Shanghai. Hong Kong will be left with nothing,' said Dr So.
But Mr Richard Vuylsteke, the president of the American Chamber of Commerce in Hong Kong, is more optimistic. He said: 'People leave, but they can be replaced. I haven't seen any significant downsizing in the financial sector. It is not an issue.'
Dr So pointed out, however, that many of the replacements may not have as much experience.
Financial headhunter Ryan Marshall noted that people who come to work in Hong Kong these days are younger - mostly in their 20s or 30s - and are unlikely to stay beyond two years.
For Mr Dunne, a 40-year-old Canadian from Vancouver, what is most important is his young son's health and well-being.
He remembers the day dust from a sandstorm originating in northern China caused the city's air pollution to hit a record high.
It was March 22, the same day his 21-month-old son Augustus ran a high fever and developed breathing difficulties.
'He got really sick. He had a high fever of 41 deg C, his chest was congested and he had difficulty breathing,' he recalled.
Augustus got better, but continues to be susceptible to coughs and colds. He had been hospitalised twice in the past six months.
Mr Dunne, who also has a five-year-old daughter, says he has been thinking about returning to Canada or moving his family to another city like Singapore.
'I have friends in Singapore. The air is clean and the sky is so clear, you can see much farther,' he said.
'Here in Central, you can't even see what's across the harbour.'
sherryah@gmail.com
--------------------------------------------------------------------------------
SMOG CITY
Just how bad is it?
In the air
· Hong Kong's air contains 1.3 times more particles of soot and other pollutants than Tokyo's, 1.7 times Singapore's and 3 times more than New York's.
· Roadside pollution exceeded 100 API (Air Pollution Index) on 23.8 per cent of the last quarter of last year, up from 3.6 per cent in the same quarter of 1999. An API of 101-200 is considered unhealthy, while 51-100 is moderate.
· Monthly roadside API average hit 143 last October, the highest monthly average in the past 10 years.
Bad for sports
· Just 41 days of healthy breathable air in 2006, with 30 days safe for outdoor sports.
· 4,800 in marathons needed medical treatment in February, with 22 taken to hospital.
Bad for health
· 1,600 die prematurely from air pollution every year.
· 81,000 hospital bed days and over seven million doctor visits caused by pollution in 2008.
· Costs from premature deaths, hospitalisations and doctor visits topped HK$2.2 billion (S$390 million) in 2008.
Where is it coming from?
· More than half from its own power plants, vehicles and ships' burning bunker fuel.
· 40 per cent from roadside emissions by buses.
· Roadside nitrogen dioxide levels last year were 2.8 times the recommended World Health Organisation guidelines, and particulate matter levels three times.
What are they doing about it?
· Tax incentives to promote the use of environment-friendly vehicles and fuels.
· Green transport fund to test green and low-carbon transport technology.
· Trying out cleaner fuel for ferries.
· But no legally binding laws yet.
Expats leaving HK for 'cleaner' pastures
Worsening air pollution driving finance professionals to S'pore
By Sherry Lee
When financial analyst Terry Dunne looks at Hong Kong's smoggy skies these days, he thinks of his toddler son - and of packing up and moving his family to another city.
Worsening air pollution is cited as the main push factor for hundreds of expatriate bankers, stock analysts and other finance professionals leaving Hong Kong each year for 'cleaner' and not just greener pastures elsewhere.
Experts find this outflow of expatriate expertise a worrying trend that could threaten Hong Kong's status as a regional financial centre in the long term.
Noting that many of the expatriates move on to new jobs in Singapore, the experts express concern that Hong Kong's loss would be Singapore's gain.
Mr Ben Tyrell, whose company Relocasia handles about 2,000 expatriate moves annually, said the number of expatriates who left Hong Kong citing its air pollution has risen sharply in the past 10 years - from 20 per cent a decade ago to 60 per cent, or 1,200.
'Pollution is among the top three reasons,' said Mr Tyrell, adding that better career prospects and personal reasons are the other two.
He notes that in pollution-triggered cases, the deciding factor for expatriates is often the health of their children.
'Singapore is attracting senior expatriate families because it is cleaner and provides a better living environment,' said Mr Tyrell.
Last month alone, his company packed off 50 expatriates who cited air pollution as a factor.
Entire financial firms are also pulling out of Hong Kong, said Mr Tyrell.
And such anecdotes, said political analyst Michael DeGolyer, are just 'the tip of the iceberg'.
About one in five people in the city of seven million is considering leaving because of its air pollution, according to his 2008 report on air pollution, Hong Kong's Silent Epidemic, and this group consists mostly of high-income earners, professionals and managers.
'Worsening pollution tends to drive out those with young children, those with higher education and more marketable skills, and the older but more experienced employees,' said Professor DeGolyer, director of the Hong Kong Transition Project at Baptist University.
Last month, the city's leading authority on air quality, Mr Anthony Hedley, was forced to leave Hong Kong for health reasons.
The 69-year-old Briton, who created the Hedley Environmental Index, had campaigned for radical measures to fight the city's pollution for two decades.
Prof DeGolyer said he believed that Hong Kong's pollution woes, if left unchecked, could undermine its leading position as a financial hub to China as well as the region.
An Environment Bureau spokesman did not comment, but the Hong Kong government said it has adopted a multi-pronged strategy to cut emissions. It attaches great importance to improving air quality, 'both for our citizens' health and for our city's competitiveness', said a spokesman.
Dr Raymond So Wai Man of the finance department at the Chinese University of Hong Kong notes that for those who want to leave Hong Kong but wish to continue working in the region, Singapore will be an obvious choice.
'Hong Kong will be affected especially if financial talent goes to Singapore, another financial hub,' he said, adding that major international fund managers are increasingly using Singapore as their base.
'Then Singapore will become the 'brain', the part that brings in revenue, and Hong Kong will be just the 'limbs', handling front-line deals.'
Hong Kong also faces increasing competition from Shanghai, which is shaping up as China's financial centre.
'When that time comes, the 'brain' will be in Singapore, and the operational front lines and financial deals will go to Shanghai. Hong Kong will be left with nothing,' said Dr So.
But Mr Richard Vuylsteke, the president of the American Chamber of Commerce in Hong Kong, is more optimistic. He said: 'People leave, but they can be replaced. I haven't seen any significant downsizing in the financial sector. It is not an issue.'
Dr So pointed out, however, that many of the replacements may not have as much experience.
Financial headhunter Ryan Marshall noted that people who come to work in Hong Kong these days are younger - mostly in their 20s or 30s - and are unlikely to stay beyond two years.
For Mr Dunne, a 40-year-old Canadian from Vancouver, what is most important is his young son's health and well-being.
He remembers the day dust from a sandstorm originating in northern China caused the city's air pollution to hit a record high.
It was March 22, the same day his 21-month-old son Augustus ran a high fever and developed breathing difficulties.
'He got really sick. He had a high fever of 41 deg C, his chest was congested and he had difficulty breathing,' he recalled.
Augustus got better, but continues to be susceptible to coughs and colds. He had been hospitalised twice in the past six months.
Mr Dunne, who also has a five-year-old daughter, says he has been thinking about returning to Canada or moving his family to another city like Singapore.
'I have friends in Singapore. The air is clean and the sky is so clear, you can see much farther,' he said.
'Here in Central, you can't even see what's across the harbour.'
sherryah@gmail.com
--------------------------------------------------------------------------------
SMOG CITY
Just how bad is it?
In the air
· Hong Kong's air contains 1.3 times more particles of soot and other pollutants than Tokyo's, 1.7 times Singapore's and 3 times more than New York's.
· Roadside pollution exceeded 100 API (Air Pollution Index) on 23.8 per cent of the last quarter of last year, up from 3.6 per cent in the same quarter of 1999. An API of 101-200 is considered unhealthy, while 51-100 is moderate.
· Monthly roadside API average hit 143 last October, the highest monthly average in the past 10 years.
Bad for sports
· Just 41 days of healthy breathable air in 2006, with 30 days safe for outdoor sports.
· 4,800 in marathons needed medical treatment in February, with 22 taken to hospital.
Bad for health
· 1,600 die prematurely from air pollution every year.
· 81,000 hospital bed days and over seven million doctor visits caused by pollution in 2008.
· Costs from premature deaths, hospitalisations and doctor visits topped HK$2.2 billion (S$390 million) in 2008.
Where is it coming from?
· More than half from its own power plants, vehicles and ships' burning bunker fuel.
· 40 per cent from roadside emissions by buses.
· Roadside nitrogen dioxide levels last year were 2.8 times the recommended World Health Organisation guidelines, and particulate matter levels three times.
What are they doing about it?
· Tax incentives to promote the use of environment-friendly vehicles and fuels.
· Green transport fund to test green and low-carbon transport technology.
· Trying out cleaner fuel for ferries.
· But no legally binding laws yet.
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