Aug 17, 2010
Sales of new private homes surge in July
By Joyce Teo
BUYERS returned to the private home market with an extra spring in their step after a lacklustre June laid low by school holidays, the World Cup and the euro zone crisis.
Developers sold almost twice as many new homes last month as they did in June in what some experts are calling a pre-Hungry Ghost Month burst.
Dr Chua Yang Liang, Jones Lang LaSalle's research head for South-east Asia, said the July number is 'a bit of a seasonal spike' as developers and buyers rush to act before the traditionally inauspicious month.
This 'pre-hunger rush' has also been seen in previous years, he said.
There were 1,544 new private homes sold in July against 847 in June, while developers launched 1,335 units compared with 1,010 in the previous month, according to the Urban Redevelopment Authority (URA) yesterday.
New private home sales totalled a robust 9,957 units for the first seven months.
While sales last month were relatively strong, buying interest remained selective with transactions lifted mostly by three new launches.
The top seller was The Scala near the Circle Line's Lorong Chuan station. Officially launched late last month, it sold 400 out of 468 units at a median price of $1,173 per sq ft.
Terrene at Bukit Timah - near the future Beauty World MRT station - sold 162 out of 172 units at a median price of $1,247 psf, while 368 Thomson sold out all 157 units last month at a median price of $1,403 psf.
Local buyers continued to drive the market in July, shown by the high take-up in suburban projects or those outside the central region, experts said.
Projects in the city fringes did relatively well. As with the suburban spots, developments near MRT stations or other key amenities with affordable pricing had better take-up rates, said Dr Chua.
These include the sold-out Centra Studios and Haig 162, and the near sold-out Leicester Suites: All offered affordably priced small format units, said CBRE Research.
Apart from 368 Thomson, prime projects did not attract much attention.
DTZ's head of South-east Asia research, Ms Chua Chor Hoon, said strong buying interest in the mass and mid-end segments continues to be fuelled by low interest rates and an improving economy.
PropNex chief executive Mohamed Ismail noted that the strengthening economy has raised slightly the threshold for the price per square foot that buyers are willing to pay.
A fairly busy July is expected to give way to a slower August because developers are likely to launch fewer units during the Hungry Ghost Month from Aug 10 to Sept 7.
'As we enter the month, coupled with the possibility of a double-dip recession in the US and a sluggish UK economy, we expect sales volume to weaken in August by about 25 to 35 per cent,' said Dr Chua.
'Some volatility may be experienced in the second half as a result of seasonal fluctuations and as the market awaits a clearer growth direction in the US and UK.'
Tuesday, August 17, 2010
ST : Temple loses TOP, devotees in a fix
Aug 17, 2010
Temple loses TOP, devotees in a fix
Loss of fire permit in July leads to premises being made off limits
By Yen Feng
DEVOTEES of the Cheng Teck Sian See Buddhist Association have been shut out of their temple during the ongoing Seventh Month activities.
The temple recently lost its temporary occupation permit (TOP) and fire permit. Without these, its premises are off-limits and members who want to pray are being turned away.
Already, the temple's trustees, who were occupying offices on the ground floor, have moved out.
The century-old temple in Geylang is said to have about 2,000 followers and holds some 800 Chinese ancestral tablets.
On July 19, the temple's trustees mailed to more than 200 members a notice that said: 'Due to the revocation of the TOP, we regret to inform that we are unable to conduct the Seventh Month puja celebrations in the premises this year.'
Ancestral veneration during the lunar seventh month is a cherished Chinese tradition and some devotees have expressed their disappointment at what has happened.
Mr Alvin Yap, 50, whose father's ancestral tablet has been kept at the temple for more than 20 years, said: 'This is a helpless situation for all of us. I hope the people involved in this can get to the root of the matter soon.'
Construction of the temple's new home in Geylang Lorong 20 began in 2007, after its original home in Tiong Bahru was reclaimed by the Government several years earlier.
The new, seven-storey building received its TOP last August.
But a site check conducted by Building and Construction Authority (BCA) officers in March found something amiss: a fire escape staircase with headroom of 1.8m, shorter than the approved height of 2m.
Around the same time, checks by the Singapore Civil Defence Force (SCDF) discovered several other irregularities, including absent fire doors, misplaced exit signs and missing smoke detectors.
In March, the SCDF downgraded the temple's fire safety certificate to a temporary fire permit and sent a letter to the temple's architects, WP Architects, saying it had until June 30 to regain the certificate.
A month later, the temple's TOP was partially suspended by the BCA - its third to seventh floors could no longer be used.
On July 9, the architects received a second letter from the SCDF that said that because the deadline for fire safety measures had not been met, the temporary permit was no longer valid.
This, in turn, led to another issue: Because the temple now did not have a fire permit, the BCA suspended the remainder of the temple's TOP for its first and second floors.
WP Architects says the matter is with its lawyers now and declined to comment further.
The temple's trustees and the parties involved in the temple's construction have locked horns a number of times over the last two years.
This year, the temple and its main contractor, Kenston Construction, went to court over the building's defects and outstanding payment issues.
In April, Kenston sued the temple and one of its trustees over comments made to the media about the temple's building safety issues.
The two parties, along with others involved in the matter, are seeking legal arbitration.
zengyan@sph.com.sg
--------------------------------------------------------------------------------
Timeline of events
2007: Construction begins on the temple's new home in Geylang Lorong 20.
August 2009: The seven-storey building gets its temporary occupation permit (TOP).
March 2010: BCA officers discover that the headroom for the fire escape staircase is 1.8m. The approved height is 2m.
Around the same time, checks by the SCDF uncover other irregularities, including absent fire doors, misplaced exit signs and missing smoke detectors.
The SCDF downgrades the temple's fire safety certificate to a temporary fire permit. It sends a letter to the temple's architects, WP Architects, saying it has until June 30 to reapply for the building's fire safety certificate.
April 2010: The temple's TOP is partially suspended by the BCA. The third to seventh floors are closed off.
July 2010: WP Architects receives a second letter from the SCDF that says that the temporary permit is no longer valid as the deadline has not been met.
As the temple does not have a fire permit, the BCA suspends the remainder of the temple's TOP for its first and second floors.
The TOP for the Cheng Teck Sian See Buddhist Association's building in Geylang, which was partially suspended by the BCA in April, was fully suspended last month. -- ST PHOTO: BENJAMIN NG
Temple loses TOP, devotees in a fix
Loss of fire permit in July leads to premises being made off limits
By Yen Feng
DEVOTEES of the Cheng Teck Sian See Buddhist Association have been shut out of their temple during the ongoing Seventh Month activities.
The temple recently lost its temporary occupation permit (TOP) and fire permit. Without these, its premises are off-limits and members who want to pray are being turned away.
Already, the temple's trustees, who were occupying offices on the ground floor, have moved out.
The century-old temple in Geylang is said to have about 2,000 followers and holds some 800 Chinese ancestral tablets.
On July 19, the temple's trustees mailed to more than 200 members a notice that said: 'Due to the revocation of the TOP, we regret to inform that we are unable to conduct the Seventh Month puja celebrations in the premises this year.'
Ancestral veneration during the lunar seventh month is a cherished Chinese tradition and some devotees have expressed their disappointment at what has happened.
Mr Alvin Yap, 50, whose father's ancestral tablet has been kept at the temple for more than 20 years, said: 'This is a helpless situation for all of us. I hope the people involved in this can get to the root of the matter soon.'
Construction of the temple's new home in Geylang Lorong 20 began in 2007, after its original home in Tiong Bahru was reclaimed by the Government several years earlier.
The new, seven-storey building received its TOP last August.
But a site check conducted by Building and Construction Authority (BCA) officers in March found something amiss: a fire escape staircase with headroom of 1.8m, shorter than the approved height of 2m.
Around the same time, checks by the Singapore Civil Defence Force (SCDF) discovered several other irregularities, including absent fire doors, misplaced exit signs and missing smoke detectors.
In March, the SCDF downgraded the temple's fire safety certificate to a temporary fire permit and sent a letter to the temple's architects, WP Architects, saying it had until June 30 to regain the certificate.
A month later, the temple's TOP was partially suspended by the BCA - its third to seventh floors could no longer be used.
On July 9, the architects received a second letter from the SCDF that said that because the deadline for fire safety measures had not been met, the temporary permit was no longer valid.
This, in turn, led to another issue: Because the temple now did not have a fire permit, the BCA suspended the remainder of the temple's TOP for its first and second floors.
WP Architects says the matter is with its lawyers now and declined to comment further.
The temple's trustees and the parties involved in the temple's construction have locked horns a number of times over the last two years.
This year, the temple and its main contractor, Kenston Construction, went to court over the building's defects and outstanding payment issues.
In April, Kenston sued the temple and one of its trustees over comments made to the media about the temple's building safety issues.
The two parties, along with others involved in the matter, are seeking legal arbitration.
zengyan@sph.com.sg
--------------------------------------------------------------------------------
Timeline of events
2007: Construction begins on the temple's new home in Geylang Lorong 20.
August 2009: The seven-storey building gets its temporary occupation permit (TOP).
March 2010: BCA officers discover that the headroom for the fire escape staircase is 1.8m. The approved height is 2m.
Around the same time, checks by the SCDF uncover other irregularities, including absent fire doors, misplaced exit signs and missing smoke detectors.
The SCDF downgrades the temple's fire safety certificate to a temporary fire permit. It sends a letter to the temple's architects, WP Architects, saying it has until June 30 to reapply for the building's fire safety certificate.
April 2010: The temple's TOP is partially suspended by the BCA. The third to seventh floors are closed off.
July 2010: WP Architects receives a second letter from the SCDF that says that the temporary permit is no longer valid as the deadline has not been met.
As the temple does not have a fire permit, the BCA suspends the remainder of the temple's TOP for its first and second floors.
The TOP for the Cheng Teck Sian See Buddhist Association's building in Geylang, which was partially suspended by the BCA in April, was fully suspended last month. -- ST PHOTO: BENJAMIN NG
BT : S'pore still cheaper to build in than HK and London: DLS
Business Times - 17 Aug 2010
S'pore still cheaper to build in than HK and London: DLS
Data refutes earlier report that S'pore is costliest Asian country to build in
By UMA SHANKARI
SINGAPORE is still a much cheaper place to build than Hong Kong and London, the director of Davis Langdon & Seah Singapore (DLS) said yesterday - refuting an earlier report that found otherwise.
DLS data shows that at end-Q1 2010, construction costs in Singapore for standard apartments, standard office space and 'prestige' office space were lower than those in London, Tokyo, Sydney and Hong Kong.
'Cost data recorded by our offices in the region has clearly established that Singapore is the third costliest city to build in (in the region) after Tokyo and Hong Kong,' DLS director Seah Choo Meng told BT in an interview.
Construction costs in London and Sydney have also been consistently higher than in Singapore, he said.
Mr Seah was responding to a report released two weeks ago by EC Harris that said Singapore is now the most expensive Asian country to build in except Japan and the 10th most expensive worldwide. This was despite a 5-8 per cent drop in tender prices here last year, EC Harris said.
Tender prices here were higher than in Hong Kong and London, according to EC Harris's international construction cost report covering 50 countries. Switzerland was the most expensive country to build in globally, the report found. Hong Kong was ranked 21st globally while the UK - or London - was ranked 16th.
Yesterday, Mr Seah presented DLS data that shows building costs in Singapore are lower than those in London, Tokyo, Sydney and Hong Kong.
The two firms collect data from their worldwide offices from the jobs they handle. The EC Harris report did not include values for Japan because the firm did not have any projects there in the past two years.
The differentiation between the DLS and EC Harris data is partly caused by a difference in how much each of them said tender prices in Singapore fell last year.
The EC Harris report put the fall at between 5 and 8 per cent. But DLS put it at 20 per cent.
Mr Seah noted: 'The Building and Construction Authority's (BCA) record has shown a drop of 15 per cent; Rider Levett Bucknall (another consultancy) indicated a drop of 18.5 per cent while DLS saw a drop in the region of 20 per cent.'
EC Harris also said the Singapore market recovered on the back of sustained demand and strong economic growth - leading to tender price growth in the first six months of the year.
Mr Seah agrees the market recovered, but said tender prices have only climbed by 3 per cent since the start of this year - which means construction prices are still a long way from their peaks after last year's 20 per cent drop.
Although Singapore is not the most expensive city in Asia in which to build, BCA is looking at how to boost construction cost-efficiency to bridge a gap in productivity between Singapore and other advanced countries, Mr Seah said. The productivity of the construction industry in Singapore is only half of that in Australia's and one third of that in Japan.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
S'pore still cheaper to build in than HK and London: DLS
Data refutes earlier report that S'pore is costliest Asian country to build in
By UMA SHANKARI
SINGAPORE is still a much cheaper place to build than Hong Kong and London, the director of Davis Langdon & Seah Singapore (DLS) said yesterday - refuting an earlier report that found otherwise.
DLS data shows that at end-Q1 2010, construction costs in Singapore for standard apartments, standard office space and 'prestige' office space were lower than those in London, Tokyo, Sydney and Hong Kong.
'Cost data recorded by our offices in the region has clearly established that Singapore is the third costliest city to build in (in the region) after Tokyo and Hong Kong,' DLS director Seah Choo Meng told BT in an interview.
Construction costs in London and Sydney have also been consistently higher than in Singapore, he said.
Mr Seah was responding to a report released two weeks ago by EC Harris that said Singapore is now the most expensive Asian country to build in except Japan and the 10th most expensive worldwide. This was despite a 5-8 per cent drop in tender prices here last year, EC Harris said.
Tender prices here were higher than in Hong Kong and London, according to EC Harris's international construction cost report covering 50 countries. Switzerland was the most expensive country to build in globally, the report found. Hong Kong was ranked 21st globally while the UK - or London - was ranked 16th.
Yesterday, Mr Seah presented DLS data that shows building costs in Singapore are lower than those in London, Tokyo, Sydney and Hong Kong.
The two firms collect data from their worldwide offices from the jobs they handle. The EC Harris report did not include values for Japan because the firm did not have any projects there in the past two years.
The differentiation between the DLS and EC Harris data is partly caused by a difference in how much each of them said tender prices in Singapore fell last year.
The EC Harris report put the fall at between 5 and 8 per cent. But DLS put it at 20 per cent.
Mr Seah noted: 'The Building and Construction Authority's (BCA) record has shown a drop of 15 per cent; Rider Levett Bucknall (another consultancy) indicated a drop of 18.5 per cent while DLS saw a drop in the region of 20 per cent.'
EC Harris also said the Singapore market recovered on the back of sustained demand and strong economic growth - leading to tender price growth in the first six months of the year.
Mr Seah agrees the market recovered, but said tender prices have only climbed by 3 per cent since the start of this year - which means construction prices are still a long way from their peaks after last year's 20 per cent drop.
Although Singapore is not the most expensive city in Asia in which to build, BCA is looking at how to boost construction cost-efficiency to bridge a gap in productivity between Singapore and other advanced countries, Mr Seah said. The productivity of the construction industry in Singapore is only half of that in Australia's and one third of that in Japan.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
BT : Developers sell 9,957 homes in first 7 months
Business Times - 17 Aug 2010
Developers sell 9,957 homes in first 7 months
Outlook still positive but buyers will be more selective with greater spread of projects
By KALPANA RASHIWALA
(SINGAPORE) Developers' sales of private homes surged 82 per cent month on month to 1,544 units in July from the low of 847 units in June, according to latest official figures. This reflects a resumption in home buying, which had taken a breather during the school holidays and World Cup.
However, sales are expected to slip to around 800-1,000 units again in August, on the back of slower launches during the Hungry Ghost Month, say some property agents. After this ends on September 7, both launches and sales will pick up again, they reckon.
In the first seven months of this year, developers have sold 9,957 private homes (excluding executive condos), after last year's strong sales of 14,688 units.
CB Richard Ellis expects the full-year figure will be about 14,000 units. Jones Lang LaSalle's estimate is 13,000-14,000 while DTZ's SE Asia research head Chua Chor Hoon puts the number at 13,000-15,000 units.
'The outlook still remains positive against the backdrop of Singapore's economic growth and the low interest rate environment but buyers will be more selective given that so many Government Land Sale sites are being sold; this will translate to greater choice of new projects.
'Prices have also been on the rise, so potential buyers will be more discerning in picking properties that have better potential for rental income or capital appreciation,' Ms Chua added. DTZ's data shows that secondary market prices of completed private homes appreciated about 6-8 per cent in the first half of this year; her full-year forecast is an 8-13 per cent increase.
CB Richard Ellis executive director (residential) Joseph Tan reckons that developers are unlikely to test new price benchmarks when they resume launches next month. But prices are unlikely to fall below current levels either, as land prices remain high, he adds.
On the other hand, signs of buyer price resistance continue to prevail. Colliers International's analysis of official developer monthly sales data released by Urban Redevelopment Authority shows that the proportion of private homes sold by developers priced at $1,500 psf and below was at its highest level in 10 months in July, at 88 per cent.
The Outside Central Region, where mass-market properties are typically located, accounted for 42.8 per cent of the total 1,544 units sold by developers in July, while the Core Central Region, where the most expensive homes in Singapore are found, had a 17.9 per cent share.
Nonetheless, a handful of buyers picked up properties at top-line prices in July, notes CB Richard Ellis executive director Li Hiaw Ho. The most expensive apartment/condominium unit (in terms of $ per square foot) sold by a developer in July was a unit at Boulevard Vue which fetched $4,600 per square foot. BT understands that Far East Organization sold the high-floor unit of 4,456 sq ft for $20.5 million.
URA's data shows that other high-end deals last month included a unit at The Orchard Residences which sold at $4,099 psf and another at Skyline @ Orchard Boulevard at $3,719 psf.
The least expensive non-landed home was a unit at The Minton in Hougang which was transacted at $612 psf.
July's surge in primary market sales came on the back of three major launches - 368 Thomson, Terrene at Bukit Timah and The Scala at Serangoon Avenue 3. Together, they made up 46.6 per cent of the total 1,544 units developers sold in July.
The top-selling project was The Scala, with 400 units transacted at a median price of $1,173 psf.
Also helping to boost last month's sales were sell-out launches for three projects that comprised mostly one-bedders - the 51-unit Centra Studios at Lorong 25 Geylang, 99-unit Haig 162 and Leicester Suites (46 of its 47 units were sold last month). 'Their success could be attributed to the affordably-priced small-format units they offered,' says CBRE's Mr Li.
Developers launched 1,335 private homes in July, up from 1,010 units in June.
Projects expected to be released after Ghosts Month include NV Residences in Pasir Ris, Twin Peaks on the Grangeford site, Cityscape in Mergui Road and Killiney 118.
Two executive condo projects - the 573-unit Esparina Residences at Compassvale Bow in Sengkang and Chinese developer MCC Land's 406-unit The Canopy in Yishun - are slated for release in October, say market watchers.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Developers sell 9,957 homes in first 7 months
Outlook still positive but buyers will be more selective with greater spread of projects
By KALPANA RASHIWALA
(SINGAPORE) Developers' sales of private homes surged 82 per cent month on month to 1,544 units in July from the low of 847 units in June, according to latest official figures. This reflects a resumption in home buying, which had taken a breather during the school holidays and World Cup.
However, sales are expected to slip to around 800-1,000 units again in August, on the back of slower launches during the Hungry Ghost Month, say some property agents. After this ends on September 7, both launches and sales will pick up again, they reckon.
In the first seven months of this year, developers have sold 9,957 private homes (excluding executive condos), after last year's strong sales of 14,688 units.
CB Richard Ellis expects the full-year figure will be about 14,000 units. Jones Lang LaSalle's estimate is 13,000-14,000 while DTZ's SE Asia research head Chua Chor Hoon puts the number at 13,000-15,000 units.
'The outlook still remains positive against the backdrop of Singapore's economic growth and the low interest rate environment but buyers will be more selective given that so many Government Land Sale sites are being sold; this will translate to greater choice of new projects.
'Prices have also been on the rise, so potential buyers will be more discerning in picking properties that have better potential for rental income or capital appreciation,' Ms Chua added. DTZ's data shows that secondary market prices of completed private homes appreciated about 6-8 per cent in the first half of this year; her full-year forecast is an 8-13 per cent increase.
CB Richard Ellis executive director (residential) Joseph Tan reckons that developers are unlikely to test new price benchmarks when they resume launches next month. But prices are unlikely to fall below current levels either, as land prices remain high, he adds.
On the other hand, signs of buyer price resistance continue to prevail. Colliers International's analysis of official developer monthly sales data released by Urban Redevelopment Authority shows that the proportion of private homes sold by developers priced at $1,500 psf and below was at its highest level in 10 months in July, at 88 per cent.
The Outside Central Region, where mass-market properties are typically located, accounted for 42.8 per cent of the total 1,544 units sold by developers in July, while the Core Central Region, where the most expensive homes in Singapore are found, had a 17.9 per cent share.
Nonetheless, a handful of buyers picked up properties at top-line prices in July, notes CB Richard Ellis executive director Li Hiaw Ho. The most expensive apartment/condominium unit (in terms of $ per square foot) sold by a developer in July was a unit at Boulevard Vue which fetched $4,600 per square foot. BT understands that Far East Organization sold the high-floor unit of 4,456 sq ft for $20.5 million.
URA's data shows that other high-end deals last month included a unit at The Orchard Residences which sold at $4,099 psf and another at Skyline @ Orchard Boulevard at $3,719 psf.
The least expensive non-landed home was a unit at The Minton in Hougang which was transacted at $612 psf.
July's surge in primary market sales came on the back of three major launches - 368 Thomson, Terrene at Bukit Timah and The Scala at Serangoon Avenue 3. Together, they made up 46.6 per cent of the total 1,544 units developers sold in July.
The top-selling project was The Scala, with 400 units transacted at a median price of $1,173 psf.
Also helping to boost last month's sales were sell-out launches for three projects that comprised mostly one-bedders - the 51-unit Centra Studios at Lorong 25 Geylang, 99-unit Haig 162 and Leicester Suites (46 of its 47 units were sold last month). 'Their success could be attributed to the affordably-priced small-format units they offered,' says CBRE's Mr Li.
Developers launched 1,335 private homes in July, up from 1,010 units in June.
Projects expected to be released after Ghosts Month include NV Residences in Pasir Ris, Twin Peaks on the Grangeford site, Cityscape in Mergui Road and Killiney 118.
Two executive condo projects - the 573-unit Esparina Residences at Compassvale Bow in Sengkang and Chinese developer MCC Land's 406-unit The Canopy in Yishun - are slated for release in October, say market watchers.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
BT : HK property stocks hit by tighter mortgage lending rules
Business Times - 17 Aug 2010
HK property stocks hit by tighter mortgage lending rules
(HONG KONG) Developers fell in Hong Kong trading after the government tightened mortgage lending rules and said it will increase the supply of land to help cool surging home prices.
Sun Hung Kai Properties Ltd, the world's biggest builder by market value, dropped 4.1 per cent to HK$110 at the 4pm close of trading, its biggest decline since May 25. Cheung Kong Holdings Ltd, controlled by Hong Kong's richest man Li Ka-shing, declined 2.3 per cent.
Property transactions in some of the city's largest residential complexes slumped by more than half over the weekend, according to Centaline Property Agency Ltd. Financial Secretary John Tsang said the government won't hesitate to introduce further measures if necessary, after saying on Aug 13 that home prices are approaching the level of 1997, the height of a previous bubble that was followed by a six-year slump.
The measures 'will hurt sentiment on property stocks,' JPMorgan & Chase Co analysts Raymond Ngai and Ryan Li wrote in a note yesterday. 'The market will require a bigger discount for developers on concerns of property bubbles and ongoing policy measures.'
The government has been seeking to rein in home prices that have soared about 45 per cent since the beginning of 2009, boosted by mortgage rates at the lowest in two decades and buying by mainland Chinese.
Henderson Land Development Co, the developer controlled by billionaire Lee Shau-kee, declined 3.2 per cent to HK$48.45. Sino Land Co dropped 5.7 per cent to HK$13.28, the biggest loser among the seven-member Hang Seng Property Index. The gauge fell 2.6 per cent yesterday, bringing its loss this year to 3.9 per cent.
Down payments for apartments costing HK$12 million (S$2.1 million) or more will rise to 40 per cent, from 30 per cent, with immediate effect, Hong Kong Monetary Authority chief executive Norman Chan said on Friday. The government will increase land sales next year, Mr Tsang said.
'The basket of measures will have the effect of stabilising prices,' said Buggle Lau, chief analyst at property agency Midland Holdings Ltd.
Weekend transactions of used apartments at 10 of Hong Kong's biggest private residential complexes fell 53.5 per cent from a week earlier to 32, Centaline, one of the city's largest real estate agencies, said.
'The demand-side measures should have an immediate impact on the market,' Mirae Asset Management Ltd analysts Keith Yeung and Stephanie Lau wrote in a report. 'Speculative activities will come down sharply and developers' premium pricing capability is likely to be affected.' Home prices will fall 10 per cent, and Sun Hung Kai and Sino Land are the 'most vulnerable' developers because they bought 'expensive parcels of land,' according to the Mirae analysts.
Sun Hung Kai on June 8 paid HK$10.9 billion for a residential site in the Ho Man Tin district. The price, which beat a Bloomberg News estimate by 30 per cent, is the highest paid in a government auction in urban Hong Kong since the market peaked in 1997.
Sino Land, one of the biggest commercial landlords in the Tsim Sha Tsui district, and K Wah International Holdings Ltd in December bought two residential sites for HK$10.4 billion in what was then the city's biggest land auction in almost two years.
Last week's measures came as Hong Kong's economy expanded a more-than-estimated 6.5 per cent in the second quarter, according to a government report last week, topping the 6.3 per cent median forecast of 13 economists in a Bloomberg survey. Hong Kong's economy will grow between 5 per cent and 6 per cent for the full year, the government said, revising up a previous forecast.
For properties worth HK$12 million or less, the maximum loan amount will be capped at HK$7.2 million, meaning down payments will increase for any property valued above HK$10.3 million. Luxury homes in the city are defined as those costing at least HK$10 million, or bigger than 1,000 square feet.
Down payments for investment properties will rise to 40 per cent from 30 per cent, Mr Chan said.
Since the early 1990s, Hong Kong banks have been restricted from lending more than 70 per cent of the purchase price of a home, to reduce the risk of loan losses from a market crash. To help the market recover from the 1998 crash, buyers were subsequently allowed to borrow a further 15 per cent of their home's value as long as they obtained mortgage insurance, a move that increased affordability while limiting risk for banks.
The market has already been cooling, with new mortgage approvals declining to HK$35.4 billion in June, down 6.2 per cent from May, according to HKMA data. Some 0.03 per cent of mortgage loans were delinquent, while only 310 owners in the city owe more on their homes than their properties are worth.
'Our house view on property developers is 'cautious' because the government is determined to curb the overheating real-estate market,' said Steve Tse, a research manager at BEA Union Investment Management. 'They don't want a bubble, and they want to get it under control.' - Bloomberg
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
HK property stocks hit by tighter mortgage lending rules
(HONG KONG) Developers fell in Hong Kong trading after the government tightened mortgage lending rules and said it will increase the supply of land to help cool surging home prices.
Sun Hung Kai Properties Ltd, the world's biggest builder by market value, dropped 4.1 per cent to HK$110 at the 4pm close of trading, its biggest decline since May 25. Cheung Kong Holdings Ltd, controlled by Hong Kong's richest man Li Ka-shing, declined 2.3 per cent.
Property transactions in some of the city's largest residential complexes slumped by more than half over the weekend, according to Centaline Property Agency Ltd. Financial Secretary John Tsang said the government won't hesitate to introduce further measures if necessary, after saying on Aug 13 that home prices are approaching the level of 1997, the height of a previous bubble that was followed by a six-year slump.
The measures 'will hurt sentiment on property stocks,' JPMorgan & Chase Co analysts Raymond Ngai and Ryan Li wrote in a note yesterday. 'The market will require a bigger discount for developers on concerns of property bubbles and ongoing policy measures.'
The government has been seeking to rein in home prices that have soared about 45 per cent since the beginning of 2009, boosted by mortgage rates at the lowest in two decades and buying by mainland Chinese.
Henderson Land Development Co, the developer controlled by billionaire Lee Shau-kee, declined 3.2 per cent to HK$48.45. Sino Land Co dropped 5.7 per cent to HK$13.28, the biggest loser among the seven-member Hang Seng Property Index. The gauge fell 2.6 per cent yesterday, bringing its loss this year to 3.9 per cent.
Down payments for apartments costing HK$12 million (S$2.1 million) or more will rise to 40 per cent, from 30 per cent, with immediate effect, Hong Kong Monetary Authority chief executive Norman Chan said on Friday. The government will increase land sales next year, Mr Tsang said.
'The basket of measures will have the effect of stabilising prices,' said Buggle Lau, chief analyst at property agency Midland Holdings Ltd.
Weekend transactions of used apartments at 10 of Hong Kong's biggest private residential complexes fell 53.5 per cent from a week earlier to 32, Centaline, one of the city's largest real estate agencies, said.
'The demand-side measures should have an immediate impact on the market,' Mirae Asset Management Ltd analysts Keith Yeung and Stephanie Lau wrote in a report. 'Speculative activities will come down sharply and developers' premium pricing capability is likely to be affected.' Home prices will fall 10 per cent, and Sun Hung Kai and Sino Land are the 'most vulnerable' developers because they bought 'expensive parcels of land,' according to the Mirae analysts.
Sun Hung Kai on June 8 paid HK$10.9 billion for a residential site in the Ho Man Tin district. The price, which beat a Bloomberg News estimate by 30 per cent, is the highest paid in a government auction in urban Hong Kong since the market peaked in 1997.
Sino Land, one of the biggest commercial landlords in the Tsim Sha Tsui district, and K Wah International Holdings Ltd in December bought two residential sites for HK$10.4 billion in what was then the city's biggest land auction in almost two years.
Last week's measures came as Hong Kong's economy expanded a more-than-estimated 6.5 per cent in the second quarter, according to a government report last week, topping the 6.3 per cent median forecast of 13 economists in a Bloomberg survey. Hong Kong's economy will grow between 5 per cent and 6 per cent for the full year, the government said, revising up a previous forecast.
For properties worth HK$12 million or less, the maximum loan amount will be capped at HK$7.2 million, meaning down payments will increase for any property valued above HK$10.3 million. Luxury homes in the city are defined as those costing at least HK$10 million, or bigger than 1,000 square feet.
Down payments for investment properties will rise to 40 per cent from 30 per cent, Mr Chan said.
Since the early 1990s, Hong Kong banks have been restricted from lending more than 70 per cent of the purchase price of a home, to reduce the risk of loan losses from a market crash. To help the market recover from the 1998 crash, buyers were subsequently allowed to borrow a further 15 per cent of their home's value as long as they obtained mortgage insurance, a move that increased affordability while limiting risk for banks.
The market has already been cooling, with new mortgage approvals declining to HK$35.4 billion in June, down 6.2 per cent from May, according to HKMA data. Some 0.03 per cent of mortgage loans were delinquent, while only 310 owners in the city owe more on their homes than their properties are worth.
'Our house view on property developers is 'cautious' because the government is determined to curb the overheating real-estate market,' said Steve Tse, a research manager at BEA Union Investment Management. 'They don't want a bubble, and they want to get it under control.' - Bloomberg
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
BT : Fusionopolis' Solaris 60% leased
Business Times - 17 Aug 2010
Fusionopolis' Solaris 60% leased
By EMILYN YAP
SOLARIS, an extension of the Fusionopolis research cluster at Buona Vista, has been 60 per cent leased ahead of its completion by the end of the year.
The developer Soilbuild Group is in 'advanced negotiations' with other potential tenants.
Soilbuild's executive director Low Soon Sim gave BT these updates following the release of the company's second quarter results last week.
Organisations which have signed leases at Solaris include government agency Spring Singapore, software designer Autodesk, video game creator and publisher Ubisoft, and green building consultancy Kaer.
Spring Singapore is Solaris' largest tenant to date, taking up some 15 per cent of the total net lettable area of around 430,000 sq ft. Tenants should be moving in in the early part of next year, Mr Low said.
Soilbuild won the tender for Phase 2B of Fusionopolis in April 2008 and put in around $140 million to develop Solaris on the 83,248 sq ft site.
The building is designed by famed architect Ken Yeang and will be decked with roof gardens and other energy saving features.
Most of the space at the Solaris is set aside for offices. There will also be a childcare centre, and retail outlets will occupy some 3,000 sq ft of space. Soilbuild plans to start marketing the retail space this quarter.
JTC Corporation, which oversees the development of Fusionopolis as a research centre for the infocommunication, media, science and engineering industries, expects the completion of Solaris to boost human traffic flow in the area.
Fusionopolis Phase 1, which was officially opened in October 2008, currently has a working population of around 2,500 people. According to The Straits Times, business has been poor for retail outlets there. Just about 57 per cent of the retail space has been taken up.
JTC estimates that the daily average human traffic flow will increase to 4,000 when Solaris is completed. The working population could grow further as Fusionopolis expands through more phases.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Fusionopolis' Solaris 60% leased
By EMILYN YAP
SOLARIS, an extension of the Fusionopolis research cluster at Buona Vista, has been 60 per cent leased ahead of its completion by the end of the year.
The developer Soilbuild Group is in 'advanced negotiations' with other potential tenants.
Soilbuild's executive director Low Soon Sim gave BT these updates following the release of the company's second quarter results last week.
Organisations which have signed leases at Solaris include government agency Spring Singapore, software designer Autodesk, video game creator and publisher Ubisoft, and green building consultancy Kaer.
Spring Singapore is Solaris' largest tenant to date, taking up some 15 per cent of the total net lettable area of around 430,000 sq ft. Tenants should be moving in in the early part of next year, Mr Low said.
Soilbuild won the tender for Phase 2B of Fusionopolis in April 2008 and put in around $140 million to develop Solaris on the 83,248 sq ft site.
The building is designed by famed architect Ken Yeang and will be decked with roof gardens and other energy saving features.
Most of the space at the Solaris is set aside for offices. There will also be a childcare centre, and retail outlets will occupy some 3,000 sq ft of space. Soilbuild plans to start marketing the retail space this quarter.
JTC Corporation, which oversees the development of Fusionopolis as a research centre for the infocommunication, media, science and engineering industries, expects the completion of Solaris to boost human traffic flow in the area.
Fusionopolis Phase 1, which was officially opened in October 2008, currently has a working population of around 2,500 people. According to The Straits Times, business has been poor for retail outlets there. Just about 57 per cent of the retail space has been taken up.
JTC estimates that the daily average human traffic flow will increase to 4,000 when Solaris is completed. The working population could grow further as Fusionopolis expands through more phases.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
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