BT : Change property agents' income structure: panel

Business Times - 06 Oct 2010

Change property agents' income structure: panel

THE compensation structure for real estate agents here remains a hindrance to making the industry more professional, panellists at a congress said yesterday.

Most property agents in Singapore get a lot of their income from commissions, which can drive them to try to close sales at the expense of customers' interests, the panellists said.

'As long as the compensation package drives you the other way, it is very hard for you to be professional,' said Far East Organization's chief operating officer Chia Boon Kuah.

Leong Sze Hian, immediate past-president of the Society of Financial Service Professionals and a Wharton Fellow, agreed.

He reckons a minimum wage system would help somewhat.

'As long as you have a lot of people who don't earn enough to make a decent living, or who have to make a decent living in a way that loses the trust of the customers, then how can you be professional?' Mr Leong asked a room full of estate agents.

Mr Chia and Mr Leong were part of a panel on developing world-class real estate professionals in Singapore at the inaugural International Real Estate Congress.

The congress is jointly organised by the Singapore Institute of Surveyors and Valuers (SISV) and Singapore Accredited Estate Agencies (SAEA).

The other two panellists - PropNex chief executive Mohamed Ismail and ERA Asia-Pacific associate director Eugene Lim - said growing the public's trust in the profession is crucial.

Most panellists and real estate professionals are hopeful that the government's move to set up a statutory board - the Council for Estate Agencies - to regulate the industry will ensure that property firms and agents have the knowledge to provide professional service while working ethically.

They noted that this is especially important as the real estate markets become more globalised.

In recent years, foreigners have shown an increasing interest in real estate in Singapore and other Asian cities such as Shanghai and Beijing, said Senior Minister of State for National Development and Education Grace Fu at the opening of the congress yesterday.

'To serve an increasingly diverse global clientele, the role of the real estate professional will have to evolve to encompass regions beyond the local market,' Ms Fu said.

'With a global real estate market, real estate practitioners will need to possess the requisite knowledge on legislation and policies of many countries.'

Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.



Mr Chia: 'As long as the compensation package drives you the other way, it is very hard for you to be professional.'

ST : Shunfu HUDC flat sells for $1.1m

Oct 6, 2010

Shunfu HUDC flat sells for $1.1m

Record deal done in July, before new rules

By Esther Teo

AN OLDER HUDC flat at Shunfu Road has been sold for $1.1 million, a record high in Bishan for this phased-out type of Housing Board (HDB) project.

At least two other similar-sized HUDC flats have sold for slightly higher prices, but they featured condominium-like facilities not on offer at the Shunfu Road flat.

The 1,668 sq ft apartment on a high floor of Block 315 sold at $659 per sq ft (psf). It won HDB resale approval last month but was sold in July, before government cooling measures took effect.

ERA senior marketing director Sandy Lim, the agent who brokered the deal, said the home was valued at about $900,000, which means an impressive $200,000 cash-over-valuation (COV).

She said the buyers, Singaporeans, liked the flat's location and spaciousness, even though it was close to its 'original condition'. The buyers also agreed to pay the $30,000 in privatisation costs.

The estate, at blocks 314 to 319, is set to be privatised by the end of the year.

HUDC flats were built in the 1970s and 1980s as an option for middle-income citizen families. HDB phased out building them in 1987 as demand fell. There are 18 HUDC estates comprising 7,731 residential and 23 shop units. All but Braddell View have been privatised or identified for privatisation.

The latest price has raised eyebrows as it is unlike Braddell View, which has a clubhouse and swimming pool despite not being privatised yet.

Two 1,701 sq ft Braddell View HUDC flats at Block 10H sold for $1.2 million each in June and August this year.

A check on HDB's website showed that the Shunfu HUDC estate has seen a premium in prices over neighbouring HDB flats, even though the latter might be closer to Marymount MRT station. For example, a slightly larger 1,701 sq ft HDB maisonette at nearby Block 301 sold for only $760,000.

Experts are surprised at the $1.1 million price, but say the city-fringe location, its imminent privatisation and collective sale potential could be key to the result.

Mr Colin Tan, head of research and consultancy at Chesterton Suntec International, said $1.1 million was a high price to pay for an older flat that had only about 75 years left on its lease.

'The buyer is probably paying for the en bloc potential of the estate and also the generous space of HUDC flats that you can't find anywhere else these days,' he said.

Mr Eugene Lim, ERA Asia Pacific associate director, agreed the rarity of such large format units was a key reason for the bumper price. He added that the value of an HUDC estate would probably rise by at least 8 per cent to 10 per cent once privatised.

'The increase will probably come after the estate is gated up or, if possible, when a swimming pool, gym or clubhouse is built...This work to enhance the property will definitely make the estate more appealing,' he said.

ERA's Ms Lim said she is currently marketing another 1,646 sq ft HUDC unit in the Shunfu estate for $1.28 million. This unit, however, is fully renovated with designer furnishing, she said.

A resident at Block 315, who asked to be known only as Mr Lim, said he was unlikely to sell his 1,770 sq ft flat as it was in 'a very nice neighbourhood'. 'We have seen fliers in the past on sales transacting at over $1 million, but we didn't know whether to believe it...I might sell if an en bloc offer with the right price comes along, but probably not individually.'

Privatisation means HUDC residents become owners of their units as well as the common property, and so have better control over the running of their estate.

They will also no longer be subject to HDB's housing policies such as having to seek approval to sublet their flats.

HDB said in July that privatisation costs that owners might incur - legal and survey fees, for example - will be capped at $30,000 per flat for the Shunfu estate.

esthert@sph.com.sg



A 1,668 sq ft unit at this Shunfu Road block sold for $659 per sq ft. The HUDC estate is set to be privatised by the end of the year. -- ST PHOTO: MARYANNE TAN

ST : Two more exec condo sites up for tender

Oct 6, 2010

Two more exec condo sites up for tender

Bt Panjang, Tampines sites to yield 1,095 units; cautious response likely

By Harsha Jethnani

LAND parcels earmarked for two executive condominium (EC) projects have been launched by the Housing Board.

This follows keen interest in the first EC in five years, Esparina Residences near Buangkok MRT station, which was open for viewing last week.

ECs, the poshest type of public housing, include some condo-style facilities while HDB rules still apply.

The two 99-year leasehold sites are located at Tampines Avenue 8 and Segar Road in the Bukit Panjang area.

The 20,600 sq m Tampines site, near the Bedok Reservoir area, could yield 525 units while the second 20,834 sq m site, next to Segar LRT station, can yield 570 units, HDB said in a statement yesterday.

The tender for the Tampines site will close at noon on Nov 23 while the Segar Road tender will close on Dec 2. Both are under the Government land sale's confirmed list for the second half of this year.

To continue meeting the strong demand for private housing, HDB also said that the Urban Redevelopment Authority will be releasing another two sites for residential development - at Punggol Central and Seletar Road - this month.

Last week, when Esparina Residences went on sale, more than 300 buyers visited the showflat, with 220 registering interest in an upcoming ballot to book a preferred unit in the 573-unit development.

Developers, however, seem to be more cautious and selective in choosing sites.

Colliers International's director for research and advisory, Ms Tay Huey Ying, expects the response to the latest EC sites to be 'lukewarm'.

'We've already seen developers' interest in residential developments simmering down from the last few tender exercises,' Ms Tay told The Straits Times.

Last month, the tender for a site in Punggol drew just four bids, with the highest bid of $136.2 million among the lowest of top bids for such sites this year.

Last week, a condominium plot in Pasir Ris also drew just four bids and relatively modest offers.

Mr Ong Teck Hui, Credo Real Estate's executive director of research and consultancy, said: 'The trend of subdued cautious bidding is likely to continue.'

Mr Nicholas Mak, executive director of SLP International Property Consultants, said developers are aware that more land sites are oncoming, 'so they are getting more and more choosy'.

harshamj@sph.com.sg

ST : HDB flat owners turn 'hoteliers'

Oct 5, 2010

HDB flat owners turn 'hoteliers'

Practice is illegal and owners risk fine or losing their flats, says board

By Mavis Toh

ROOMS in some Housing Board (HDB) flats are being marketed like hotel rooms to tourists looking to save money on accommodation.

About 50 posts can be found in room rental and classifieds sites online, offering such rooms. As with hotels, rates are higher on weekends. Housekeeping is available, for an extra fee, as is an airport pick-up.

Tourists on short-term visits have their pick of rooms across the island - from Kallang and Geylang to Jurong and Sengkang. The posts state the location, 'room rate' and facilities; some even come with photographs to give interested parties a preview.

The problem: It is all illegal.

When contacted, HDB said its flats are not to be let out to tourists, and home owners who do this risk being fined and served compulsory acquisition orders.

The spokesman said the board has received queries from flat owners about subletting rooms to tourists, but has advised them against doing it.

'A tourist's length of stay is usually short, and the turnover of such 'occupiers' is expected to be high. This may lead to high human traffic to and from the flat, which will disrupt the pleasant living environment and ambience in our HDB estates,' the spokesman said.

The board added that subletting of rooms to 'non-approved sub-tenants' like tourists is an infringement of the lease and the board can take stern action through a fine or even a compulsory acquisition of the flat.

Asked whether any home owner has been penalised for this so far, HDB said the figure was not available.

Meanwhile, some home owners are making money on the side this way.

On one website, a home owner said he was looking to let three of the four bedrooms in his 1,184-sq-ft apartment in the west, which he shares with his wife. They have no children.

In their flat, the rooms set aside for paying guests are even named - Belgium Suite, Snow White Suite and Little Swedish, which he claims are as clean as those in 'a typical five-star hotel'.

He charges a daily rate of between $52 and $82. His 'guests' pay a cleaning fee of up to $132, and $28 for an airport pick-up.

Payments, due before check-in, are only in cash or by bank transfer.

When The Straits Times asked whether rooms were available for the week, the owner said it was a full house.

'Recently it's been quite packed, perhaps because of F1,' he said, adding that he has been letting out the rooms to supplement the family income for three years.

Beyond the money, he said, it has been interesting getting to know people from other cultures; he has had guests from Japan, France and Germany, all of whom booked his rooms online.

Over in Jurong West, a part-time tutor is making available two bedrooms in her maisonette. Bookings are for at least seven days, at $50 a day.

Many other advertisements to which The Straits Times responded were placed by owners or occupiers from India, the Philippines and China, who target their fellow countrymen here to look for work or on holiday.

A Hong Kong woman who stayed in one such 'vacation home' in Redhill this year said she was put off by the cost of a hotel room.

'The rooms in Singapore are at least $200 per night - too expensive for a short break in a nearby country. I paid only $60 a night for the flat,' said the 26-year-old, who wanted to be known only as Ms Shum.

For that price, she said, she got a clean room and even tips on the sights she should catch while in town.

mavistoh@sph.com.sg



A room in Bukit Batok advertised on a website. Often these ads target tourists - a move which the HDB says is an infringement of the lease and could lead to a fine or even a compulsory acquisition of the flat. -- PHOTO: GUMTREE.SG

ST : Slower sales despite crowded showflats

Oct 5, 2010

Slower sales despite crowded showflats

Experts blame the uncertainty created by cooling measures

By Esther Teo

NEWER showflats were chock-a-block across the island over the weekend but home seekers have turned wary and were in a look-but-don't-buy mood.

Sales eased with experts blaming the uncertainty created by the recent cooling measures implemented during a period of record prices.

DMG and Partners analyst Brandon Lee added that in the mass market, 'while interest has not waned substantially, take-up rate has slowed, reflecting a more cautious, wait-and-see approach'.

Weekend sales reflect the new mood. Developer Hoi Hup Sunway sold almost 90 units at the soft launch for Vacanza@East at Lengkong Tujoh last Tuesday but only about 20 sales have been registered since, even though the showflat was crowded over the weekend. The 473-unit project has racked up total sales of 110 units.

Mr Lee said take-up for the freehold project was tepid due mainly to the Government's recent measures, the project's location - it is about 1km away from Kembangan MRT station - and its premium pricing.

'Overall pricing of $1,100 psf represents a 38 per cent premium over the $800 psf fetched by nearby projects such as Grosvenor View and Starville... completed in 2006.'

City Developments' 642-unit NV Residences in Pasir Ris, on the market since Aug 30, has sold 358 out of the 400 units released, with 23 sales made last week. NV sold 250 units within the first week of its preview about a month ago.

There were about five sales at high-end Twin Peaks at Leonie Hill Road over the weekend, with more than half of the 70 units released at the 99-year leasehold condo sold since its launch two weeks ago.

Market sentiment will be tested again on Saturday when Far East Organization holds a preview for invited guests at its 999-year leasehold The Lanai in Hillview Avenue.

There seems to be more buoyancy in the HDB sector.

Esparina Residences, an executive condominium project near Buangkok MRT station, is said to have received almost 1,000 potential buyers registering interest on Friday in a ballot to book a preferred unit.

Experts say that many buyers, anticipating further price falls in the wake of more launches in the private market, are in no hurry to open their cheque books, although they will be happy doing some window shopping.

'We can expect reasonably crowded showflats, but no one's going to be in a rush to sign on the dotted line,' said OrangeTee's head of research and consultancy Tan Kok Keong.

Cushman & Wakefield's senior manager of Asia-Pac research, Mr Ong Kah Seng, said some projects have received encouraging buying interest.

'There are a number (of buyers) still interested... but are increasingly evaluating the decision to buy given the restrictions in re-selling,' he added.

esthert@sph.com.sg


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LOTS OF WINDOW SHOPPING

'We can expect reasonably crowded showflats but no one's going to be in a rush to sign on the dotted line.'

OrangeTee's head of research and consultancy Tan Kok Keong

ST : Demand eases for BTO flats

Oct 5, 2010

Demand eases for BTO flats

New project draws fewer than 3,000 bids, about 2 per unit

By Daryl Chin



A WOODLANDS build-to-order (BTO) project has attracted fewer than 3,000 applications for 1,329 flats, or about two buyers per unit - the lowest demand for a BTO launch in recent years.

As of 5pm yesterday, demand was highest for the bigger flats, with 1,521 out of the total 2,857 applications for 569 four-room units, and 749 bids for 210 five-room flats. Applications closed yesterday at midnight.

The numbers are similar to those for the last BTO project, Yishun Riverwalk, which concluded last month. It averaged about three applications per unit, well below the ratio seen in past BTO launches.

For example, in May, projects Punggol Emerald and Punggol Waves saw application numbers reach up to six times the 1,429 units on offer.

Analysts The Straits Times spoke to said the lower number of applications for both the Woodlands and Yishun developments may be an indication that first-timers are returning to the resale market.

'This is the type of demand you should see realistically,' said PropNex corporate communications manager Adam Tan. 'An oversubscription of about six times would be an indication that supply is severely lacking.'

He added that since new measures to cool the market were introduced at the end of August, cash-over-valuation (COV) amounts have been dropping.

According to PropNex's most recent transactions, COV sums have fallen about 20 per cent to 30 per cent. The median COV amount for the second quarter, according to the Housing Board, was $30,000.

Mr Tan said: 'Many buyers are holding out in hopes that resale flat prices will go down further.

'If prices and COV do not drop to their expected levels by the first quarter, some buyers may return to look at BTO flats.'

ERA Asia Pacific associate director Eugene Lim said buyers near the $6,000 to $10,000 monthly income ceiling might find design, build and sell scheme (DBSS) and executive condominium (EC) flats more appealing than the standard flats offered this time round.

Under the DBSS and EC schemes, public housing flats that are developed and built by private developers come with condo-like finishes.

'Woodlands has one of the largest transaction volumes for resale flats, so a buyer is likely to purchase one if he can get the COV down to a level he is comfortable with, rather than waiting three years for the BTO flats,' said Mr Lim.

Mr Colin Tan, head of research and consultancy at Chesterton Suntec International, said another possibility could be the sheer number of BTOs being launched by the Government to sate demand. The total number of flats put up for sale by the HDB stands at 14,200, almost twice the BTO supply for the whole of last year.

'It might still be too early to tell if this is a result of the recent HDB rule changes,' he added. 'The location could be a factor for some, so buyers are waiting for BTOs in other locations before they decide to buy.'

One such buyer is first-timer Jack Foong. The 29-year-old has been house-hunting for the past year, balloting five times unsuccessfully for developments in the Punggol area.

Said the civil servant: 'My girlfriend and I are looking for waterfront living near the outskirts of the city. Those units at Woodlands are just too far, and you still need to take a bus to reach the train station.'

darylc@sph.com.sg


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DIP IN BIDS

· WOODLANDS (Oct)

Total applications: 2,857

Total available units: 1,329

· PUNGGOL (May)

Total applications: About 9,000

Total available units: 1,429