Are HDB flats affordable?
by Mah Bow Tan
05:55 AM Nov 12, 2010
Recently, the Housing and Development Board was conferred the UN-Habitat Scroll of Honour Award - the most prestigious human settlements award in the world. In recognising Singapore's achievement, the UN-Habitat Chief of Information Services said: "It's really quite impressive for a country to provide adequate shelter and home ownership for so many."
Ask most housing experts and observers, and they will say that HDB flats remain within reach of the majority of Singaporeans. After all, HDB builds and sells flats at heavily-subsidised prices to ensure affordability. This has made it possible for an average of 15,000 young couples every year to join the ranks of homeowners.
Most of these couples buying new flats use just 20 to 25 per cent of their monthly income to pay for their flats. With their CPF contributions, few have to pay any cash for their mortgage payments. In total, more than 80 per cent of Singaporeans live in 900,000 HDB flats today. Yet, people still worry that HDB flats are not affordable. Why are there such sentiments?
Indeed, housing affordability - whether a flat is within financial reach - is not a straightforward issue. Different people have different notions of what is "within reach". Some argue that a 30-year housing loan is too long for a flat to be considered affordable. Others say that flat prices are much higher compared to their parents' time. The debate is further complicated by rising aspirations - whether housing is "within reach" also depends on what we aspire towards.
For a meaningful discussion on affordability, we need objective and commonly accepted yardsticks. So, what are the measures of affordability? How does HDB ensure that flats remain within reach of Singaporeans?
MEASURES TO ENSURE AFFORDABILITY
Focus on first-timers. To ensure that first-time buyers have access to affordable housing, we do several things. First, HDB prices its new flats below market value, taking into account the income of homebuyers. Hence, first-timers enjoy a substantial subsidy when they buy new flats from HDB.
Next, for first-timers who cannot wait for a new flat or wish to buy a specific flat in a specific location, HDB provides a CPF Housing Grant of $30,000 (or $40,000 if they stay near their parents) to buy a resale flat. Beyond that, new and resale flat buyers can apply for a concessionary loan. For a $200,000 loan over 30 years, the interest subsidy amounts to about $30,000.
Help according to income. For households earning $5,000 or less a month, an Additional CPF Housing Grant of up to $40,000 is provided for their purchase of new or resale flats. In other words, a family earning $1,500 can get as much as $80,000 in housing grants. Families earning more, between $8,000 and $10,000, can now buy new flats under the Design, Build and Sell Scheme (DBSS), in addition to Executive Condominiums, and enjoy a CPF Housing Grant of $30,000.
MEASURES OF AFFORDABILITY
I have been discussing affordability in layman's terms. Let me now get into the technical stuff. In particular, how do experts determine housing affordability? There are a few generally accepted benchmarks.
Income affordability. One is the housing price-to-income ratio (or HPI), which compares median house price to annual household income.
In a Straits Times article in February 2010, two NUS professors, Tu Yong and Yu Shi Ming, noted that Singapore's HPI for resale flats in non-mature estates is 5.8, compared to Hong Kong's 19.8 and London's 7.1. That means Singaporeans generally need 5.8 times of their annual household income to buy a resale flat in non-mature estates, whereas a Hong Kong resident needs more than three times that amount.
If we take Department of Statistics 2009 data on the median income of younger households - those aged between 25 and 35 years old - who are likely to be first-timers, their HPI is even lower, at 4.5 for resale flats and 3.8 for new flats. This is because they have higher incomes than average households.
Financing affordability. While the HPI is relatively easy to understand, it does not consider factors like loan availability and financing costs, which are important for many deciding to buy a flat. Therefore, another widely-accepted measure is the debt-service-ratio (DSR), which looks at the proportion of the monthly income used to pay mortgages.
The DSR for new HDB flats in non-mature estates, based on an industry norm of a 30-year loan, averaged 23 per cent this year. This is well within the 30-35 per cent international benchmark for affordable expenditure on housing.
Depending on flat type, the DSR ranged from 11 per cent for standard flats to 29 per cent for premium projects like the Punggol Waterway Terraces, which cater to higher income households.
We must also remember that CPF savings can be used for the initial downpayment and monthly instalments. Hence, more than 80 per cent of new flat buyers pay for their housing loans entirely out of CPF, without having to touch their take-home pay.
Whichever objective measure we choose, it is clear that there are enough HDB flats within reach of today's homebuyers. They range from smaller, no-frills flats in non-mature estates to premium flats in mature estates, catering for different aspirations and budgets (see table above). I hope buyers choose carefully, taking into account their budgets and aspirations. Housing affordability is decided not just by the options offered by HDB but also the choices of homebuyers.
BALANCING HOMEBUYER AND TAXPAYER INTERESTS
I can understand the anxiety among young couples wanting to buy a flat of their choice, within their budget, and as soon as possible. HDB has ramped up supply significantly and recently introduced more measures to temper excessive exuberance in the market and to moderate prices.
HDB also regularly reviews its subsidies to ensure affordability. But I must caution that there are limits to how much we can increase subsidies, without compromising other interests.
In other words, we must also consider affordability from a national standpoint. If we increase housing subsidies, what would we have to give up? The quality of education for our children? Healthcare services for our parents? Or do we impose a higher tax burden on Singaporeans?
There are no easy answers. Ultimately, we need to balance the interests of affordability for homebuyers and the burden on taxpayers.
The writer is the Minister for National Development.
Friday, November 12, 2010
TODAY Online : No end to bidders for land?
No end to bidders for land?
by Colin Tan property@mediacorp.com.sg
05:55 AM Nov 12, 2010
The headline of a news report for a recent tender for private housing development screamed "Serangoon site draws just 4 bids". Another said the top two bids were just 2.6 per cent apart. It was alluding to the fact that the margins between the top bids before the Aug 30 cooling measures were mainly in the double digits, peaking at 31 per cent for a condominium plot in Yishun in August. They are now in the single digits.
For sure, these are all legitimate market signals but are we reading too much significance into them? Yes, we know developers, as a group, have become more cautious. The recently-released real estate sentiment index said as much. But these developers are in the tender to win it, not just to nick it by a small margin. If they keep losing it by the odd percentage point, I am sure they will up the ante for the next tender.
I would suggest that the real story behind these land tenders - coming fast and furious at a pace never witnessed before - is this: Is there no ebb to the demand for land for residential developments?
Before the dust settles on one tender, another is announced. Except for one site for executive condominium development, there has been no strong indication that the demand for land has waned in a big way.
And the demand will still be there as long as there are home sales. So, the market signal to slow the demand for land has to come from the demand side of the housing equation.
Interestingly, the analyses on which the news report was based for the story on the closing gap between the top bids did not mention anything about the gap between the highest and lowest bids.
If we are saying that there is now a greater consensus of views, then why are the margins between the top and lowest bids still showing the wide divergence among developers. Mostly, the margin is about 40 per cent, going up to as high as close to 100 per cent.
Property is all about location and we see it in the bids for the various plots. Those with smaller winning margins were for sites in the far-flung areas, while the wider margins were for plots closer to the city. When tenders for plots closer to the city are offered, then we may see wider margins once again.
In any case, four bids is not in any way a poor market response. We have to look at the location and, mind you, the winning bid is still not cheap. The analysis is not wrong, but let's complete it and give it a fuller picture.
Another story which caught my eye recently was the fuss about the Urban Redevelopment Authority's estimates of future housing supply. The worry was that some investors might make the wrong decision to buy, thinking supply for the year was low when it was actually high, and would, therefore, have difficulty finding tenants later.
Firstly, since when did it become the top priority of investors to buy properties off the plan for rental income? If their first priority is to collect rental income, they would be better off picking a completed property. The reality is that most investors today buy for capital gains first before rental income.
Also, should not the proportion of investor buyers vis-a-vis owner-occupier purchasers for projects completing in the year be more important when analysing the rental potential?
A 400-unit project which secures Temporary Occupation Permit today also does not mean that all 400 units will be potentially be up for rental tomorrow. In reality, the handing over of keys for the entire project can take between three and six months, depending on the size of the development. Investors who get their keys within a month have a head start over those who receive them three to four months later. The time lag can make a big difference to the rental income achieved.
Fewer units are being completed this year and the number of rental contracts has actually gone up by about 5 per cent but there has still been a slowdown in the pace of rental growth. This can only happen because a higher proportion of the completed units were up for rental rather than owner-occupation.
In any case, it was clear that these figures were compiled based on feedback from developers. The market is more dynamic now than in the past and circumstances can and do change.
The numbers will only be more critical if sales are allowed only upon completion of the units. If the vast majority of units were to be unleashed on the market at the same time, then prices could be influenced significantly.
The writer is Head of Research and Consultancy at Chesterton Suntec International.
by Colin Tan property@mediacorp.com.sg
05:55 AM Nov 12, 2010
The headline of a news report for a recent tender for private housing development screamed "Serangoon site draws just 4 bids". Another said the top two bids were just 2.6 per cent apart. It was alluding to the fact that the margins between the top bids before the Aug 30 cooling measures were mainly in the double digits, peaking at 31 per cent for a condominium plot in Yishun in August. They are now in the single digits.
For sure, these are all legitimate market signals but are we reading too much significance into them? Yes, we know developers, as a group, have become more cautious. The recently-released real estate sentiment index said as much. But these developers are in the tender to win it, not just to nick it by a small margin. If they keep losing it by the odd percentage point, I am sure they will up the ante for the next tender.
I would suggest that the real story behind these land tenders - coming fast and furious at a pace never witnessed before - is this: Is there no ebb to the demand for land for residential developments?
Before the dust settles on one tender, another is announced. Except for one site for executive condominium development, there has been no strong indication that the demand for land has waned in a big way.
And the demand will still be there as long as there are home sales. So, the market signal to slow the demand for land has to come from the demand side of the housing equation.
Interestingly, the analyses on which the news report was based for the story on the closing gap between the top bids did not mention anything about the gap between the highest and lowest bids.
If we are saying that there is now a greater consensus of views, then why are the margins between the top and lowest bids still showing the wide divergence among developers. Mostly, the margin is about 40 per cent, going up to as high as close to 100 per cent.
Property is all about location and we see it in the bids for the various plots. Those with smaller winning margins were for sites in the far-flung areas, while the wider margins were for plots closer to the city. When tenders for plots closer to the city are offered, then we may see wider margins once again.
In any case, four bids is not in any way a poor market response. We have to look at the location and, mind you, the winning bid is still not cheap. The analysis is not wrong, but let's complete it and give it a fuller picture.
Another story which caught my eye recently was the fuss about the Urban Redevelopment Authority's estimates of future housing supply. The worry was that some investors might make the wrong decision to buy, thinking supply for the year was low when it was actually high, and would, therefore, have difficulty finding tenants later.
Firstly, since when did it become the top priority of investors to buy properties off the plan for rental income? If their first priority is to collect rental income, they would be better off picking a completed property. The reality is that most investors today buy for capital gains first before rental income.
Also, should not the proportion of investor buyers vis-a-vis owner-occupier purchasers for projects completing in the year be more important when analysing the rental potential?
A 400-unit project which secures Temporary Occupation Permit today also does not mean that all 400 units will be potentially be up for rental tomorrow. In reality, the handing over of keys for the entire project can take between three and six months, depending on the size of the development. Investors who get their keys within a month have a head start over those who receive them three to four months later. The time lag can make a big difference to the rental income achieved.
Fewer units are being completed this year and the number of rental contracts has actually gone up by about 5 per cent but there has still been a slowdown in the pace of rental growth. This can only happen because a higher proportion of the completed units were up for rental rather than owner-occupation.
In any case, it was clear that these figures were compiled based on feedback from developers. The market is more dynamic now than in the past and circumstances can and do change.
The numbers will only be more critical if sales are allowed only upon completion of the units. If the vast majority of units were to be unleashed on the market at the same time, then prices could be influenced significantly.
The writer is Head of Research and Consultancy at Chesterton Suntec International.
TODAY Online : Do your homework Overseas properties may offer good returns but risks abound
Do your homework
Overseas properties may offer good returns but risks abound
by Png Poh Soon
05:55 AM Nov 12, 2010
Signs of a slowdown in Singapore home sales showed in both the number of primary and secondary transactions following the Government's announcement of property market cooling measures on Aug 30.
The number of developers' sales, subsales and resales fell by about 28 per cent, 52 per cent and 42 per cent, respectively, in September from the previous month.
While there has been a decrease in property transactions within Singapore, there has been a pickup in marketing efforts for overseas properties from as near as Malaysia to as far as the United Kingdom. There has been an increase in the number of advertisements in recent weeks inviting Singapore investors to exhibitions and road shows for overseas properties.
Investors here are increasingly attracted by potential opportunities overseas as the local market takes a breather. With the current low savings rates, they are looking for better yielding assets to park their money. Potential price appreciation, income guarantees, low mortgage rates and favourable exchange rates are some of the main factors attracting investors to foreign markets.
Based on recent Knight Frank research, Singapore investors formed the third-largest group of buyers from Asia, after those from China and Hong Kong, of prime London properties from July last year to June this year.
Before jumping on the bandwagon, potential buyers should not assume that the same institutional and legal framework that is applicable in Singapore will apply in other countries.
What should buyers look out for when investing in overseas properties? What are the risks and who should they consult?
Many often buy properties in countries that they are familiar with. Some might have studied in a particular country and have developed a fondness for it. Others feel safer if their investment is closer to home and, therefore, prefer to buy a property in neighbouring countries.
From experience, up to 20 per cent of buyers who purchased foreign properties during exhibitions had not visited the city and up to 70 per cent of buyers had not inspected the project site. As environments change and cities evolve, it is prudent to re-visit the site and not to rely solely on memories or gut feel.
For completed overseas properties, it is also advisable to seek an independent professional valuation. One may want to reconsider the purchase if there is a big difference between the asking price and the valuation. In any case, if bank financing is required, a valuation will be carried out by the bank. It may also be worthwhile to get a structural survey done, too. If significant problems are highlighted, one can either forgo the purchase or negotiate a lower price to account for the rectification cost.
Some projects offer purchasers rental guarantees, some as high as 8 per cent. A rental guarantee is a contract between the granter, usually the developer or the vendor and the buyer, where the latter is paid a fixed income based on a guaranteed rate on the purchase price.
For example, a guaranteed rental of 6 per cent on an apartment bought for £250,000 ($519,000) in London amounts to £15,000 per year.
Most rental guarantees are on a gross basis where the buyer is still required to pay all outgoings, such as maintenance costs and property taxes. Because of this, the net return will be lower.
Properties with rental guarantees often also come at a higher price to compensate the granter for bearing the risk of not earning an income when tenants cannot be secured in time or higher vacancies during off-peak holiday periods. Buyers should note that the rent collected may drop significantly after the guarantee period.
It is important to engage reliable managing agents to look for tenants, to collect rent and to look after general repairs. Usually they charge a fee of 5 to 10 per cent of the monthly rent. An agent's commission for securing a tenant is usually the equivalent of one month's rent for a two-year lease, similar to the practice in Singapore. Total outgoings average between about 10 to 20 per cent of gross rental income per year.
There are other miscellaneous costs such as legal fees, stamp duties, valuation fees and bank processing fees. The amounts vary across countries and the prospective buyer should seek professional advice.
Potential buyers should also be aware of tax regulations, especially for mature markets such as the United States and Australia. In many instances, rental income is taxed at the progressive personal income tax scale in the country where the income is sourced. While capital gains tax does not apply in Singapore, it may be applicable in other countries. Buyers should consult tax advisers to ensure they understand all tax issues.
To guard against poor workmanship, the sale and purchase agreement should provide for a two- to six-month liability period for the developer to rectify the faults. In instances where there are delays in the completion, purchasers should be compensated or can opt to rescind the purchase with the money refunded.
The types of legal recourse available are subject to the terms and conditions in the sale and purchase agreement. Buyers are advised to read the document carefully before signing and paying the initial reservation fee, which is often non-refundable. They can engage lawyers to advise them on their rights if things go awry.
If a developer goes bankrupt during the construction stage, any monies paid directly to the developer rather than to a trust fund are usually not recoverable. Hence when buying properties off-the-plan or under construction, one should look at the developer's reputation, track record and financial standing to reduce the risk of potential losses.
There are also other legal considerations to note. Some countries have laws that restrict resale property ownership. For example, in Australia, residential properties can be resold only to Australian citizens, permanent residents and foreign students or foreign companies that have obtained the Foreign Investment Review Board's approval to buy for owner occupation.
In Malaysia, the government's consent is required for the sale of freehold landed properties to non-citizens. In some instances, the property can only be sold to the bumiputera.
In a nutshell, while there are many success stories, buying that overseas property is not as simple as some may think. One needs to look beyond the glossy brochures and the glitzy displays. Engaging competent and experienced advisers will help the process but at the end of the day, it is still caveat emptor (buyer beware).
The writer is Senior Manager, Consultancy and Research, at Knight Frank.
Overseas properties may offer good returns but risks abound
by Png Poh Soon
05:55 AM Nov 12, 2010
Signs of a slowdown in Singapore home sales showed in both the number of primary and secondary transactions following the Government's announcement of property market cooling measures on Aug 30.
The number of developers' sales, subsales and resales fell by about 28 per cent, 52 per cent and 42 per cent, respectively, in September from the previous month.
While there has been a decrease in property transactions within Singapore, there has been a pickup in marketing efforts for overseas properties from as near as Malaysia to as far as the United Kingdom. There has been an increase in the number of advertisements in recent weeks inviting Singapore investors to exhibitions and road shows for overseas properties.
Investors here are increasingly attracted by potential opportunities overseas as the local market takes a breather. With the current low savings rates, they are looking for better yielding assets to park their money. Potential price appreciation, income guarantees, low mortgage rates and favourable exchange rates are some of the main factors attracting investors to foreign markets.
Based on recent Knight Frank research, Singapore investors formed the third-largest group of buyers from Asia, after those from China and Hong Kong, of prime London properties from July last year to June this year.
Before jumping on the bandwagon, potential buyers should not assume that the same institutional and legal framework that is applicable in Singapore will apply in other countries.
What should buyers look out for when investing in overseas properties? What are the risks and who should they consult?
Many often buy properties in countries that they are familiar with. Some might have studied in a particular country and have developed a fondness for it. Others feel safer if their investment is closer to home and, therefore, prefer to buy a property in neighbouring countries.
From experience, up to 20 per cent of buyers who purchased foreign properties during exhibitions had not visited the city and up to 70 per cent of buyers had not inspected the project site. As environments change and cities evolve, it is prudent to re-visit the site and not to rely solely on memories or gut feel.
For completed overseas properties, it is also advisable to seek an independent professional valuation. One may want to reconsider the purchase if there is a big difference between the asking price and the valuation. In any case, if bank financing is required, a valuation will be carried out by the bank. It may also be worthwhile to get a structural survey done, too. If significant problems are highlighted, one can either forgo the purchase or negotiate a lower price to account for the rectification cost.
Some projects offer purchasers rental guarantees, some as high as 8 per cent. A rental guarantee is a contract between the granter, usually the developer or the vendor and the buyer, where the latter is paid a fixed income based on a guaranteed rate on the purchase price.
For example, a guaranteed rental of 6 per cent on an apartment bought for £250,000 ($519,000) in London amounts to £15,000 per year.
Most rental guarantees are on a gross basis where the buyer is still required to pay all outgoings, such as maintenance costs and property taxes. Because of this, the net return will be lower.
Properties with rental guarantees often also come at a higher price to compensate the granter for bearing the risk of not earning an income when tenants cannot be secured in time or higher vacancies during off-peak holiday periods. Buyers should note that the rent collected may drop significantly after the guarantee period.
It is important to engage reliable managing agents to look for tenants, to collect rent and to look after general repairs. Usually they charge a fee of 5 to 10 per cent of the monthly rent. An agent's commission for securing a tenant is usually the equivalent of one month's rent for a two-year lease, similar to the practice in Singapore. Total outgoings average between about 10 to 20 per cent of gross rental income per year.
There are other miscellaneous costs such as legal fees, stamp duties, valuation fees and bank processing fees. The amounts vary across countries and the prospective buyer should seek professional advice.
Potential buyers should also be aware of tax regulations, especially for mature markets such as the United States and Australia. In many instances, rental income is taxed at the progressive personal income tax scale in the country where the income is sourced. While capital gains tax does not apply in Singapore, it may be applicable in other countries. Buyers should consult tax advisers to ensure they understand all tax issues.
To guard against poor workmanship, the sale and purchase agreement should provide for a two- to six-month liability period for the developer to rectify the faults. In instances where there are delays in the completion, purchasers should be compensated or can opt to rescind the purchase with the money refunded.
The types of legal recourse available are subject to the terms and conditions in the sale and purchase agreement. Buyers are advised to read the document carefully before signing and paying the initial reservation fee, which is often non-refundable. They can engage lawyers to advise them on their rights if things go awry.
If a developer goes bankrupt during the construction stage, any monies paid directly to the developer rather than to a trust fund are usually not recoverable. Hence when buying properties off-the-plan or under construction, one should look at the developer's reputation, track record and financial standing to reduce the risk of potential losses.
There are also other legal considerations to note. Some countries have laws that restrict resale property ownership. For example, in Australia, residential properties can be resold only to Australian citizens, permanent residents and foreign students or foreign companies that have obtained the Foreign Investment Review Board's approval to buy for owner occupation.
In Malaysia, the government's consent is required for the sale of freehold landed properties to non-citizens. In some instances, the property can only be sold to the bumiputera.
In a nutshell, while there are many success stories, buying that overseas property is not as simple as some may think. One needs to look beyond the glossy brochures and the glitzy displays. Engaging competent and experienced advisers will help the process but at the end of the day, it is still caveat emptor (buyer beware).
The writer is Senior Manager, Consultancy and Research, at Knight Frank.
ST : Strata-titled malls lose out to glitzy new retail centres
Nov 12, 2010
Strata-titled malls lose out to glitzy new retail centres
Older premises suffer from poor maintenance and lack of promotion, say businesses
By Jessica Lim & Ng Kai Ling
IN DECLINE
'Sometimes we have zero customers. Promotions for the mall are so bad. You talk about Orchard Plaza, no one knows where it is. The mall is also poorly maintained. There are cockroaches everywhere.'
Mr Jeffrey Liew, owner of Letona Departmental store in Orchard Plaza. His complaint was echoed by Mr Mark Chainani, above, the manager of Modella Tailors in the same mall, who said business has been slow recently.
-- ST PHOTO: TED CHEN
STRATA-TITLED malls are suffering, shabby cousins to glitzy new shopping centres such as Knightsbridge and Ion Orchard that have sprung up in Singapore's shopping belt recently.
Retailers at such malls - including Orchard Plaza, Far East Plaza and Midpoint Orchard - say business has dropped by up to half compared to a year ago.
The store units in strata-titled malls are owned by individual owners who often rent out the spaces. Most malls here have one owner who manages everything from renting out the shop units to promoting the mall.
At Far East Plaza, 12 out of about 120 shops at level one - which is targeted at youth - are up for lease, and at least two have been vacant for about a year.
Tenants there say that since the new malls opened last year, business has fallen by up to 30 per cent.
Midpoint Orchard also reports similar losses. Resan Boutique, which offers tailoring services and sells jewellery, collects $1,500 a month - down 30 per cent from a year ago. Its owner, Ms Soh Li Wah, 60, blames this on increased competition from other malls.
The situation seems even more dire over at Orchard Plaza, which has a mish-mash of businesses that include massage parlours, tailoring shops and sundry shops.
At SGMobile - a mobile phone shop on the ground floor - daily turnover has dropped to $500 from $1,000 last year, said its owner, who wanted to be known only as Danny.
He said he has seen a sharp decline in the number of tourists in the area this year.
'This place cannot compare to the spiffy new malls in the area. We can barely cover rent,' he said, adding that he will be moving out next year. His monthly rental is a four-figure sum.
It is the same at Letona Departmental store, also in Orchard Plaza.
The owner of the electronics store, Mr Jeffrey Liew, 51, said business has dropped by half.
'Sometimes we have zero customers. Promotions for the mall are so bad. You talk about Orchard Plaza, no one knows where it is,' he said.
'The mall is also poorly maintained. There are cockroaches everywhere.'
Business is also bad at two other strata-titled malls The Straits Times visited - Far East Shopping Centre and Tanglin Shopping Centre.
The latter will be put up for collective sale at the end of this month, with a reserve price of $1.25 billion.
Retail experts say that poor maintenance and the lack of promotion plague most strata-titled malls, which were built in the 1970s and are slowly being phased out except for a handful.
Senior lecturer Sarah Lim, from Singapore Polytechnic's business school, said: 'When it comes to promotional activities, it is difficult to get all the individual owners to participate.
'And when it comes to maintenance and upgrading, there are so many different opinions on which maintenance company to hire and how much each tenant should come up with.'
Mr Charles Yue, a property agent who handles the rent and sale of shops at Far East Plaza, agreed.
'Strata-titled malls are not coordinated well, as individual owners act for their own self-interest,' he said.
For example, Far East Organization owns a 46 per cent stake in Far East Plaza, with the rest of the 54 per cent or some 600 shops shared among some 550 individual owners.
Tailor Ali John, who has been at Far East Shopping Centre for 30 years, said: 'The landlords are reluctant to do anything because they can still collect rent.'
He said he pays close to $5,000 a month for his 300 sq ft unit on the mall's second floor.
What this means for such businesses is that they have to think smarter and work harder to bring in customers.
At Golf & Leisure at Far East Shopping Centre, the shop tries to win over regular customers by carrying niche brands and offering good service.
The shop, which opened six years ago, has since expanded from one unit to three.
'We cannot depend on walk-in customers; at least 80 per cent of our customers are regulars,' said retail manager Michele James.
Over at Midpoint Orchard, bead shop Purple Beads pulls in regular customers by offering classes. 'Look outside, it is so run-down. But we are unaffected because our regulars always come back,' said owner Nancy Law.
Nonetheless, in the long term, the owners of these shop units will have to do more to survive.
Lecturer Ms Lim said that owners of units in these strata-titled malls should 'get together, form a committee and discuss ways to position themselves as a mall'.
She said: 'They should decide what to do in the long term, what kind of customer they want to target and then set up a calendar of events to reach out to this market.'
limjess@sph.com.sg
kailing@sph.com.sg
Strata-titled malls lose out to glitzy new retail centres
Older premises suffer from poor maintenance and lack of promotion, say businesses
By Jessica Lim & Ng Kai Ling
IN DECLINE
'Sometimes we have zero customers. Promotions for the mall are so bad. You talk about Orchard Plaza, no one knows where it is. The mall is also poorly maintained. There are cockroaches everywhere.'
Mr Jeffrey Liew, owner of Letona Departmental store in Orchard Plaza. His complaint was echoed by Mr Mark Chainani, above, the manager of Modella Tailors in the same mall, who said business has been slow recently.
-- ST PHOTO: TED CHEN
STRATA-TITLED malls are suffering, shabby cousins to glitzy new shopping centres such as Knightsbridge and Ion Orchard that have sprung up in Singapore's shopping belt recently.
Retailers at such malls - including Orchard Plaza, Far East Plaza and Midpoint Orchard - say business has dropped by up to half compared to a year ago.
The store units in strata-titled malls are owned by individual owners who often rent out the spaces. Most malls here have one owner who manages everything from renting out the shop units to promoting the mall.
At Far East Plaza, 12 out of about 120 shops at level one - which is targeted at youth - are up for lease, and at least two have been vacant for about a year.
Tenants there say that since the new malls opened last year, business has fallen by up to 30 per cent.
Midpoint Orchard also reports similar losses. Resan Boutique, which offers tailoring services and sells jewellery, collects $1,500 a month - down 30 per cent from a year ago. Its owner, Ms Soh Li Wah, 60, blames this on increased competition from other malls.
The situation seems even more dire over at Orchard Plaza, which has a mish-mash of businesses that include massage parlours, tailoring shops and sundry shops.
At SGMobile - a mobile phone shop on the ground floor - daily turnover has dropped to $500 from $1,000 last year, said its owner, who wanted to be known only as Danny.
He said he has seen a sharp decline in the number of tourists in the area this year.
'This place cannot compare to the spiffy new malls in the area. We can barely cover rent,' he said, adding that he will be moving out next year. His monthly rental is a four-figure sum.
It is the same at Letona Departmental store, also in Orchard Plaza.
The owner of the electronics store, Mr Jeffrey Liew, 51, said business has dropped by half.
'Sometimes we have zero customers. Promotions for the mall are so bad. You talk about Orchard Plaza, no one knows where it is,' he said.
'The mall is also poorly maintained. There are cockroaches everywhere.'
Business is also bad at two other strata-titled malls The Straits Times visited - Far East Shopping Centre and Tanglin Shopping Centre.
The latter will be put up for collective sale at the end of this month, with a reserve price of $1.25 billion.
Retail experts say that poor maintenance and the lack of promotion plague most strata-titled malls, which were built in the 1970s and are slowly being phased out except for a handful.
Senior lecturer Sarah Lim, from Singapore Polytechnic's business school, said: 'When it comes to promotional activities, it is difficult to get all the individual owners to participate.
'And when it comes to maintenance and upgrading, there are so many different opinions on which maintenance company to hire and how much each tenant should come up with.'
Mr Charles Yue, a property agent who handles the rent and sale of shops at Far East Plaza, agreed.
'Strata-titled malls are not coordinated well, as individual owners act for their own self-interest,' he said.
For example, Far East Organization owns a 46 per cent stake in Far East Plaza, with the rest of the 54 per cent or some 600 shops shared among some 550 individual owners.
Tailor Ali John, who has been at Far East Shopping Centre for 30 years, said: 'The landlords are reluctant to do anything because they can still collect rent.'
He said he pays close to $5,000 a month for his 300 sq ft unit on the mall's second floor.
What this means for such businesses is that they have to think smarter and work harder to bring in customers.
At Golf & Leisure at Far East Shopping Centre, the shop tries to win over regular customers by carrying niche brands and offering good service.
The shop, which opened six years ago, has since expanded from one unit to three.
'We cannot depend on walk-in customers; at least 80 per cent of our customers are regulars,' said retail manager Michele James.
Over at Midpoint Orchard, bead shop Purple Beads pulls in regular customers by offering classes. 'Look outside, it is so run-down. But we are unaffected because our regulars always come back,' said owner Nancy Law.
Nonetheless, in the long term, the owners of these shop units will have to do more to survive.
Lecturer Ms Lim said that owners of units in these strata-titled malls should 'get together, form a committee and discuss ways to position themselves as a mall'.
She said: 'They should decide what to do in the long term, what kind of customer they want to target and then set up a calendar of events to reach out to this market.'
limjess@sph.com.sg
kailing@sph.com.sg
ST : Several property launches in the offing
Nov 12, 2010
Several property launches in the offing
By Esther Teo
A BRACE of property launches - from one-room units to upscale penthouses - are lined up to hit Singapore's property market over the coming weeks.
Those queueing up with new projects include UOL Group, with its Spottiswoode Residences; Sim Lian Group, with Waterview; and United Engineers (UEL), with a new executive condominium (EC) development.
Launches of CapitaLand's The Nassim and its 1,715-unit condo on the Farrer Court site are also expected by the end of this year.
UOL Group, which staged a preview of its 351-unit Spottiswoode Residences today, has released 100 units comprising a selection of one-, two- and three-bedroom apartments at prices ranging from $1.05 million for a one-bedroom apartment to $2.67 million for a three-bedroom unit.
This works out to between $1,720 and $2,100 per sq ft (psf).
The project consists of mostly one- and two-bedroom units, but there are 25 three-bedders and seven penthouses. The unit sizes for one- to three-bedders vary from 603 sq ft to 1,421 sq ft, while a typical penthouse is 2,530 sq ft, according to UOL.
The freehold plot, which will host a 36-storey tower, is next to Spottiswoode Park and close to Tanjong Pagar, which is slated to be transformed into a new bustling waterfront district once container terminals in the vicinity move out.
UOL Group chief operating officer Liam Wee Sin, who announced that the company may keep some units back for sale at a later date, said: 'Coupled with the redevelopment of the Tanjong Pagar railway station, what we have is an attractive and exciting growth story which is compelling.'
Sim Lian Group is due to launch its VIP preview of the 696-unit Waterview along Tampines Avenue 10 on Tuesday, with the main launch next Friday.
The project is expected to sell at between $850 and $950 psf, with apartment sizes ranging from two-bedroom units of 786 sq ft to penthouses of 4,768 sq ft.
The 99-year leasehold project comprising 12 blocks of 15 storeys will have 56 four-bedroom apartments and 24 penthouses. The rest are two- and three-bedroom units, with half of them coming with an attached study.
The wraps are expected to be taken off UEL's new executive condominium shortly. It will be the third EC in five years.
UEL announced on Wednesday that its 540-unit project, located at the junction of Sengkang East Avenue and Buangkok Drive, is likely to be launched either next month or in January and will have six 18-storey towers.
It follows the launches of ECs Esparina Residences near Buangkok MRT Station and The Canopy at Yishun Avenue 11 earlier this year.
Elsewhere, agents are said to be canvassing interest for Suites at Eunos, Robinson Suites and a Keppel Land project next to Lakeside MRT station.
Several property launches in the offing
By Esther Teo
A BRACE of property launches - from one-room units to upscale penthouses - are lined up to hit Singapore's property market over the coming weeks.
Those queueing up with new projects include UOL Group, with its Spottiswoode Residences; Sim Lian Group, with Waterview; and United Engineers (UEL), with a new executive condominium (EC) development.
Launches of CapitaLand's The Nassim and its 1,715-unit condo on the Farrer Court site are also expected by the end of this year.
UOL Group, which staged a preview of its 351-unit Spottiswoode Residences today, has released 100 units comprising a selection of one-, two- and three-bedroom apartments at prices ranging from $1.05 million for a one-bedroom apartment to $2.67 million for a three-bedroom unit.
This works out to between $1,720 and $2,100 per sq ft (psf).
The project consists of mostly one- and two-bedroom units, but there are 25 three-bedders and seven penthouses. The unit sizes for one- to three-bedders vary from 603 sq ft to 1,421 sq ft, while a typical penthouse is 2,530 sq ft, according to UOL.
The freehold plot, which will host a 36-storey tower, is next to Spottiswoode Park and close to Tanjong Pagar, which is slated to be transformed into a new bustling waterfront district once container terminals in the vicinity move out.
UOL Group chief operating officer Liam Wee Sin, who announced that the company may keep some units back for sale at a later date, said: 'Coupled with the redevelopment of the Tanjong Pagar railway station, what we have is an attractive and exciting growth story which is compelling.'
Sim Lian Group is due to launch its VIP preview of the 696-unit Waterview along Tampines Avenue 10 on Tuesday, with the main launch next Friday.
The project is expected to sell at between $850 and $950 psf, with apartment sizes ranging from two-bedroom units of 786 sq ft to penthouses of 4,768 sq ft.
The 99-year leasehold project comprising 12 blocks of 15 storeys will have 56 four-bedroom apartments and 24 penthouses. The rest are two- and three-bedroom units, with half of them coming with an attached study.
The wraps are expected to be taken off UEL's new executive condominium shortly. It will be the third EC in five years.
UEL announced on Wednesday that its 540-unit project, located at the junction of Sengkang East Avenue and Buangkok Drive, is likely to be launched either next month or in January and will have six 18-storey towers.
It follows the launches of ECs Esparina Residences near Buangkok MRT Station and The Canopy at Yishun Avenue 11 earlier this year.
Elsewhere, agents are said to be canvassing interest for Suites at Eunos, Robinson Suites and a Keppel Land project next to Lakeside MRT station.
ST : Landlord wins suit to evict home owner
Nov 12, 2010
Landlord wins suit to evict home owner
SERVED an eviction notice by his landlord, retiree Goh Kim Thong, 73, refused to budge - even when offered $225,000 for the terrace house in Mandai.
Mr Goh named his price - between $1.8 million and $2 million.
His landlord, Mr Ong Beng Chong, went to court to get the situation resolved.
In July, the High Court awarded Mr Goh $74,000 for his house in Meng Suan Road - a third of the compensation amount he was offered, based on valuation reports - and ordered him to hand over the house in four months.
Mr Goh stood firm on his asking price and appealed.
Yesterday, the Court of Appeal asked Mr Ong's lawyer whether his client was prepared to revisit his earlier offer, to which the reply came back: $200,000.
The court, comprising Chief Justice Chan Sek Kong, Justice Andrew Phang and Justice V. K. Rajah, then awarded Mr Goh $200,000 and gave him until Dec 31 to move out.
Mr Goh grumbled that the sum would not buy a three-room flat.
His single-storey, 50-year-old house is one of nine along the road, numbered 20 to 28 and built on Mr Ong's land.
The piece of land has a history that dates back to the 1950s, a time when people could own the land, but let others build houses on it in return for 'ground rent'. For the Meng Suan Road houses, ground rent was between $7 and $20 a month.
Mr Goh and his wife had bought No. 24, without the land, in 1983 for a mere $10,000 from the then-ground tenants.
In recent years, Mr Ong, who had redevelopment plans for his land, started sending his tenants quit notices and offers of compensation.
Mr Goh received his notice in October last year, and rebuffed Mr Ong's initial compensation offer.
He and his family do not live in the house, which is rented out to six workers from Malaysia. Each pays $180 a month.
During the hearing of Mr Ong's suit to evict him, Mr Goh, who did not have a lawyer, argued that he was entitled to squat on the land until the 999-year lease runs out in the year 2883.
But the High Court disagreed, saying that the law on this kind of land is clear: It states that the land owner can retake the land as long as the building owner is reasonably compensated.
Mr Ong, who also filed suit against three other tenants, eventually acquired the houses after mediation or an out-of-court settlement. Two other units are occupied by Mr Ong's family and relatives, leaving the tenants of three more units for him to evict.
SELINA LUM
Landlord wins suit to evict home owner
SERVED an eviction notice by his landlord, retiree Goh Kim Thong, 73, refused to budge - even when offered $225,000 for the terrace house in Mandai.
Mr Goh named his price - between $1.8 million and $2 million.
His landlord, Mr Ong Beng Chong, went to court to get the situation resolved.
In July, the High Court awarded Mr Goh $74,000 for his house in Meng Suan Road - a third of the compensation amount he was offered, based on valuation reports - and ordered him to hand over the house in four months.
Mr Goh stood firm on his asking price and appealed.
Yesterday, the Court of Appeal asked Mr Ong's lawyer whether his client was prepared to revisit his earlier offer, to which the reply came back: $200,000.
The court, comprising Chief Justice Chan Sek Kong, Justice Andrew Phang and Justice V. K. Rajah, then awarded Mr Goh $200,000 and gave him until Dec 31 to move out.
Mr Goh grumbled that the sum would not buy a three-room flat.
His single-storey, 50-year-old house is one of nine along the road, numbered 20 to 28 and built on Mr Ong's land.
The piece of land has a history that dates back to the 1950s, a time when people could own the land, but let others build houses on it in return for 'ground rent'. For the Meng Suan Road houses, ground rent was between $7 and $20 a month.
Mr Goh and his wife had bought No. 24, without the land, in 1983 for a mere $10,000 from the then-ground tenants.
In recent years, Mr Ong, who had redevelopment plans for his land, started sending his tenants quit notices and offers of compensation.
Mr Goh received his notice in October last year, and rebuffed Mr Ong's initial compensation offer.
He and his family do not live in the house, which is rented out to six workers from Malaysia. Each pays $180 a month.
During the hearing of Mr Ong's suit to evict him, Mr Goh, who did not have a lawyer, argued that he was entitled to squat on the land until the 999-year lease runs out in the year 2883.
But the High Court disagreed, saying that the law on this kind of land is clear: It states that the land owner can retake the land as long as the building owner is reasonably compensated.
Mr Ong, who also filed suit against three other tenants, eventually acquired the houses after mediation or an out-of-court settlement. Two other units are occupied by Mr Ong's family and relatives, leaving the tenants of three more units for him to evict.
SELINA LUM
ST : IndoChine owner wins court battle
Nov 11, 2010
IndoChine owner wins court battle
INDOCHINE pub and restaurant chain owner Michael Ma has won a court battle to get back, with interest, the $386,000 he put down nearly 3-1/2 years ago on a property deal that had to be aborted.
The Court of Appeal yesterday ruled in his favour, overturning an earlier decision by a High Court judge who had dismissed his case for a refund.
In June 2007, Mr Ma had viewed five shophouses in Tanjong Katong Road and agreed to buy them for $7.72 million.
He first paid the 1 per cent option fee of $77,200; then, after the option was exercised, another $308,800, or 4 per cent of the purchase price.
Later, Mr Ma, an Australian who is a permanent resident in Singapore, found out that as a foreigner, he was not eligible to buy the shophouses as they were partially restricted for residential use.
Since the deal could not be completed, the seller, Goodman Development, said he had to forfeit his deposit.
Mr Ma, represented by lawyer Kenneth Pereira, sued Goodman, claiming it had misrepresented the status of the shophouses, saying they were for commercial use.
He claimed that he had asked Goodman's property agent whether the shophouses were zoned 'commercial' and she confirmed they were.
But Goodman, represented by Ms Felicia Ng, denied misleading Mr Ma. The property agent said she told him the upstairs unit was residential and downstairs commercial.
And in May, the High Court said that given Mr Ma's business acumen and experience, he would not have paid without verifying the zoning. The judge found that Mr Ma knew what the zoning was when the balance of the deposit was paid.
And although the contract was void because Mr Ma was not eligible to buy the property, he failed to show a strong case for a refund, said the High Court.
But yesterday, a three-judge appeals court disagreed.
During the hearing, Justice V.K. Rajah said both parties were under a 'mistaken common assumption' at the time that Mr Ma was entitled to buy the property.
Both acted in good faith and did not think they were doing anything improper, so the contract was void but not illegal.
SELINA LUM
IndoChine owner wins court battle
INDOCHINE pub and restaurant chain owner Michael Ma has won a court battle to get back, with interest, the $386,000 he put down nearly 3-1/2 years ago on a property deal that had to be aborted.
The Court of Appeal yesterday ruled in his favour, overturning an earlier decision by a High Court judge who had dismissed his case for a refund.
In June 2007, Mr Ma had viewed five shophouses in Tanjong Katong Road and agreed to buy them for $7.72 million.
He first paid the 1 per cent option fee of $77,200; then, after the option was exercised, another $308,800, or 4 per cent of the purchase price.
Later, Mr Ma, an Australian who is a permanent resident in Singapore, found out that as a foreigner, he was not eligible to buy the shophouses as they were partially restricted for residential use.
Since the deal could not be completed, the seller, Goodman Development, said he had to forfeit his deposit.
Mr Ma, represented by lawyer Kenneth Pereira, sued Goodman, claiming it had misrepresented the status of the shophouses, saying they were for commercial use.
He claimed that he had asked Goodman's property agent whether the shophouses were zoned 'commercial' and she confirmed they were.
But Goodman, represented by Ms Felicia Ng, denied misleading Mr Ma. The property agent said she told him the upstairs unit was residential and downstairs commercial.
And in May, the High Court said that given Mr Ma's business acumen and experience, he would not have paid without verifying the zoning. The judge found that Mr Ma knew what the zoning was when the balance of the deposit was paid.
And although the contract was void because Mr Ma was not eligible to buy the property, he failed to show a strong case for a refund, said the High Court.
But yesterday, a three-judge appeals court disagreed.
During the hearing, Justice V.K. Rajah said both parties were under a 'mistaken common assumption' at the time that Mr Ma was entitled to buy the property.
Both acted in good faith and did not think they were doing anything improper, so the contract was void but not illegal.
SELINA LUM
ST : Bought: $20m in June 2009 Sold: $37m in Oct 2009
Nov 10, 2010
Bought: $20m in June 2009 Sold: $37m in Oct 2009
Good-class bungalows are changing hands at a fast clip as prices soar
By Esther Teo
The owner sold this 40,677 sq ft good-class bungalow on Ridout Road four months after buying it, making a handsome profit of $17 million. -- PHOTO: GOOGLE.COM
GOOD-CLASS bungalow owners are cashing in on rocketing property prices.
A CB Richard Ellis (CBRE) analysis of Urban Redevelopment Authority (URA) Realis caveats shows that good-class bungalows are netting bumper profits for owners who have seen average per sq ft (psf) prices rise almost 30 per cent over the past year.
Several have taken to buying and selling their good-class bungalows within a period of less than two years.
At least seven good-class bungalows bought since May last year have been sold within 18 months of purchase, with four sold within a year, with a profit of as much as 85 per cent over the purchase price.
This massive gain was seen by a 40,677 sq ft good-class bungalow property on Ridout Road near the Holland area, translating to a $17 million gain within a four-month span.
At least one home, on Nassim Road, has even been sold five times within the past six years - soaring from $9.8 million in 2005 to $43.5 million this year.
It sold at $1,800 psf in April this year - almost 4.5 times the $405 psf it was sold for in February 2005. The 24,186 sq ft property had changed hands at $620 psf in August 2006, $760 psf in December the same year, followed by $1,000 psf in June 2007.
Experts said that good-class bungalows have turned out to be one of this year's star investment propositions.
URA data shows that non-landed home prices inched up 1.6 per cent in the third quarter, while prices of detached homes rose 8.4 per cent over the same period.
CBRE said that while the 109 good-class bungalow sales last year had been transacted at $831 psf on average, the 86 transactions this year to September, which totalled $1.6 billion, were done at an average of $1,055 psf - a 27 per cent surge over the previous year.
This increase is one of the steepest over the last 15 years, said Cushman and Wakefield's senior manager of Asia-Pacific research, Mr Ong Kah Seng.
He noted that the keen buying interest in good-class bungalows was being driven by limited supply, making it the safest buy for a home buyer not limited by affordability.
'(Even with) developers' concerted efforts to brand condominiums with innovative concepts, the product is fairly homogeneous...On the other hand, buyers of good-class bungalows, in addition to being proud owners of the land, will be able to highly customise their homes to be materially different from another,' he said.
Mr Douglas Wong, CBRE director of luxury homes, said that the approximately 2,400 good-class bungalows, which can be found in 39 prime gazetted areas such as Nassim, Dalvey and Tanglin, are owned by only about 1,000 individuals.
These owners are usually ultra-high net worth Singaporeans, who are mostly professionals, businessmen or entrepreneurs, he said.
'Many of the buyers might have purchased their homes with the intention of long-term investment, but when the market moves, they might seize the opportunity to make some profits instead,' he added.
Mr Alexs Chua, managing director of property agency AC MacGyver, a specialist in landed homes, said that about 20 per cent of homes sold last year have been put on the market again, although many owners may just be testing the market.
He expects prices to rise another 10 per cent by March next year.
But CBRE's Mr Wong reports that demand had slowed in the third quarter, when 19 good-class bungalows were sold compared to 36 in the second quarter and 31 in the first quarter.
'This could be attributed partly to cautious sentiments and partly to the widening price gap between good-class bungalow owners' expectations and buyers' offers,' he said.
However, he expects the market to achieve about 100 to 120 transactions amounting to about $1.8 billion this year.
Typically, only Singapore citizens can own a good-class bungalow, but permanent residents may obtain permission to buy small bungalows with land areas of about 15,000 sq ft.
esthert@sph.com.sg
Bought: $20m in June 2009 Sold: $37m in Oct 2009
Good-class bungalows are changing hands at a fast clip as prices soar
By Esther Teo
The owner sold this 40,677 sq ft good-class bungalow on Ridout Road four months after buying it, making a handsome profit of $17 million. -- PHOTO: GOOGLE.COM
GOOD-CLASS bungalow owners are cashing in on rocketing property prices.
A CB Richard Ellis (CBRE) analysis of Urban Redevelopment Authority (URA) Realis caveats shows that good-class bungalows are netting bumper profits for owners who have seen average per sq ft (psf) prices rise almost 30 per cent over the past year.
Several have taken to buying and selling their good-class bungalows within a period of less than two years.
At least seven good-class bungalows bought since May last year have been sold within 18 months of purchase, with four sold within a year, with a profit of as much as 85 per cent over the purchase price.
This massive gain was seen by a 40,677 sq ft good-class bungalow property on Ridout Road near the Holland area, translating to a $17 million gain within a four-month span.
At least one home, on Nassim Road, has even been sold five times within the past six years - soaring from $9.8 million in 2005 to $43.5 million this year.
It sold at $1,800 psf in April this year - almost 4.5 times the $405 psf it was sold for in February 2005. The 24,186 sq ft property had changed hands at $620 psf in August 2006, $760 psf in December the same year, followed by $1,000 psf in June 2007.
Experts said that good-class bungalows have turned out to be one of this year's star investment propositions.
URA data shows that non-landed home prices inched up 1.6 per cent in the third quarter, while prices of detached homes rose 8.4 per cent over the same period.
CBRE said that while the 109 good-class bungalow sales last year had been transacted at $831 psf on average, the 86 transactions this year to September, which totalled $1.6 billion, were done at an average of $1,055 psf - a 27 per cent surge over the previous year.
This increase is one of the steepest over the last 15 years, said Cushman and Wakefield's senior manager of Asia-Pacific research, Mr Ong Kah Seng.
He noted that the keen buying interest in good-class bungalows was being driven by limited supply, making it the safest buy for a home buyer not limited by affordability.
'(Even with) developers' concerted efforts to brand condominiums with innovative concepts, the product is fairly homogeneous...On the other hand, buyers of good-class bungalows, in addition to being proud owners of the land, will be able to highly customise their homes to be materially different from another,' he said.
Mr Douglas Wong, CBRE director of luxury homes, said that the approximately 2,400 good-class bungalows, which can be found in 39 prime gazetted areas such as Nassim, Dalvey and Tanglin, are owned by only about 1,000 individuals.
These owners are usually ultra-high net worth Singaporeans, who are mostly professionals, businessmen or entrepreneurs, he said.
'Many of the buyers might have purchased their homes with the intention of long-term investment, but when the market moves, they might seize the opportunity to make some profits instead,' he added.
Mr Alexs Chua, managing director of property agency AC MacGyver, a specialist in landed homes, said that about 20 per cent of homes sold last year have been put on the market again, although many owners may just be testing the market.
He expects prices to rise another 10 per cent by March next year.
But CBRE's Mr Wong reports that demand had slowed in the third quarter, when 19 good-class bungalows were sold compared to 36 in the second quarter and 31 in the first quarter.
'This could be attributed partly to cautious sentiments and partly to the widening price gap between good-class bungalow owners' expectations and buyers' offers,' he said.
However, he expects the market to achieve about 100 to 120 transactions amounting to about $1.8 billion this year.
Typically, only Singapore citizens can own a good-class bungalow, but permanent residents may obtain permission to buy small bungalows with land areas of about 15,000 sq ft.
esthert@sph.com.sg
ST : Hot money flood 'could trigger more property curbs here'
Nov 10, 2010
Hot money flood 'could trigger more property curbs here'
By Aaron Low
THE flood of hot money unleashed by the United States' latest round of monetary easing runs the risk of inflating a Singapore property bubble and increases the chances of further property dampening measures, analysts warned yesterday.
Regional markets - already awash with liquidity from advanced economies seeking better returns in Asia - are expected to be on the receiving end of a large slice of the US$600 billion (S$770 billion) injected by the US Federal Reserve last week.
A Citigroup report noted that loan growth had already been rising and the stock market had seen a flurry of activity, with trading volumes higher and a surge of new listings, even before the latest round of easing was announced.
And Dr Chua Hak Bin, economist at Bank of America-Merrill Lynch, is among a growing number of experts concerned that the low interest rate environment is combining with the flow of liquidity to form 'the right conditions for a bubble to form'.
'It's too early to say if there is indeed a bubble, but the conditions are right,' he said.
Analysts are highlighting property as the asset area most likely to be impacted by these large flows, with the market boosted in two ways.
The more direct route is via foreign funds buying into property directly, pushing prices up.
The other is by flows pushing down interest rates and allowing people to borrow more to buy property.
'Property is probably the most interest-rate-sensitive sector there is and Asians are fanatical about property,' said DBS economist David Carbon.
In August, the Government announced a series of measures to curb property speculation, but Prime Minister Lee Hsien Loong said last week that the Government was still carefully watching the market.
Citigroup economist Kit Wei Zheng said that concern over how much households are borrowing to finance their homes and 'political pressures ahead of general election' could lead to more cooling measures.
'Amid flush liquidity and low interest rates, further administrative tightening measures on property are likely if transaction volumes or prices re-accelerate,' he said.
Dr Chua Yang Liang, head of research at real estate firm Jones Lang LaSalle in Singapore, said such curbs would most likely kick in only if the mass market segment overheats.
He noted that the August measures were primarily aimed at the Housing Board market and mass market condominiums, whereas liquidity from the latest round of quantitative easing - or QE2 as it is termed - is likely to focus more on high-end private market properties.
'A key indicator is how fast prices in the mass market segment will rise. A sustainable rate is 1 to 2 per cent a quarter,' he said.
If the housing market does look in danger of overheating, the Government has a range of weapons to call on, he said.
They include increasing the cash down payment needed to buy property, higher stamp duty, and a more drastic capital gains tax.
Hot money flood 'could trigger more property curbs here'
By Aaron Low
THE flood of hot money unleashed by the United States' latest round of monetary easing runs the risk of inflating a Singapore property bubble and increases the chances of further property dampening measures, analysts warned yesterday.
Regional markets - already awash with liquidity from advanced economies seeking better returns in Asia - are expected to be on the receiving end of a large slice of the US$600 billion (S$770 billion) injected by the US Federal Reserve last week.
A Citigroup report noted that loan growth had already been rising and the stock market had seen a flurry of activity, with trading volumes higher and a surge of new listings, even before the latest round of easing was announced.
And Dr Chua Hak Bin, economist at Bank of America-Merrill Lynch, is among a growing number of experts concerned that the low interest rate environment is combining with the flow of liquidity to form 'the right conditions for a bubble to form'.
'It's too early to say if there is indeed a bubble, but the conditions are right,' he said.
Analysts are highlighting property as the asset area most likely to be impacted by these large flows, with the market boosted in two ways.
The more direct route is via foreign funds buying into property directly, pushing prices up.
The other is by flows pushing down interest rates and allowing people to borrow more to buy property.
'Property is probably the most interest-rate-sensitive sector there is and Asians are fanatical about property,' said DBS economist David Carbon.
In August, the Government announced a series of measures to curb property speculation, but Prime Minister Lee Hsien Loong said last week that the Government was still carefully watching the market.
Citigroup economist Kit Wei Zheng said that concern over how much households are borrowing to finance their homes and 'political pressures ahead of general election' could lead to more cooling measures.
'Amid flush liquidity and low interest rates, further administrative tightening measures on property are likely if transaction volumes or prices re-accelerate,' he said.
Dr Chua Yang Liang, head of research at real estate firm Jones Lang LaSalle in Singapore, said such curbs would most likely kick in only if the mass market segment overheats.
He noted that the August measures were primarily aimed at the Housing Board market and mass market condominiums, whereas liquidity from the latest round of quantitative easing - or QE2 as it is termed - is likely to focus more on high-end private market properties.
'A key indicator is how fast prices in the mass market segment will rise. A sustainable rate is 1 to 2 per cent a quarter,' he said.
If the housing market does look in danger of overheating, the Government has a range of weapons to call on, he said.
They include increasing the cash down payment needed to buy property, higher stamp duty, and a more drastic capital gains tax.
ST : Serangoon residential site draws just 4 bids
Nov 10, 2010
Serangoon residential site draws just 4 bids
Top bid of $156.8m from joint venture which plans to build 470 units
By Esther Teo
A JOINT venture linking Frasers Centrepoint, Far East Organization and Japanese company Sekisui House has topped a residential site tender with a bid of $156.8 million.
The joint venture's offer of $320 per sq ft (psf) per plot ratio (ppr) for the site at Upper Serangoon View was just 3 per cent higher than Centurion Re's bid of $152.9 million, or $312 psf ppr.
Centurion Properties - which has a majority stake in the firm developing Kovan Residences - is controlled by former star stockbroker Han Seng Juan and his cousin David Loh.
Only four bids were received during the tender period for the 13,000 sq m site. The others were from units of CapitaLand, with a bid of $147.8 million, and City Developments, which lodged the lowest bid of $136.4 million, or $278 psf ppr.
The 99-year leasehold site earmarked for condominium housing has a maximum gross floor area of 45,501 sq m and can house an estimated 540 units, the Housing Board said yesterday.
It is near Punggol Park and Holy Innocents' High School. Shopping malls Hougang Plaza and Hougang Central's Hougang Mall, which is close to the Hougang MRT station and bus interchange, are just a short drive away.
A joint statement from the highest bidders said the site would be attractive to home buyers, given that it will have views of the adjacent Sungei Serangoon and the nearby Punggol Park.
The companies plan to build about 470 units in eight blocks of up to 17 storeys each.
Sekisui House, which has its headquarters in Osaka, is the largest home builder in Japan, and it will bring its expertise in creating high-quality buildings to this project, the statement said.
CB Richard Ellis Research executive director Li Hiaw Ho said that the four bids submitted showed moderate interest in the plot.
He noted that the top bid was within expectations and reflected a break-even cost of around $650 to $680 psf. He predicted that the units could possibly sell at $800 to $850 psf.
Nearby condo projects such as Evergreen Park and Rio Vista were sold in the resale market at between $600 and $720 psf in the July to September period, he added.
Mr Ong Teck Hui, Credo Real Estate head of research and consultancy, said that the site was in the same league as the last four land tenders for private developments, which saw winning bids of between $320 and $350 psf ppr.
But he noted that the Serangoon site's top bid of $320 psf ppr was a shade lower than the previous Hougang Avenue 7 tender at $340 psf ppr.
This could be due to the site being slightly further away from Hougang Central, where the amenities, MRT station and bus interchange are located, he said.
'This pattern of bidding still reflects caution on the part of developers who are mindful of the continuity of sites coming in,' Mr Ong added.
'There's a government land sales (GLS) tender closing every week into mid-December and the GLS programme next year can be expected to throw up a wide selection of sites when it is announced.'
esthert@sph.com.sg
Serangoon residential site draws just 4 bids
Top bid of $156.8m from joint venture which plans to build 470 units
By Esther Teo
A JOINT venture linking Frasers Centrepoint, Far East Organization and Japanese company Sekisui House has topped a residential site tender with a bid of $156.8 million.
The joint venture's offer of $320 per sq ft (psf) per plot ratio (ppr) for the site at Upper Serangoon View was just 3 per cent higher than Centurion Re's bid of $152.9 million, or $312 psf ppr.
Centurion Properties - which has a majority stake in the firm developing Kovan Residences - is controlled by former star stockbroker Han Seng Juan and his cousin David Loh.
Only four bids were received during the tender period for the 13,000 sq m site. The others were from units of CapitaLand, with a bid of $147.8 million, and City Developments, which lodged the lowest bid of $136.4 million, or $278 psf ppr.
The 99-year leasehold site earmarked for condominium housing has a maximum gross floor area of 45,501 sq m and can house an estimated 540 units, the Housing Board said yesterday.
It is near Punggol Park and Holy Innocents' High School. Shopping malls Hougang Plaza and Hougang Central's Hougang Mall, which is close to the Hougang MRT station and bus interchange, are just a short drive away.
A joint statement from the highest bidders said the site would be attractive to home buyers, given that it will have views of the adjacent Sungei Serangoon and the nearby Punggol Park.
The companies plan to build about 470 units in eight blocks of up to 17 storeys each.
Sekisui House, which has its headquarters in Osaka, is the largest home builder in Japan, and it will bring its expertise in creating high-quality buildings to this project, the statement said.
CB Richard Ellis Research executive director Li Hiaw Ho said that the four bids submitted showed moderate interest in the plot.
He noted that the top bid was within expectations and reflected a break-even cost of around $650 to $680 psf. He predicted that the units could possibly sell at $800 to $850 psf.
Nearby condo projects such as Evergreen Park and Rio Vista were sold in the resale market at between $600 and $720 psf in the July to September period, he added.
Mr Ong Teck Hui, Credo Real Estate head of research and consultancy, said that the site was in the same league as the last four land tenders for private developments, which saw winning bids of between $320 and $350 psf ppr.
But he noted that the Serangoon site's top bid of $320 psf ppr was a shade lower than the previous Hougang Avenue 7 tender at $340 psf ppr.
This could be due to the site being slightly further away from Hougang Central, where the amenities, MRT station and bus interchange are located, he said.
'This pattern of bidding still reflects caution on the part of developers who are mindful of the continuity of sites coming in,' Mr Ong added.
'There's a government land sales (GLS) tender closing every week into mid-December and the GLS programme next year can be expected to throw up a wide selection of sites when it is announced.'
esthert@sph.com.sg
ST : 8,000 apply for 1,322 BTO flats
Nov 10, 2010
8,000 apply for 1,322 BTO flats
Five-room flats oversubscribed by 12 times in Sengkang
By Daryl Chin
DEMAND for the latest batch of new Housing Board flats is high, with the offering oversubscribed by six times.
Nearly 8,000 people applied for the 1,322 build-to-order (BTO) units in Sengkang and Bukit Panjang, before applications closed at midnight on Monday.
By contrast, oversubscription rates for the two previous projects in Yishun in September and Woodlands last month were more modest, at 2.4 and 2.2 respectively.
The oversubscription rate for the latest project, while high, was not as high as some of the earlier BTO projects such as the ones in Punggol and Boon Lay in May, which was more than six times the number of units available.
Bigger flats proved the most popular this time around. Five-room premium flats at Anchorvale Horizon in Sengkang were oversubscribed by 12 times, with 1,838 applications for 148 units.
The 710 four-room flats at Anchorvale Horizon and the other development, Senja Parc View in Bukit Panjang, were oversubscribed by about five times. The 112 two-room flats in Senja Parc View were the least popular, with 89 applications.
Mr Colin Tan, head of research and consultancy at Chesterton Suntec International, said the response shows buyers are increasingly looking for value for money.
Location is another important factor. 'The previous BTOs with lower demand might not be in the area where people want to relocate to,' he said.
ERA Asia Pacific associate director Eugene Lim said the demand for the Sengkang flats, which are within walking distance from the town centre and the MRT, is a sign buyers are becoming more discerning.
This is because since the end of last year, HDB has been saying in advance the number of flats it plans to build, and in which areas.
Some people are also prepared to wait for the flats they want because now they have more options, he added. HDB announced 16,000 new BTO flats this year, with 22,000 expected next year.
Mr Nicholas Mak, research executive director for SLP International Property Consultants, said the lower subscription rates for the earlier projects in Yishun and Woodlands could be down to uncertainty in the market after new rules were introduced on Aug 30.
These include prohibiting private property owners from buying HDB resale flats, a move that eased the red-hot demand for such flats and possibly enticed more first-time HDB flat buyers into the resale market.
'In addition, the public perception of Punggol and Sengkang seems to be changing, attracting more young professionals,' he added.
The high subscription rates at good locations mean first-time buyers holding out for such popular flats could be in for a long wait.
First-timer Mark Khoo, 26, began applying for flats at the start of this year.
The marketing executive said: 'We originally wanted only those popular ones but after getting rejected four times, we decided to try for Yishun Riverwalk, a location less subscribed, so we're hoping for the best.'
He added that a number of his friends also face the same predicament.
'We might sacrifice convenience, but at least we will get a place,' he added.
darylc@sph.com.sg
8,000 apply for 1,322 BTO flats
Five-room flats oversubscribed by 12 times in Sengkang
By Daryl Chin
DEMAND for the latest batch of new Housing Board flats is high, with the offering oversubscribed by six times.
Nearly 8,000 people applied for the 1,322 build-to-order (BTO) units in Sengkang and Bukit Panjang, before applications closed at midnight on Monday.
By contrast, oversubscription rates for the two previous projects in Yishun in September and Woodlands last month were more modest, at 2.4 and 2.2 respectively.
The oversubscription rate for the latest project, while high, was not as high as some of the earlier BTO projects such as the ones in Punggol and Boon Lay in May, which was more than six times the number of units available.
Bigger flats proved the most popular this time around. Five-room premium flats at Anchorvale Horizon in Sengkang were oversubscribed by 12 times, with 1,838 applications for 148 units.
The 710 four-room flats at Anchorvale Horizon and the other development, Senja Parc View in Bukit Panjang, were oversubscribed by about five times. The 112 two-room flats in Senja Parc View were the least popular, with 89 applications.
Mr Colin Tan, head of research and consultancy at Chesterton Suntec International, said the response shows buyers are increasingly looking for value for money.
Location is another important factor. 'The previous BTOs with lower demand might not be in the area where people want to relocate to,' he said.
ERA Asia Pacific associate director Eugene Lim said the demand for the Sengkang flats, which are within walking distance from the town centre and the MRT, is a sign buyers are becoming more discerning.
This is because since the end of last year, HDB has been saying in advance the number of flats it plans to build, and in which areas.
Some people are also prepared to wait for the flats they want because now they have more options, he added. HDB announced 16,000 new BTO flats this year, with 22,000 expected next year.
Mr Nicholas Mak, research executive director for SLP International Property Consultants, said the lower subscription rates for the earlier projects in Yishun and Woodlands could be down to uncertainty in the market after new rules were introduced on Aug 30.
These include prohibiting private property owners from buying HDB resale flats, a move that eased the red-hot demand for such flats and possibly enticed more first-time HDB flat buyers into the resale market.
'In addition, the public perception of Punggol and Sengkang seems to be changing, attracting more young professionals,' he added.
The high subscription rates at good locations mean first-time buyers holding out for such popular flats could be in for a long wait.
First-timer Mark Khoo, 26, began applying for flats at the start of this year.
The marketing executive said: 'We originally wanted only those popular ones but after getting rejected four times, we decided to try for Yishun Riverwalk, a location less subscribed, so we're hoping for the best.'
He added that a number of his friends also face the same predicament.
'We might sacrifice convenience, but at least we will get a place,' he added.
darylc@sph.com.sg
ST : Lift upgrades for more Potong Pasir blocks
Nov 8, 2010
Lift upgrades for more Potong Pasir blocks
Announcement comes a week after similar one for Hougang
By Teo Wan Gek
A SECOND batch of Housing Board blocks in opposition-held Potong Pasir and Hougang has been identified for lift upgrading, with the announcements coming within a week of each other.
The People's Action Party (PAP) adviser to grassroots organisations in Potong Pasir, Mr Sitoh Yih Pin, said three precincts in Potong Pasir Avenue 1 and Avenue 3 - comprising a total of 22 blocks - will be offered the lift upgrading programme (LUP).
'This is a mature estate and residents welcome news of the three additional precincts,' he told The Straits Times yesterday after a community event in Potong Pasir Avenue 1.
He said earlier that the LUP was 'a good thing for residents, especially the elderly ones'.
In July last year, the National Development Ministry announced that 65 precincts, including those in the two opposition wards, would be selected for LUP. Three months later, Mr Sitoh said that nine blocks had been picked.
The event he attended yesterday was a gathering of residents from that first batch of flats to discuss questions about the design and costs involved.
His announcement that 22 more blocks were being offered LUP came a week after the PAP grassroots adviser in Hougang, Mr Eric Low, made a similar one. Mr Low told Hougang residents on Oct 31 that 32 blocks in three precincts would be offered LUP. These were in addition to the six blocks he announced in October last year.
Mr Sitoh, who lost twice in Potong Pasir to Singapore People's Party chief Chiam See Tong, declined to comment yesterday when asked about the timing of his latest announcement and a general election, due by February 2012.
Anticipation about the polls has heightened since Prime Minister Lee Hsien Loong's disclosure on Oct 30 that the Electoral Boundaries Review Committee, which maps out changes to constituencies, had been convened.
Mr Low, on the other hand, told The Straits Times that the timing of his announcement in Hougang last week was 'mere coincidence'. He acknowledged that some would see it as a political move, but said this was only because he represented the PAP in Hougang.
Mr Low, who was twice unsuccessful against Workers' Party chief Low Thia Khiang, revealed that a straw poll earlier this year in Hougang found about 90 per cent of residents from the first batch of blocks supported LUP.
But he said the LUP was no guarantee of a sure-win for him: 'Whatever I do, it depends very much on the mood at that time an election is called.'
The announcements last year to offer LUP to opposition wards earlier represented a shift in position by the Government, which had said after the 2006 election that the wards would be 'at the end of the queue' for LUP.
The Straits Times spoke to more than a dozen Potong Pasir and Hougang residents about the recent announcements. Most said it would not impact on how they voted as the Government had already said the constituencies would be eligible for LUP.
'So it's only a matter of time (before) we get it,' said Hougang resident and delivery driver Tan Ping Hua, 58.
But Potong Pasir resident Ang Chong Lai, 34, whose block is in line for LUP, said now was the best time for the PAP to 'pour in incentives'.
With talk that Mrs Lina Chiam could replace her husband in the ward, 'this may be the best time for the PAP to turn voters to their side', said the director of a new media company.
Residents said they would also assess Mr Chiam and Mr Low Thia Khiang based on their track records.
Landscape designer and Hougang resident Ong Kuee Fen, 57, said of Mr Low Thia Khiang: 'He has been here for so long. He has served us well.'
Added technical officer David Kwa, 45, who has lived in Hougang for 15 years: 'I will vote in support of the LUP, but that does not mean I will vote for the PAP.'
wangekt@sph.com.sg
Lift upgrades for more Potong Pasir blocks
Announcement comes a week after similar one for Hougang
By Teo Wan Gek
A SECOND batch of Housing Board blocks in opposition-held Potong Pasir and Hougang has been identified for lift upgrading, with the announcements coming within a week of each other.
The People's Action Party (PAP) adviser to grassroots organisations in Potong Pasir, Mr Sitoh Yih Pin, said three precincts in Potong Pasir Avenue 1 and Avenue 3 - comprising a total of 22 blocks - will be offered the lift upgrading programme (LUP).
'This is a mature estate and residents welcome news of the three additional precincts,' he told The Straits Times yesterday after a community event in Potong Pasir Avenue 1.
He said earlier that the LUP was 'a good thing for residents, especially the elderly ones'.
In July last year, the National Development Ministry announced that 65 precincts, including those in the two opposition wards, would be selected for LUP. Three months later, Mr Sitoh said that nine blocks had been picked.
The event he attended yesterday was a gathering of residents from that first batch of flats to discuss questions about the design and costs involved.
His announcement that 22 more blocks were being offered LUP came a week after the PAP grassroots adviser in Hougang, Mr Eric Low, made a similar one. Mr Low told Hougang residents on Oct 31 that 32 blocks in three precincts would be offered LUP. These were in addition to the six blocks he announced in October last year.
Mr Sitoh, who lost twice in Potong Pasir to Singapore People's Party chief Chiam See Tong, declined to comment yesterday when asked about the timing of his latest announcement and a general election, due by February 2012.
Anticipation about the polls has heightened since Prime Minister Lee Hsien Loong's disclosure on Oct 30 that the Electoral Boundaries Review Committee, which maps out changes to constituencies, had been convened.
Mr Low, on the other hand, told The Straits Times that the timing of his announcement in Hougang last week was 'mere coincidence'. He acknowledged that some would see it as a political move, but said this was only because he represented the PAP in Hougang.
Mr Low, who was twice unsuccessful against Workers' Party chief Low Thia Khiang, revealed that a straw poll earlier this year in Hougang found about 90 per cent of residents from the first batch of blocks supported LUP.
But he said the LUP was no guarantee of a sure-win for him: 'Whatever I do, it depends very much on the mood at that time an election is called.'
The announcements last year to offer LUP to opposition wards earlier represented a shift in position by the Government, which had said after the 2006 election that the wards would be 'at the end of the queue' for LUP.
The Straits Times spoke to more than a dozen Potong Pasir and Hougang residents about the recent announcements. Most said it would not impact on how they voted as the Government had already said the constituencies would be eligible for LUP.
'So it's only a matter of time (before) we get it,' said Hougang resident and delivery driver Tan Ping Hua, 58.
But Potong Pasir resident Ang Chong Lai, 34, whose block is in line for LUP, said now was the best time for the PAP to 'pour in incentives'.
With talk that Mrs Lina Chiam could replace her husband in the ward, 'this may be the best time for the PAP to turn voters to their side', said the director of a new media company.
Residents said they would also assess Mr Chiam and Mr Low Thia Khiang based on their track records.
Landscape designer and Hougang resident Ong Kuee Fen, 57, said of Mr Low Thia Khiang: 'He has been here for so long. He has served us well.'
Added technical officer David Kwa, 45, who has lived in Hougang for 15 years: 'I will vote in support of the LUP, but that does not mean I will vote for the PAP.'
wangekt@sph.com.sg
ST : En bloc market still active
Nov 8, 2010
PROPERTY WATCH
En bloc market still active
Eight collective sales sealed since cooling measures on Aug 30
By Esther Teo
THE measures to cool the property boom have taken some of the heat out of the en bloc market but there is still plenty of interest, say industry experts.
They believe the steps that were announced on Aug 30 have made developers more cautious, resulting in lower bids and fewer successful tenders.
Eight collective sales - they include Pastoral View in Bassein Road and Glenville in Lim Tua Tow Road - totalling $369 million have been completed since Aug 30.
But at least five sites where tenders closed after that date have struck out with buyers.
The five are Maison Royale in Surrey Road, Newton View, Selegie Centre, Amber Glades near Marine Parade and 13 shophouses in Owen Road. All are freehold developments.
Experts said most of the owners are either negotiating private treaties or deciding whether to go for a second tender process.
The Straits Times understands that Selegie Centre and Maison Royale both had three interested parties but neither received a bid.
Jones Lang LaSalle's head of investments, Ms Stella Hoh, said the collective sale market has started picking up momentum.
'However, the cooling measures would have at least an impact as the bids offered by developers depend on what they think the demand will be from end buyers, who are affected by these new rules,' she added.
Collective sale sites going for under $100 million seem to be the one area where buyers - usually boutique developers - are still prepared to put their money down.
This could be due to their more affordable prices and the relative ease of garnering the 80 per cent support level from owners compared with larger developments, experts said.
Seven of the eight successful sales since Aug 30 involve smaller sites priced at less than $100 million.
Robin Court and an adjoining bungalow in Robin Drive even bucked the trend of lower bids to sell at $77.33 million, more than the $66 million to $74 million expected, said Mr Karamjit Singh, managing director of Credo Real Estate.
Guillemard Court drew an even better response. It received seven bids and one expression of interest before selling for $41.6 million, almost 30 per cent above its indicative price of $33 million, said marketing agent Deans Realtors.
Director Alwyn Low said this could be due to its accessibility - the Dakota MRT station is just 600m away - and the ease the rectangular-shaped plot presents for building.
Results like that bode well for smaller sites, according to Mr Kevin Lim, Urban Front Real Estate's executive director of investment sales.
Mr Lim told The Straits Times: 'Interest is still high as we're receiving enquiries from many developers. If the pricing is good, (they) will still purchase... but smaller sites seem to be more saleable as their quantum price is smaller, which means developers would take on lesser risks.'
Bigger sites can be expected to hit the market next year, after the dust has settled from recent changes to en bloc rules, which have extended the sale process for some larger developments, added Ms Hoh, of Jones Lang LaSalle.
Jones Lang LaSalle said in a report last week that collective sale transactions have hit $975.6 million so far this year.
And residential collective sales - at $883.6 million year-to-date - account for more than 90 per cent of the total, with sales predominantly in upgrader locations such as Balestier and Toa Payoh in District 12, Geylang and Eunos in District 14 and Serangoon and Hougang in District 19.
In contrast, there was only one successful collective sale last year - that of Dragon Mansion for $100.8 million.
Jones Lang LaSalle added that the rise in popularity of collective sales can be due to 'improving fundamentals of the Singapore property market and the widening gap between new sale and resale prices for residential property'.
esthert@sph.com.sg
PROPERTY WATCH
En bloc market still active
Eight collective sales sealed since cooling measures on Aug 30
By Esther Teo
THE measures to cool the property boom have taken some of the heat out of the en bloc market but there is still plenty of interest, say industry experts.
They believe the steps that were announced on Aug 30 have made developers more cautious, resulting in lower bids and fewer successful tenders.
Eight collective sales - they include Pastoral View in Bassein Road and Glenville in Lim Tua Tow Road - totalling $369 million have been completed since Aug 30.
But at least five sites where tenders closed after that date have struck out with buyers.
The five are Maison Royale in Surrey Road, Newton View, Selegie Centre, Amber Glades near Marine Parade and 13 shophouses in Owen Road. All are freehold developments.
Experts said most of the owners are either negotiating private treaties or deciding whether to go for a second tender process.
The Straits Times understands that Selegie Centre and Maison Royale both had three interested parties but neither received a bid.
Jones Lang LaSalle's head of investments, Ms Stella Hoh, said the collective sale market has started picking up momentum.
'However, the cooling measures would have at least an impact as the bids offered by developers depend on what they think the demand will be from end buyers, who are affected by these new rules,' she added.
Collective sale sites going for under $100 million seem to be the one area where buyers - usually boutique developers - are still prepared to put their money down.
This could be due to their more affordable prices and the relative ease of garnering the 80 per cent support level from owners compared with larger developments, experts said.
Seven of the eight successful sales since Aug 30 involve smaller sites priced at less than $100 million.
Robin Court and an adjoining bungalow in Robin Drive even bucked the trend of lower bids to sell at $77.33 million, more than the $66 million to $74 million expected, said Mr Karamjit Singh, managing director of Credo Real Estate.
Guillemard Court drew an even better response. It received seven bids and one expression of interest before selling for $41.6 million, almost 30 per cent above its indicative price of $33 million, said marketing agent Deans Realtors.
Director Alwyn Low said this could be due to its accessibility - the Dakota MRT station is just 600m away - and the ease the rectangular-shaped plot presents for building.
Results like that bode well for smaller sites, according to Mr Kevin Lim, Urban Front Real Estate's executive director of investment sales.
Mr Lim told The Straits Times: 'Interest is still high as we're receiving enquiries from many developers. If the pricing is good, (they) will still purchase... but smaller sites seem to be more saleable as their quantum price is smaller, which means developers would take on lesser risks.'
Bigger sites can be expected to hit the market next year, after the dust has settled from recent changes to en bloc rules, which have extended the sale process for some larger developments, added Ms Hoh, of Jones Lang LaSalle.
Jones Lang LaSalle said in a report last week that collective sale transactions have hit $975.6 million so far this year.
And residential collective sales - at $883.6 million year-to-date - account for more than 90 per cent of the total, with sales predominantly in upgrader locations such as Balestier and Toa Payoh in District 12, Geylang and Eunos in District 14 and Serangoon and Hougang in District 19.
In contrast, there was only one successful collective sale last year - that of Dragon Mansion for $100.8 million.
Jones Lang LaSalle added that the rise in popularity of collective sales can be due to 'improving fundamentals of the Singapore property market and the widening gap between new sale and resale prices for residential property'.
esthert@sph.com.sg
ST : 96% of eligible blocks offered lift upgrading
Nov 8, 2010
96% of eligible blocks offered lift upgrading
MORE than 96 per cent of eligible Housing Board blocks have been offered lift upgrading since the programme was introduced in 2001, the HDB has said.
This means that about 4,900 blocks have already come under the programme to provide lift landings on every floor of older HDB blocks, which usually have one lift landing for every three or four floors. A total of $3.8 billion has been earmarked for this programme.
The board, which disclosed this in response to questions from The Straits Times, added that the Lift Upgrading Programme (LUP) is on track to be completed by the previously set deadline of 2014.
Depending on the complexity of the design of the blocks or precincts, it takes an average of nine to 15 months from the time lift upgrading is announced to a poll being conducted among residents.
The programme is heavily subsidised by the Government. Residents and town councils each co-pay between 5 per cent and 12.5 per cent of the cost.
Construction work, which starts only after a successful poll, takes about 24 to 30 months, depending on the configuration of the block and the precinct size.
The LUP will proceed only when 75 per cent of residents vote for it.
In July last year, the opposition-held wards were picked for the first time for lift upgrading - six blocks in Hougang and nine blocks in Potong Pasir.
Another 32 blocks in Hougang and 22 in Potong Pasir have since been picked.
The HDB statement said that $150 million has been allocated for lift upgrading in the two wards, and will be spent to upgrade all eligible blocks.
The actual cost of upgrading varies according to the configuration of the blocks. For example, segmented blocks without common corridors may require adding new lift shafts so that residents can have direct access to a lift.
For a segmented block of 12 storeys with four lifts, for example, it can cost about $30,000 per household that currently does not have direct lift access.
It would, on the other hand, cost $14,000 per household in a standard 12-storey block which requires a new lift shaft and existing lifts to be upgraded. The cost is lower because it would be necessary to only upgrade the existing lifts.
Costs would be higher for low-rise blocks than for high-rise blocks as there are fewer households to share the cost.
TEO WAN GEK
96% of eligible blocks offered lift upgrading
MORE than 96 per cent of eligible Housing Board blocks have been offered lift upgrading since the programme was introduced in 2001, the HDB has said.
This means that about 4,900 blocks have already come under the programme to provide lift landings on every floor of older HDB blocks, which usually have one lift landing for every three or four floors. A total of $3.8 billion has been earmarked for this programme.
The board, which disclosed this in response to questions from The Straits Times, added that the Lift Upgrading Programme (LUP) is on track to be completed by the previously set deadline of 2014.
Depending on the complexity of the design of the blocks or precincts, it takes an average of nine to 15 months from the time lift upgrading is announced to a poll being conducted among residents.
The programme is heavily subsidised by the Government. Residents and town councils each co-pay between 5 per cent and 12.5 per cent of the cost.
Construction work, which starts only after a successful poll, takes about 24 to 30 months, depending on the configuration of the block and the precinct size.
The LUP will proceed only when 75 per cent of residents vote for it.
In July last year, the opposition-held wards were picked for the first time for lift upgrading - six blocks in Hougang and nine blocks in Potong Pasir.
Another 32 blocks in Hougang and 22 in Potong Pasir have since been picked.
The HDB statement said that $150 million has been allocated for lift upgrading in the two wards, and will be spent to upgrade all eligible blocks.
The actual cost of upgrading varies according to the configuration of the blocks. For example, segmented blocks without common corridors may require adding new lift shafts so that residents can have direct access to a lift.
For a segmented block of 12 storeys with four lifts, for example, it can cost about $30,000 per household that currently does not have direct lift access.
It would, on the other hand, cost $14,000 per household in a standard 12-storey block which requires a new lift shaft and existing lifts to be upgraded. The cost is lower because it would be necessary to only upgrade the existing lifts.
Costs would be higher for low-rise blocks than for high-rise blocks as there are fewer households to share the cost.
TEO WAN GEK
ST : Small size, big draw
Nov 6, 2010
Small size, big draw
Shoebox apartments are fetching record prices, even those outside the city centre
By Esther Teo
SMALL studio apartments might be a tight squeeze for some, but they have punched above their weight - and size - by achieving record prices, even in less glitzy areas outside the city centre.
These so-called shoebox apartments, typically less than 500 sq ft in size, first made their presence felt around 2006 in mainly prime districts. The Robertson Edge project off Mohamed Sultan Road is one example.
But the trend has since spread to regions outside the central area.
In fact, a 474 sq ft apartment at The Scala, near Lorong Chuan MRT station, was sold for $1,522 per sq ft (psf) - or about $720,000 - in August, according to caveats lodged with the Urban Redevelopment Authority.
Experts said this was likely to be a benchmark price set for a 99-year leasehold project outside the central region. Another two similarly sized apartments sold for $1,467 psf and $1,437 psf last month.
Other apartments which have fetched high prices include a 484 sq ft unit at 99-year leasehold project Optima@Tanah Merah, which sold for $1,280 psf, or $620,000, in September.
A 420 sq ft unit at Siglap V - also outside the central area - transacted at $1,584 psf, or $665,000, in August, while a 409 sq ft unit at Suites@Changi sold for $1,379 psf, or $564,000, in September. Both projects, however, are freehold.
Experts said buyers are drawn to the more affordable investment prices of shoebox units, compared with those of family-sized homes. The rising prices of Housing Board flats might also have nudged some to buy private properties at comparable prices instead.
The success of earlier shoebox developments, which have enjoyed capital gains in line with the market and higher rental yields, has also fed the trend, they added.
A CB Richard Ellis report last month said about 10 residential projects featuring predominantly small-format units will be launched in the next few months. With the exception of one, all the sites are in suburban areas like Telok Kurau, Siglap and Eunos.
Cushman and Wakefield's senior manager of Asia-Pacific research Ong Kah Seng said most shoebox apartment buyers are price-sensitive, and similar in profile to the typical buyers of suburban condominiums. Such units are thus increasingly popular, even if they are in non-prime areas, he said.
'Buyers of shoebox units are mixed in profile, but are usually singles or couples without kids, who do consider renting out the units... although the majority do not mind using them for owner occupation should there be limitations in finding the right tenants,' added Mr Ong.
Mr Colin Tan, head of research and consultancy at Chesterton Suntec International, said that with the market flush with liquidity, investors are constantly looking for avenues to park their cash.
And because investors have dominated sales, the attractions which owners usually look for, such as amenities, security and surroundings, matter less, he said. Instead, accessibility, such as being close to an MRT station, takes precedence.
Mr Tan added that small-format units are a consequence of high property prices, and as long as prices continue to rise, more of such units can be expected.
Kim Eng Research analyst Ooi Yi Tung said shoebox units offer an alternative to buyers who are priced out of the larger private property market and ineligible for Housing Board flats, or reject public housing for its perceived lower quality and lack of facilities.
Shoebox units also achieve slightly better rental yields than larger units because of their lower prices. Robertson Edge, for example, fetches a rental yield of 6.6 per cent, while the average yield for a centrally located condominium is 3 per cent to 4 per cent, he said.
Mr Ching Chiat Kwong, chief executive of property developer Oxley Holdings, said that as small units have affordable prices, buyers need not take huge loans and do not need to fear interest rate hikes, unlike buyers of units with larger price tags and heftier loans.
Oxley is a prominent developer of shoebox apartments, which will make up about half of the up to nine projects it expects to launch within the next six months.
Buyers of its units have included not only investors, who target the expatriate singles market, but also owner-occupiers who are mostly singles, young couples and some retirees who desire the ease of maintaining a small home, Mr Ching said.
He added: 'Although young people are mobile and seek an independent lifestyle, they like to live near their parents. So it's not surprising that you see people buying small units in suburban mature areas to be near their parents.'
But risks remain, as shoebox units are more vulnerable during an economic downturn, should the expatriate tenant population shrink.
Said Mr Ong: 'During challenging economic times, it's likely that local professionals will be cautious in spending, including on accommodation. There may be some who will choose to stay with their families until the economy shows strong signs of recovery.'
esthert@sph.com.sg
Small size, big draw
Shoebox apartments are fetching record prices, even those outside the city centre
By Esther Teo
SMALL studio apartments might be a tight squeeze for some, but they have punched above their weight - and size - by achieving record prices, even in less glitzy areas outside the city centre.
These so-called shoebox apartments, typically less than 500 sq ft in size, first made their presence felt around 2006 in mainly prime districts. The Robertson Edge project off Mohamed Sultan Road is one example.
But the trend has since spread to regions outside the central area.
In fact, a 474 sq ft apartment at The Scala, near Lorong Chuan MRT station, was sold for $1,522 per sq ft (psf) - or about $720,000 - in August, according to caveats lodged with the Urban Redevelopment Authority.
Experts said this was likely to be a benchmark price set for a 99-year leasehold project outside the central region. Another two similarly sized apartments sold for $1,467 psf and $1,437 psf last month.
Other apartments which have fetched high prices include a 484 sq ft unit at 99-year leasehold project Optima@Tanah Merah, which sold for $1,280 psf, or $620,000, in September.
A 420 sq ft unit at Siglap V - also outside the central area - transacted at $1,584 psf, or $665,000, in August, while a 409 sq ft unit at Suites@Changi sold for $1,379 psf, or $564,000, in September. Both projects, however, are freehold.
Experts said buyers are drawn to the more affordable investment prices of shoebox units, compared with those of family-sized homes. The rising prices of Housing Board flats might also have nudged some to buy private properties at comparable prices instead.
The success of earlier shoebox developments, which have enjoyed capital gains in line with the market and higher rental yields, has also fed the trend, they added.
A CB Richard Ellis report last month said about 10 residential projects featuring predominantly small-format units will be launched in the next few months. With the exception of one, all the sites are in suburban areas like Telok Kurau, Siglap and Eunos.
Cushman and Wakefield's senior manager of Asia-Pacific research Ong Kah Seng said most shoebox apartment buyers are price-sensitive, and similar in profile to the typical buyers of suburban condominiums. Such units are thus increasingly popular, even if they are in non-prime areas, he said.
'Buyers of shoebox units are mixed in profile, but are usually singles or couples without kids, who do consider renting out the units... although the majority do not mind using them for owner occupation should there be limitations in finding the right tenants,' added Mr Ong.
Mr Colin Tan, head of research and consultancy at Chesterton Suntec International, said that with the market flush with liquidity, investors are constantly looking for avenues to park their cash.
And because investors have dominated sales, the attractions which owners usually look for, such as amenities, security and surroundings, matter less, he said. Instead, accessibility, such as being close to an MRT station, takes precedence.
Mr Tan added that small-format units are a consequence of high property prices, and as long as prices continue to rise, more of such units can be expected.
Kim Eng Research analyst Ooi Yi Tung said shoebox units offer an alternative to buyers who are priced out of the larger private property market and ineligible for Housing Board flats, or reject public housing for its perceived lower quality and lack of facilities.
Shoebox units also achieve slightly better rental yields than larger units because of their lower prices. Robertson Edge, for example, fetches a rental yield of 6.6 per cent, while the average yield for a centrally located condominium is 3 per cent to 4 per cent, he said.
Mr Ching Chiat Kwong, chief executive of property developer Oxley Holdings, said that as small units have affordable prices, buyers need not take huge loans and do not need to fear interest rate hikes, unlike buyers of units with larger price tags and heftier loans.
Oxley is a prominent developer of shoebox apartments, which will make up about half of the up to nine projects it expects to launch within the next six months.
Buyers of its units have included not only investors, who target the expatriate singles market, but also owner-occupiers who are mostly singles, young couples and some retirees who desire the ease of maintaining a small home, Mr Ching said.
He added: 'Although young people are mobile and seek an independent lifestyle, they like to live near their parents. So it's not surprising that you see people buying small units in suburban mature areas to be near their parents.'
But risks remain, as shoebox units are more vulnerable during an economic downturn, should the expatriate tenant population shrink.
Said Mr Ong: 'During challenging economic times, it's likely that local professionals will be cautious in spending, including on accommodation. There may be some who will choose to stay with their families until the economy shows strong signs of recovery.'
esthert@sph.com.sg
ST : Court orders home sale after family row
Nov 5, 2010
Court orders home sale after family row
Joint owners of $1.9m property must sell house, though mum and daughter cannot agree
By K.C. Vijayan, Law Correspondent
UNDER the law, when a property is held jointly by two individuals it cannot be sold unless both agree.
But the High Court has recently made an exception based on powers granted under the law to order the sale of such a house where both mother and daughter could not agree.
After her father left the family in 1983, Madam Neo Hui Ling became protective of her mother, Madam Ang Ah Siew.
Madam Neo eventually made her mother the joint tenant of a $1.88 million three-storey house in MacPherson she bought in 2007. This meant the property would revert to the survivor when one of the two died. She did this so her mother would have a roof over her head if Madam Neo should unexpectedly die.
But the duo had hardly lived there for three years when their relationship soured, leading Madam Neo to take her mother to court to force the sale of the house.
In High Court judgment grounds published on Wednesday, Justice Lai Siu Chiu ordered the sale, noting the relationship between the pair had 'drastically deteriorated'.
Among other things, the judge noted an incident in the house in March which was the last straw.
Madam Ang had, with two other daughters and six strangers, barged into Madam Neo's room to perform 'religious rites to cleanse' Madam Neo's room of 'dirty things'. She also made her daughter drink talisman water.
Madam Ang and her two daughters said they were concerned that Madam Neo was under some spell or possessed, noted the judge.
Following the incident, Madam Neo moved out of the six-room house and began living out of a suitcase in rented premises.
The judge said it was not necessary for her to detail all the conflicts they had.
'Those accounts clearly showed the relationship had broken down such that it was impossible to expect the parties to act jointly in deciding what to do with the property,' said Justice Lai.
Madam Neo had bought the property with a $1.35 million loan and paid about $10,000 a month in mortgage payments.
Madam Ang did not contribute a single cent towards the purchase of the house.
Madam Neo's lawyer Lisa Sam argued she had to sell the house as the financial burden on her had increased. This was because she had to service the loan and bear the expenses of a separate household.
Justice Lai also noted Madam Ang would not suffer any hardship if the house was sold as another daughter had agreed to take her in. In any case, Madam Neo offered to provide rented accommodation if her mother wanted.
The judge ordered 50 per cent of the sale proceeds to be given to Madam Neo, with the remaining half held by Madam Neo's lawyers pending a decision on if and how the amount is to be shared among the occupants.
Madam Ang's lawyer Steven Lee has filed a notice of appeal in the case.
vijayan@sph.com.sg
Court orders home sale after family row
Joint owners of $1.9m property must sell house, though mum and daughter cannot agree
By K.C. Vijayan, Law Correspondent
UNDER the law, when a property is held jointly by two individuals it cannot be sold unless both agree.
But the High Court has recently made an exception based on powers granted under the law to order the sale of such a house where both mother and daughter could not agree.
After her father left the family in 1983, Madam Neo Hui Ling became protective of her mother, Madam Ang Ah Siew.
Madam Neo eventually made her mother the joint tenant of a $1.88 million three-storey house in MacPherson she bought in 2007. This meant the property would revert to the survivor when one of the two died. She did this so her mother would have a roof over her head if Madam Neo should unexpectedly die.
But the duo had hardly lived there for three years when their relationship soured, leading Madam Neo to take her mother to court to force the sale of the house.
In High Court judgment grounds published on Wednesday, Justice Lai Siu Chiu ordered the sale, noting the relationship between the pair had 'drastically deteriorated'.
Among other things, the judge noted an incident in the house in March which was the last straw.
Madam Ang had, with two other daughters and six strangers, barged into Madam Neo's room to perform 'religious rites to cleanse' Madam Neo's room of 'dirty things'. She also made her daughter drink talisman water.
Madam Ang and her two daughters said they were concerned that Madam Neo was under some spell or possessed, noted the judge.
Following the incident, Madam Neo moved out of the six-room house and began living out of a suitcase in rented premises.
The judge said it was not necessary for her to detail all the conflicts they had.
'Those accounts clearly showed the relationship had broken down such that it was impossible to expect the parties to act jointly in deciding what to do with the property,' said Justice Lai.
Madam Neo had bought the property with a $1.35 million loan and paid about $10,000 a month in mortgage payments.
Madam Ang did not contribute a single cent towards the purchase of the house.
Madam Neo's lawyer Lisa Sam argued she had to sell the house as the financial burden on her had increased. This was because she had to service the loan and bear the expenses of a separate household.
Justice Lai also noted Madam Ang would not suffer any hardship if the house was sold as another daughter had agreed to take her in. In any case, Madam Neo offered to provide rented accommodation if her mother wanted.
The judge ordered 50 per cent of the sale proceeds to be given to Madam Neo, with the remaining half held by Madam Neo's lawyers pending a decision on if and how the amount is to be shared among the occupants.
Madam Ang's lawyer Steven Lee has filed a notice of appeal in the case.
vijayan@sph.com.sg
ST : Woodlands site: Far East puts in top bid amid six-way battle
Nov 5, 2010
Woodlands site: Far East puts in top bid amid six-way battle
By Esther Teo
PROPERTY giant Far East Organization has lodged the top offer in a six-way bidding battle for a Woodlands site.
The firm tendered $105.1 million for the 99-year leasehold plot at the junction of Woodlands Avenue 1 and Rosewood Drive. That works out at $333 per sq ft (psf) per plot ratio.
Next up was EL Development on $100.9 million. BS Capital, Sim Lian Land, TID Residential and Ecco Development, with the lowest bid of $73 million, were also in the hunt.
Mr Li Hiaw Ho, executive director of CB Richard Ellis Research, said the six bids showed that developers are fairly confident about the site. Demand is likely to come from potential HDB upgraders and investors who want to tap the expatriate market as the plot is about a 10-minute walk from the Singapore American School.
The 21,000 sq m site has a maximum gross floor area of 29,339 sq m and can be used for strata landed housing or condominium units. About 265 homes could be built, depending on the type of development, said the Housing Board yesterday.
Mr Chng Kiong Huat, Far East's executive director of development and planning, said the firm expects to build a five-storey condominium. '(It) will incorporate some townhouses designed to complement the low-rise set-up. Buyers will have a choice of one- to four-bedroom units and townhouses, with private terraces, roof gardens and dedicated carpark spaces,' he added.
Far East's bid translates to a break-even cost of $650 to $700 psf with the project likely to be launched above $800 psf, Mr Li said. The firm has built a few projects in the area, including private condo Casablanca and the New England-style houses in Woodgrove Estate.
In the sub-sale market, units at the nearby Rosewood Suites, which is still being built, sold at $650 to $700 psf in the third quarter. Units in Woodgrove Condominium transacted at $560 to $675 psf in the secondary market while Casablanca apartments went for $620 to $750 psf.
Woodlands site: Far East puts in top bid amid six-way battle
By Esther Teo
PROPERTY giant Far East Organization has lodged the top offer in a six-way bidding battle for a Woodlands site.
The firm tendered $105.1 million for the 99-year leasehold plot at the junction of Woodlands Avenue 1 and Rosewood Drive. That works out at $333 per sq ft (psf) per plot ratio.
Next up was EL Development on $100.9 million. BS Capital, Sim Lian Land, TID Residential and Ecco Development, with the lowest bid of $73 million, were also in the hunt.
Mr Li Hiaw Ho, executive director of CB Richard Ellis Research, said the six bids showed that developers are fairly confident about the site. Demand is likely to come from potential HDB upgraders and investors who want to tap the expatriate market as the plot is about a 10-minute walk from the Singapore American School.
The 21,000 sq m site has a maximum gross floor area of 29,339 sq m and can be used for strata landed housing or condominium units. About 265 homes could be built, depending on the type of development, said the Housing Board yesterday.
Mr Chng Kiong Huat, Far East's executive director of development and planning, said the firm expects to build a five-storey condominium. '(It) will incorporate some townhouses designed to complement the low-rise set-up. Buyers will have a choice of one- to four-bedroom units and townhouses, with private terraces, roof gardens and dedicated carpark spaces,' he added.
Far East's bid translates to a break-even cost of $650 to $700 psf with the project likely to be launched above $800 psf, Mr Li said. The firm has built a few projects in the area, including private condo Casablanca and the New England-style houses in Woodgrove Estate.
In the sub-sale market, units at the nearby Rosewood Suites, which is still being built, sold at $650 to $700 psf in the third quarter. Units in Woodgrove Condominium transacted at $560 to $675 psf in the secondary market while Casablanca apartments went for $620 to $750 psf.
ST : It's still easiest to do business in Singapore
Nov 5, 2010
It's still easiest to do business in Singapore
Efficiency, transparency help Republic top World Bank report for fifth year running
By Aaron Low
Singapore's top ranking is due to the efficiency of its processes and the transparency of its rules. But its weakest area is property registration, in which it ranked 15th. -- PHOTO: URA
SINGAPORE has been ranked the world's easiest place to do business - for the fifth year running.
It pipped Hong Kong, New Zealand, Britain and the United States to take top spot in the latest World Bank 'Doing Business' report, published yesterday.
The top 10 spots in the ranking, which is into its eighth year, were largely unchanged from the previous year's report.
Canada moved up from ninth to seventh place, just behind Denmark, pushing Norway and Ireland from seventh and eighth to eighth and ninth place respectively. Australia was ranked 10th.
Singapore's strong performance was attributed to the efficiency of its processes and the transparency of its rules, especially in areas involving technology.
The World Bank uses nine criteria to assess how easy it is to do business, from starting a business to getting credit and trading across borders.
But the report, which surveyed 183 economies, does not take into account factors such as corruption, macroeconomic stability or security.
The World Bank said economies that did well had advanced e-government initiatives. For instance, Singapore has a one-stop online portal for businesses to interact with the Government.
The Republic was No. 1 in terms of ease of cross-border trading, and second in the areas of applying for construction permits, protecting investors and closing a business.
Property registration was Singapore's weakest area, with the World Bank noting that registering property here involves three procedures and takes five days.
It came 15th in this category, up one place from last year, but trailing countries such as Saudi Arabia and Portugal.
Overall, 216 regulatory reforms were implemented by 117 governments. The developing world led the charge, with two-thirds of emerging economies reforming business regulations in the past year.
DBS Bank economist Irvin Seah said while it was unsurprising that Singapore was top again, making it easier to do businesses is still a comparative advantage.
'It is not easy to keep ahead of competitors especially when the region is also liberalising its economies,' he said.
Indeed, South-east Asian countries continued to improve, after many of them had reformed their regulatory processes and introduced electronic systems.
The most-improved South-east Asian countries were Vietnam, which jumped 10 places from 88th to 78th, and Brunei, which climbed five spots to 112nd.
But while it is easy to start and do business in Singapore, firms here said there are several areas of concern.
One is rising rental costs, said Mr Lawrence Leow, president of the Association of Small and Medium Enterprises.
Another is a tightening labour market, especially in the services sector, said the Singapore Chinese Chamber of Commerce and Industry.
Mr Freddy Ong, managing director of logistics firm Worldgreen Shipping, hopes the Government will re-examine the tight quotas on foreign workers.
'It's hard to hire good Singaporeans and the strict quota on foreign workers is a real problem for my company,' he said.
aaronl@sph.com.sg
It's still easiest to do business in Singapore
Efficiency, transparency help Republic top World Bank report for fifth year running
By Aaron Low
Singapore's top ranking is due to the efficiency of its processes and the transparency of its rules. But its weakest area is property registration, in which it ranked 15th. -- PHOTO: URA
SINGAPORE has been ranked the world's easiest place to do business - for the fifth year running.
It pipped Hong Kong, New Zealand, Britain and the United States to take top spot in the latest World Bank 'Doing Business' report, published yesterday.
The top 10 spots in the ranking, which is into its eighth year, were largely unchanged from the previous year's report.
Canada moved up from ninth to seventh place, just behind Denmark, pushing Norway and Ireland from seventh and eighth to eighth and ninth place respectively. Australia was ranked 10th.
Singapore's strong performance was attributed to the efficiency of its processes and the transparency of its rules, especially in areas involving technology.
The World Bank uses nine criteria to assess how easy it is to do business, from starting a business to getting credit and trading across borders.
But the report, which surveyed 183 economies, does not take into account factors such as corruption, macroeconomic stability or security.
The World Bank said economies that did well had advanced e-government initiatives. For instance, Singapore has a one-stop online portal for businesses to interact with the Government.
The Republic was No. 1 in terms of ease of cross-border trading, and second in the areas of applying for construction permits, protecting investors and closing a business.
Property registration was Singapore's weakest area, with the World Bank noting that registering property here involves three procedures and takes five days.
It came 15th in this category, up one place from last year, but trailing countries such as Saudi Arabia and Portugal.
Overall, 216 regulatory reforms were implemented by 117 governments. The developing world led the charge, with two-thirds of emerging economies reforming business regulations in the past year.
DBS Bank economist Irvin Seah said while it was unsurprising that Singapore was top again, making it easier to do businesses is still a comparative advantage.
'It is not easy to keep ahead of competitors especially when the region is also liberalising its economies,' he said.
Indeed, South-east Asian countries continued to improve, after many of them had reformed their regulatory processes and introduced electronic systems.
The most-improved South-east Asian countries were Vietnam, which jumped 10 places from 88th to 78th, and Brunei, which climbed five spots to 112nd.
But while it is easy to start and do business in Singapore, firms here said there are several areas of concern.
One is rising rental costs, said Mr Lawrence Leow, president of the Association of Small and Medium Enterprises.
Another is a tightening labour market, especially in the services sector, said the Singapore Chinese Chamber of Commerce and Industry.
Mr Freddy Ong, managing director of logistics firm Worldgreen Shipping, hopes the Government will re-examine the tight quotas on foreign workers.
'It's hard to hire good Singaporeans and the strict quota on foreign workers is a real problem for my company,' he said.
aaronl@sph.com.sg
ST : Home loan applications down
Nov 5, 2010
Home loan applications down
THE Government's measures to cool the property market have sharply cut Singapore home loan applications at DBS bank, chief executive Piyush Gupta said yesterday.
He said local mortgage applications have slumped by 20 per cent to 25 per cent since the steps were introduced on Aug 30.
OCBC Bank CEO David Conner also indicated earlier this week that it has seen a 20 per cent fall in housing loan applications since Aug 30. The cooling measures included a reduction in the amount people with existing mortgages could borrow to buy second properties. Urban Redevelopment Authority data out last month showed private home prices rising just 2.9 per cent in the third quarter - down from the previous quarter's 5.3 per cent. The number of new homes sold by developers fell in the third quarter.
Home loan applications down
THE Government's measures to cool the property market have sharply cut Singapore home loan applications at DBS bank, chief executive Piyush Gupta said yesterday.
He said local mortgage applications have slumped by 20 per cent to 25 per cent since the steps were introduced on Aug 30.
OCBC Bank CEO David Conner also indicated earlier this week that it has seen a 20 per cent fall in housing loan applications since Aug 30. The cooling measures included a reduction in the amount people with existing mortgages could borrow to buy second properties. Urban Redevelopment Authority data out last month showed private home prices rising just 2.9 per cent in the third quarter - down from the previous quarter's 5.3 per cent. The number of new homes sold by developers fell in the third quarter.
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