ST : HK may cool property sector further

Nov 23, 2010

HK may cool property sector further

HONG KONG: The Chinese city's Financial Secretary has hinted at further measures to cool the red-hot Hong Kong property market, as real estate agents reported a drop-off in sales after tough new rules were unveiled last week.

'We will launch appropriate measures again when it's needed,' Financial Secretary John Tsang wrote on his blog on Sunday. 'I can say without a doubt, we will not turn a blind eye to the risks that are affecting our economy and financial stability.'

The city needs to be decisive and proactive in mitigating the risks posed by the asset bubble, he added. 'It unsettles me to know that speculators are capitalising on market sentiments...to make profits.'

Mr Tsang on Friday last week unveiled a range of measures aimed at restraining property prices - the toughest steps yet to rein in home values that have soared more than 50 per cent since January last year. Among the measures was a sliding scale of new stamp duties aimed at discouraging people from selling property quickly after buying it.

As of the weekend, anyone reselling a property within six months of purchase is now subject to a 15 per cent stamp duty. A 10 per cent duty applies to sales within six to 12 months, and 5 per cent within 12 to 24 months.

The head of the Hong Kong Monetary Authority, the city's de facto central bank, also outlined measures tightening the issuance of mortgages.

The measures appeared to have an immediate impact, with secondary residential home sales dropping off over the weekend. Weekend sales of used homes fell 83 per cent from the previous week, according to data from Centaline Property Agency, the city's largest closely held real estate broker.

Ricacorp, one of Hong Kong's largest real estate agents, said sales had plunged by 70 per cent on Saturday and Sunday, compared with the previous weekend. 'Clients are postponing signing contracts,' managing director Willy Liu told Agence France-Presse.

Mr Raymond Chan, regional sales director of Midland Realty, said sales of newly built properties had also dipped: 'We expected a blow-out sale for a property launch last Friday, but it sold only around two-thirds, far short of our expectations.'

The United States bond purchase programme announced earlier this month has heightened the asset bubble risk in Hong Kong and it was necessary for the government to adopt 'pre-emptive' measures, Mr Tsang wrote on the blog.

There is no need to change the city's currency peg to the US dollar as this is not the 'major factor' leading to an asset bubble risk, he said. The Hong Kong dollar has been pegged to its US counterpart since 1983.

BLOOMBERG, AGENCE FRANCE-PRESSE

ST : S'pore tops in office rental growth

Nov 23, 2010

S'pore tops in office rental growth

It shares the spot with China with 11% growth

By Esther Teo

OFFICE landlords here have much to cheer about after rises in third-quarter Grade A rents outshone gains in other Asia-Pacific business centres.

Singapore, along with Beijing, topped the table, according to a survey by property consultancy Jones Lang LaSalle (JLL).

Both recorded quarterly net effective rental growth of 10.9 per cent in local currency terms. This excludes outgoings such as maintenance fees and property taxes and aims to reflect the net rental income earned by property investors.

Gross effective rent measures the total occupancy costs paid by tenants.

Singapore was ranked fourth out of 26 Asia-Pacific cities in terms of net effective rent, with landlords getting an average of US$671 (S$870) per sq m a year, JLL said.

This level is behind those of Hong Kong, Tokyo and Mumbai, but above those of other regional business centres such as Ho Chi Minh City, Kuala Lumpur and Bangkok, which rank 6th, 21st and 22nd respectively.

JLL said the average prime Grade A gross effective rent here in the third quarter was $8.70 per sq ft of net lettable area per month.

This puts it above levels in 2000, but it is still about 16 per cent, 23 per cent and 52 per cent below peak levels in 1991, 1996 and 2008 respectively, JLL added.

The firm said that although prime Grade A gross effective rents have increased 12.3 per cent so far this year, more rises are expected by the year end.

'Upside potential for rents next year and in 2012 also appears visible considering their current level vis-a-vis previous peak levels,' JLL added.

Still, a large supply of office space is set to come onstream next year, which means vacancy levels are expected to rise in the short term.

Even with steady demand levels, rental growth is expected to be slower in the first half of next year compared with the second half and further on in 2012.

JLL head of markets Chris Archibold said levels of occupier interest in new developments have been very strong over the last six months.

He added that the numerous large relocation transactions have further bolstered investor sentiment.

'Next year will see significant supply coming online but a fair degree of this is pre-committed, and while vacancy will increase in the first half of next year, we do not foresee this having any adverse effect on rentals,' he said.

JLL also said the Asia Pacific Office Rental Index gained 1.8 per cent in the third quarter, with more markets expected to strengthen as landlords start to gain bargaining power across the board.

Mr Ong Kah Seng, Cushman and Wakefield's

senior manager of Asia-Pacific research, said that new multinational corporations entering the market looking for space and existing companies embarking on expansion plans have helped the recovery in prime office rents.

Companies generally recognise that prime office rents are still way below the record high in mid-2008, he said.

There is also a limited forthcoming supply as the lacklustre years in the second half of 2008 and last year saw a dearth of new office development plans being kicked off, Mr Ong added.

esthert@sph.com.sg

ST : S'pore not likely to see HK-style property curbs

Nov 23, 2010

S'pore not likely to see HK-style property curbs

Market not as bubbly and recent measures still taking effect: Analysts

By Cheryl Lim

THE new cooling measures aimed at taking the heat out of Hong Kong's sizzling property market are unlikely to be inflicted on Singapore any time soon, according to industry experts.

They believe Singapore's market is not at the same frenzied level as in Hong Kong while recent steps brought in by the Government here need time to take effect.

The Hong Kong measures have targeted speculators with a sliding scale of new stamp duties.

Restraints on lending, mostly directed at the luxury end of the market, have also been put in place.

If these steps do not help deflate the asset bubble that is clearly building, harsher measures are almost certain to be put in place, as hinted in Hong Kong Financial Secretary John Tsang's official blog on Sunday.

While both Singapore and Hong Kong have similar characteristics - they are dynamic avenues for foreign investment, have scarce land and compete to attract rich investors - analysts say such steps are not likely to be on the cards here.

'It's unlikely the Government will simply follow what other governments are doing,' said Ms Tay Huey Ying, director of research and advisory at Colliers International.

'Singapore's Government has shown itself to be very measured in introducing cooling measures; the steps taken have been trying to temper exuberance without countering demand.'

The Government imposed cooling steps in August that tightened ownership rules for HDB buyers, set new loan limits and increased the amount of time a home buyer must hold on to his property before reselling it if he wants to avoid paying sellers' stamp duty.

Dr Chua Yang Liang, research head at Jones Lang LaSalle, said Singapore is still a way off from needing Hong Kong-style measures.

He said several factors, including transaction volume and the rate of increase in prices, would have to undergo an 'unusual spike in demand' before the Government decides to turn the screw a little tighter.

Even if this happens, any further cooling measures that Singapore is likely to take will probably differ from Hong Kong's, he said.

Mr Mohamed Ismail, chief executive of property agency PropNex, said the policies introduced in August should be given time to take effect before the Government decides to act again.

He also believes that incremental changes to property policies are not the way to go.

'It creates instability in the minds of investors and destabilises the local market. Buyers will be kept guessing how often or how soon the policies will change...they will be more detrimental if they come in small doses.'

Keeping this in mind, the Government must strike a fair balance if and when it acts, Mr Ismail said.

'You don't want speculators to drive up prices, but you have to keep the property market exciting enough for investors to bring in the money.'

However, Ms Tay believes that introducing new cooling measures is unlikely to change the mindsets of Asian investors who have traditionally looked at property as investments.

'With attractive low interest rates, buyers are finding (buying property) more worth their while than parking money in the bank...unless cooling measures really impact affordability, property will continue to remain as an alternative investment.'

Data released by the Urban Redevelopment Authority earlier this month showed that developers had sold 1,058 private homes last month, excluding executive condominiums, an increase of 16.1 per cent from September.

cherlim@sph.com.sg

ST : 1,715 units coming up at Farrer Court

Nov 23, 2010

1,715 units coming up at Farrer Court

THE much-anticipated project to be built on the former Farrer Court site is expected to be previewed later this month after almost two years of delay.

Marketing material obtained by The Straits Times indicates that CapitaLand's massive 1,715-unit development will be named D'Leedon.

The 99-year leasehold project, consisting of seven 36-storey towers and located on a 838,488 sq ft site, will include one- to four-bedroom apartments, penthouses and 12 strata villas.

Marketing agents said the average price across the project will be in the $1,600 to $1,800 per sq ft (psf) range.

However, with City Developments' freehold project, The Glyndebourne, in the vicinity selling at an average price of $2,100 psf, smaller units might fetch comparable prices as well, they added.

The Straits Times understands that a preview will be held for the developer's invited guests on Thursday and for ex-owners of the former HUDC estate on Friday.

One-plus-study units will range from 592 sq ft to 840 sq ft, two-bedroom units will be between 786 sq ft and 1,216 sq ft, while three-bedroom apartments will be between 1,076 sq ft and 1,668 sq ft.

The project is designed by internationally renowned Pritzker Architecture Prize winner Zaha Hadid - the award's first female recipient - and is expected to be completed in 2014.

CapitaLand had bought the former HUDC estate in a collective sale in 2007 for a record $1.34 billion.

The upmarket condo was to have been launched for sale in the first half of last year and then in the first half of this year but had been delayed owing to market conditions.

Initially, about 1,500 generously sized units were planned.

CapitaLand is developing the 99-year leasehold plot with three partners. Hotel Properties and a Morgan Stanley Real Estate fund will each hold 22.5 per cent, while Wachovia Development will take 20 per cent.

Separately, Sim Lian Group said yesterday that it has sold 332 units out of the 390 units launched at the 696-unit Waterview at an average price of $838 psf.

The condo, at the junction of Tampines Avenue 1 and Tampines Avenue 10, was launched last Friday. Twelve of its 24 penthouse units have also been sold.

Sim Lian said that 90 per cent of the buyers were Singaporeans with the remaining buyers permanent residents and foreigners, from countries such as Australia, China and Malaysia.

It will be releasing 110 new units this week which will be launched at slightly increased prices, bringing the total number of units released to 500.

The 99-year leasehold 341,654 sq ft site comprises twelve 15-storey blocks.

ESTHER TEO

ST : MPs want stricter curbs on foreign property speculators

Nov 23, 2010

parliament

MPs want stricter curbs on foreign property speculators

By Rachel Chang

MEMBERS of Parliament yesterday endorsed harsher penalties for foreigners speculating in landed property here, but asked the Government to clamp down even more.

They argued that home ownership is an emotional issue for Singaporeans, and that further rules to restrict foreigners dabbling in the local market should be considered.

This arose in the course of a debate over changes proposed by the Government involving foreign ownership of landed residential properties. The changes were passed by Parliament after the debate.

In Singapore, only citizens and permanent residents (PRs) who make 'significant economic contribution' can own landed property. These PRs can buy only one such property, must live in it and cannot sell it for three years.

As for foreign developers, they can buy land to build homes, but the project must be completed in five years and all units sold within two years of it receiving the temporary occupancy permit. This is to prevent hoarding.

When the deadlines are not met, they will forfeit their banker's guarantee, pegged at 10 per cent of the land price. But with the new law, an extension charge will also be levied for the extended time taken beyond the project completion period.

In addition, PRs who sell their homes within three years will pay up to $200,000 in fines.

The previous maximum fine was only $5,000, an amount Law Minister K. Shanmugam noted was 'far below the amount of profit they might have gained from speculating in the property'.

Also, an owner who rents out his property will face a financial penalty of up to three times the rental income earned or $10,000, whichever is higher.

The present criminal sanction will, however, be removed, 'as that may not be appropriate', said Mr Shanmugam.

Non-citizens who inherit landed property will have five years, instead of the previous 10, to dispose of it. And those who give up their citizenship or PR status must sell their landed property, but no deadline was specified. At present, they can continue to keep their property.

MPs like Mr Hri Kumar Nair (Bishan-Toa Payoh GRC) welcomed the changes, but argued for even tighter restrictions, like a capital gains tax on foreigners who sell their property within three years.

While such sellers were in the minority, he said 'property prices are driven by sentiment, and the activities of a few at the fringes can have an impact'.

Nominated MP Paulin Straughan went even further in suggesting that foreign ownership of condominiums and high-rise apartments be restricted.

'This may place the coveted ownership of private property within the reach of more Singaporeans,' she said.

But Mr Shanmugam, while noting that such wider measures were outside the purview of the amendments under debate, said excessive measures could have 'many possible consequences, and most of them are bad for Singapore'.

The drop in demand could cause asset devaluation, and Singapore's reputation as a magnet for capital and talent could be harmed.

He emphasised to MPs that landed homes made up only 6 per cent of residential property in Singapore. Of that 6 per cent, only 3.6 per cent is foreign-owned.

ST : China's ghost cities

Nov 22, 2010

China's ghost cities

Properties are snapped up by investors, but many remain empty

By Ho Ai Li , CHINA CORRESPONDENT



There are no traffic jams and few pedestrians on the broad streets of Kangbashi district in Ordos City, where many people have bought homes they do not intend to occupy. -- ST PHOTOS: HO AI LI

ORDOS (INNER MONGOLIA): A public theatre shaped like the traditional Mongolian head-dress, a library building in the form of three books, and a museum that looks as shiny and abstract as the renowned Guggenheim Museum in Bilbao, Spain.

Kangbashi, a district in Ordos City, Inner Mongolia, does not lack iconic buildings. Nor does it lack housing.

Surrounding the public buildings in the 32 sq km district, neat rows of modern apartment blocks and townhouses shine under the desert sun as sports utility vehicles cruise along its broad avenues - a picture of middle-class idyll.

But when night falls, the lights do not come on in most of these homes. The houses have been sold but their owners do not live in them.

'They call it a 'ghost city'. In the daytime, it looks beautiful. At night, the houses have no lights,' said Ms Liu Qilong, 46, a long-time Inner Mongolia resident.

It's the same in many places across China, with people buying apartments with no intention of occupying them or renting them out.

A survey by the state grid company, reported by Chinese media earlier this year, showed that as many as 65.4 million homes did not use any electricity at all - which suggested that housing which could accommodate nearly 200 million people was not being put to good use.

With investment options limited in China, and bank savings exposed to the ravages of inflation, many prefer to park their money in property.

And property has proven to be a good investment vehicle, as China's nationwide housing index has shown a rise of 10 per cent each year since 2001, noted Mr Michael Kurtz, head of Asia strategy for Macquarie Securities, in a column in The Wall Street Journal.

Add to that the virtually zero cost in holding on to property - no annual property tax, for instance - and home owners are content with letting their properties stay empty until divested. The result is the emergence of unneeded housing, or sold homes which are left empty.

This has in turn created 'ghost cities' such as Kangbashi in Ordos, as well as pockets in cities such as Beijing, Tianjin or Guangzhou.

Jin Jing City, a spacious development between Beijing and Tianjin which includes golf courses, hotels and housing for half a million people, is also reportedly dead quiet at night. But perhaps nowhere are the excesses of China's property boom better reflected than in Ordos - the boomtown in the middle of nowhere.

A city of about 1.6 million people, Ordos hit pay dirt in recent years as demand for its coal soared. It boasts one-sixth of proven coal reserves in China, as well as a third of its natural gas reserves.

In terms of income per capita, it is China's second richest city, behind only Hong Kong, with average earnings hitting US$19,679 (S$25,557) a year.

Building cranes can be seen all around the city, which opened its first airport three years ago, a connection to business hubs such as Guangzhou and Beijing.

Not content with remaking the older and more crowded districts, Ordos' government lined up plans to build a new district from scratch six years ago.

The outcome was Kangbashi, which cost up to 17 billion yuan (S$3.3 billion) to build and was supposed to be more alluring than the older Dongsheng district as it was nearer the river, brand-new and less congested.

Houses were quickly snapped up and more were still being built. The houses here have all been sold, a taxi driver surnamed Guo, 30, pointed out to The Straits Times as he drove past yet another site under construction. But far fewer people than expected have settled there in the four years since the Ordos government moved into it. Kangbashi was projected to have 100,000 residents by this year. But only 28,000 people lived there as of April, reported China Daily.

Ms Chen Li, 40, a housewife who moved to Kangbashi only about a month ago, said: 'At night I never come out because the occupancy rate of my housing area is not very high. I'm a bit scared of going out.'

Like many civil servants, her husband used to commute about 50km every day between Kangbashi and the older district of Dongsheng, where their old home was. The family moved to the new area only for their son, who attends a well-known secondary school in the new district.

'It's not very convenient to buy things here,' she said.

Ms Chen was one of a handful of people spotted visiting the library on a recent weekday afternoon. In the Xinhua Bookstore inside the library, there were only four to five customers.

All was quiet inside the 47,480 sq m exhibition and convention centre shaped like a Mongolian tent, which has three exhibition halls and a multi-function centre that can seat 900 people.

'Everywhere else in the world, cities are built after people congregated. But here, they build first before people congregate,' mused Mr Guo Qingfeng, a civil servant, during a visit to Kangbashi.

Professor Bao Guangcai, an economics expert from the Inner Mongolia University, said: 'My personal feeling is that it's a kind of waste, a kind of planning error.'

For Inner Mongolia University student Li Nan, 20, Kangbashi may be quiet compared to elsewhere, but is not a bad place to live. He stays in the dormitory on his campus located in the district, and spends his free time watching movies at the local cinema or going to the library.

'It's not that bad, just that there are fewer people. It's not that scary,' said the undergraduate.

hoaili@sph.com.sg

ST : More illegally partition homes to create rental space

Nov 22, 2010

More illegally partition homes to create rental space

By Mavis Toh


HOMEOWNERS are increasingly being caught illegally turning their homes into lodging houses and dormitories as they try to make a quick buck from foreign workers, students and even tourists.

They build partitions in their apartments and houses to increase the number of rooms they can rent out - boosting their rental income.

While renting out rooms is not illegal, building partitions in existing apartments to create more space for rental is an offence which can send homeowners to jail.

The Urban Redevelopment Authority (URA) told The Straits Times that it has looked into 1,000 cases of unauthorised use of residential properties this year.

This is a sharp rise from the 500 cases last year and 400 in 2008. More such operations are being exposed due to public feedback.

Under the law, the illegal conversion of premises can be punished with a fine of $200,000 and a year in jail. If the offender carries on with such activities after being convicted, he can be fined $10,000 a day.

Property agents said the practice has become even more rampant as the influx of foreigners in recent years - from 755,000 in 2000 to 1.25 million last year - has driven up demand for rental units.

In some cases, even tenants partition their apartments to sublet to others.

An agent who has been in the industry for eight years said: 'They can rent out an apartment for $3,000 but if they partition the unit into 10 rooms and charge $500 for each room, they can collect up to $5,000 in rent. This is good money.'

A Straits Times check online found some operating a hotel-like business - renting out partitioned rooms in Orchard Road condominiums to tourists for between $89 and $350 daily.

Malaysian tourist Trish Lee, 40, a housewife, said she was ushered into a small partitioned room at Lucky Tower when she visited in March.

'The apartment had no living and dining rooms. From the entrance, there was only a corridor leading to numbered rooms partitioned using chipboard. The experience was terrible,' she said, adding she had booked the room through a website which had touted it as a boutique hotel.

Agent Kelvin Tan, 38, said some owners also knowingly let out their apartments to firms who cram up to 30 foreign workers under one roof.

'They close one eye by charging them a few thousand dollars extra. The living conditions of these places are usually bad and the workers are just given mattresses to lie on,' he added.

The activities have also drawn the attention of the Singapore Civil Defence Force, which is concerned about fire hazards created by the illegal partitioning.

It issued 443 Notices of Fire Safety Offence to residential premises for unauthorised change of use in the first nine months of this year. The number of such notices went up from 356 in 2008 to 613 last year. Offenders will be brought to court if they continue the violations.

A URA spokesman said that the occupancy of a residential unit should satisfy a minimum of 10 sq m per person, subject to a cap of eight occupants, to ensure a good living environment and prevent overcrowding.

'The presence of transient occupiers may create disturbance and disamenity to the other residents in the development,' she added.

Of the 1,000 cases the URA looked into this year, 700 were found to have built partitions in their apartments without permission, among other infringements. More than half of them have since ceased the unauthorised activities.

The remaining ones are subject to further inspection and warning notices, among other enforcement actions, from the URA.

ST : not yet sold out

Nov 22, 2010

not yet sold out

Still no buyers for 1,000 posh homes

By Esther Teo


MANY high-end condominium units are sitting unsold even after completion, as the luxury home market remains quieter than in previous years.

Twelve developments have been completed this year, each with more than 10 units still unsold as of last month, according to new data released by property consultancy CB Richard Ellis (CBRE).

Of these, 10 are in prime areas, with a total of 384 unsold units, CBRE said.

For instance, Wing Tai's Belle Vue Residences in Oxley Walk, which obtained its temporary occupation permit (TOP) in the second quarter, has not found buyers for 61 of its 176 units as of last month.

Paterson Suites, which had its TOP in the third quarter, has 79 units out of 102 yet to be taken up.

Another eight projects are expected to receive TOP soon, each with at least 10 unsold units, added CBRE.

Seven of these are also in prime locations: Districts 9, 10 and 11 - which cover Orchard, Holland, Newton and Bukit Timah - and the Sentosa and Tanjong Pagar areas.

In all, buyers are still needed for more than 1,000 posh homes in projects already completed or expected to be ready by early next year.

Most of these projects were first launched in the property boom of 2007, including Riveria Gardens in River Valley and Marina Collection in Sentosa Cove.

Not all these completed units are available for sale, however.

Experts say that some developers have yet to launch their remaining units as prices are still below their previous peak.

Developers are biding their time, waiting for the luxury market to catch up with or even surpass the historical highs, they say.

CBRE Research executive director Li Hiaw Ho said that developers either slowed down or stopped sales completely when the financial crisis hit Singapore.

When the residential market recovered last year, developers were hopeful that high-end prices would recover and that foreign interest would return.

However, while high-end prices have seen a recovery this year, they are still below the previous peak.

Foreigners are also less active compared to 2007 because the United States and European economies are still weak, he added.

Colliers International's director of research and advisory Tay Huey Ying said that luxury home prices are now just 5.4 per cent shy of their peak in 2007. While volumes are still thin, prices are gradually creeping up, she added.

'Some developers might feel that it is not the right time to launch as demand is still not strong enough to push luxury home prices past their previous peak.'

In boom years, some developers might have bought residential land at 'aggressive prices' and are now waiting for home prices to catch up, Ms Tay added.

Cushman and Wakefield's managing director Donald Han said some of these projects might have seen a significant number of units sold at relatively high prices pre-crisis when they were first launched.

Developers thus had an obligation to these initial buyers not to offload the remaining units at a lower price.

Seeming over-eager to sell could also cause the market to lose confidence in the developer's holding power, he said.

'Once a development has sold about 50 to 60 per cent, it would most likely have broken even and there would be less pressure to dump units,' he said.

'Developers can also choose to keep units to rent out temporarily,' Mr Han added.

Experts added that unlike 99-year leasehold mass market condos that might depreciate after completion, many of the high-end projects had freehold tenure.

Some luxury home buyers are also keen to 'feel and touch' their homes and the quality of the finishes before making such pricey purchases.

This might give completed projects at least some kind of an edge over new launches, they said.

Ms Wendy Tang, Knight Frank director of residential services, added that with prime residential sites hard to come by, developers might also see no urgent need to dispose of high-end projects quickly as it might be difficult to replenish land banks with such exclusive sites.

esthert@sph.com.sg

ST : Residents in Bedok get rooftop gym

Nov 22, 2010

Residents in Bedok get rooftop gym



Mr George Yeo trying his hand at one of the exercise machines in the new gym on the roof of the multi-storey carpark at Block 714A, Bedok Reservoir Road, yesterday. -- PHOTO: LIANHE WANBAO

A GOOD workout can leave you feeling on top of the world. Especially when the gym you are using is on the roof.

Residents in Bedok have been given a rooftop gym with a difference - it is on top of a public multi-storey carpark.

The $240,000 facility, the first in Singapore to be built on a carpark, was officially opened yesterday by MP for Aljunied GRC, Mr George Yeo, who is the Foreign Minister. The nearly 2,000 sq ft gym, on top of Block 714A, Bedok Reservoir Road, took four months to construct.

It is aimed at promoting healthy lifestyles and forging a stronger identity among residents. The gym also provides an alternative exercise venue for residents who currently use the jogging track at nearby Bedok Reservoir Park.

Run by a private operator, the gym is open from 7am-10pm on weekdays, and 7am-8pm on weekends and public holidays. It costs $3.50 per session and $2.50 for those under 21 or above 60.

Mrs Josephine Chew, 63, who has lived in the area for 30 years, is glad she can now use the gym when the weather is unsuitable for outdoor exercise.

The retiree, who exercises at least four times a week, said: 'It's very convenient, and it's indoors. It was the only thing that was missing in this area.'

Another resident, Mr Ravinder Bahadur, 45, is hoping to lead a healthier lifestyle, now that the gym has opened.

'The fees are reasonably priced, it's well within reach, and the opening hours are just right. Those on their way back home from office can just pop in,' he said.

Mr Yeo, adviser to Bedok Reservoir-Punggol grassroots organisations, called the project, which was included in the planning of the carpark's construction, an 'experiment' which worked out.

He said: 'I encourage other MPs in my GRC, when they build multi-storey carparks, to think of this idea as well. Because if it works here, it may work elsewhere.'

JALELAH ABU BAKER

ST : IEA steps up promotion of real estate courses

Nov 20, 2010

IEA steps up promotion of real estate courses

By Cheryl Lim


A LEADING property industry organisation is stepping up efforts to make Singapore a regional leader in real estate.

The campaign involves heavier local and overseas promotion of two internationally recognised courses run by the Institute of Estate Agents (IEA).

The IEA won the right this year to offer the courses, which cover global real estate markets and financial analysis concepts.

Previously, both programmes were offered only in the United States.

It plans to offer another course, on residential property, next year.

Foreign interest in the courses is growing, with the IEA receiving as many as seven inquiries a day.

The IEA's immediate past president, Mr Jeff Foo, said the increased marketing efforts will bode well for Singapore's real estate sector.

He said local agents who undergo the five-day programmes will benefit from an increased awareness of standards in global real estate markets.

This will make it easier for real estate agents to facilitate global co-brokering agreements, which will help foreigners moving here.

The programmes are run once a year with about 30 participants enrolled for each course, which costs up to $1,700.

Five participants from Malaysia and the Philippines have completed one of the courses, and the IEA says that it expects up to 10 people from both countries to sign up for the next round.

This is scheduled to take place in the middle of next year.

Mr Foo said that Singapore's central location and infrastructure will encourage real estate agents from neighbouring countries, including Thailand and Vietnam, to enrol in the courses.

'It's more economical for them to travel here than all the way (to the United States). It's expensive if you think in terms of air tickets, hotels and time,' he pointed out.

ST : UE's exec condo to target young couples

Nov 20, 2010

UE's exec condo to target young couples

Analysts upbeat about demand for upcoming Sengkang project

By Yasmine Yahya



An artist's impression of Austville Residences, a 540-unit executive condo expected to be launched next month or in January. It is the third executive condo to be unveiled this year, following Esparina Residences and The Canopy. -- PHOTO: UNITED ENGINEERS

UNITED Engineers (UE) is hoping to cash in on the pent-up demand for affordable housing among young couples with the unveiling of Austville Residences, a 540-unit executive condominium.

The 99-year leasehold project is expected to be launched some time next month or in January. It is located between Sengkang East Avenue and Buangkok Drive, a three-minute walk to Kangkar LRT station and five minutes away from Ranggung LRT station.

Prices will start from $650 per sq ft (psf), with two-bedroom units priced from $562,000.

UE said this will be the first executive condo in Singapore to have a theme design - the developers have taken Australian nature resorts as their inspiration.

The project will include features such as a beach-style pool, a barbecue corner and a vineyard-inspired dining pavilion. It is the third executive condo to be unveiled this year, and analysts expect it to be just as popular as the previous two, especially among young couples.

'For the location, I think the price is reasonable. If you look at recent launches of private residential properties, take-up has been good,' said Mr Steven Tan, executive director of residential at property agency OrangeTee.

'The market is receptive to private property prices of $800 to $900 psf. The average prices of executive condos represent a 20 per cent discount to that. Plus, since it's considered public housing, first-time buyers can get the $30,000 Central Provident Fund grant as well,' he added.

The senior manager of Asia-Pacific research at Cushman & Wakefield, Mr Ong Kah Seng, was equally upbeat.

'Looking at how oversubscribed Esparina Residences was, it reflects that there is strong demand for executive condos in various locations waiting to be absorbed. There is also continued relevance for executive condos to cater to the 'sandwiched class', which will help executive condos appreciate as choice dwellings.'

Esparina Residences was one of two executive condos launched earlier this year. Situated near Buangkok MRT station, it has a median price of $761 psf. So far, 425 of its 573 units have been sold.

The other one launched, The Canopy in Yishun, has been selling at a median price of $658 psf. Of its 406 units, 104 have been taken up.

Executive condos are a hybrid of public and private housing. Before this year, the last one was launched in 2005. This is just one reason why they are proving to be so popular today, said Mr Ong.

'Executive condos are popular primarily due to the long dearth of new projects and prices of private suburban condominiums which have generally reached record highs. Executive condos are hence the closest substitutes for eligible buyers who wish to enjoy a condominium living experience,' he said.

Austville features six 18-storey towers with two- to four-bedroom units, including 30 penthouse units. Unit sizes range from 811 to 1,241 sq ft.

UE said the expected temporary occupation permit date for Austville will be no later than 2014.

yasminey@sph.com.sg

ST : One Finlayson Green for sale floor by floor

Nov 20, 2010

One Finlayson Green for sale floor by floor

STRATA offices and retail units at One Finlayson Green in the Central Business District are on the market but investors have to buy entire floors.

The prime location - near Raffles Place MRT station - and tight market should stimulate demand, according to marketing agent for Singapore and South-east Asia Jones Lang LaSalle (JLL).

The 19-storey building, which has retail outlets on the first and second levels, has a total saleable floor area of about 96,132 sq ft. Each floor measures up to about 6,437 sq ft.

The building was bought in March by the Lucrum APS100 fund, which was founded by Indonesian investor Norman Winata.

It is believed to have paid $155 million to $157 million for the property.

JLL tips prices for the strata floors to range from $2,600 to $2,800 per square foot, while the retail space could go for more than $4,000 psf. That is going by a recent sale at Malacca Centre that was transacted at $4,021 psf.

Ms Stella Hoh, JLL's head of investments, believes demand will be healthy given strong economic growth and limited availability of quality strata offices.

Expressions of interest close on Jan 12.

ST : Cashback scam: Agent's jail term cut to two weeks

Nov 20, 2010

Cashback scam: Agent's jail term cut to two weeks

A PROPERTY agent convicted of taking part in a cashback scam had his one-month jail sentence reduced to two weeks and a $1,000 fine yesterday.

Francis Clinton Wong Chee Meng, 39, was acting for a flat seller when former agent Nick Goh Chong Liang approached him and convinced him to take part in the plot.

When police started investigating, Goh - who was running the scam with two others, including fugitive lawyer David Rasif - told Wong not to implicate him, and threatened to take revenge on him if he did.

Wong then lied to the police, saying the buyer's agent had suggested the scam. He was sentenced in June to two weeks in jail for cheating and one month for giving police false information. The two terms were concurrent.

He appealed, and the High Court yesterday reduced his sentence for giving false information to a $1,000 fine. His appeal against the sentence for cheating was dismissed.

In cutting Wong's sentence, Justice Steven Chong noted the threats he had received from Goh in 2005. Wong had no other probable motivation for lying to the police, he said.

Goh, 37, hatched the cashback scam in 2003 with Rasif - who is still on the run after siphoning off $11 million of his clients' money - and fellow lawyer David Tan Hock Boon, 40.

It involved convincing flat sellers to declare an inflated amount above the actual agreed purchase price. The banks would then be deceived into issuing higher mortgage loans to the buyers.

Wong was accused of cheating Standard Chartered Bank into believing that the purchase price of a Yishun flat was $250,000 when it was actually $203,000. This resulted in the bank giving a $187,500 loan to the buyer.

Wong then convinced the seller to transfer the $47,000 'cashback' - the difference between the real price and the inflated one - to a shell company set up by Goh, saying it was a requirement by the buyer.

Goh was jailed for five years and five months in 2007.

Tan was jailed for five years in 2008.

SELINA LUM

ST : HK cracks down on property speculation

Nov 20, 2010

HK cracks down on property speculation

It imposes more curbs as IMF warns of the danger of asset inflation

HONG KONG: Hong Kong has imposed additional taxes and raised down payments on residential properties, stepping up a battle against surging prices after the International Monetary Fund warned that asset inflation may derail the Chinese city's economy.

Homes sold within six months of purchase will incur a 15 per cent stamp duty from today, Financial Secretary John Tsang said in a briefing yesterday. Down payments for homes costing HK$12 million (S$2 million) or more will rise to 50 per cent, from 40 per cent.

'The measures show the government is serious about curbing speculation, and that would impact on market sentiment, leading to a fall in home sales volume,' said Mr David Ng, a Hong Kong-based property analyst at Royal Bank of Scotland. 'Home prices won't see a decline immediately as speculators could still keep their stocks in the low interest rate environment.'

Governments from South Korea to Brazil are acting to stem fund inflows into their higher-yielding markets after the US Federal Reserve announced a plan to buy an additional US$600 billion (S$780 billion) in government debt to support the US economy.

Hong Kong is resorting to increased taxes and tighter lending to curb home prices that have risen more than 50 per cent since the beginning of last year because the city's currency peg to the US dollar prevents its de-facto central bank from raising interest rates.

'The unusual surge in flat prices has attracted speculators; this coupled with quantitative easing measures has distorted the market expectation regarding inflation and asset prices,' Mr Tsang said. 'The government is resolute in maintaining economic stability and curbing any threat to people's livelihoods.'

Properties resold within six months to 12 months will incur a 10 per cent stamp duty, while those resold from 12 months to 24 months will be charged 5 per cent, Mr Tsang said. The stamp duty will be split between buyers and sellers, he said.

Down payments for homes costing between HK$8 million and HK$12 million will be increased to 40 per cent from 30 per cent, Hong Kong Monetary Authority chief executive Norman Chan said at a separate briefing yesterday.

The maximum loan to value for all non-owner occupied residential properties and those held by companies will be lowered to 50 per cent, Mr Chan said.

The government will adopt more measures to make sure the market is stable, Mr Tsang said.

The additional stamp duty 'is quite substantial and is a way to deter speculation', said Mr Benedict Ma, Hong Kong- based associate director of research at CB Richard Ellis, the world's biggest real estate services firm. 'Investors, especially those in the luxury market, will have to reassess whether this is really the right time to get into the market.'

The IMF said in a report on Thursday that Hong Kong's accelerating asset inflation risks causing a bust that leads to deflation and an extended economic 'downturn', and urged further measures to rein in prices. The city has in the past year raised down payment ratios and boosted land supply to curb home prices, which have surpassed a 1997 peak on the back of record-low mortgage rates and an influx of mainland Chinese buyers.

South Korea revived a tax on foreigners investing in its bonds yesterday; Thailand is ending foreigners' 15 per cent tax exemption on income from domestic bonds; Brazil has tripled a tax on purchases of local fixed-income assets by overseas investors.

And Bank of Taiwan, the unit of the island's biggest financial services company, has cut the amount of loans for buyers of luxury residential properties and second homes as the state-owned lender seeks to reduce credit risk.

BLOOMBERG

ST : New watchdog gets six complaints a day

Nov 19, 2010
New watchdog gets six complaints a day
By Daryl Chin

IN THE 19 days since it was set up, the Council for Estate Agencies (CEA) has received a total of 72 complaints or about six every working day, about errant property agents.

Till Nov 10, about one in two complaints to the CEA was about unprofessional agents or the quality of service they provided.

Complaints about misrepresentation, alleged fraud, disputes on commission and bickering between agents made up the rest.

The council can now only refer complaints involving disputes on commissions and contractual matters back to the agents, who will be tasked to provide the CEA with a report within 14 days.

Said a spokesman: 'If they are unable to resolve the dispute, CEA will advise consumers to go to mediation centres such as the Consumers Association of Singapore (Case) or the Singapore Mediation Centre.'

The council can also issue warning letters to errant agents for acts such as distributing fliers containing misleading information.

Beginning January next year, however, the CEA, which has a staff of 30, will start handing out licences to estate agents registered with them. Only CEA-registered agents will be allowed to transact properties.

And the council will have the authority to fine, suspend or revoke the licences of those who break the rules.

In addition, for complaints involving commission or contractual disputes, it will require estate agents to be physically present to participate in the dispute resolution process.

At present, Case can attempt to resolve the dispute only if both parties agree to do so.

If the agent does not turn up, consumers can take their grievances to the Small Claims Tribunal for further action. The process can take up to a month.

Last year, Case received 1,079 complaints against property agents for unsatisfactory service and misleading claims.

This year, it has received 961 complaints so far.

Said Case director Seah Seng Choon: 'When the CEA is able to take action next year, it will certainly speed up the dispute process. This is long overdue as estate agents have been left unregulated for too long.'

Property agencies The Straits Times spoke to said it was too early to tell how this might affect them.

PropNex, which has about 6,000 agents, receives an average of about 40 complaints monthly, most of them involving commission disputes.

ST : S'pore prime office rents spike in Q3

Nov 19, 2010

S'pore prime office rents spike in Q3

Biggest increase since end-2007, with 7.2% quarter-on-quarter rise

By Gabriel Chen

RISING prime office rents in Singapore accelerated in the third quarter, jumping the most since the end of 2007, according to a new report by CB Richard Ellis (CBRE).

CBRE said prime rents saw a big jump of 7.2 per cent quarter-on-quarter, from $6.90 per sq ft per month to $7.40 psf per month during the period, thanks to increasing demand from financial institutions, insurance firms and professional business service companies.

The major leasing deals reported during this period were primarily focused on various new Grade A or prime developments.

In another boost for the office market, the vacancy rate at Grade A buildings fell, the report said.

The CBRE findings come on the heels of a Colliers International report, which indicated that Singapore notched up the biggest increase in rents across the Asia-Pacific region in the third quarter.

Colliers found that in US dollar terms, Central Business District Grade A office rents leapt 15.6 per cent in the three months ended Sept 30 compared with the previous quarter.

'Singapore has enjoyed particularly strong occupier demand over the past six months,' said CBRE Singapore's executive director for office services, Mr Moray Armstrong.

'Even while the volume of leasing activity may ease going into 2011, we remain optimistic on the market outlook.'

The CBRE report noted that overall office rents in Asia rose 3.2 per cent quarter-on-quarter in the third quarter of this year.

Aside from the higher office rents in Singapore, the increase was also attributable to the strong growth in Greater China.

For example, the Hong Kong office market recorded the largest rental growth of any market in the region.

However, rental growth in cities such as Guangzhou, Shanghai and a number of major ones in India is already being constrained by the large amount of new supply coming on stream in the short to medium term, CBRE said.

In Japan, the Tokyo Grade A office market saw mixed fortunes during the quarter with well-located Grade A buildings securing new tenants but other Grade A buildings in less attractive locations continuing to have trouble finding tenants.

gabrielc@sph.com.sg


--------------------------------------------------------------------------------

BRIGHT OUTLOOK

'Singapore has enjoyed particularly strong occupier demand over the past six months... Even while the volume of leasing activity may ease going into 2011, we remain optimistic on the market outlook.'

Mr Moray Armstrong, CBRE Singapore's executive director for office services

ST : $1.7b reserve price: Will builders bite?

Nov 19, 2010

PINE GROVE COLLECTIVE SALE

$1.7b reserve price: Will builders bite?

Joint bids likely, say analysts, pointing to cautious mood

By Francis Chan & Yasmine Yahya

PINE Grove is set to be put up for collective sale but its high $1.7 billion reserve price - the same carrot that enticed residents to support the sale - may put off potential bidders, say market experts.

But most still think there would be no lack of interest from developers, which could submit joint bids for the sprawling site off Ulu Pandan Road, home to 660 units.

'I wouldn't say the price would turn them away, but it's very likely that they will form consortiums to bid for it,' said Ms Tay Huey Ying, Colliers' director of research and advisory.

Mr Colin Tan, research and consultancy director of Chesterton Suntec International, was more optimistic, saying that with the world flush with liquidity at the moment, 'anything can happen'.

But he pointed out that developers may be cautious since other projects launched between 2007 and 2008 in the area have not been fully sold yet.

'Projects like The Interlace, Farrer Court... these are huge projects that are still not fully sold,' said Mr Tan. 'So who would build a similar project when you have other existing projects that have not been fully sold?'

Jones Lang LaSalle has been appointed the marketing agent of the estate, which sits on 893,178 sq ft of land.

News broke earlier this week that the requisite 80 per cent of residents from the estate had given their support for the collective sale. This, said some Pine Grove residents yesterday, was after the reserve price had been revised upwards to $1.7 billion earlier this month.

'Some of my neighbours were still undecided, but changed their minds after they received the notice about the latest price revision,' said a 47-year-old resident from Block 1B.

At $1.7 billion, owners could receive between $2.1 million and $2.75 million per unit, depending on the size of the apartment and development charge. Most of the units are 1,754 sq ft in size.

If the sale does go through, Pine Grove would become Singapore's largest residential collective sale, beating the previous record of $1.34 billion paid for Farrer Court in 2007.

The collection of signatures from residents started on Nov 15 last year, said a resident from Block 1C.

This latest collective sale attempt by Pine Grove residents follows at least two previous failed attempts - one in 2007 and another last year. This time, collective sale committee members and property agents went door-to-door to seek support for the sale in the days leading up to the Nov 14 deadline.

'They were very proactive this time and my parents thought it was a good price, so they have agreed to it,' said a resident from Block 1P.

Residents who do not want to sell their homes, however, said they felt harassed and pressured to put pen to paper.

'Where else can I get such a spacious home?' said a semi-retired woman who has been living in Block 1B for 15 years. 'Here, I don't even close my windows and main door.'

Residents are in for a nervous few weeks as they wait for the official confirmation that an 80 per cent mandate to start the sale has been received.

franchan@sph.com.sg

yasminey@sph.com.sg

ST : 348 Waterview units offered at launch

Nov 19, 2010

348 Waterview units offered at launch



SIM Lian Group is launching its 99-year leasehold Waterview condominium in Bedok Reservoir today.

The group said it would offer 348 units - half of the 696 units in the project - at an average price of $838 per square foot.

Waterview lies at the junction of Tampines Avenue 1 and Tampines Avenue 10, right next to Bedok Reservoir Park.

It is also located near schools, such as Temasek Polytechnic, the United World College of South East Asia and St Hilda's Primary School, as well as Tampines Regional Centre and other amenities.

Sitting on a 341,654 sq ft site, the development comprises 12 15-storey blocks and offers views of Bedok Reservoir and Tampines Quarry Park.

Waterview also has two pools: one for adults and a fun pool for children.

The flats range from two-bedroom units to luxurious single-level penthouses with six bedrooms.

Most of the units have views of the reservoir, the quarry or the pools - which is why it is called Waterview, Sim Lian said yesterday.

'The selling price for the first phase of the project is within expectations and acceptable to home buyers,' said Mr Ong Kah Seng, a senior manager for Asia-Pacific research at Cushman & Wakefield.

'The level is based on the prices of neighbouring developments, the cost of the site when it was awarded in the first half of this year and the prevailing sentiment among home buyers, which suggests at least cautious optimism among potential buyers,' he noted.

The Waterview launch follows a slew of property releases that have hit the residential market in recent weeks, with more expected before the year is over.

One was the launch earlier this month of UOL Group's Spottiswoode Residences, which saw 130 units sold during a three-day preview.

The development is near the soon-to-be-rejuvenated Tanjong Pagar area.

Prices at Spottiswoode ranged from $1,720 psf to $2,150 psf.

UOL said 86 per cent of the buyers were Singaporeans, most of whom were aged 40 or above. They included doctors, professionals, bankers and businessmen, and chose higher-priced units with sea views.

CapitaLand is expected to launch The Nassim and its 1,715-unit condo at the Farrer Court site by the end of this year.

GABRIEL CHEN

ST : 1,176 BTO flats coming near scenic Yishun park

Nov 19, 2010

1,176 BTO flats coming near scenic Yishun park

Units up to 40% cheaper than comparable resale flats

By Daryl Chin

THE Housing Board has launched more than 1,100 build-to-order (BTO) flats in Yishun that will be located near the scenic Lower Seletar Reservoir Park.

Property experts expect demand for the flats to be good, especially since they are priced up to 40 per cent below the median price of comparable flats on the HDB resale market.

The Yishun Greenwalk, which will be sold under a standard contract, was launched yesterday. It will bring the total number of new flats for sale under the BTO and Sale of Balance Flat exercise to 16,700 since the start of this year.

The bulk of the 1,176 units will be made up of 602 four-room flats of 990 sq ft each, with a price range of $224,000 to $280,000. There will also be 462 five-room flats, each 1,205 sq ft and priced between $298,000 and $365,000. The remaining 112 units are three-room flats with a floor area of 721 sq ft, and priced between $150,000 and $186,000 each.

As with all new BTO launches, up to 95 per cent of the flats will be set aside for first-time buyers.

PropNex corporate communications manager Adam Tan said he expected the project to be oversubscribed by as much as four times. This is because first-timers will be drawn towards the price, which is up to 40 per cent lower than HDB resale flat prices in the area.

In September, a three-room flat was sold for $288,000 while a five-room unit was sold for $443,000. Both were a stone's throw from the upcoming project.

The project, located between Yishun Ring Road and Yishun Avenue 9, is near to amenities and schools, making it attractive to young first-timer couples who are planning to start a family soon.

Said Mr Tan: 'Yishun is no longer a quiet HDB estate. It has seen, and continues to see, developments that add to a more well-rounded lifestyle for residents.'

In 2007, Yishun was selected by the HDB to be part of a Remaking Our Heartland initiative to rejuvenate the middle-aged town.

These measures included extending the Northpoint Shopping Centre with a new public library within its premises; building a Heritage Garden detailing Yishun's history; the recently opened Khoo Teck Puat Hospital; and new, condo-style HDB flats in a project called Adora Green, which is expected to be launched next year.

The HDB said first-time flat buyers are estimated to use 21 per cent to 24 per cent of their monthly household income to meet loan payments. The monthly household income ceiling is set at $3,000 a month for three-room units and $8,000 a month for the rest.

Those earning not more than $5,000 can also apply for the Additional CPF Housing Grant of up to $40,000. This can be used to offset the initial down payment. Applications for flats can be submitted at the HDB's website from today to Dec 1.

darylc@sph.com.sg

ST : Last lap for Turf City

Nov 19, 2010

Last lap for Turf City

Lease runs out next August but tenants unfazed; business has picked up speed

By Cheryl Lim

THE fate of the popular Turf City shopping mall appears uncertain.

Turf City in Bukit Timah has been leased out by the Singapore Land Authority (SLA) since the Turf Club moved to Kranji in 1999.

However, it has now emerged that the latest lease, which was granted by the SLA in June, was for one year rather than the usual three.

The SLA has told The Straits Times that this lease is the 'final' one, and that it will not be available for renewal when it expires on Aug 31 next year.

SLA's state property information website states 'nil' for the available tenure after the expiry of the current lease.

SLA says the development plans for the site are still under study by the relevant authorities. When contacted, the master tenant - private developer Singapore Agro Agricultural (SAA) - did not say why the lease was not being renewed.

Earlier reports have said SAA is behind the 2.33-ha Farmart Centre in Tengah, Singapore's first farm shopping centre.

The Turf City mall occupies 760,000 sq ft and houses more than 160 tenants, ranging from Giant hypermarket to car dealerships and restaurants.

Most tenants interviewed say they have not had official word from Turf City's management about what will happen when the lease ends.

Despite this, it is believed that several eateries have renovated their premises recently, while uptake for new leases remains healthy. Checks revealed several new tenants have inked new leases in the last few months.

Hair salon Yen's Hair Image celebrated its official opening earlier this month. Its owner, Ms Jolene Bousky, said she was fully aware of the risks when she signed the one-year lease with Turf City in August.

'Management did tell me that the lease may be continued when it ends. But they can't guarantee that for sure... customers have asked why I want to continue but I think even staying here for one or two years will help boost my customer base,' she said.

Since 2001, the site has been leased out to private business enterprises for various interim uses, such as sports and recreation, food and beverage, and retail.

A modest revamp in 2003 saw the addition of The Market Place, a flea-market of sorts modelled after Bangkok's Mahboonkrong shopping centre.

Over the years, the mall has also played host to several lifestyle events including performances by foreign artists and sporting events such as the Tanglin Rugby Club Barclays Cup and the Schools National Cross-Country Championships.

One tenant, Mr Teh Han Sing, managing director of Chin Lian Seng Motor Trading, said he would be sad to leave the place as business is good, having picked up in recent years.

Other tenants say they, too, have seen a recent revival in what they once called 'dead city'.

The shopping mall has turned into a favourite haunt of both expat and local families, many drawn by the array of children's activities and sports offered by businesses there.

When contacted, the Urban Redevelopment Authority (URA) said the site occupied by Turf City has been zoned for residential use since 1993, to better reflect its planning intentions.

Under the 2008 Master Plan, the site is still zoned for residential use and the URA said the development timeframe has not been firmed up yet.

OrangeTee head of research and consultancy Tan Kok Keong said the tenure of the lease is too short to warrant any meaningful investment.

He said that if the area is to be redeveloped, it could be turned into a landed residential estate, a private social club or a sports club.

Mr Danny Yeo, group managing director of Knight Frank, said the site's proximity to well-established schools and the upcoming rail network makes it an ideal location for residential development.

'The area is very green. Once you put in commercial elements there, it will destroy the serenity of the residential estate,' he added.

'There aren't many high-rise developments. It's largely landed property and it's best kept at that.'

cherlim@sph.com.sg

Additional reporting by Dhevarajan Devadas

ST : An asset which appreciates

Nov 18, 2010

An asset which appreciates

· What challenges do you see for public housing in the years ahead?

First, there is the question of how much resources we should put into this. Punggol 21 Plus, Dawson and so on look marvellous and we are very proud of these projects. But it costs money to do these things. Not just money to build the high-quality flats and amenities, but also the land we are setting aside to be able to deliver these standards, with spaces for parks and so on. So there is a significant economic cost to this, which we have to be aware of. I think it is a good investment in our social infrastructure, but we have to be conscious of the cost and the resources that we are putting into this.

Second, there is the question of income distribution. We need to be a lot more focused in the way we distribute the housing subsidy to Singaporeans. We did not use to be very discriminating about this, or precise in deciding exactly how much the subsidy should be. You bought a flat, at a discount from the market price, and if you live in it for 20-something years, it would have appreciated very substantially.

For example, a three-room flat in Ang Mo Kio in the 1970s cost less than $20,000. Today it is worth $250,000 or more. Most of the people who bought those flats in the 1970s in Ang Mo Kio were quite poor, and I think it is right that we have helped them to enjoy this tremendous capital gain over time. As the economy grew and Singapore prospered, this was how they could participate in the success of the country. It is their share of our success.

But now many families buying HDB flats are not poor. We have to make sure that what you get in terms of an implicit or explicit subsidy is appropriate, and commensurate with what people who are less well-off than you are getting.

If your monthly household income is $8,000, should you enjoy the same HDB subsidy as a $2,000 income household? I think the housing subsidy should vary with family circumstances.

In fact, we have already done that with the Additional CPF Housing Grant, which is now a maximum of $40,000 for those earning $1,500 or less per month. Over time, we probably will build up this. I think it is fair. Because if you are earning $8,000, you are not poor. You might feel entitled to some bite of the cherry, but I think it should be a somewhat smaller bite.

· Another major issue facing public housing is the ageing of Singapore society. How will public housing provide for this?

Yes, this is a major thing we have to think about. How do we arrange it to give people a way to cash out of their house in an orderly manner? Providing rental flats is a very disorderly mechanism for people to cash out. They sell their flats, take the capital gain, which they may then save or spend. But anyway, they come back to the Government and say give me a rental flat, I now have nowhere to live, or maybe even have no money left. And it defeats the whole purpose of the home ownership programme, because the HDB flat was meant to take care of you till your sunset years.

So what do I do? I can make it harder to rent a flat, to make sure the rental flats go to those most in need, or I can raise the price of the rental flat for those who are not actually poor. But the Government does not want to be your landlord; we would like you to be a home owner for as long as you live. That is why we have the Lease Buyback Scheme. That is why we have short (30-year) leases on studio apartments.

We have to get people used to this idea and create the incentives so that people see it as a natural arrangement. You might sell your flat, but you will still need some place to live in. So you should provide for your next 30 years. If you are 60, it may be another 20 to 30 years of life. Best to provide for that in advance, and not wonder every month where are you going to find money to pay the rent.

· Do you see any major challenges in trying to deliver on some of these policies, such as the ups and downs in the economy and financial markets?
Oh yes, it depends on how the economy performs. If you want to redevelop the HDB estates, you are talking about several billion dollars a year, times 20-25 years. That's a huge amount of money. We project that we can afford it, but it is far from a trivial commitment.

· Some people believe that as a society, Singapore has over-invested in housing. What do you say?

If you look at it purely from an economic point of view, then our quality of housing is very high, whether in terms of the quality of the environment, or square metres per person. But the political and social dividends have been considerable. If you left the low end to their own devices, without the compulsory CPF savings, poorer Singaporeans would not have put so much money into their house, they would have lived in much more miserable conditions, and we would have slums in Singapore. From their personal maximisation point of view, as rational consumers, that may be their personal choice. But in terms of the overall society, we would be far worse off to have ghettos and slums.

· It would be a very different society.

It would be a very different society. And if you allowed that to happen, there would also be a racial element, which you cannot run away from, which would be big trouble.

· As Prime Minister, how much is housing on your mind as a policy concern?

Housing problems are not so urgent (now) because we have already got the population housed, and many of the schemes are already there. But these issues are growing over time and need a long lead time to tackle, so you can't wait till they become urgent, because by then, to do anything will take at least another five to 10 years.

So you have to think about them progressively, and every few years take another step, and it takes several years to get that step implemented. And that is what we have been doing...

Building flats for Singaporeans is not just a matter of awarding the contracts and administering the construction projects. We have to get the scheme right and the incentives right, so that people respond in a way that is collectively constructive and sensible for us. And every time you think you have tweaked and got it right, you will find some unexpected consequences, and then you have to adjust your scheme.

As we free up the HDB market, it resembles more closely the private property market, where booms and busts are in the nature of the market dynamics. The HDB resale market is now already linked to the private market, because people who sell their HDB flats often aim to upgrade to a condo. So when the private property market goes up or down, the HDB resale market tends to go up or down too, and that can be very painful, in both directions.

We would like the HDB flat to be an asset which appreciates gradually from year to year, but we can't guarantee that in the short term. In the long term, HDB flat values should appreciate so long as Singapore prospers, and we have a good government. And that is what we must strive for.

ST : Upgrading to keep up with expectations

Nov 18, 2010

Upgrading to keep up with expectations



PM Lee points out that these days, people not only want a flat, but they also want it soon and in their preferred location, all of which puts a lot of pressure on the Government. -- ST FILE PHOTO

Our Homes: 50 Years Of Housing A Nation, a history of the HDB, was launched last week by President S R Nathan. Written by Warren Fernandez and published by Singapore Press Holdings, the book carried an interview with Prime Minister Lee Hsien Loong. Below are excerpts from the interview.

· How would you describe the role of housing in the politics of Singapore?

PM Lee: It is still very important. In terms of providing roofs over people's heads, we have settled that a long time ago. What we are looking for now is communities, social integration, uplift at the lower end and also, first-class living environments across the island. Now, we are thinking not only of housing and investment, but also monetisation, because as people grow old, they have this nest egg and will want to draw on this nest egg. So we need to arrange for an orderly drawdown of this nest egg, which will see them through.

· Historically, how has public housing played a role in evolving a social compact in Singapore?

Without public housing, this would be a totally different country. It is because we have HDB public housing and all the networks which go with it - the Residents' Committees (RCs), the Citizens' Consultative Committees and so on, but particularly the RCs, which have been a tremendous success - that we have been able to have communities and activities and reach the grassroots, to hold the ground together. Take the issue of the ageing of our society. We would not be able to handle these problems without the RCs, and the senior citizens groups, and people keen to participate in these community activities. If they lived in isolation, in their own flats, without knowing their neighbours, each one shut behind their doors, it would be a lot tougher to manage.

And the social stresses would have been there - ethnic enclaves, income disparities. You cannot duck these, because these are global pressures. So you must have the network and the HDB is a very important part of this. We have given Singaporeans an asset, to give an extra leg-up at the lower end, to make this a harmonious, integrated community...

It's not just the economics, but also the community building. And also, the values and tone of the society. You could go on a totally individualistic approach, each one on your own, look after yourself, and don't poke your nose in your neighbours' business. Perhaps in the next generation, we may drift in that direction if we are not careful. But so far, we have been able to bring people along through various ways, different kinds of activities and so keep the reach out to them.

· But politics has also changed over time, with the rising expectations of public housing.

That's true. In the old days, first of all, a roof was already a great blessing. Second, if you owned your flat, the Government had done you a huge favour. But now, the desire is not only for a flat, but a flat very soon, and a flat at preferred locations. That puts a lot of pressure on the Government.

· There has been a ratcheting up of expectations, especially in the 1980s and 1990s.

In the 1990s, until 1996, during the property boom, there was a great expectation that this was not only a house, but also a fast way to turn a very quick capital gain. I came across a young man who said he had bought his house in the 1990s, and then sold it after five years, and made a five-times capital gain. And, he says, that's the right thing, and that's what the Government should do... Nowadays, why can't the Government do that any more? But that is totally not realistic.

Another time, I met a young man living in Pasir Ris, who was eager to sell his flat once the five-year occupation period was up, and move into private property. So I asked him, why do you want to do that? You have got a Pasir Ris flat, it's beautiful. At that time, it was the newest estate, spectacular sea views and so on. And he said: 'Moving on, moving on.'

There is a tremendous anxiety to get ahead, and also to segregate out. We have to try, in that environment, to keep communities integrated, bigger and smaller flats, even some rental flats and studio apartments, all mixed together so that one can't tell if you are living in a particular district, whether you are up or down, or where you rank on the totem pole.

· How do you deal with the rising expectations, of wanting to move on from public housing?

In the long term, we expect the proportion of private housing to go up. It is still now only about 15 per cent. We had expected it to go up more, but public housing has stayed around 85 per cent. I think gradually the private housing share will go up. But for a long time, HDB will be the preponderant majority, and with high quality HDB environments. That is why we have projects like Punggol 21, Dawson, and upgrading and renewal plans for all the older housing estates in Singapore. We do not want our public housing estates to gradually decline into disrepair.

ST : Why public housing must remain primary

Nov 18, 2010

Why public housing must remain primary

· How did the idea to remake whole HDB estates come about?

We saw the new estates coming up, better than the old ones, and the comparison was very stark. So we have implemented - for more than 10 years now - all sorts of schemes to upgrade the old estates. I remember before the 1997 election, I announced the plans for upgrading the whole of Ang Mo Kio town. We included the Main Upgrading Programme, Interim Upgrading Programme, and spelt out how neighbourhoods would be done up. And progressively, over the years, we did that.

But we looked at it again a couple of years ago, as we were building the new townships, and found that unless we did still more, contrast was going to be even greater. You have to hold out hope that progress is not just for somebody else, but that the Government has not forgotten you, and will look after you also.

So we asked ourselves what we could do, on an estate basis, for the older townships, to bring them up. And it is partly the individual housing blocks, which are important, because that is where the people live in.

But it is also the estate amenities - the schools, the park connectors, the shops, businesses, jobs and industries around - so people can enjoy a complete living environment without having to travel too far.

We felt that if we put our minds to it, this is a programme which can take us forward 15, maybe 20 years, maybe even longer. Because it's a very major job to do this, it is not something you can do within five years.

It takes major investments, you need a certain consistency to keep this line and progressively build on it over time. And you can do this all over Singapore. I think it is a major plus if we can promise this, and deliver this. So we launched the project.

· But are you not raising expectations of public housing even further?

Nothing is automatic. It really depends on people working hard, making the economy grow and electing a government that can deliver. If the economy fails, there are no surpluses, or the government is incompetent, then nothing will happen, and you will be in the same situation as so many other countries. But if we can deliver it, I think we can achieve a quality of life that is quite unique almost anywhere in the world.

· Some people have argued that we should be making the transition away from the heavy reliance on public housing, now that most people have had their basic housing needs met. What do you think of this view?

I understand the aspiration of young people to say, I have arrived, I want to be in a private property, or even landed property. But from an overall societal point of view, there are great advantages to having high-quality public housing.

The alternative to this is consciously to target public housing to cater to the lower end, and make all those who are doing well live in private housing.

Then instead of providing more land for Punggol 21, we could just sell the land in Punggol and developers could build condos there for sale, or even rental, and the majority of people would live in such private estates and take care of yourselves.

But apart from the fact that the HDB can build a better town than the private sector, the tenor of an HDB town is also different from that in private housing. We can arrange a greater degree of integration, and there are social restraints we can encourage which are helpful.

For example, in public estates, we have not allowed each precinct to be ringfenced, so that there is a certain commons on the ground, and you can wander anywhere, it is open, it is one community.

In a private estate, every project, every condo is a little island unto itself, and you don't venture into the condo next door. It's a different atmosphere altogether.

Also, there is the very important issue of ethnic integration. We can integrate our public housing estates, by imposing the ethnic quota requirements on flat buyers. It is one of the conditions that people accept when they buy an HDB flat, and it is crucial for Singapore to have this.