31 Jan 2011,
Rents for HDB flats on the rise
But number of subletting deals has fallen amid recent property cooling measures
By Daryl Chin
THE decision to buy a four-room public housing flat in Whampoa 10 years ago is now paying off for sales executive Jennifer Tan. The 35-year-old lived in it for three years and started renting it out in 2004, making $1,000 a month from it.
Today, her rental income is $2,300.
She and her husband, who live with her parents, said: 'The rental market is getting stronger, so I plan to hold on to the flat for as long as I can.'
The median rental for those who have rented out their flats has been rising steadily in the past year or so, except for a slight dip in the second quarter of 2009. A two-room flat that commanded $1,100 in 2009 will fetch $1,300 now; a five-room unit, which could be rented out at $1,800 back then, will earn $2,150 now.
But despite this, the number of subletting transactions among public housing units has fallen, latest figures from the Housing Board show.
At the end of last year, there were 5,868, a 22 per cent fall from 7,540 in the third quarter.
Analysts and industry players The Straits Times spoke to said rentals are likely to head north as the economy grows and more workers come here to take up jobs. And with high property prices now, people will choose to rent instead of buy.
However, these factors have come up against the recent cooling measures: The Government has announced it will ramp up the supply of new flats from 17,700 last year to 22,000 this year.
PropNex spokesman Adam Tan said: 'With an increased supply and a faster completion time for build-to-order flats, there is less of a push for home owners to rent a flat if they can wait it out.'
ERA key executive officer Eugene Lim said that in any case, rentals for HDB flats will not go past $3,000, because at that price, one can rent a private property.
Mr Colin Tan, research and consultancy director of Chesterton Suntec International, said: 'Demand could also be coming from home owners who have sold their homes and are renting HDB flats, while waiting for prices to fall in a market correction.'
Among those who rent their homes and are being hit by rising rentals, some are examining their options. Mr Melvin Seow, 32, who pays $2,000 a month to rent a four-room flat in Punggol, said: 'If rental prices are going to increase and I cannot get a flat soon, I may move back with my parents.'
darylc@sph.com.sg
Thursday, February 10, 2011
ST : 10-unit boutique development sold for $47m
31 Jan 2011,
10-unit boutique development sold for $47m
By Dennis Chan
A 10-UNIT boutique development at Robin Road has been sold to Sing Holdings for $47 million.
With each unit fetching on average $4.7 million in gross proceeds, the sale of Robin Star off Bukit Timah Road understandably had the unanimous agreement of all the owners.
As the owners chose to ink the collective sale agreement by private treaty, approval from the Strata Titles Board was not required.
'An en bloc sale with unanimous consent is not required to adhere to the en bloc law of marketing by tender. They could choose private treaty negotiations,' said Ms Yong Choon Fah, executive director of Credo Real Estate, which brokered the deal.
This price tag works out to about $1,393 per sq ft (psf) on potential gross floor area, after factoring in development charge, she said.
This is comparable to the price of $1,388 psf per plot ratio (ppr) for Serene House, which was sold last month.
A development charge is payable when a developer redevelops sites to a higher intensity or value use.
With the purchase of Robin Star, Sing Holdings was able to average down the cost by amalgamating the site with the adjoining Robin Court and 1 Robin Drive, which the mainboard-listed company purchased for $77.33 million in a tender exercise last September, said Credo.
The amalgamated freehold site will have a combined land area of 64,878 sq ft.
'With a plot ratio of 1.4 and including a 10 per cent balcony area allocation, the property can yield a gross floor area of about 99,913 sq ft,' said Sing Holdings.
The total purchase price of $124.33 million for the sites translates to about $1,297 psf ppr, inclusive of estimated development charges of about $5.28 million.
The site is about 250m to the upcoming Stevens MRT station, part of the Downtown Line, which is expected to be operational in 2015, said Ms Yong.
Sing Holdings chief executive Lee Sze Hao said the acquisitions fit neatly to its strategy of focusing on developing residential projects in prime areas.
'Properties in this location have a special appeal to both locals and foreigners. The three sites, when amalgamated, will be able to offer a good development size and flexibility to achieve a good layout and design,' he said.
Sing Holdings currently has two other development projects. One is BelleRive, a 15-storey apartment tower off Bukit Timah Road which is about 94 per cent sold and is expecting to obtain temporary occupation permit this quarter. The other is The Laurels, a 19-storey residential development along Cairnhill Road which is about 90 per cent sold.
10-unit boutique development sold for $47m
By Dennis Chan
A 10-UNIT boutique development at Robin Road has been sold to Sing Holdings for $47 million.
With each unit fetching on average $4.7 million in gross proceeds, the sale of Robin Star off Bukit Timah Road understandably had the unanimous agreement of all the owners.
As the owners chose to ink the collective sale agreement by private treaty, approval from the Strata Titles Board was not required.
'An en bloc sale with unanimous consent is not required to adhere to the en bloc law of marketing by tender. They could choose private treaty negotiations,' said Ms Yong Choon Fah, executive director of Credo Real Estate, which brokered the deal.
This price tag works out to about $1,393 per sq ft (psf) on potential gross floor area, after factoring in development charge, she said.
This is comparable to the price of $1,388 psf per plot ratio (ppr) for Serene House, which was sold last month.
A development charge is payable when a developer redevelops sites to a higher intensity or value use.
With the purchase of Robin Star, Sing Holdings was able to average down the cost by amalgamating the site with the adjoining Robin Court and 1 Robin Drive, which the mainboard-listed company purchased for $77.33 million in a tender exercise last September, said Credo.
The amalgamated freehold site will have a combined land area of 64,878 sq ft.
'With a plot ratio of 1.4 and including a 10 per cent balcony area allocation, the property can yield a gross floor area of about 99,913 sq ft,' said Sing Holdings.
The total purchase price of $124.33 million for the sites translates to about $1,297 psf ppr, inclusive of estimated development charges of about $5.28 million.
The site is about 250m to the upcoming Stevens MRT station, part of the Downtown Line, which is expected to be operational in 2015, said Ms Yong.
Sing Holdings chief executive Lee Sze Hao said the acquisitions fit neatly to its strategy of focusing on developing residential projects in prime areas.
'Properties in this location have a special appeal to both locals and foreigners. The three sites, when amalgamated, will be able to offer a good development size and flexibility to achieve a good layout and design,' he said.
Sing Holdings currently has two other development projects. One is BelleRive, a 15-storey apartment tower off Bukit Timah Road which is about 94 per cent sold and is expecting to obtain temporary occupation permit this quarter. The other is The Laurels, a 19-storey residential development along Cairnhill Road which is about 90 per cent sold.
ST : Housing remains a hot election issue, says Mah
31 Jan 2011,
Housing remains a hot election issue, says Mah
HOUSING will be a hot topic in the next general election even though property prices could come down, said National Development Minister Mah Bow Tan.
The opposition is likely to zero in on the issue, he said in the last of a three-part interview published yesterday in the Chinese daily Lianhe Wanbao.
The topic will surface during the next election, which must be held by February next year, because 'prices are high and young people are unhappy', he said.
'Prices could come down, but I think they (the opposition) will try to stir it up, which is fine,' said Mr Mah, who described his current portfolio as his most challenging one so far.
The opposition's argument will always have some traction among some people, he added, but most Singaporeans would understand that 'certain things can be done, certain things cannot be done'.
'You cannot expect that in a situation where the economy is growing at 14 per cent, that you know housing prices will not go up. But we try to make sure it doesn't get overheated,' he said.
Housing remains a hot election issue, says Mah
HOUSING will be a hot topic in the next general election even though property prices could come down, said National Development Minister Mah Bow Tan.
The opposition is likely to zero in on the issue, he said in the last of a three-part interview published yesterday in the Chinese daily Lianhe Wanbao.
The topic will surface during the next election, which must be held by February next year, because 'prices are high and young people are unhappy', he said.
'Prices could come down, but I think they (the opposition) will try to stir it up, which is fine,' said Mr Mah, who described his current portfolio as his most challenging one so far.
The opposition's argument will always have some traction among some people, he added, but most Singaporeans would understand that 'certain things can be done, certain things cannot be done'.
'You cannot expect that in a situation where the economy is growing at 14 per cent, that you know housing prices will not go up. But we try to make sure it doesn't get overheated,' he said.
ST : Upgrading to private home? Wait a bit, says Mah
30 Jan 2011,
Upgrading to private home? Wait a bit, says Mah
If you are a Housing Board flat owner looking to upgrade to a private property, wait a little longer before signing on the dotted line.
This was the advice from Minister for National Development Mah Bow Tan in an interview published in the Chinese daily Lianhe Wanbao yesterday.
'Housing prices are rather high now... if you wait for a while, you might find more affordable properties,' Mr Mah was quoted in the paper as saying.
Serious home buyers should be patient, said Mr Mah, as he expects interest rates and the supply of private properties to rise soon, and both these factors should help to curb the steady trend of rising prices.
'When that happens, you will be thankful that you didn't buy right now!' he added.
The property market hit new highs last year, fuelled by strong demand from cash-rich buyers, low interest rates and strong economic growth.
Private home prices moved up 17.6 per cent last year after rising just 1.6 per cent the year before. Non-landed property, which includes condominium units popular with Housing Board upgraders, rose 14 per cent.
Mr Mah said the Government is trying to dampen a 'flock' mentality that seems to have developed among property investors lured by the promise of making a quick profit.
He added that the recent market cooling measures - which include hefty sellers' stamp duties and lowered loan limits for second mortgages - should be seen in this context.
Rather than deterring home buyers from upgrading their houses, or reducing prices, they are meant to stabilise the market so that prices can increase at a more steady rate, he said.
'Reducing prices on purpose is not our aim, and it is of no use at all,' said Mr Mah. 'This may make some home buyers happy, but on the other hand, home sellers will be unhappy.'
For those who cannot wait and need to upgrade their homes right now, Mr Mah said he believed the new measures should not deter them as long as they have sufficient cash flow.
The minister also said that the Government is studying the effects of the latest round of measures closely, and warned that it could act again in three to four months' time.
He said property players will also need some time to digest the new measures and assess their impact before deciding what to do next.
'Although there are some who have reacted in knee-jerk fashion, most buyers and sellers are adopting a wait-and-see approach,' he added.
Amresh Gunasingham
Upgrading to private home? Wait a bit, says Mah
If you are a Housing Board flat owner looking to upgrade to a private property, wait a little longer before signing on the dotted line.
This was the advice from Minister for National Development Mah Bow Tan in an interview published in the Chinese daily Lianhe Wanbao yesterday.
'Housing prices are rather high now... if you wait for a while, you might find more affordable properties,' Mr Mah was quoted in the paper as saying.
Serious home buyers should be patient, said Mr Mah, as he expects interest rates and the supply of private properties to rise soon, and both these factors should help to curb the steady trend of rising prices.
'When that happens, you will be thankful that you didn't buy right now!' he added.
The property market hit new highs last year, fuelled by strong demand from cash-rich buyers, low interest rates and strong economic growth.
Private home prices moved up 17.6 per cent last year after rising just 1.6 per cent the year before. Non-landed property, which includes condominium units popular with Housing Board upgraders, rose 14 per cent.
Mr Mah said the Government is trying to dampen a 'flock' mentality that seems to have developed among property investors lured by the promise of making a quick profit.
He added that the recent market cooling measures - which include hefty sellers' stamp duties and lowered loan limits for second mortgages - should be seen in this context.
Rather than deterring home buyers from upgrading their houses, or reducing prices, they are meant to stabilise the market so that prices can increase at a more steady rate, he said.
'Reducing prices on purpose is not our aim, and it is of no use at all,' said Mr Mah. 'This may make some home buyers happy, but on the other hand, home sellers will be unhappy.'
For those who cannot wait and need to upgrade their homes right now, Mr Mah said he believed the new measures should not deter them as long as they have sufficient cash flow.
The minister also said that the Government is studying the effects of the latest round of measures closely, and warned that it could act again in three to four months' time.
He said property players will also need some time to digest the new measures and assess their impact before deciding what to do next.
'Although there are some who have reacted in knee-jerk fashion, most buyers and sellers are adopting a wait-and-see approach,' he added.
Amresh Gunasingham
ST : Fewer flat owners unable to pay up
29 Jan 2011,
Fewer flat owners unable to pay up
Figure has dropped by nearly 11,000 in two years
By K.C. Vijayan
NEARLY 11,000 fewer Housing Board flat owners are in mortgage arrears compared to two years ago, figures have revealed.
About 23,000 were behind with repayments at the end of last year, down from 33,700 in November 2008.
Six out of every 100 owners were in arrears as of last month, down from eight per 100 about two years earlier.
The Housing Board disclosed the figures when responding to the case of an 83-year-old woman who is having to sell her flat after she fell behind with her mortgage repayments.
Madam Elizabeth Hong, a retired nurse, bought the four-room resale flat in Marine Terrace jointly with her daughter Janet for $230,000 in September 1994.
The Housing Board gave her a housing loan of about $148,000 but she began to fall into arrears in July 1998.
In 2006, she turned up at the Housing Board Geylang Branch Office and informed its staff that her daughter had left the flat. Janet, 43, used to help pay the monthly $705 instalment from her CPF account.
It is understood that mother and daughter did not see eye to eye and the daughter has stayed away ever since.
As the arrears began to mount, the Housing Board served notice in January last year that it intended to re-acquire the flat.
Madam Hong, who had been assigned lawyer Pratap Kishan through the Legal Aid Bureau, sought a High Court order last month to have the flat sold and the proceeds divided equally between her and her daughter.
She needed a court order under the law because she could not locate her daughter, the flat's co-owner, and there was no way of knowing whether she would object to the sale.
However, Janet turned up late last year and notified through lawyer R. Shanmugam that she wished to have the flat sold.
Both their lawyers will go back to the High Court next month to get an order to sell based on mutually agreed terms.
The proceeds from the sale of the flat will help pay off the outstanding Housing Board mortgage loan and should leave Madam Hong enough to relocate to a new flat.
She told The Straits Times on Wednesday that she has not yet decided where to move to after the flat has been sold.
She has two grown-up sons who live with their families.
Looking sprightly and animated, the slim, medium-built white-haired woman said she had given her daughter a good education and was disappointed at what had happened.
'I am very miserable now. I will decide what to do after the flat is sold,' she said. 'I never thought this would happen.'
Madam Hong said her daughter left more than six years ago without telling her she was going, and had not returned since.
In court documents filed she said she had even hired a private investigator to track her down, but to no avail.
The Housing Board said on Wednesday that it had tried to help Madam Hong with various measures but she had not responded.
'We would like to highlight that Madam Hong had more than 10 years to work out her housing situation,' said a spokesman.
Owners are generally given ample time to resolve their loan instalment arrears, the spokesman added.
The Housing Board sends reminders, conducts house visits and works with the families to encourage them to take concrete steps to make the repayments.
Under the law, it can compulsorily acquire a flat if arrears remain unpaid for three months.
However, the spokesman made it clear that the Housing Board will do so only when all other efforts fail.
Even then it 'will assist in alternative accommodation if necessary. The majority of lessees will heed our advice in resolving their arrears situation before reaching the stage where compulsory acquisition is required'.
The spokesman said the Housing Board will help flat owners in financial difficulty, but they 'need to exercise personal responsibility to seek long-term solutions'.
vijayan@sph.com.sg
--------------------------------------------------------------------------------
SADDENED BY SALE
'I am very miserable now... I never thought this would happen.'
Madam Elizabeth Hong on selling her flat to repay her mortgage arrears
ENOUGH TIME GIVEN
'We would like to highlight that Madam Hong had more than 10 years to work out her housing situation.'
A Housing Board spokesman, saying she did not respond to offers of help
--------------------------------------------------------------------------------
Options for financially strapped owners
BUYING a home is a long-term commitment, so it is important to be prudent and keep within your means, said an HDB spokesman.
One common reason for flat owners falling into arrears is that they have lost their jobs.
'HDB will help flat owners in financial straits who are unable to cope with their home loans to transit to a long-term sustainable solution,' said the spokesman.
HDB has housing counsellors at all of its 20 branch offices who can help such flat owners find both short-term and long-term solutions.
Short-term measures:
· Owners can make smaller payments temporarily.
· Payments can be deferred for up to six months.
· Arrears can be paid in stages within a reasonable time.
Long-term measures:
· Getting other family members to help pay the loans, for example, by becoming joint flat owners.
· Giving owners another loan to buy a smaller flat.
· Offering owners interim rental housing at below market rates. Under the scheme, two families share a three-room flat to keep rents low.
· Public rental scheme for those with no other housing options.
Fewer flat owners unable to pay up
Figure has dropped by nearly 11,000 in two years
By K.C. Vijayan
NEARLY 11,000 fewer Housing Board flat owners are in mortgage arrears compared to two years ago, figures have revealed.
About 23,000 were behind with repayments at the end of last year, down from 33,700 in November 2008.
Six out of every 100 owners were in arrears as of last month, down from eight per 100 about two years earlier.
The Housing Board disclosed the figures when responding to the case of an 83-year-old woman who is having to sell her flat after she fell behind with her mortgage repayments.
Madam Elizabeth Hong, a retired nurse, bought the four-room resale flat in Marine Terrace jointly with her daughter Janet for $230,000 in September 1994.
The Housing Board gave her a housing loan of about $148,000 but she began to fall into arrears in July 1998.
In 2006, she turned up at the Housing Board Geylang Branch Office and informed its staff that her daughter had left the flat. Janet, 43, used to help pay the monthly $705 instalment from her CPF account.
It is understood that mother and daughter did not see eye to eye and the daughter has stayed away ever since.
As the arrears began to mount, the Housing Board served notice in January last year that it intended to re-acquire the flat.
Madam Hong, who had been assigned lawyer Pratap Kishan through the Legal Aid Bureau, sought a High Court order last month to have the flat sold and the proceeds divided equally between her and her daughter.
She needed a court order under the law because she could not locate her daughter, the flat's co-owner, and there was no way of knowing whether she would object to the sale.
However, Janet turned up late last year and notified through lawyer R. Shanmugam that she wished to have the flat sold.
Both their lawyers will go back to the High Court next month to get an order to sell based on mutually agreed terms.
The proceeds from the sale of the flat will help pay off the outstanding Housing Board mortgage loan and should leave Madam Hong enough to relocate to a new flat.
She told The Straits Times on Wednesday that she has not yet decided where to move to after the flat has been sold.
She has two grown-up sons who live with their families.
Looking sprightly and animated, the slim, medium-built white-haired woman said she had given her daughter a good education and was disappointed at what had happened.
'I am very miserable now. I will decide what to do after the flat is sold,' she said. 'I never thought this would happen.'
Madam Hong said her daughter left more than six years ago without telling her she was going, and had not returned since.
In court documents filed she said she had even hired a private investigator to track her down, but to no avail.
The Housing Board said on Wednesday that it had tried to help Madam Hong with various measures but she had not responded.
'We would like to highlight that Madam Hong had more than 10 years to work out her housing situation,' said a spokesman.
Owners are generally given ample time to resolve their loan instalment arrears, the spokesman added.
The Housing Board sends reminders, conducts house visits and works with the families to encourage them to take concrete steps to make the repayments.
Under the law, it can compulsorily acquire a flat if arrears remain unpaid for three months.
However, the spokesman made it clear that the Housing Board will do so only when all other efforts fail.
Even then it 'will assist in alternative accommodation if necessary. The majority of lessees will heed our advice in resolving their arrears situation before reaching the stage where compulsory acquisition is required'.
The spokesman said the Housing Board will help flat owners in financial difficulty, but they 'need to exercise personal responsibility to seek long-term solutions'.
vijayan@sph.com.sg
--------------------------------------------------------------------------------
SADDENED BY SALE
'I am very miserable now... I never thought this would happen.'
Madam Elizabeth Hong on selling her flat to repay her mortgage arrears
ENOUGH TIME GIVEN
'We would like to highlight that Madam Hong had more than 10 years to work out her housing situation.'
A Housing Board spokesman, saying she did not respond to offers of help
--------------------------------------------------------------------------------
Options for financially strapped owners
BUYING a home is a long-term commitment, so it is important to be prudent and keep within your means, said an HDB spokesman.
One common reason for flat owners falling into arrears is that they have lost their jobs.
'HDB will help flat owners in financial straits who are unable to cope with their home loans to transit to a long-term sustainable solution,' said the spokesman.
HDB has housing counsellors at all of its 20 branch offices who can help such flat owners find both short-term and long-term solutions.
Short-term measures:
· Owners can make smaller payments temporarily.
· Payments can be deferred for up to six months.
· Arrears can be paid in stages within a reasonable time.
Long-term measures:
· Getting other family members to help pay the loans, for example, by becoming joint flat owners.
· Giving owners another loan to buy a smaller flat.
· Offering owners interim rental housing at below market rates. Under the scheme, two families share a three-room flat to keep rents low.
· Public rental scheme for those with no other housing options.
ST : Analysts expect sober year for private property market
29 Jan 2011,
Analysts expect sober year for private property market
By Esther Teo
PRIVATE home prices may have moved up 17.6 per cent last year, eclipsing historical peaks and setting new highs across various segments in the process, but this year is expected to be far less exciting.
Analysts say price growth is expected to slow, and the volume of sales is set for a significant fall.
There was more evidence of this in new data released by the Urban Redevelopment Authority (URA) yesterday, which saw prices moderating across most segments as the property market continued to take a breather four months into the Government's Aug 30 property market cooling measures.
Fourth-quarter home prices gained 2.7 per cent, slightly down from the 2.9 per cent in the previous quarter and unchanged from flash estimates released earlier this month, the URA said.
However, certain segments - in particular, condominiums and detached homes - showed signs of defying gravity even after three rounds of cooling measures.
This may have contributed to the Government's decision to introduce another round of tougher-than-expected cooling measures two weeks ago, experts said.
Prices of detached homes continued their upward march with an 8.5 per cent jump in the fourth quarter - just eclipsing the already impressive 8.4 per cent gain in the quarter before. Detached home owners saw the value of their properties rise by a hefty 37.6 per cent last year alone - the most out of any segment.
Prices of landed homes in general, however, moderated to a 5.5 per cent rise, from 7.7 per cent in the third quarter.
This was owing to slower price gains in the semi-detached and terrace segments, with a 3.1 per cent and 3.7 per cent rise in prices respectively. This follows a buoyant 7.5 per cent and 7.2 per cent price growth in the quarter before.
An uptick was also noted in the non-landed home segment, which recorded a price rise of 1.8 per cent, up from a gain of 1.6 per cent in the quarter before.
URA data shows that price growth in this segment has been falling since the second quarter of last year.
Other indexes also suggested that non-landed home prices were creeping up again as buying interest returned to the market in the later months of last year, after buyers initially retreated when the Aug 30 measures were first introduced.
The National University of Singapore's Singapore Residential Price Index, which tracks only the prices of completed non-landed projects, posted a 0.9 per cent month-on-month rise last month - the first increase after two months.
Homes in non-central areas recorded an even larger gain of 2.2 per cent.
Ms Tay Huey Ying, Colliers International's director of research and advisory, noted that price gains of suburban homes also strengthened to 2.1 per cent, up from the initial estimate of 1.6 per cent.
'This indicates the continued uptrend in prices for transactions that have taken place in the last two weeks of the quarter, which probably is one of the triggers for the introduction of further cooling measures in January,' she added.
Robust sales were seen in suburban projects such as The Lakefront Residences in the Jurong Lake district, Waterview in Tampines Avenue 10 and The Tennery in Bukit Panjang in the fourth quarter.
Experts said, however, that despite impressive gains last year, this year will be a more sobering one for the market in the light of this month's measures, which caught many by surprise.
CBRE Research executive director Li Hiaw Ho said: 'Prices are likely to remain unchanged in view of this stand-off, but sales volume could fall in the short term. Selectively, new projects that are well-located and with good access will still see a good response.'
Analysts expect sober year for private property market
By Esther Teo
PRIVATE home prices may have moved up 17.6 per cent last year, eclipsing historical peaks and setting new highs across various segments in the process, but this year is expected to be far less exciting.
Analysts say price growth is expected to slow, and the volume of sales is set for a significant fall.
There was more evidence of this in new data released by the Urban Redevelopment Authority (URA) yesterday, which saw prices moderating across most segments as the property market continued to take a breather four months into the Government's Aug 30 property market cooling measures.
Fourth-quarter home prices gained 2.7 per cent, slightly down from the 2.9 per cent in the previous quarter and unchanged from flash estimates released earlier this month, the URA said.
However, certain segments - in particular, condominiums and detached homes - showed signs of defying gravity even after three rounds of cooling measures.
This may have contributed to the Government's decision to introduce another round of tougher-than-expected cooling measures two weeks ago, experts said.
Prices of detached homes continued their upward march with an 8.5 per cent jump in the fourth quarter - just eclipsing the already impressive 8.4 per cent gain in the quarter before. Detached home owners saw the value of their properties rise by a hefty 37.6 per cent last year alone - the most out of any segment.
Prices of landed homes in general, however, moderated to a 5.5 per cent rise, from 7.7 per cent in the third quarter.
This was owing to slower price gains in the semi-detached and terrace segments, with a 3.1 per cent and 3.7 per cent rise in prices respectively. This follows a buoyant 7.5 per cent and 7.2 per cent price growth in the quarter before.
An uptick was also noted in the non-landed home segment, which recorded a price rise of 1.8 per cent, up from a gain of 1.6 per cent in the quarter before.
URA data shows that price growth in this segment has been falling since the second quarter of last year.
Other indexes also suggested that non-landed home prices were creeping up again as buying interest returned to the market in the later months of last year, after buyers initially retreated when the Aug 30 measures were first introduced.
The National University of Singapore's Singapore Residential Price Index, which tracks only the prices of completed non-landed projects, posted a 0.9 per cent month-on-month rise last month - the first increase after two months.
Homes in non-central areas recorded an even larger gain of 2.2 per cent.
Ms Tay Huey Ying, Colliers International's director of research and advisory, noted that price gains of suburban homes also strengthened to 2.1 per cent, up from the initial estimate of 1.6 per cent.
'This indicates the continued uptrend in prices for transactions that have taken place in the last two weeks of the quarter, which probably is one of the triggers for the introduction of further cooling measures in January,' she added.
Robust sales were seen in suburban projects such as The Lakefront Residences in the Jurong Lake district, Waterview in Tampines Avenue 10 and The Tennery in Bukit Panjang in the fourth quarter.
Experts said, however, that despite impressive gains last year, this year will be a more sobering one for the market in the light of this month's measures, which caught many by surprise.
CBRE Research executive director Li Hiaw Ho said: 'Prices are likely to remain unchanged in view of this stand-off, but sales volume could fall in the short term. Selectively, new projects that are well-located and with good access will still see a good response.'
ST : HDB resale market shows signs of cooling
29 Jan 2011,
HDB resale market shows signs of cooling
Some median prices, transaction figures and COV prices dip
By Jessica Cheam
THE HDB resale market enjoyed a boom period last year but numbers out yesterday also show that the heat may finally be coming out of the market.
Some median prices have started to decline, while transaction numbers and cash-over-valuation payments are falling.
Analysts say the trend is likely to be due to the August cooling measures imposed to apply the brakes to a runaway market.
But while the sector is clearly slowing, yesterday's Housing Board data also confirms that 2010 was yet another bumper year for flat owners. Prices rose 2.5 per cent in the fourth quarter over the third to hit another record and bring the total growth for the year to 14.1 per cent.
This follows an 8.2 per cent increase in 2009 when the economy was still hurting from the financial crisis, a 14.5 per cent jump in 2008 and a 17.5 per cent increase in 2007.
It's small beer maybe compared with the 90s boom when prices rocketed 34.3 per cent in 1996 alone, but still a good run for owners.
However, analysts noted yesterday that price rises were 'gentler' in the last three months of 2010, which had the lowest quarterly growth since the second quarter of 2009. Other figures point to the same trend. The HDB's numbers confirmed that cash premium paid by buyers over a flat's valuation, known as cash-over-valuation (COV), fell islandwide in the quarter.
Overall median COV for the fourth quarter fell to $23,000 from $30,000 in the third, with 96 per cent of sales transacted above valuation.
The fall was more obvious in certain areas such as Central, Sembawang and Queenstown, which all recorded declines of about 35 per cent in median COV.
In Queenstown, for example, the median COV fell from $35,000 in the third quarter to $23,000 in the fourth.
The decline in COVs seems to have continued into this month, according to agency sales figures.
The median COV range has fallen further to about $16,500 for three-roomers and $25,000 for five-room flats, said PropNex spokesman Adam Tan.
ERA Asia Pacific key executive officer Eugene Lim said that based on his firm's sales this month, median COVs has fallen to about $21,000.
While COVs are falling, resale prices were still inching up across most towns.
Analysts said this was due to the time lag in the valuations, which are based on transactions in months before the cooling measures hit. Last August, the Government tightened financing and restricted ownership of resale flats in a bid to calm the buoyant market.
While most towns registered slight price increases in the quarter, Jurong East and Choa Chu Kang had declines.
The median resale price of an executive flat in Jurong East dropped from $631,500 in the third quarter to $585,900 in the fourth. A four-roomer in the Central area also dropped, from a median $471,000 to $456,500.
Declining transaction numbers also point to a slowing market. The number of flats sold fell from 8,205 in the third quarter to 6,454 in the fourth, a decline of about 21 per cent. Sales dropped 13 per cent to 32,257 for the full year.
Industry observers said yesterday that the 14.1 per cent price rise for 2010 reflected the economy's record growth of 14.7 per cent. But they also said that HDB resale prices would moderate further this year with marginal price increases as the heightened cooling measures took hold.
Earlier this month, the Government unleashed another round of measures. It reduced the amount a buyer can borrow for a second home to 60 per cent of the purchase price and sharply increased sellers' stamp duties to curb speculation.
'This will lead to less activity in the HDB upgrader segment, as they won't be able to stump up 40 per cent down payment,' said PropNex's Mr Tan.
Mr Colin Tan, a research and consultancy director at Chesterton Suntec International, said the 'problem of runaway HDB price rises looks contained' and expects the market to stabilise further.
Meanwhile, the HDB offered 17,700 new flats under its build-to-order (BTO) scheme last year and plans to offer another 22,000 this year if there is demand.
There will be a further 8,000 executive condominium units and design, build and sell scheme (DBSS) homes as well.
jcheam@sph.com.sg
facebook.com/cheamjessica
HDB resale market shows signs of cooling
Some median prices, transaction figures and COV prices dip
By Jessica Cheam
THE HDB resale market enjoyed a boom period last year but numbers out yesterday also show that the heat may finally be coming out of the market.
Some median prices have started to decline, while transaction numbers and cash-over-valuation payments are falling.
Analysts say the trend is likely to be due to the August cooling measures imposed to apply the brakes to a runaway market.
But while the sector is clearly slowing, yesterday's Housing Board data also confirms that 2010 was yet another bumper year for flat owners. Prices rose 2.5 per cent in the fourth quarter over the third to hit another record and bring the total growth for the year to 14.1 per cent.
This follows an 8.2 per cent increase in 2009 when the economy was still hurting from the financial crisis, a 14.5 per cent jump in 2008 and a 17.5 per cent increase in 2007.
It's small beer maybe compared with the 90s boom when prices rocketed 34.3 per cent in 1996 alone, but still a good run for owners.
However, analysts noted yesterday that price rises were 'gentler' in the last three months of 2010, which had the lowest quarterly growth since the second quarter of 2009. Other figures point to the same trend. The HDB's numbers confirmed that cash premium paid by buyers over a flat's valuation, known as cash-over-valuation (COV), fell islandwide in the quarter.
Overall median COV for the fourth quarter fell to $23,000 from $30,000 in the third, with 96 per cent of sales transacted above valuation.
The fall was more obvious in certain areas such as Central, Sembawang and Queenstown, which all recorded declines of about 35 per cent in median COV.
In Queenstown, for example, the median COV fell from $35,000 in the third quarter to $23,000 in the fourth.
The decline in COVs seems to have continued into this month, according to agency sales figures.
The median COV range has fallen further to about $16,500 for three-roomers and $25,000 for five-room flats, said PropNex spokesman Adam Tan.
ERA Asia Pacific key executive officer Eugene Lim said that based on his firm's sales this month, median COVs has fallen to about $21,000.
While COVs are falling, resale prices were still inching up across most towns.
Analysts said this was due to the time lag in the valuations, which are based on transactions in months before the cooling measures hit. Last August, the Government tightened financing and restricted ownership of resale flats in a bid to calm the buoyant market.
While most towns registered slight price increases in the quarter, Jurong East and Choa Chu Kang had declines.
The median resale price of an executive flat in Jurong East dropped from $631,500 in the third quarter to $585,900 in the fourth. A four-roomer in the Central area also dropped, from a median $471,000 to $456,500.
Declining transaction numbers also point to a slowing market. The number of flats sold fell from 8,205 in the third quarter to 6,454 in the fourth, a decline of about 21 per cent. Sales dropped 13 per cent to 32,257 for the full year.
Industry observers said yesterday that the 14.1 per cent price rise for 2010 reflected the economy's record growth of 14.7 per cent. But they also said that HDB resale prices would moderate further this year with marginal price increases as the heightened cooling measures took hold.
Earlier this month, the Government unleashed another round of measures. It reduced the amount a buyer can borrow for a second home to 60 per cent of the purchase price and sharply increased sellers' stamp duties to curb speculation.
'This will lead to less activity in the HDB upgrader segment, as they won't be able to stump up 40 per cent down payment,' said PropNex's Mr Tan.
Mr Colin Tan, a research and consultancy director at Chesterton Suntec International, said the 'problem of runaway HDB price rises looks contained' and expects the market to stabilise further.
Meanwhile, the HDB offered 17,700 new flats under its build-to-order (BTO) scheme last year and plans to offer another 22,000 this year if there is demand.
There will be a further 8,000 executive condominium units and design, build and sell scheme (DBSS) homes as well.
jcheam@sph.com.sg
facebook.com/cheamjessica
ST : 1st-time flat buyers may face stiffer rules
29 Jan 2011,
1st-time flat buyers may face stiffer rules
NATIONAL Development Minister Mah Bow Tan yesterday said the Government is considering coming up with tougher measures to deter first-time Housing Board flat buyers from repeatedly declining to select a flat.
In an interview with Lianhe Wanbao yesterday, he said changes might be made to the HDB's build-to-order scheme to penalise those who forgo the flat selection process despite being successful during balloting.
This will prevent those who do not need to buy a flat urgently from applying indiscriminately.
Under the current rules, applicants who reject two chances to select a flat will have their first-timer priorities removed for a period of one year.
This means if they apply for a flat in any HDB sales exercise within that one-year period, they will no longer enjoy priorities for first-timers. These priorities include being given two chances in the shortlisting of their applications, as compared to a second-time applicant, who gets only one chance.
When asked if the harsher penalties might include extending the one-year period, Mr Mah said the Government is still looking into the changes.
He added that the Government will also not speed up the implementation of the Selective En bloc Redevelopment Scheme just to satisfy demand from Singaporeans for flats.
The cost of redeveloping such flats is high and the Government's focus is on building new flats that Singaporeans can afford.
The programme will continue but the speed of redevelopment will depend on the cost-benefit situation and economic environment, Mr Mah said.
He also hinted that Singaporeans can expect to see some housing 'goodies' in this year's Budget.
1st-time flat buyers may face stiffer rules
NATIONAL Development Minister Mah Bow Tan yesterday said the Government is considering coming up with tougher measures to deter first-time Housing Board flat buyers from repeatedly declining to select a flat.
In an interview with Lianhe Wanbao yesterday, he said changes might be made to the HDB's build-to-order scheme to penalise those who forgo the flat selection process despite being successful during balloting.
This will prevent those who do not need to buy a flat urgently from applying indiscriminately.
Under the current rules, applicants who reject two chances to select a flat will have their first-timer priorities removed for a period of one year.
This means if they apply for a flat in any HDB sales exercise within that one-year period, they will no longer enjoy priorities for first-timers. These priorities include being given two chances in the shortlisting of their applications, as compared to a second-time applicant, who gets only one chance.
When asked if the harsher penalties might include extending the one-year period, Mr Mah said the Government is still looking into the changes.
He added that the Government will also not speed up the implementation of the Selective En bloc Redevelopment Scheme just to satisfy demand from Singaporeans for flats.
The cost of redeveloping such flats is high and the Government's focus is on building new flats that Singaporeans can afford.
The programme will continue but the speed of redevelopment will depend on the cost-benefit situation and economic environment, Mr Mah said.
He also hinted that Singaporeans can expect to see some housing 'goodies' in this year's Budget.
ST : Boost for Paya Lebar's hub status
28 Jan 2011,
Boost for Paya Lebar's hub status
By Cheryl Lim
THE transformation of part of Paya Lebar into a major city fringe commercial hub is a step closer after the first site in the area was launched for sale.
The land parcel at the junction of Paya Lebar Road and Eunos Road 8 is to boast mainly offices.
The new hub is called Paya Lebar Central. The Government aims to turn the area into a vibrant, pedestrian-friendly commercial hub including retail outlets and hotels, and attractive open spaces.
Overall, about 12 ha will be converted to commercial use, generating potential floor space of more than 5,381,955 sq ft.
The Urban Redevelopment Authority said the district will cater to businesses that do not need to operate within the city centre. It could become a sizeable fringe commercial centre.
The site now being offered is next to the Paya Lebar interchange station, which serves the Circle and East-West MRT lines.
The 159,866 sq ft commercial site sits in the heart of the district, and is just a 10-minute drive to the CBD. The site will be able to contain a maximum gross floor area (GFA) of 671,453 sq ft and can be built to a height of 64m above mean sea level.
At least 80 per cent of the GFA will need to be allocated to office use. The rest can also be used for other activities permitted under the commercial zoning. The tender will close on April 21.
Mr Ong Kah Seng, Cushman & Wakefield senior manager of Asia-Pacific research, anticipates good interest from developers, including those who traditionally stick to residential development.
He said they may 'wish to diversify their development and investment activities, as the office sector seems to be more stable in growth and requires less necessary government intervention to ensure supply-demand balance'.
The recent focus has been on prime offices, said Mr Ong. But the completion of other major suburban commercial sites, like Jurong Gateway, will see the emergence of a new tier of suburban offices in the next few years.
Boost for Paya Lebar's hub status
By Cheryl Lim
THE transformation of part of Paya Lebar into a major city fringe commercial hub is a step closer after the first site in the area was launched for sale.
The land parcel at the junction of Paya Lebar Road and Eunos Road 8 is to boast mainly offices.
The new hub is called Paya Lebar Central. The Government aims to turn the area into a vibrant, pedestrian-friendly commercial hub including retail outlets and hotels, and attractive open spaces.
Overall, about 12 ha will be converted to commercial use, generating potential floor space of more than 5,381,955 sq ft.
The Urban Redevelopment Authority said the district will cater to businesses that do not need to operate within the city centre. It could become a sizeable fringe commercial centre.
The site now being offered is next to the Paya Lebar interchange station, which serves the Circle and East-West MRT lines.
The 159,866 sq ft commercial site sits in the heart of the district, and is just a 10-minute drive to the CBD. The site will be able to contain a maximum gross floor area (GFA) of 671,453 sq ft and can be built to a height of 64m above mean sea level.
At least 80 per cent of the GFA will need to be allocated to office use. The rest can also be used for other activities permitted under the commercial zoning. The tender will close on April 21.
Mr Ong Kah Seng, Cushman & Wakefield senior manager of Asia-Pacific research, anticipates good interest from developers, including those who traditionally stick to residential development.
He said they may 'wish to diversify their development and investment activities, as the office sector seems to be more stable in growth and requires less necessary government intervention to ensure supply-demand balance'.
The recent focus has been on prime offices, said Mr Ong. But the completion of other major suburban commercial sites, like Jurong Gateway, will see the emergence of a new tier of suburban offices in the next few years.
ST : 2 collective sales done at lower prices
28 Jan 2011,
2 collective sales done at lower prices
By Esther Teo
TWO collective sales have been completed, although both were at prices lower than earlier indicated, perhaps showing that recent cooling measures have tempered demand a little.
Marine Point in Marine Parade Road has been acquired by CapitaLand at $101million. The owners wanted $110 million when the tender was launched in October.
If an estimated development charge of $12.8million is included, the price works out to $1,056 per sq ft (psf) per plot ratio (ppr), CapitaLand said.
It plans to redevelop the 51,185 sq ft freehold site into a 150-unit condominium of one-bedroom plus study and two-bedroom apartments.
This will bring CapitaLand's pipeline of homes here to more than 2,600 units.
Mr Wong Heang Fine, chief executive of CapitaLand Residential Singapore, said the firm plans to maximise the project's height to about 19 storeys and is confident that it will get strong interest from young families and professionals who have grown up in the area.
'This will give the majority of the apartments a good view of the surrounding skyline and the sea. We plan to have (it) ready for launch in the first half of 2012,' he added.
Bartley Terrace, near Bartley MRT station, was sold for $40million, which The Straits Times understands to be below its reserve price.
The tender was launched last year with an asking price of $48million.
Meadows Investment, a firm owned by Mr Neo Tiam Boon, executive director of local property and construction firm Tiong Aik Group, bought the site in a private treaty, said marketing agent Urban Front yesterday.
The price works out to about $760 psf ppr, inclusive of about $3million in development charges and a 10per cent balcony allocation.
The District 19 freehold site has a land area of about 40,482 sq ft with a plot ratio of 1.4.
The owners of the 32 units stand to reap $1.14million to $1.8million each, Urban Front said.
Marine Point (above) sold for $101million, despite $110million originally being sought for it. Bartley Terrace also sold below its original asking price of $48million, eventually going for $40million. -- PHOTOS: ERA ASIA PACIFIC, URBAN FRONT
2 collective sales done at lower prices
By Esther Teo
TWO collective sales have been completed, although both were at prices lower than earlier indicated, perhaps showing that recent cooling measures have tempered demand a little.
Marine Point in Marine Parade Road has been acquired by CapitaLand at $101million. The owners wanted $110 million when the tender was launched in October.
If an estimated development charge of $12.8million is included, the price works out to $1,056 per sq ft (psf) per plot ratio (ppr), CapitaLand said.
It plans to redevelop the 51,185 sq ft freehold site into a 150-unit condominium of one-bedroom plus study and two-bedroom apartments.
This will bring CapitaLand's pipeline of homes here to more than 2,600 units.
Mr Wong Heang Fine, chief executive of CapitaLand Residential Singapore, said the firm plans to maximise the project's height to about 19 storeys and is confident that it will get strong interest from young families and professionals who have grown up in the area.
'This will give the majority of the apartments a good view of the surrounding skyline and the sea. We plan to have (it) ready for launch in the first half of 2012,' he added.
Bartley Terrace, near Bartley MRT station, was sold for $40million, which The Straits Times understands to be below its reserve price.
The tender was launched last year with an asking price of $48million.
Meadows Investment, a firm owned by Mr Neo Tiam Boon, executive director of local property and construction firm Tiong Aik Group, bought the site in a private treaty, said marketing agent Urban Front yesterday.
The price works out to about $760 psf ppr, inclusive of about $3million in development charges and a 10per cent balcony allocation.
The District 19 freehold site has a land area of about 40,482 sq ft with a plot ratio of 1.4.
The owners of the 32 units stand to reap $1.14million to $1.8million each, Urban Front said.
Marine Point (above) sold for $101million, despite $110million originally being sought for it. Bartley Terrace also sold below its original asking price of $48million, eventually going for $40million. -- PHOTOS: ERA ASIA PACIFIC, URBAN FRONT
ST : Home sales: Volume to fall, not prices
28 Jan 2011,
Home sales: Volume to fall, not prices
But new housing could see oversupply in next few years, notes DTZ
By Esther Teo
HOME sales are expected to drop in the wake of the Government's recent cooling measures, although prices should hold up fairly well, according to a new report.
But DTZ Research pointed out that the substantial supply of new housing in the pipeline could outstrip demand in the next few years, leading to prices and rentals coming under pressure.
It also flagged the challenges posed by sluggish Western economies and the possibility of more cooling measures.
The property consultancy's report was focused partly on the possible effects of cooling measures introduced on Jan 13.
It tipped that sales volume would fall as short-term speculators would be weeded out of the market by the hefty seller's stamp duty of up to 16 per cent for homes sold within a year of purchase.
But not all investors will withdraw. Some may find the 4 per cent seller's stamp duty on homes sold in their fourth year of purchase to be surmountable.
They could shift their focus to buying unfinished units with completion dates three to four years ahead.
Prices this year are expected to be largely stable with a decline of not more than 5 per cent, said Ms Chua Chor Hoon, DTZ's research head for South-east Asia and one of the report's authors.
'(Prices are) underpinned by economic growth, low interest rates, strong holding power of developers, the appreciation of the Singapore dollar, and the inflow of foreign purchasers due to the property market clampdown in mainland China and Hong Kong,' she added.
Landed homes, small units and high-end apartments are expected to be less affected by the measures.
Said DTZ executive director (residential) Margaret Thean: 'Small units with their low price quantum will continue to attract investors with spare cash or singles wanting their own units.'
She also said the seller's stamp duty will have little impact on landed homes as most are purchased for owner-occupation, while high-end apartments will continue to attract foreign interest.
Other challenges come in the form of a potential oversupply.
A spike in completed units is expected in the next two to three years, with the Government putting out a record number of homes through public housing and land sales programmes.
'There is also uncertainty over the strength of recovery of the major Western economies. If they recover well, interest rates will move up and reduce the affordability of mortgage payments,' the report added.
'On the other hand, if they continue to languish, this will have an effect on the Singapore economy and optimism in the property market eventually.'
With the residential market facing numerous challenges, investors are likely to identify opportunities in other property sectors and alternative investment products, DTZ said.
esthert@sph.com.sg
Home sales: Volume to fall, not prices
But new housing could see oversupply in next few years, notes DTZ
By Esther Teo
HOME sales are expected to drop in the wake of the Government's recent cooling measures, although prices should hold up fairly well, according to a new report.
But DTZ Research pointed out that the substantial supply of new housing in the pipeline could outstrip demand in the next few years, leading to prices and rentals coming under pressure.
It also flagged the challenges posed by sluggish Western economies and the possibility of more cooling measures.
The property consultancy's report was focused partly on the possible effects of cooling measures introduced on Jan 13.
It tipped that sales volume would fall as short-term speculators would be weeded out of the market by the hefty seller's stamp duty of up to 16 per cent for homes sold within a year of purchase.
But not all investors will withdraw. Some may find the 4 per cent seller's stamp duty on homes sold in their fourth year of purchase to be surmountable.
They could shift their focus to buying unfinished units with completion dates three to four years ahead.
Prices this year are expected to be largely stable with a decline of not more than 5 per cent, said Ms Chua Chor Hoon, DTZ's research head for South-east Asia and one of the report's authors.
'(Prices are) underpinned by economic growth, low interest rates, strong holding power of developers, the appreciation of the Singapore dollar, and the inflow of foreign purchasers due to the property market clampdown in mainland China and Hong Kong,' she added.
Landed homes, small units and high-end apartments are expected to be less affected by the measures.
Said DTZ executive director (residential) Margaret Thean: 'Small units with their low price quantum will continue to attract investors with spare cash or singles wanting their own units.'
She also said the seller's stamp duty will have little impact on landed homes as most are purchased for owner-occupation, while high-end apartments will continue to attract foreign interest.
Other challenges come in the form of a potential oversupply.
A spike in completed units is expected in the next two to three years, with the Government putting out a record number of homes through public housing and land sales programmes.
'There is also uncertainty over the strength of recovery of the major Western economies. If they recover well, interest rates will move up and reduce the affordability of mortgage payments,' the report added.
'On the other hand, if they continue to languish, this will have an effect on the Singapore economy and optimism in the property market eventually.'
With the residential market facing numerous challenges, investors are likely to identify opportunities in other property sectors and alternative investment products, DTZ said.
esthert@sph.com.sg
ST : Hot property
28 Jan 2011,
Hot property
57% jump in commercial real estate transactions last year with sales more than doubling to $2.5 billion
By Esther Teo
INVESTORS streamed back into the commercial property market last year on the back of the economic rebound and the improving rents it brought.
A new report said the number of transactions of strata-titled commercial real estate - shops, shophouses and offices - jumped 57 per cent to 1,219 last year over a muted 2009.
The total value of sales more than doubled to $2.5 billion.
But the robust figures are still well below the record 1,849 transactions totalling $8.7 billion that took place in the boom year of 2007.
Experts say investors favour strata-titled units because they are a relatively cheap way to enter the commercial market and are not affected by the Government's recent cooling measures. Estimated rental yields of between 4 per cent and 6 per cent - trumping the residential sector's 3 per cent - have spurred interest as well.
Offices were the star performer last year with transactions up 85 per cent over 2009 to 387 while their total value rocketed 165 per cent to $850 million.
Knight Frank's data showed that most transactions were between $1 million and $2 million.
These comprised units from $1,500 to $2,000 per sq ft (psf) and typically less than 1,000 sq ft in buildings such as The Central and International Plaza, the report noted.
Ms Mary Sai, Knight Frank's executive director and head of auction (commercial), said the number of units sold to foreigners last year jumped 130 per cent.
'(This is) not surprising as the number of foreigners in Singapore has increased over the year and residential prices have also achieved new record highs,' she said.
Strata-titled shops also performed well with the value of sales up 92 per cent to $533 million while transaction numbers surged 58 per cent to 484.
Most were priced under $1 million and are the sort of unit found in buildings like Bukit Timah Shopping Centre, People's Park Complex and Golden Mile Complex.
But sales of units between $1 million and $1.9 million recorded the fastest growth.
These shops are typically found in central areas with plenty of passers-by or in malls like Sim Lim Square or Holland Road Shopping Centre that have affluent neighbourhoods within striking distance.
Shophouses were also popular last year with 348 transactions worth $1.1 billion, up from 262 sales totalling $611 million in 2009.
Most sales were between $1 million and $5 million and in areas such as Boat Quay, Chinatown and Tanjong Pagar.
'Shophouses in these areas are popular because of their limited supply, good lettability, strong demand from food and beverage tenants and potential capital appreciation for freehold properties,' said Ms Sai.
Joo Chiat Road was the most popular street for shophouses with 22 transactions, while Duxton Road and Geylang Road also attracted buyers.
Property developer Far East Organization said industrial properties and offices are attracting growing interest as they are exempt from the cooling measures.
Knight Frank said the outlook remains bright thanks to the sound economy while the new residential cooling measures are likely to continue diverting investors to commercial units.
esthert@sph.com.sg
Hot property
57% jump in commercial real estate transactions last year with sales more than doubling to $2.5 billion
By Esther Teo
INVESTORS streamed back into the commercial property market last year on the back of the economic rebound and the improving rents it brought.
A new report said the number of transactions of strata-titled commercial real estate - shops, shophouses and offices - jumped 57 per cent to 1,219 last year over a muted 2009.
The total value of sales more than doubled to $2.5 billion.
But the robust figures are still well below the record 1,849 transactions totalling $8.7 billion that took place in the boom year of 2007.
Experts say investors favour strata-titled units because they are a relatively cheap way to enter the commercial market and are not affected by the Government's recent cooling measures. Estimated rental yields of between 4 per cent and 6 per cent - trumping the residential sector's 3 per cent - have spurred interest as well.
Offices were the star performer last year with transactions up 85 per cent over 2009 to 387 while their total value rocketed 165 per cent to $850 million.
Knight Frank's data showed that most transactions were between $1 million and $2 million.
These comprised units from $1,500 to $2,000 per sq ft (psf) and typically less than 1,000 sq ft in buildings such as The Central and International Plaza, the report noted.
Ms Mary Sai, Knight Frank's executive director and head of auction (commercial), said the number of units sold to foreigners last year jumped 130 per cent.
'(This is) not surprising as the number of foreigners in Singapore has increased over the year and residential prices have also achieved new record highs,' she said.
Strata-titled shops also performed well with the value of sales up 92 per cent to $533 million while transaction numbers surged 58 per cent to 484.
Most were priced under $1 million and are the sort of unit found in buildings like Bukit Timah Shopping Centre, People's Park Complex and Golden Mile Complex.
But sales of units between $1 million and $1.9 million recorded the fastest growth.
These shops are typically found in central areas with plenty of passers-by or in malls like Sim Lim Square or Holland Road Shopping Centre that have affluent neighbourhoods within striking distance.
Shophouses were also popular last year with 348 transactions worth $1.1 billion, up from 262 sales totalling $611 million in 2009.
Most sales were between $1 million and $5 million and in areas such as Boat Quay, Chinatown and Tanjong Pagar.
'Shophouses in these areas are popular because of their limited supply, good lettability, strong demand from food and beverage tenants and potential capital appreciation for freehold properties,' said Ms Sai.
Joo Chiat Road was the most popular street for shophouses with 22 transactions, while Duxton Road and Geylang Road also attracted buyers.
Property developer Far East Organization said industrial properties and offices are attracting growing interest as they are exempt from the cooling measures.
Knight Frank said the outlook remains bright thanks to the sound economy while the new residential cooling measures are likely to continue diverting investors to commercial units.
esthert@sph.com.sg
ST : Banks roll out flexible home loans
27 Jan 2011,
Banks roll out flexible home loans
They offer up to 60% financing, raising it to 80% later to help those hit by new rules
By Jessica Cheam
BANKS here are providing an unprecedented degree of flexibility when granting loans to home buyers who are moving from one home to another.
They are agreeing to grant loans of up to 60 per cent of the property's value first, and raising them to 80 per cent later.
The move is helping property upgraders save time and money as they navigate tricky timelines created by new property financing rules first introduced last August.
To recap, the rules stipulate that home owners with an existing home loan can obtain only 70 per cent financing for a second home they wish to buy. The limit was reduced further to 60 per cent this month. The usual loan limit is 80 per cent.
This makes it hard for home buyers, particularly those in the Housing Board market, who simply want to move from one property to another. They now have to prove they have sold their existing flat before qualifying for 80 per cent financing.
The problem is that the proof of sale is a letter of approval from the HDB, which is issued two weeks after what is known as the 'first appointment'. This appointment, part of the HDB buying process, takes place six to eight weeks from when the deal is struck.
What this means is that an HDB upgrader or downgrader would have to sell his unit first and wait about two months before he can get 80 per cent financing from a bank for his next home. Otherwise, he will get only 60 per cent.
Logistically, he will also have to move out of his existing flat way before he can move into his new one.
This has translated to hundreds of property buyers moving to an interim location. Some even ask for an extension of stay at their existing homes beyond the legal completion of the sale, which is technically illegal under HDB rules.
Most banks here say they are prepared to grant these buyers 60 per cent financing on a new home, and then restructuring the loan to 80 per cent financing when the buyer proves he has sold his home.
HSBC personal financing services head Greg Zeeman said: 'We are flexible about reviewing loan quantums, as we understand customers sometimes need more time to sell their existing property or decide on the proportion of loan and CPF savings used to finance their new property.'
This is a radical departure from past practice. Previously, once the letter of offer from a bank was accepted by a borrower, the terms could not be changed, said Dennis Wee Group director Chris Koh.
United Overseas Bank (UOB) loans division head Chia Siew Cheng said UOB also offers this flexibility, but added that it also takes into account 'current market regulations and guidelines, customers with good credit records, stable income and the ability to service the loan'.
Private property owners who are buying and selling their homes in back-to-back transactions also potentially benefit from this increased flexibility. But the problem is less acute for them because in the private property market, home sellers can stipulate a longer period of time for a sale to be completed.
The stamp duty certificate - the proof needed for 80 per cent financing for private property - is also obtained earlier in the sale process.
One home owner looking to move is housewife Koh Lay Hua, 55, who cheered the new flexibility offered by banks. 'I'm glad some banks are allowing this... I definitely would have to sell my flat to pay for the next one.'
jcheam@sph.com.sg
www.facebook.com/facebook.com/cheamjessica
Banks roll out flexible home loans
They offer up to 60% financing, raising it to 80% later to help those hit by new rules
By Jessica Cheam
BANKS here are providing an unprecedented degree of flexibility when granting loans to home buyers who are moving from one home to another.
They are agreeing to grant loans of up to 60 per cent of the property's value first, and raising them to 80 per cent later.
The move is helping property upgraders save time and money as they navigate tricky timelines created by new property financing rules first introduced last August.
To recap, the rules stipulate that home owners with an existing home loan can obtain only 70 per cent financing for a second home they wish to buy. The limit was reduced further to 60 per cent this month. The usual loan limit is 80 per cent.
This makes it hard for home buyers, particularly those in the Housing Board market, who simply want to move from one property to another. They now have to prove they have sold their existing flat before qualifying for 80 per cent financing.
The problem is that the proof of sale is a letter of approval from the HDB, which is issued two weeks after what is known as the 'first appointment'. This appointment, part of the HDB buying process, takes place six to eight weeks from when the deal is struck.
What this means is that an HDB upgrader or downgrader would have to sell his unit first and wait about two months before he can get 80 per cent financing from a bank for his next home. Otherwise, he will get only 60 per cent.
Logistically, he will also have to move out of his existing flat way before he can move into his new one.
This has translated to hundreds of property buyers moving to an interim location. Some even ask for an extension of stay at their existing homes beyond the legal completion of the sale, which is technically illegal under HDB rules.
Most banks here say they are prepared to grant these buyers 60 per cent financing on a new home, and then restructuring the loan to 80 per cent financing when the buyer proves he has sold his home.
HSBC personal financing services head Greg Zeeman said: 'We are flexible about reviewing loan quantums, as we understand customers sometimes need more time to sell their existing property or decide on the proportion of loan and CPF savings used to finance their new property.'
This is a radical departure from past practice. Previously, once the letter of offer from a bank was accepted by a borrower, the terms could not be changed, said Dennis Wee Group director Chris Koh.
United Overseas Bank (UOB) loans division head Chia Siew Cheng said UOB also offers this flexibility, but added that it also takes into account 'current market regulations and guidelines, customers with good credit records, stable income and the ability to service the loan'.
Private property owners who are buying and selling their homes in back-to-back transactions also potentially benefit from this increased flexibility. But the problem is less acute for them because in the private property market, home sellers can stipulate a longer period of time for a sale to be completed.
The stamp duty certificate - the proof needed for 80 per cent financing for private property - is also obtained earlier in the sale process.
One home owner looking to move is housewife Koh Lay Hua, 55, who cheered the new flexibility offered by banks. 'I'm glad some banks are allowing this... I definitely would have to sell my flat to pay for the next one.'
jcheam@sph.com.sg
www.facebook.com/facebook.com/cheamjessica
ST : China takes fresh steps to rein in property prices
27 Jan 2011,
China takes fresh steps to rein in property prices
BEIJING: China yesterday raised the minimum down payment on second homes and ordered the authorities to rein in property prices in its latest move aimed at quelling public angst about high real estate costs.
The State Council - China's Cabinet - ordered that the minimum second-home down payment be hiked to 60 per cent of the property's value. Just last April, it ordered the payment raised to 50 per cent as the government fought to curb skyrocketing property values and real estate speculation.
The State Council also said cities that had seen especially fast property price increases must draw up and implement measures to limit real estate sales.
China's government has issued a raft of measures recently to curb spiralling prices, as polls have shown the difficulty in affording housing has become the top consumer fear.
Inflation and disputes over land have a history of sparking unrest in China.
However, property prices in China's major cities have continued to increase, posting their fourth straight month-on-month rise in December as sales picked up pace.
The State Council reiterated an order it issued last year that mortgage loan rates on second-home purchases must be at least 10 per cent higher than the central bank's benchmark lending rates.
It also told the authorities across the nation to increase the supply and availability of affordable and public housing, and use a range of tax, land-use and other policies to put the brakes on land speculators.
Those found violating any measures aimed at tackling price spurts must be 'severely' dealt with, it said.
Whether the new move will work remains to be seen, as property experts put out a report in Beijing citing data to prove that prices are likely to rise further this year.
The findings echo a report issued last week by the Chinese Academy of Sciences, which predicts property prices will rise 12.77 per cent this year.
December home prices in 70 major Chinese cities rose 0.3 per cent month-on-month and 6.4 per cent year-on-year, the National Bureau of Statistics said on Monday.
Also, according to reports, China's top 10 property developers have shifted their sights to investing in second- and third-tier cities after cooling measures in big cities such as Beijing and Shanghai shaved their profit margin.
As home buyers and speculators follow on their heels to these cities, such as Changchun and its otherwise little-known neighbour, Tonghua, in north-eastern Jilin province, property prices in these places will soon rival those of first-tier cities, reported the Chinese media.
AGENCE FRANCE-PRESSE, CHINA DAILY/ASIA NEWS NETWORK
China takes fresh steps to rein in property prices
BEIJING: China yesterday raised the minimum down payment on second homes and ordered the authorities to rein in property prices in its latest move aimed at quelling public angst about high real estate costs.
The State Council - China's Cabinet - ordered that the minimum second-home down payment be hiked to 60 per cent of the property's value. Just last April, it ordered the payment raised to 50 per cent as the government fought to curb skyrocketing property values and real estate speculation.
The State Council also said cities that had seen especially fast property price increases must draw up and implement measures to limit real estate sales.
China's government has issued a raft of measures recently to curb spiralling prices, as polls have shown the difficulty in affording housing has become the top consumer fear.
Inflation and disputes over land have a history of sparking unrest in China.
However, property prices in China's major cities have continued to increase, posting their fourth straight month-on-month rise in December as sales picked up pace.
The State Council reiterated an order it issued last year that mortgage loan rates on second-home purchases must be at least 10 per cent higher than the central bank's benchmark lending rates.
It also told the authorities across the nation to increase the supply and availability of affordable and public housing, and use a range of tax, land-use and other policies to put the brakes on land speculators.
Those found violating any measures aimed at tackling price spurts must be 'severely' dealt with, it said.
Whether the new move will work remains to be seen, as property experts put out a report in Beijing citing data to prove that prices are likely to rise further this year.
The findings echo a report issued last week by the Chinese Academy of Sciences, which predicts property prices will rise 12.77 per cent this year.
December home prices in 70 major Chinese cities rose 0.3 per cent month-on-month and 6.4 per cent year-on-year, the National Bureau of Statistics said on Monday.
Also, according to reports, China's top 10 property developers have shifted their sights to investing in second- and third-tier cities after cooling measures in big cities such as Beijing and Shanghai shaved their profit margin.
As home buyers and speculators follow on their heels to these cities, such as Changchun and its otherwise little-known neighbour, Tonghua, in north-eastern Jilin province, property prices in these places will soon rival those of first-tier cities, reported the Chinese media.
AGENCE FRANCE-PRESSE, CHINA DAILY/ASIA NEWS NETWORK
ST : Unclear outcome in several en bloc tenders
27 Jan 2011,
Unclear outcome in several en bloc tenders
Developers' bids may not have met reserve prices, say residents
By Esther Teo
AN UNUSUAL quiet has come over the closing of several mega collective sale tenders that were launched amid much fanfare with $500 million-plus reserve prices.
New launches for collective sales, however, have continued unabated.
The lack of news on the closed tenders has stirred talk among some residents that developers' bids, if any, may have fallen short of reserve prices.
Recent reports, for example, have suggested that Tulip Garden - whose tender with a reserve price of $650 million was launched early last month and closed last Thursday - had received no bids.
A resident The Straits Times spoke to said he understood three parties had expressed interest but no bids were made.
Mr Karamjit Singh, managing director of marketing agent Credo Real Estate, however, said the firm was 'still in discussion with developers'.
If Tulip Garden gets sold for $650 million, it would be the third-largest collective sale by value here and the first freehold one above $500 million in three years.
Similarly, on the commercial front, no news is out yet on Tanglin Shopping Centre, whose tender with a reserve price of a hefty $1.25 billion closed on Tuesday.
City Developments (CDL), however, said in a statement yesterday that it had expressed interest in negotiating for the purchase of the development. Millennium & Copthorne Hotels, CDL's hotel arm, owns 85 retail and office units and 325 parking spaces there.
Ms Jean Goh, senior marketing director of marketing agent ERA Realty, declined to comment further, saying the firm was still in the midst of negotiations.
Hawaii Tower in Meyer Road, with a $700 million reserve price and whose tender closed yesterday, also got no bids.
Mr Jeremy Lake, CB Richard Ellis' executive director for investment properties, said the firm is following up with four parties that had expressed interest.
Experts say the collective sale market is being tested again with the Jan 13 property cooling measures leaving the market in flux as many were caught by surprise.
Tanglin Shopping Centre might be affected as ERA had earlier said it could be redeveloped to include homes.
The collective sale market had picked up last year with more than 30 sales totalling about $1.7 billion recorded as home prices surged. The strong rebound had been expected to continue this year.
Tenders launched before the latest property measures, and closing since, may have struggled to meet ambitious reserve prices, experts suggest, though they say it is too soon to draw conclusions.
Mr Alwyn Low, director of Deans Realtors, said even if bids with no special conditions came in above the reserve price for a collective sale, they would still take about a week to be finalised. There is also 10 weeks after the tender closes for private treaties to be ironed out.
Mr Donald Han, vice-chairman of property consultancy Cushman & Wakefield, said developers are more cautious. 'Deals of more than $500 million can still happen, but vendors might need to consider more realistic pricing in the light of the new measures.'
Some developers are also often more inclined to pursue government land sites as the sale process is faster and fuss-free, experts said.
Market watchers will be awaiting news on an expression of interest that closed on Jan 12 for strata offices and retail units at 1 Finlayson Green.
Credo's Mr Singh said the tender closing date for the Whitley Heights apartments has been pushed back to March 2, owing to requests from developers to look into the more complex nature of developing strata-landed homes.
The collective sale momentum, however, has carried on to this year. At least 10 collective sale tenders have been launched this year. These include Holland Tower, Newton View and Ying Mansions.
esthert@sph.com.sg
Unclear outcome in several en bloc tenders
Developers' bids may not have met reserve prices, say residents
By Esther Teo
AN UNUSUAL quiet has come over the closing of several mega collective sale tenders that were launched amid much fanfare with $500 million-plus reserve prices.
New launches for collective sales, however, have continued unabated.
The lack of news on the closed tenders has stirred talk among some residents that developers' bids, if any, may have fallen short of reserve prices.
Recent reports, for example, have suggested that Tulip Garden - whose tender with a reserve price of $650 million was launched early last month and closed last Thursday - had received no bids.
A resident The Straits Times spoke to said he understood three parties had expressed interest but no bids were made.
Mr Karamjit Singh, managing director of marketing agent Credo Real Estate, however, said the firm was 'still in discussion with developers'.
If Tulip Garden gets sold for $650 million, it would be the third-largest collective sale by value here and the first freehold one above $500 million in three years.
Similarly, on the commercial front, no news is out yet on Tanglin Shopping Centre, whose tender with a reserve price of a hefty $1.25 billion closed on Tuesday.
City Developments (CDL), however, said in a statement yesterday that it had expressed interest in negotiating for the purchase of the development. Millennium & Copthorne Hotels, CDL's hotel arm, owns 85 retail and office units and 325 parking spaces there.
Ms Jean Goh, senior marketing director of marketing agent ERA Realty, declined to comment further, saying the firm was still in the midst of negotiations.
Hawaii Tower in Meyer Road, with a $700 million reserve price and whose tender closed yesterday, also got no bids.
Mr Jeremy Lake, CB Richard Ellis' executive director for investment properties, said the firm is following up with four parties that had expressed interest.
Experts say the collective sale market is being tested again with the Jan 13 property cooling measures leaving the market in flux as many were caught by surprise.
Tanglin Shopping Centre might be affected as ERA had earlier said it could be redeveloped to include homes.
The collective sale market had picked up last year with more than 30 sales totalling about $1.7 billion recorded as home prices surged. The strong rebound had been expected to continue this year.
Tenders launched before the latest property measures, and closing since, may have struggled to meet ambitious reserve prices, experts suggest, though they say it is too soon to draw conclusions.
Mr Alwyn Low, director of Deans Realtors, said even if bids with no special conditions came in above the reserve price for a collective sale, they would still take about a week to be finalised. There is also 10 weeks after the tender closes for private treaties to be ironed out.
Mr Donald Han, vice-chairman of property consultancy Cushman & Wakefield, said developers are more cautious. 'Deals of more than $500 million can still happen, but vendors might need to consider more realistic pricing in the light of the new measures.'
Some developers are also often more inclined to pursue government land sites as the sale process is faster and fuss-free, experts said.
Market watchers will be awaiting news on an expression of interest that closed on Jan 12 for strata offices and retail units at 1 Finlayson Green.
Credo's Mr Singh said the tender closing date for the Whitley Heights apartments has been pushed back to March 2, owing to requests from developers to look into the more complex nature of developing strata-landed homes.
The collective sale momentum, however, has carried on to this year. At least 10 collective sale tenders have been launched this year. These include Holland Tower, Newton View and Ying Mansions.
esthert@sph.com.sg
ST : More gain than pain in N-S Expressway project
27 Jan 2011,
More gain than pain in N-S Expressway project
Some will lose their homes, but benefits outweigh social costs
By Christopher Tan
THE announcement of a new highway is not always met with the kind of enthusiasm other infrastructure projects usually receive, such as an MRT line, a cruise terminal, or even yet another shopping mall.
Property prices near a new expressway project do not appreciate; they almost always depreciate. In the developed world, highways are associated with several negative externalities - noise, congestion, accidents, pollution, and so on.
In the early 1900s, a new road was always good news because it connected rural communities. The opposite is true today. In many big cities, highways have severed communal links instead of forging them. This explains the rise of anti-highway movements in the 1970s and 1980s to halt or divert road projects in America, the land of the automobile.
It is understandable then that Singapore's North-South Expressway (NSE) project is drawing mixed feelings.
Motorists, especially those living in northern towns like Woodlands, Sembawang and Yishun, breathed a collective sigh of relief when the alignment of the first stretch was announced last week. This is because the end of their suffering with the perennially choked Central Expressway is now in sight.
But others living along the path of the $8 billion, 21km NSE may be having a few sleepless nights. Some have had their homes acquired to make way for the new road. Others will endure the approximately seven years of construction. Many will have to live with the increased traffic once it is completed.
This is why cost-benefit analyses for highway projects are never just about the cost of concrete and steel, cost of design, and other engineering considerations.
Social costs and benefits should often be given equal, if not more, weight. Or so literature on public policy tells us.
Such studies, however, are seldom cut-and-dried. How does one measure social costs and benefits in the present, continuous and future tenses? How strong are competing needs for a given budget allocation? And are there engineering limits to what can be done?
So, while it is easy to question why the Land Transport Authority (LTA) has not chosen an all-underground route for the expressway to reduce land acquisitions and future noise, there are drawbacks associated with the subterranean option too.
For starters, an underground road will cost three to four times more than a surface road. It will also cost up to 10 times more to operate and maintain.
The fact that the northern portion of the NSE runs mostly through industrial estates makes it more logical to pick a surface road than an underground one there. It will take the form of an elevated road, or viaduct. This minimises land consumption because a viaduct occupies mainly air space, with its supporting pillars standing on existing road dividers.
Most of the plots of land acquired are along the underground section of the NSE. This is because entrance and exit ramps of underground roads require space. Also, the LTA is using a trench excavation construction (cut and cover) method, which needs more space than the tunnelling method.
There are now tunnel-boring machines wide enough for underground highway construction. But these work best for deeper tunnels. Deeper tunnels require access and exit ramps to run for longer distances to ensure the gradient is not too steep for vehicles. And longer ramps will inevitably eat up more land.
The bottom line here is that a major infrastructure project often entails some property acquisition, especially in a built-up city state. Those affected will understandably feel upset, but it is remarkable that such a massive project is being carried out with minimal acquisition - with the owners of 35 terrace houses having to give up their properties, and others sacrificing part of their land.
As for grumbles about home owners' wasted renovation works, the NSE was in fact first mentioned in the Urban Redevelopment Authority's 2001 Concept Plan. The corridor where it will probably run has been 'safeguarded' or earmarked for possible future development since 2007. Prudent property owners should do a Singapore Land Authority search for a fee, before embarking on a major house renovation.
On its part, perhaps the Government can review current policies regarding compensation to reflect the actual cost incurred by 'losers' in an acquisition process, which goes beyond property values to include less tangible aspects such as inconvenience and cost of relocation.
A change in policy should not, however, open an avenue for profiteering or speculation, but be aimed squarely at recognising what the few have to bear for the good of the many.
Smoother commutes between the northern towns and the rest of Singapore will be one greater good. Proceeds from land sales arising from a huge acquired plot in Marymount that will be redeveloped are another.
Another group of people who will be adversely affected by the NSE are those living and working near its length. Compensating them would be improbable since many others who live and work near roads elsewhere on the island suffer the same fate. The LTA might erect noise barriers where it can to mitigate the situation. Its current practice of relying on planted hedges to reduce noise is not nearly as effective.
So, is the motorist getting a free ride in this social equation? Well, no, he pays relatively high vehicle taxes (which currently include pretty lofty certificate of entitlement premiums), petrol duty, road tax, and so on.
And to ensure that he continues to be aware of the social costs he imposes, he will be made to pay for congestion if and when the need arises.
On this front, electronic road-pricing (ERP) gantries will not be necessary on the NSE. By the time the expressway is completed in 2020, Singapore's satellite-tracked, distance-based ERP system should be up and beeping away.
christan@sph.com.sg
More gain than pain in N-S Expressway project
Some will lose their homes, but benefits outweigh social costs
By Christopher Tan
THE announcement of a new highway is not always met with the kind of enthusiasm other infrastructure projects usually receive, such as an MRT line, a cruise terminal, or even yet another shopping mall.
Property prices near a new expressway project do not appreciate; they almost always depreciate. In the developed world, highways are associated with several negative externalities - noise, congestion, accidents, pollution, and so on.
In the early 1900s, a new road was always good news because it connected rural communities. The opposite is true today. In many big cities, highways have severed communal links instead of forging them. This explains the rise of anti-highway movements in the 1970s and 1980s to halt or divert road projects in America, the land of the automobile.
It is understandable then that Singapore's North-South Expressway (NSE) project is drawing mixed feelings.
Motorists, especially those living in northern towns like Woodlands, Sembawang and Yishun, breathed a collective sigh of relief when the alignment of the first stretch was announced last week. This is because the end of their suffering with the perennially choked Central Expressway is now in sight.
But others living along the path of the $8 billion, 21km NSE may be having a few sleepless nights. Some have had their homes acquired to make way for the new road. Others will endure the approximately seven years of construction. Many will have to live with the increased traffic once it is completed.
This is why cost-benefit analyses for highway projects are never just about the cost of concrete and steel, cost of design, and other engineering considerations.
Social costs and benefits should often be given equal, if not more, weight. Or so literature on public policy tells us.
Such studies, however, are seldom cut-and-dried. How does one measure social costs and benefits in the present, continuous and future tenses? How strong are competing needs for a given budget allocation? And are there engineering limits to what can be done?
So, while it is easy to question why the Land Transport Authority (LTA) has not chosen an all-underground route for the expressway to reduce land acquisitions and future noise, there are drawbacks associated with the subterranean option too.
For starters, an underground road will cost three to four times more than a surface road. It will also cost up to 10 times more to operate and maintain.
The fact that the northern portion of the NSE runs mostly through industrial estates makes it more logical to pick a surface road than an underground one there. It will take the form of an elevated road, or viaduct. This minimises land consumption because a viaduct occupies mainly air space, with its supporting pillars standing on existing road dividers.
Most of the plots of land acquired are along the underground section of the NSE. This is because entrance and exit ramps of underground roads require space. Also, the LTA is using a trench excavation construction (cut and cover) method, which needs more space than the tunnelling method.
There are now tunnel-boring machines wide enough for underground highway construction. But these work best for deeper tunnels. Deeper tunnels require access and exit ramps to run for longer distances to ensure the gradient is not too steep for vehicles. And longer ramps will inevitably eat up more land.
The bottom line here is that a major infrastructure project often entails some property acquisition, especially in a built-up city state. Those affected will understandably feel upset, but it is remarkable that such a massive project is being carried out with minimal acquisition - with the owners of 35 terrace houses having to give up their properties, and others sacrificing part of their land.
As for grumbles about home owners' wasted renovation works, the NSE was in fact first mentioned in the Urban Redevelopment Authority's 2001 Concept Plan. The corridor where it will probably run has been 'safeguarded' or earmarked for possible future development since 2007. Prudent property owners should do a Singapore Land Authority search for a fee, before embarking on a major house renovation.
On its part, perhaps the Government can review current policies regarding compensation to reflect the actual cost incurred by 'losers' in an acquisition process, which goes beyond property values to include less tangible aspects such as inconvenience and cost of relocation.
A change in policy should not, however, open an avenue for profiteering or speculation, but be aimed squarely at recognising what the few have to bear for the good of the many.
Smoother commutes between the northern towns and the rest of Singapore will be one greater good. Proceeds from land sales arising from a huge acquired plot in Marymount that will be redeveloped are another.
Another group of people who will be adversely affected by the NSE are those living and working near its length. Compensating them would be improbable since many others who live and work near roads elsewhere on the island suffer the same fate. The LTA might erect noise barriers where it can to mitigate the situation. Its current practice of relying on planted hedges to reduce noise is not nearly as effective.
So, is the motorist getting a free ride in this social equation? Well, no, he pays relatively high vehicle taxes (which currently include pretty lofty certificate of entitlement premiums), petrol duty, road tax, and so on.
And to ensure that he continues to be aware of the social costs he imposes, he will be made to pay for congestion if and when the need arises.
On this front, electronic road-pricing (ERP) gantries will not be necessary on the NSE. By the time the expressway is completed in 2020, Singapore's satellite-tracked, distance-based ERP system should be up and beeping away.
christan@sph.com.sg
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