12 Feb 2011,
An indicative valuation isn't the final word
TO START with, 'indicative valuation' is a term coined to reflect the indicative market value, which should not be interpreted as the proper valuation of a property ('Indicative valuations are a vital tool' by Ms Monika Fischer; Jan 26).
The aim of valuation or appraisal is to determine the market value of a particular interest in a property at a point in time for a specific purpose. Valuation is an opinion arrived at logically using established techniques and methodologies.
Ms Fischer expressed her concern that she obtained four 'indicative valuations' of the same property ranging from $3.2 million to $4 million.
This is to be expected as an 'indicative valuation' is carried out without any field inspection, detailed research and analysis.
While Ms Fischer finds that 'indicative valuations' are useful, they must not be relied upon for one's property investment decisions. The institute maintains that any form of endorsement by valuers on the figures stated as 'indicative valuations' (before proper valuations are carried out) is not a subscribed valuation practice.
Evelyn Chang (Ms)
Executive Director
Singapore Institute of Surveyors and Valuers
Monday, February 14, 2011
ST : Tighter rules for US home buyers
12 Feb 2011,
Tighter rules for US home buyers
They include mandatory 10 per cent downpayment for purchase of homes and other reforms
WASHINGTON: The Treasury Department yesterday proposed to set a mandatory 10 per cent down payment for US home buyers and to wind down state-backed mortgage lenders that have underpinned the housing market for 40 years.
'The plan is for fundamental reform, to wind down the GSEs (government-sponsored enterprises), strengthen consumer protection and preserve access to affordable housing for the people who need it,' it said in a report.
Launching what could be the biggest shake-up of the housing market in a generation, the Obama administration said home buyers should have to put down at least a 10 per cent deposit to buy a home.
The wide-ranging proposals effectively end the US government's long-standing support for the goal of having every American own their own home.
'The administration believes that we must continue to help ensure that Americans have access to quality housing they can afford,' the proposals said.
'This does not mean, however, that our goal is for all Americans to become homeowners.'
While some proposals would have a direct and quick impact on home buyers, it is the reforms of Fannie Mae and Freddie Mac that may have the broadest effect.
The two firms, which before the crisis back-stopped around three quarters of the housing market, have come under fire for their role in fuelling the housing bubble.
In the wake of a long and painful recession, the government has been left to guarantee - directly or via deals with bank lenders - 'more than nine out of every 10 new mortgages.' Yet despite their role in the financial melt-down, reforming Fannie and Freddie remains politically charged.
Supporters argue the lenders have made housing affordable for millions of poorer Americans. Critics say they represent unwarranted government interference in the housing market.
The Obama administration called on Congress and stakeholders to have an 'honest discussion' about the way forward.
While laying out three broad options to overhaul the mortgage lending system, the administration is letting Congress make the final decision.
The Treasury Department said in its report that the government should withdraw its support for the mortgage market slowly, over five years or more. The report describes a path for winding down Fannie Mae and Freddie Mac, which have swallowed US$150 billion (S$192 billion) in federal aid since the government took them over in September 2008.
Under any scenario, the private sector will assume a greater role in housing finance as the government scales back its involvement.
By handing the decision to Congress, the administration sidesteps one of the most complex and politically explosive questions facing America's financial system. Any of the three options will almost certain force mortgage rates to rise.
AGENCE FRANCE-PRESSE, ASSOCIATED PRESS
Tighter rules for US home buyers
They include mandatory 10 per cent downpayment for purchase of homes and other reforms
WASHINGTON: The Treasury Department yesterday proposed to set a mandatory 10 per cent down payment for US home buyers and to wind down state-backed mortgage lenders that have underpinned the housing market for 40 years.
'The plan is for fundamental reform, to wind down the GSEs (government-sponsored enterprises), strengthen consumer protection and preserve access to affordable housing for the people who need it,' it said in a report.
Launching what could be the biggest shake-up of the housing market in a generation, the Obama administration said home buyers should have to put down at least a 10 per cent deposit to buy a home.
The wide-ranging proposals effectively end the US government's long-standing support for the goal of having every American own their own home.
'The administration believes that we must continue to help ensure that Americans have access to quality housing they can afford,' the proposals said.
'This does not mean, however, that our goal is for all Americans to become homeowners.'
While some proposals would have a direct and quick impact on home buyers, it is the reforms of Fannie Mae and Freddie Mac that may have the broadest effect.
The two firms, which before the crisis back-stopped around three quarters of the housing market, have come under fire for their role in fuelling the housing bubble.
In the wake of a long and painful recession, the government has been left to guarantee - directly or via deals with bank lenders - 'more than nine out of every 10 new mortgages.' Yet despite their role in the financial melt-down, reforming Fannie and Freddie remains politically charged.
Supporters argue the lenders have made housing affordable for millions of poorer Americans. Critics say they represent unwarranted government interference in the housing market.
The Obama administration called on Congress and stakeholders to have an 'honest discussion' about the way forward.
While laying out three broad options to overhaul the mortgage lending system, the administration is letting Congress make the final decision.
The Treasury Department said in its report that the government should withdraw its support for the mortgage market slowly, over five years or more. The report describes a path for winding down Fannie Mae and Freddie Mac, which have swallowed US$150 billion (S$192 billion) in federal aid since the government took them over in September 2008.
Under any scenario, the private sector will assume a greater role in housing finance as the government scales back its involvement.
By handing the decision to Congress, the administration sidesteps one of the most complex and politically explosive questions facing America's financial system. Any of the three options will almost certain force mortgage rates to rise.
AGENCE FRANCE-PRESSE, ASSOCIATED PRESS
ST : Housing affordability of key concern
12 Feb 2011,
Housing affordability of key concern
This is the fifth of a special 10-part series in which The Straits Times explores some of the key issues expected to be tackled in the Budget on Feb 18. Property, utility rebates, bigger grants and higher income ceilings top list
By Jessica Cheam
ASK Mr Chandra Mohan what he hopes for when the Budget is announced next week and he will tell you matter-of-factly: utility and rental rebates.
The 65-year-old, who works in an events firm, lives in a three-room rental flat in Woodlands with his mother and sister, paying about $100 a month.
Because his mother has had a stroke and requires 24-hour care, the siblings have faced financial difficulties in recent years. They had to sell their four-room HDB flat in Sembawang a few years ago.
'If we can get some form of rental-flat or utility rebates, it would help us cope with rising costs,' he said.
In the longer term, the family hopes to own a Housing Board flat again, maybe with the help of grants for needy families.
Families like Mr Mohan's should be at the top of the priority list for measures in the upcoming Budget, said West Coast GRC MP Cedric Foo, who chairs the Government Parliamentary Committee for National Development.
Any rebates would be of help and additional housing grants for needy families should be considered, including raising the income ceiling to qualify for them, he added.
Those in the sandwich class are also hoping for measures to help them combat rising housing costs and living expenses. Take civil servant Charan Jaipragas, 26, for example. He recently bought a resale HDB maisonette in Taman Jurong for $495,000 with his fiancee.
Even though they received a housing grant of $25,000 from the HDB, the purchase wiped out their savings. 'Any rebates will help us young households,' he said.
Experts whom The Straits Times spoke to had differing views on whether measures in the Budget would address home buyers, owners or both. Most said the usual staples of property, utility and service and conservancy rebates could be announced.
Some said the Budget could see larger housing grants, perhaps for the lower-income households, and flexibility on who qualifies for the grants.
'The traditional remedies of upgrading of old estates, increasing the supply of HDB flats and sharpening the differential between Singaporeans and PRs (permanent residents) (in terms of benefits given) may again be applied,' said OCBC economist Selena Ling.
KPMG Advisory tax partner Leonard Ong said: 'We hope to see the one-off 40 per cent property tax rebate given for owner-occupied residential properties in the 2009 Budget reinstated in the current Budget.'
Ernst & Young tax services partner Choo Eng Chuan feels, however, that higher housing grants could further fuel the property boom. 'This could make prices rise further, making the situation worsen indirectly,' he said.
Prices of HDB resale flats, which rose 14.1 per cent last year, have hit new records on the back of a recovering economy.
Mr Choo feels that the growing income gap is also a big concern and traditional measures such as rebates for HDB dwellers would be more effective in addressing this divide.
One thing that the Government could do is to perhaps raise the income ceiling to qualify for the Central Provident Fund housing grant, he said.
The ceiling for each household is now $8,000 or $10,000, depending on the type of flat. 'As the economy grows, salaries do get higher, so this is something they could review,' suggested Mr Choo.
Housing affordability of key concern
This is the fifth of a special 10-part series in which The Straits Times explores some of the key issues expected to be tackled in the Budget on Feb 18. Property, utility rebates, bigger grants and higher income ceilings top list
By Jessica Cheam
ASK Mr Chandra Mohan what he hopes for when the Budget is announced next week and he will tell you matter-of-factly: utility and rental rebates.
The 65-year-old, who works in an events firm, lives in a three-room rental flat in Woodlands with his mother and sister, paying about $100 a month.
Because his mother has had a stroke and requires 24-hour care, the siblings have faced financial difficulties in recent years. They had to sell their four-room HDB flat in Sembawang a few years ago.
'If we can get some form of rental-flat or utility rebates, it would help us cope with rising costs,' he said.
In the longer term, the family hopes to own a Housing Board flat again, maybe with the help of grants for needy families.
Families like Mr Mohan's should be at the top of the priority list for measures in the upcoming Budget, said West Coast GRC MP Cedric Foo, who chairs the Government Parliamentary Committee for National Development.
Any rebates would be of help and additional housing grants for needy families should be considered, including raising the income ceiling to qualify for them, he added.
Those in the sandwich class are also hoping for measures to help them combat rising housing costs and living expenses. Take civil servant Charan Jaipragas, 26, for example. He recently bought a resale HDB maisonette in Taman Jurong for $495,000 with his fiancee.
Even though they received a housing grant of $25,000 from the HDB, the purchase wiped out their savings. 'Any rebates will help us young households,' he said.
Experts whom The Straits Times spoke to had differing views on whether measures in the Budget would address home buyers, owners or both. Most said the usual staples of property, utility and service and conservancy rebates could be announced.
Some said the Budget could see larger housing grants, perhaps for the lower-income households, and flexibility on who qualifies for the grants.
'The traditional remedies of upgrading of old estates, increasing the supply of HDB flats and sharpening the differential between Singaporeans and PRs (permanent residents) (in terms of benefits given) may again be applied,' said OCBC economist Selena Ling.
KPMG Advisory tax partner Leonard Ong said: 'We hope to see the one-off 40 per cent property tax rebate given for owner-occupied residential properties in the 2009 Budget reinstated in the current Budget.'
Ernst & Young tax services partner Choo Eng Chuan feels, however, that higher housing grants could further fuel the property boom. 'This could make prices rise further, making the situation worsen indirectly,' he said.
Prices of HDB resale flats, which rose 14.1 per cent last year, have hit new records on the back of a recovering economy.
Mr Choo feels that the growing income gap is also a big concern and traditional measures such as rebates for HDB dwellers would be more effective in addressing this divide.
One thing that the Government could do is to perhaps raise the income ceiling to qualify for the Central Provident Fund housing grant, he said.
The ceiling for each household is now $8,000 or $10,000, depending on the type of flat. 'As the economy grows, salaries do get higher, so this is something they could review,' suggested Mr Choo.
ST : Older office buildings taking on competition
12 Feb 2011,
Older office buildings taking on competition
Upgrading and makeovers in the works for those in prime CBD areas
By Esther Teo
LANDLORDS of older buildings in the traditionally prime areas of Raffles Place and Robinson Road are not taking the emergence of new blocks in areas like Marina Bay lying down.
Renovation works, ranging from simple upgrading to full-scale makeovers, are being undertaken to give ageing Grade A offices a smarter new face.
While the booming economy is certainly helping landlords as firms expand and take up more space, early signs are that the makeover strategy is working.
Leases are being renewed and new tenants signed up - with some even paying record rents.
But experts say it is still too early to determine how the older blocks will fare - with the age and quality of each building determining if it can keep tenants.
It is also hard to put a finger on any firm trend as many companies have taken out pre-commitments for space in new blocks such as the Marina Bay Financial Centre (MBFC) and Asia Square, but have yet to physically relocate.
This means occupancy rates and rents at older buildings are still holding up - for now.
Pontiac Land Group - which owns Centennial and Millenia towers - will lose a major tenant when Citibank goes to Asia Square. The bank's employees, some of whom are also at Capital Square, will move out in stages, from the last quarter of this year through to 2013, as existing leases expire. But the firm said that over the next few months, it is confident of achieving a pre-commitment level of about 60 per cent of the space that will be vacated by Citibank this year.
Replacement tenants include PetroChina International (Singapore), which will occupy about 70,000 sq ft by this year, said Pontiac Land.
'We believe that (ample parking space in a prime location) is a strong feature about Millenia Singapore that MBFC cannot meet,' the firm added.
Mr Andy Tan, executive vice-president of MEAG Pacific Star Asset Management - the manager of Capital Square - said Morgan Stanley, Bloomberg and Aberdeen Asset Management have recently renewed their leases, with some expanding their space by up to 46 per cent.
Capital Square in Raffles Place houses units of Barclays Capital and Macquarie, which have announced their move to MBFC. Mr Tan said that Pacific Star secured 180,000 sq ft of lease renewals and expansion last year alone, and is even signing new tenants from the IT and chemical sectors at record rentals.
CapitaCommercial Trust (CCT) is also planning to smarten up Six Battery Road in a bid to get higher rents.
Standard Chartered Bank and Nomura are moving at least part of their operations from Six Battery Road to MBFC, so CCT will take advantage of the downtime during tenant changes to include energy-saving features.
'Of the 65,600 sq ft of lettable area expected to be upgraded and available this year, 52 per cent has already been pre-leased to new and existing tenants,' said Ms Lynette Leong, chief executive of CapitaCommercial Trust Management Limited.
Buildings older than 15 years and strata-owned ones are expected to be most vulnerable to the siren call of Marina Bay and newer offices.
Knight Frank's director of office space, Mr Robert MacDonald, said investors will probably have to spend plenty of cash to smarten up these blocks while also providing attractive incentives if they want to keep tenants.
He said that Centennial and Millenia towers will be the ones to watch once Citigroup and Baker & McKenzie vacate.
esthert@sph.com.sg
Older office buildings taking on competition
Upgrading and makeovers in the works for those in prime CBD areas
By Esther Teo
LANDLORDS of older buildings in the traditionally prime areas of Raffles Place and Robinson Road are not taking the emergence of new blocks in areas like Marina Bay lying down.
Renovation works, ranging from simple upgrading to full-scale makeovers, are being undertaken to give ageing Grade A offices a smarter new face.
While the booming economy is certainly helping landlords as firms expand and take up more space, early signs are that the makeover strategy is working.
Leases are being renewed and new tenants signed up - with some even paying record rents.
But experts say it is still too early to determine how the older blocks will fare - with the age and quality of each building determining if it can keep tenants.
It is also hard to put a finger on any firm trend as many companies have taken out pre-commitments for space in new blocks such as the Marina Bay Financial Centre (MBFC) and Asia Square, but have yet to physically relocate.
This means occupancy rates and rents at older buildings are still holding up - for now.
Pontiac Land Group - which owns Centennial and Millenia towers - will lose a major tenant when Citibank goes to Asia Square. The bank's employees, some of whom are also at Capital Square, will move out in stages, from the last quarter of this year through to 2013, as existing leases expire. But the firm said that over the next few months, it is confident of achieving a pre-commitment level of about 60 per cent of the space that will be vacated by Citibank this year.
Replacement tenants include PetroChina International (Singapore), which will occupy about 70,000 sq ft by this year, said Pontiac Land.
'We believe that (ample parking space in a prime location) is a strong feature about Millenia Singapore that MBFC cannot meet,' the firm added.
Mr Andy Tan, executive vice-president of MEAG Pacific Star Asset Management - the manager of Capital Square - said Morgan Stanley, Bloomberg and Aberdeen Asset Management have recently renewed their leases, with some expanding their space by up to 46 per cent.
Capital Square in Raffles Place houses units of Barclays Capital and Macquarie, which have announced their move to MBFC. Mr Tan said that Pacific Star secured 180,000 sq ft of lease renewals and expansion last year alone, and is even signing new tenants from the IT and chemical sectors at record rentals.
CapitaCommercial Trust (CCT) is also planning to smarten up Six Battery Road in a bid to get higher rents.
Standard Chartered Bank and Nomura are moving at least part of their operations from Six Battery Road to MBFC, so CCT will take advantage of the downtime during tenant changes to include energy-saving features.
'Of the 65,600 sq ft of lettable area expected to be upgraded and available this year, 52 per cent has already been pre-leased to new and existing tenants,' said Ms Lynette Leong, chief executive of CapitaCommercial Trust Management Limited.
Buildings older than 15 years and strata-owned ones are expected to be most vulnerable to the siren call of Marina Bay and newer offices.
Knight Frank's director of office space, Mr Robert MacDonald, said investors will probably have to spend plenty of cash to smarten up these blocks while also providing attractive incentives if they want to keep tenants.
He said that Centennial and Millenia towers will be the ones to watch once Citigroup and Baker & McKenzie vacate.
esthert@sph.com.sg
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In business for over 30 years, success in providing real estate investment opportunities to clients around the world is a simple, yet effective separation of roles and responsibilites. The four pillars of strength guide the land from the research and acquisition, through to the exit, including the distribution of proceeds to our clients ......
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To know more how this is really work for you and your clients....
Please contact me Terence Tay @ (+65) 9387-5896 or email : terencetay.kh@gmail.com
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