ST : Private home buyers go slow

Nov 22, 2009

property

Private home buyers go slow

Year-end lull hits auction deals and new launches as buying sentiment cools

By Joyce Teo




The posh 99-year leasehold Marina Bay Suites is set to hold a private preview on Wednesday. It is likely to be the last major condo launch this year. -- PHOTO: MARINA BAY FINANCIAL CENTRE

The auction market is seeing more sellers eager to beat the year-end lull as sentiment cools.

However, buyers do not seem to be in a hurry to commit.

Knight Frank's auction on Thursday offered 23 residential properties for sale - its longest list this year, said executive director for auctions Mary Sai.

Among them was a rare 999-year leasehold, two-storey house in Pasir Ris Road that sits on 8,007 sq ft of land and faces a seafront park.

Even so, the bids came in below the opening price of $4.5 million, and the property was not sold. The counter offer was $4 million and the closing bid $4.24 million.

Only one residential property was sold at the auction. It was a low-floor, two-bedroom unit in freehold Regent Court which was sold for $700,000.

'The auction attracted a large crowd of observers, but the results were disappointing as buyers remained cautious,' said Ms Sai.

'Of late, potential buyers have been making counter offers that are 10 to 20 per cent below the opening bids.'

Whether the sale goes through depends on whether the seller can accept such prices, she said.

These are not mortgagee sales.

Mr Shaun Poh, DTZ's senior director for investment advisory services and auctions, said the mild slowdown in the auction market recently is partly a reflection of what is happening in the overall market.

Owners want to sell now as the school holidays are coming, and they worry that people might no longer be in the buying mood, said Ms Sai.

She added: 'With all the government announcements, some also think it is better to sell now than later.'

The Government came out in mid-September with measures to calm the property market.

Two months later, Finance Minister Tharman Shanmugaratnam warned that the Government would not hesitate to use every tool at its disposal in a calibrated fashion to prevent another boom.

Said Ms Sai: 'People are still keen to buy, but they have become more cautious since there has been a strong word from the Government that there is no need to panic as there is enough supply.'

At Colliers International, deputy managing director of agency and business services Grace Ng said it had received fewer inquiries about properties put up for auction since the government announcements.

The number of auction deals has also fallen since prices have risen, she said.

'At the beginning of the year, sellers were asking for prices above valuation, and buyers couldn't get bank support,' she said. 'Now, they are asking for prices at valuation level, but values have since gone up, so there is some resistance.'

With the slowdown in the market, buying activities might pick up only next year, industry observers said.

The new launch market is fairly quiet too, with the exception of the posh Marina Bay Suites, which will hold a private preview on Wednesday.

The launch of the 99-year leasehold project - by a consortium made up of Keppel Land, Cheung Kong Holdings and Hongkong Land - has been delayed for nearly two years because of the global crisis. It has 221 large units (three- and four-bedders). The developers have not disclosed the prices.

CBRE's executive director for residential properties, Mr Joseph Tan, said Marina Bay Suites is likely to be the last major condo launch this year.

ST : Sports Hub: Vivian asks for patience

Nov 22, 2009

Sports Hub: Vivian asks for patience

Minister says delay is deliberate, so as to get best deal for construction of project

By Wang Meng Meng




Present at the unveiling of Youth Olympic Games mascots Lyo (in orange) and Merly at Suntec City yesterday were (from left) Senior Parliamentary Secretary of MCYS Teo Ser Luck , Dr Vivian Balakrishnan (with his son), YOG organising committee chairman Ng Ser Miang and deputy chairman Niam Chiang Meng. -- ST PHOTO: DESMOND FOO

Please be patient and Singapore will get a Sports Hub everyone can be proud of.

That was Dr Vivian Balakrish-nan's response to queries on the Singapore Sports Hub Consor-tium's (SSHC) recent decision to launch a financing competition to raise money for the delayed project.

The completion of the Sports Hub, to be built on the site of the National Stadium in Kallang, has been pushed back tentatively to late 2013 or early 2014.

The Minister for Community Development, Youth and Sports, who was speaking on the sidelines at the unveiling of the Youth Olympic Games (YOG) mascots, appealed for understanding.

'I understand Singaporeans' impatience to get this iconic project off the ground. I also want to see a wonderful new Sports Hub for all Singaporeans.

'But I also ask for your understanding to let me do this properly, carefully and get value for money. Then, in due time, this is something which we can all be proud of,' he said.

Due to the recession, the $1.87 billion project has encountered funding problems.

Construction is expected to cost $1.2 billion, with the money raised from the private sector. It is understood that the consortium has yet to raise the money necessary for construction to begin.

Dr Balakrishnan said: 'The delay is unfortunate. It's not something we wanted to happen. It was caused by, first, inflation in construction costs. Secondly, the fact there is a global financial crisis, credit became a problem. I decided and deliberately delayed it in order to get the best deal possible for Singapore.

'Yes, this has been a deliberate decision but now the signs are positive again. This is now exactly the right time to proceed and the first step is to conduct this competition for financing. I'm sure we will get good offers placed on the table and I'm sure we can then proceed.'

The SSHC had hoped to pull down the National Stadium by the first quarter of next year, but this is dependent on the final contract being signed first.

Demolition will take about three months. Construction can then begin and will take about three years.

Since the announcement of the project in 2005, the completion date has been pushed back repeatedly from next year to 2011, 2012, and then 2013.

Singapore's hosting of the South-east Asia Games in 2013 is now uncertain, as the biennial event was supposed to showcase the Hub.

Yesterday, the two YOG official mascots were unveiled at Suntec City. Named 'Lyo' after the lion and 'Merly' after the Merlion, the duo will promote the Olympic va-lues of excellence, friendship and respect through their acts and stories.

They will also be promoting the inaugural YOG - to be hosted at various venues around Singapore next August - by visiting five countries on five continents. The destinations have yet to be confirmed.

Both mascots have been given background stories.

Lyo, whose mane resembles the Olympic flame, stands for 'Lion of the Youth Olympics'. He is a basketball enthusiast and a guitarist and loves dishes like chilli crabs and chicken rice.

Merly got her name from 'mer' (meaning the sea) while 'l' and 'y' stand for 'liveliness' and 'youthfulness' respectively. She dreams of becoming an environmental scientist, and the vegetarian's favourite dessert is ice kacang.

ST : The dollars and sense of home loans

Nov 22, 2009

The dollars and sense of home loans

Get a package that matches your income profile and appetite for risk

By Lorna Tan, Senior Correspondent

Home buyers were recently advised not to throw caution to the wind in their anticipation of fulfilling the Singapore dream of snapping up a private unit.

The Monetary Authority of Singapore (MAS) earlier this month flagged two scenarios in which the private property sector could falter. Lately, it has levelled off somewhat, after a strong rebound.

MAS warned that property buyers could not assume that interest rates on home loans will stay at their current rock bottom levels indefinitely.

If the economy rebounds, interest rates are more likely to rise over the longer term, MAS cautioned.

This, in turn, would drive up monthly instalments on home loans that are not fixed.

If that happens, any home borrower who over-extended himself with a big loan could face serious problems.

The second scenario that MAS laid out: Home buyers could suffer losses from falling home prices as a result of a possible market correction if economic growth proves weaker than expected.

The Sunday Times takes a closer look at key factors to weigh up when taking out a home loan.

Affordability issues

In order to ensure prudent financial planning, Mr Dennis Ng, spokesman for www.HousingLoanSG.com - a mortgage consultancy portal - suggests that home buyers track their total monthly debt repayment obligations.

These repayments should not exceed 35 per cent of their household income.

For example, suppose your car loan instalment is $800, other monthly bills are $1,200 and your housing loan instalment is $3,000. That adds up to a total monthly debt repayment of $5,000.

Assume a monthly household income of $10,000.

That means half your income is going into debts. In the language of financial experts, that is called a debt-servicing ratio of 50 per cent.

That is not advisable as it is well above the maximum recommended debt-servicing ratio of 35 per cent.

Mortgage consultancy firm Global Creatif Financial helps its clients work out the maximum amount they can borrow. Firstly, it takes into account its

clients' individual and/or combined income (with spouse) derived from employment, trade, property or other income.

This amount would then be used to deduct monthly commitments including mortgage loans, car loans, bank loans, overdraft and credit card bills, said its managing director Annie Lim.

From there, Global Creatif calculates how much cash the client has left after fulfilling his monthly obligations. Using a desired loan term and an applied interest rate, it calculates the lump sum that the client can potentially borrow.

Another tip from Mr Ng is that prospective home buyers should not assess the affordability of a home they are eyeing by using current low interest rates.

Before the downturn in 2007, home loan interest rates were hovering at a higher rate of about 4 per cent.

So to be prudent, home buyers should calculate their instalments based on a higher interest rate of, say, 4 per cent instead. This would give them a better sense of whether they could afford the instalments if rates change.

Home buyers should set aside sufficient funds to meet future instalments should interest rates move up.

One's long-term repayment ability should take into account the stability of your source of income and the available Central Provident Fund (CPF) savings for the down payment and monthly loan servicing, said a spokesman for United Overseas Bank (UOB).

Consider a 25-year housing loan of $500,000 at a current rate of 2 per cent.

If indeed rates rise to 4 per cent, then monthly mortgage instalments will jump 24.5 per cent or about $520.

Using the same rate revision, if the loan is a higher $800,000, the hike in monthly instalments is about $830.

If the property is meant for investment and you are using the rental earned to fund your monthly loan instalments, you might want to factor in a possible drop in rental rates, added Mr Ng.

This is because rental rates fluctuate and it is only prudent to be prepared for the possibility of lower rental income to ensure you can still afford the instalments if rental rates fall.

Mr Ng advised home buyers to factor in a possible 10 to 20 per cent drop in rental.

Let's assume that the property is rented out at $3,000 a month. Rental falls of 10 and 20 per cent translate to lower rentals of $2,700 and $2,400, respectively.

Whether you are buying a house to live in or as an investment, it is prudent to have sufficient cash or CPF savings on standby to pay for at least six months of housing loan instalments in the event of unforeseen circumstances.

This means that if your loan instalment is $3,000, you should have $18,000 in cash and/or CPF monies set aside to cover six months of instalments.

Interest rates movement

Financial experts generally believe that home loan rates will stay low for the next six to 12 months.

Singapore home loan interest rates are very much affected by the Singapore Inter-bank Offered Rate (Sibor), pointed out Mr Ng. 'Sibor is in turn affected by two factors, United States Federal Reserve interest rates and the liquidity in the Singapore banking system. And the US has indicated it is likely to keep interest rates low for the time being,' he said.

Sibor is the interest rate at which banks lend to one another and is partly influenced by the supply of and demand for funds.

UOB said it expects Sibor rates to remain steady at the current level of 0.7 per cent for the next six months.

However, in the event that the US economy recovers, the US Federal Reserve might increase interest rates. If that happens in, say, about a year's time, interest rates here would likely rise as well.

Mr Ng recalled that Sibor was 3.58 per cent in 2007 and above 2 per cent last year. It dropped below 1 per cent only this year when the US cut interest rates to a historic low of 0.25 per cent. For the last 10 months, it has been about 0.7 per cent. As a result, some consumers may have the misconception that Sibor is always below 1 per cent.

'Consumers need to be mentally prepared for Sibor to go up to 2 per cent in more than one year's time,' he cautioned.

Another indication that home loan rates are likely to remain low, at least in the coming months, is the introduction of low one-year fixed rate packages by the financial institutions, said Ms Lim.

'The general sentiment in the market is that rates will remain low for the next 12 months,' she said.

Whether rates will indeed start creeping upwards a year from now depends on how long it takes for the global economy to right itself, but Ms Lim is certain that rates will move upwards more than three years from now.

Fixed or variable home loan packages

Naturally, the benefit of a fixed package is certainty: You know how much your instalments are for a set period.

The key difference between most fixed rate and variable packages is that the former comes with a lock-in period where you are penalised for any premature exit from the package.

Variable packages usually do not impose a lock-in period. Therefore they are recommended for clients who are not sure if they would be holding on to their properties. A no-lock-in package is deemed to be more suitable as the home buyer is not slapped with a penalty payment if he sells his property and redeems his loan. Also, variable packages tend to feature lower interest rates than most fixed rate packages, noted Ms Lim.

'These variable packages are also suitable for clients who feel that they are comfortable with any short-term fluctuations and/or feel that rates will generally remain low in the short term,' she added.

However, a variable rate, as the name implies, means that the bank can change the interest rate any time. For example, a three-month rate would re-set every three months. At the end of each three-month period, it could be higher or lower and you would pay more or less accordingly.

Fixed rate packages are suitable for clients who want certainty and peace of mind, and are not comfortable with rate fluctuations.

If you are unlikely to sell your house in the next three years, Mr Ng suggested that now might be a good time to lock in the low interest rates. You might want to consider fixing interest rates for the next two to three years.

Looking at present circumstances, both Mr Ng and Ms Lim would go for variable packages with no lock-in, as the sentiment is that rates would remain low at least for the next one year.

'Since Sibor is unlikely to go up in the next six to 12 months, one might be better off opting for a one-month or three-month Sibor package. In the event that the Sibor starts rising, one can opt to switch to a 12-month Sibor package,' said Mr Ng.

One-month Sibor is currently at 0.4375 per cent, three-month Sibor is 0.68 per cent while 12-month Sibor is 0.9 per cent. So if you choose the latter, you might end up paying more interest while interest rates are still low.

lorna@sph.com.sg

Concerns over demand & supply of HDB flats to be raised in Parliament

Concerns over demand & supply of HDB flats to be raised in Parliament
By Lin Jiamei, 938LIVE | Posted: 20 November 2009 1607 hrs

SINGAPORE: Concerns over the property market will be one of the main topics to be discussed in Parliament next week.

MP for Aljunied GRC Cynthia Phua will be asking the Minister for National Development about the projected supply and demand of HDB flats over the next five years while MP for Marine Parade GRC Muhammad Faishal wants to know about the waiting time for new couples applying for HDB flats.

MPs are also planning to ask the Minister of Foreign Affairs for his assessment of the recently concluded APEC meetings.

And there are three questions on Shell's S$1-per-litre fuel promotion on October 24 and the traffic jams that resulted.

Concerns over new immigrants will also be discussed.

Opposition MP Chiam See Tong will be asking the Deputy Prime Minister on the number of foreigners who have successfully applied for permanent residency in Singapore.

Parliament is also expected to introduce changes to the Moneylenders Act to enhance penalties for loansharks.

Parliament will sit at 1.30pm on Monday. - 938LIVE/vm

TODAY Online : Singing the bubble blues

Singing the bubble blues

Is the market really cooling off? Some don't think so and expect more measures if exuberance persists

05:55 AM Nov 21, 2009

by Tan Hui Leng

SINGAPORE - Sales of private homes have dipped to their second lowest level this year in October according to data released by the Urban Redevelopment Authority (URA) this week.

While market observers believe that this downward trend was the result of the recent anti-speculative measures introduced by the Government, some analysts are sceptical that the market has started to cool.

According to statistics, sales of new properties have been tapering off in the last three months from 1,805 in August, to 1,143 in September, and 811 in October.

Still, this is after a record of 2,772 units sold in July and way above the year's lowest level in January when only 108 units were sold.

Analysts reckoned that sentiment in the property market had simmered down in August and September as it coincided with the Hungry Ghost Festival, a traditionally quiet period.

Sales failed to pick up in September after the Government announced anti-speculative measures which included the removal of the Interest Absorption Scheme.

However, Chesterton Suntec International's research and consultancy head Colin Tan said that the total of 811 units sold in October was still above average when compared to some 600 homes sold a month before 2007 - the height of the last property rally. This figure, he added, does not bode well when factors such as falling rents and supply glut are taken into account as well.

According to URA's data, the vacancy rate of completed private residential units increased from 5.9 per cent as at the end of Q2 this year to 6.2 per cent as at end Q3.

"Government intervention is inevitable," said Mr Tan, who attributes the strong showing in property sales to excess liquidity from both local and foreign buyers.

"This excess money is too strong to fight," said Mr Tan. He also expects the authorities to consider reducing mortgage loan amount to a lower proportion of the sale price - down from the 80 per cent now.

"If confidence is hit badly, then at least the asset bubble will not be as large," he added.

Meanwhile, Ngee Ann Polytechnic real estate lecturer Nicholas Mak takes a more sanguine view. "I don't think the authorities will put in any measures in the next three to six months," he said. "I expect sales to move forward on a steady keel and keep within the volume of 600 to 1,500 units."

As long as there are no excessive signs of speculation and no sharp price increases, Mr Mak does not expect the authorities to take further action, particularly as the decline in rental is moderating and hitting bottom soon.

"Possible danger signs are when everything starts to go up: Prices, rentals and volume of speculation," he said. "Then that is when the Government may do something."

Jones Lang Lasalle South-east Asia's head of research, Dr Chua Yang Liang, expects transaction volume in the non-landed segment to contract by a further 10 to 20 per cent on the back of the seasonal year-end slowdown and anti-speculative measures.

"However, should housing price growth continue to surge ahead of economic fundamentals despite the recent moral persuasion by the Government to cool residential demand, further anti-speculative measures with a bigger bite could be introduced. For example, a capital gains tax say for those who flip within a two-year period of the first purchase," he said in response to the monthly sales figures released on Monday. Tan Hui Leng

ST Forum : Block eligible for other upgrading schemes

Nov 21, 2009

Block eligible for other upgrading schemes

WE THANK Ms Pamela Hoo for last Saturday's letter, 'Left out of Sers'. The Selective En-bloc Redevelopment Scheme (Sers) is implemented only for old HDB precincts that can be redeveloped to optimise land use. Blocks 110, 111, 113 and 114 Bukit Merah View were identified for Sers based on this principle.

Block 116 is physically separated from the Sers precinct by Bukit Merah View road and Block 115 (market and food centre). Together with the market and food centre, the shops and eating houses in Block 116 form an integral focal point of the community to serve the needs of the surrounding residents.

While Block 116 is not suitable for Sers, it is eligible for other upgrading programmes that can improve lift access and the conditions of the flats. Details will be announced when the plans for the block are firmed up.

Heng Mien Joo (Mrs)
Deputy Director (Projects & Development)
Housing & Development Board

ST : No stamp duty boost for Govt

Nov 21, 2009
PROPERTY BOOM

No stamp duty boost for Govt
More units sold, but these may not match up to last year's overall value
By Fiona Chan

THIS year's surprise housing boom may have provided an unexpected windfall for property owners - but not necessarily for the Government.

Developers and individual sellers will probably sell twice the number of private homes this year than they did last year, going by the latest property market figures.

However, the Government is unlikely to see an increase in its revenues from stamp duty, which is a tax on transactions such as property sales.

This is mainly because many of the homes sold in the current boom are much smaller in size and located in the cheaper suburban areas.

So the value of homes sold this year - which determines the amount of stamp duty payable - may not surpass that of last year, when more luxury homes were sold, say property consultants.

Stamp duty takings so far this year bear this out. From January to September, the Government took in $1.37 billion in stamp duty, according to figures from the Department of Statistics website.

This is about 15 per cent less than in the same period last year, even though the property market was slowing down then in anticipation of the financial crisis that hit hard in September that year.

For the whole of last year, the Government received $1.84 billion in stamp duty. This year's stamp duty collections may be about the same level or even lower, now that the property boom appears to be losing steam, say property consultants.

However, stamp duties look set to exceed the Government's initial expectations at the beginning of the year, when the recession was at its worst and the property market was in a slump.

In its January Budget, the Government projected stamp duty takings of only $1billion for the 2009 financial year, which started in April and ends in March next year. So far, between April and September, the Government has already collected $1.1 billion.

Stamp duty is a tax on commercial and legal documents used in some transactions such as property sales, which make up the bulk of stamp duty collections.

For housing transactions, stamp duty ranges from 1 per cent to 3 per cent of the purchase price. In the massive boom year of 2007, stamp duty reached a record $4.1 billion.

In the first nine months of this year alone, almost 25,800 private homes were sold - nearly double the number sold in the whole of last year.

But the sizes of the homes sold this year have generally shrunk, said Dr Chua Yang Liang, head of South-east Asia research at Jones Lang LaSalle.

'Because unit sizes have fallen, the total quantum of the home price is less,' he said. 'The market value of transactions this year actually remains at about the same level as last year.'

A spike in demand for smaller mass-market homes means that while property developers are likely to double their sales of new homes this year compared with last year, the total value of sales will be halved, according to recent research by property consultancy CB Richard Ellis (CBRE).

In the coming months to the end of the Government's 2009 financial year, there may be a pick-up in sales of upmarket homes, which could add to stamp duty collections, said Mr Li Hiaw Ho, executive director of CBRE Research.

He said the higher-end segment of the property market has not moved much in the current boom, but recent improved economic data may attract more buyers.

Foreigners, in particular, could be drawn back into the market early next year after the festive season is over, said Dr Chua.

'The economy is showing a better outlook, and there is more bullishness compared with six months ago, so there is a potential for more interest in the high-end market,' he said.

BT : Preview of Marina Bay Suites next week

Business Times - 21 Nov 2009


Preview of Marina Bay Suites next week

By KALPANA RASHIWALA

AFTER an almost two-year wait, Marina Bay Suites will finally be previewed next Wednesday to VVIPs and invited buyers, BT understands.

Pricing for the preview has not been finalised, but some market watchers suggest it could be a shade below $2,500 per sq ft on average. Others tip the average price at about $2,300 psf. No interest absorption scheme will be offered.

Early last year - when the 99-year leasehold project was expected to be released - the average price was tipped at about $2,800 psf.

The 66-storey condo block has 221 units, comprising 218 three- or four-room apartments and three penthouses.

Three-bedders range from about 1,570 to 1,620 sq ft; four-bedders will be 2,050 to almost 2,700 sq ft. The penthouses include two duplex units of about 4,700 and 8,100 sq ft and a single-level unit of around 5,600 sq ft.

Marina Bay Suites was due to be released early last year, but steadily worsening market conditions that culminated in the global financial slump meant the project could not be released in 2008. In March this year, Keppel Land - which is part of the consortium developing the condo - confirmed the project's construction was deferred.

The other members of the consortium are Hongkong Land and Cheung Kong Holdings/ Hutchison Whampoa. Marina Bay Suites will be the second residential project on the Business and Financial Centre site, which the consortium bagged in a Singapore Government tender in 2005.

The first residential project - the 428-unit Marina Bay Residences (MBR) - sold out in three days in December 2006. The 55-storey development achieved an average price in the region of $1,850 psf, according to a statement by the developer at the time.

Many buyers flipped their units - in some cases within days of their purchase - for handsome gains as high as $1 million or even more for four-bedroom units that face Marina Bay.

MBR has one and two-bedroom units in addition to three and four-bedders. The project, along with the neighbouring completed development, The Sail @ Marina Bay, continues to make news in the secondary market. Sources say a 900 sq ft bay-front unit on the 50th floor at The Sail sold recently for about $3,000 psf, while a 30-odd storey four-bedder at MBR facing the bay fetched just above $2,700 psf.

Marina Bay Suites' preview will be held on the mezzanine level of One Raffles Quay.



THE SUITE LIFE
The 66-storey condo block has 221 units, comprising 218 three- or four-room apartments and three penthouses. Market watchers suggest average price could be slightly below $2,500 per sq ft

BT : HK clamps down on marketing of apartments

Business Times - 21 Nov 2009


HK clamps down on marketing of apartments

(Hong Kong)

HONG KONG plans to tighten restrictions on marketing of uncompleted apartments, responding to concerns that misleading sales tactics by property developers have contributed to a surge in prices this year.

The measures will require developers to provide more transparency about the square footage of apartments they are selling before completing, as well as information on floor numbering, said a statement from the Transport and Housing Bureau.

Chief Executive Donald Tsang told reporters yesterday about the rules, which were reached in an agreement with the Real Estate Developers Association of Hong Kong.

Hong Kong said developers will need to spell out the usable square footage inside the homes. It also will require that developers 'provide floor numbering information in a more prominent manner in the sales brochures'.

Hong Kong developers also will need to publicly disclose transactions of uncompleted apartments within five working days of signing a preliminary sales agreement, down from the current one month. -- Bloomberg

BT : HK faces asset bubble risk: central bank

Business Times - 21 Nov 2009


HK faces asset bubble risk: central bank

It attracted record HK$567.5 billion in fund inflows in the past 13 months

(Hong Kong)

HONG KONG'S central bank chief Norman Chan warned that asset prices in the city could climb sharply next year and disconnect from fundamentals, raising the risk of a bubble, and said surging capital inflows posed a dilemma for policymakers across Asia.

'With interest rates exceptionally low and with abundant liquidity around the world, Hong Kong faces the potential risk next year that asset prices may go up sharply and become increasingly disconnected from economic fundamentals,' Mr Chan, head of the Hong Kong Monetary Authority, said in an article on its website.

While other economies could raise interest rates in a bid to curb inflation in assets such as property, that tactic could backfire and attract even more outside investors who are hungry for higher yields, Mr Chan noted.

Hong Kong faces a different challenge. Its currency peg to the US dollar forces it to track monetary policy in the United States, which is expected to keep rates low for some time.

The financial centre, a key gateway to mainland China, also prides itself on its open economy and thus would be unlikely to look at capital controls at this stage, analysts said. However, more measures to curb property speculation may be in the offing.

Emerging markets such as Brazil and Taiwan have both announced capital controls in recent weeks to keep what they say are 'hot money' speculative flows from fuelling sharp gains in their currencies and destabilising their recovering economies.

Russia said on Thursday it would consider 'soft' measures to curb inflows, while Indonesia is also studying ways to control foreign investment in one-month central bank bonds.

Hong Kong attracted a record HK$567.5 billion (S$101.8 billion) in fund inflows between Oct 1 2008 and Nov 13, 2009, according to the HKMA. That has helped Hong Kong stock prices soar 57 per cent this year and property prices surge nearly 30 per cent.

Prices of luxury property in the city, however, have surged over 40 per cent this year as mainland Chinese have been snapping up apartments. A weak dollar and expectations that US, and therefore Hong Kong interest rates will stay low for some time are also encouraging foreigners to buy Hong Kong assets.

That prompted the HKMA last month to tighten mortgage lending rules, especially on luxury property, by capping the mortgage limit for property valued at US$2.6 million or more at 60 per cent, compared with 70 per cent previously. However, as many mainland Chinese buyers are flush with cash, that may not work.

The government has also said it is ready to release more land for sale to ward off a possible property bubble. This week it announced its first large-scale land sale in two years.

Mr Chan said it was not easy to say whether Hong Kong was now seeing an asset bubble but warned that values risked deviating from fundamentals.

Massive fund flows into the city's banking system have put intense upward pressure on the Hong Kong dollar, forcing the HKMA to intervene repeatedly to keep the currency within its trading band against the US dollar.

The HKMA has injected a record HK$620 billion since October 2008.

In nearby South Korea, officials have also warned of the risk of a housing bubble and have threatened to raise interest rates from a record low 2 per cent to calm prices. -- Reuters

Singapore recession is over

Singapore recession is over

Nov 20, 2009 - PropertyGuru.com.sg

Singapore declared yesterday that its recession was over, as its economy grew for the second straight quarter in the three months to September.

Official data showed that Singapore’s gross domestic product (GDP) increased 14.2 percent in the third quarter for its quarter-on-quarter annualized basis, following a 21.7 percent growth in the previous quarter.

“Effectively, the recession in Singapore is over,” said Ministry of Trade and Industry’s (MTI) Second Permanent Secretary, Ravi Menon, during a media briefing.

"Economies around the world are now turning the corner," he said. "Singapore has benefited from these global and regional trends."

The country’s year-on-year GDP increased 0.6 percent in the third quarter, as compared to the 3.3 percent contraction in the second quarter, said MTI in its Q3 economic survey.

In its forecast for 2010, MTI predicted a 3.0 to 5.0 percent economic growth, while maintaining the existing 2.0 to 2.5 percent projection of a contraction this year.

The trade-reliant economy of the country was the first in Asia to decline due to the recession last year, as the global downturn hit demands for its exports, especially from the US.

Inflation rate to increase in 2010

Inflation rate to increase in 2010

Nov 20, 2009 - PropertyGuru.com.sg

The inflation rate is expected to increase next year as the Housing Development Board (HDB) increased its property values.

Singapore revised its consumer price index (CPI) inflation forecast from 1 to 2 percent to 2.5 and 3.5 percent.

This is in connection with the recent revision of the Inland Revenue Authority (IRA)’s annual values for HDB properties, which factor into the Consumer Price Index (CPI) as imputed rents under the component of the accommodation cost.

Singapore’s Monetary Authority considered the revision as technical. The inflation forecast, excluding the cost of accommodation and private vehicles, remained at 1 to 2 percent.

“This core inflation should remain non-threatening in the absence of domestic price pressures, even as one-off factors push up headline inflation,” says Alvin Liew, an economist from Standard Chartered.

But some economists predict other risks may affect next year’s inflation rate.

Leong Wai Ho of Barclays Capital believes “the forecast adjustment may not have fully factored in the prospect of higher food prices,” due to the unfavourable economic conditions across Asia.

And although the government’s revision is technical, “the potential impact on inflation expectations cannot be completely ignored,” says economist Kit Wei Zheng of Citi.

TODAY ONLINE : 4 individuals, 7 projects win

4 individuals, 7 projects win
by Evelyn Choo evelynchoo@mediacorp.com.sg 05:55 AM Nov 20, 2009

SINGAPORE - Four outstanding designers and seven projects have won this year's President's Design Awards.

President S R Nathan gave out the annual awards - aimed at encouraging the local design industry to raise the bar in areas such as architecture and product design - at the Istana last night.

The four winners of the Designer of the Year award are Mr Koichiro Ikebuchi, director of Atelier Ikebuchi; Mr Chris Lee, founder and creative director of Asylum Creative; Mr Look Boon Gee, managing director of Look Architects; Mr Tham Khai Meng, worldwide creative director of Ogilvy and Mather.

The seven project and product designs, which received the Design of the Year awards for their national significance and creative value, are the Genexis Theatre at Fusionopolis by Arup and Woha; Paper Fold by Exit Design, Republic Polytechnic by DP Architects and Maki and Associates; The Met in Bangkok by Woha; Urband Origami by Nanyang Optical; the X-halo Breath Thermometer by Philips Design; and the Henderson Waves by RSP Architects Planners and Engineers and IJP Corporation.

The Henderson Waves bridge, which weaves seamlessly in and out of a canopy, brings park users closer to nature. Its eye-catching curves, spanning some 300m, connect Mount Faber and Telok Blangah Hill Park.

The design team behind this urban sculpture said it was inspired by a mathematical formula.

Dr Liu Thai-Ker, director of RSP Architects Planners and Engineers, said: "The mathematical formula is something very scientific, very technological. Nature is very organic, very primordial. The happy combination of these two things to this bridge, in my mind, tickles the minds of people.

"In the last decade, you can see the flair of a more varied, diverse environment - day and night, city and countryside - is now starting to emerge, including the creation of this bridge."

Also making waves in the local and international design circles is 39-year-old Chris Lee. The founder of homegrown creative company Asylum has made his mark with novel takes on a myriad of projects, from interior design, branding to managing a music record label.

"The majority of design work is not really exciting. I think it's where we find our niche client that's important. When I first started Asylum, I just thought there would be opportunities out there that do not fit into the typical design mould. So all our projects are very different, but I think it's great that way," said Mr Lee.

The DesignSingapore Council said this year's winners reflect an increased vibrancy in the design sector.

TODAY ONLINE : New scheme to deter errant agents

New scheme to deter errant agents
by Lin Yan Qin 05:55 AM Nov 20, 2009

SINGAPORE - Some overpromise on the school's facilities; others tell potential students they can work while they pursue their studies here - all in a bid to profit from a foreign student's move to study in Singapore.

And it is these practices which are the target of new criteria under the voluntary EduTrust scheme - the quality certification under the recently introduced Private Education Act. This puts the onus on private education institutions (PEIs) to ensure the student agents they engage to recruit foreign students for their schools, are not resorting to underhanded means to get business.

While the PEIs MediaCorp spoke to all declared themselves ready to meet the new requirements, some wonder if tougher measures are needed to arrest the problem of errant agents.

"You can have schools collaborating with agents just to make money," said a private language school instructor, who did not want to be named.

"If we don't make agents more accountable, they can still get away with making a quick buck, moving from one school to the next."

Under the new criteria - necessary for schools which want to recruit foreign students - PEIs have to meet certain requirements for evaluating and training agents before they can start recruiting.

These include signing contracts with the agents and ensuring they do not misrepresent the PEI or provide misleading information to students.

In addition, PEIs are required to collate feedback from students on the services provided by the agents as part of their monitoring process.

"Students who are over-reliant and have not done their due diligence may be misled by errant agents," said Mr Alan Phua, managing director for domestic operations at Informatics Education. He added that although some of the schools were already meeting some of the conditions, making them compulsory would force all schools to fall into line and improve the situation.

A serious case last year involved Columbia Business School, where some foreign students brought in by agents were told that they could work eight hours for $700 a month while attending three hours of classes each day. Less radical claims usually involve exaggerating the size of the school and its facilities.

"We have had agents (who) overpromise, telling foreign students (they) can work and study here, which is not true," said Technology, Management and Communications (TMC) Educational Group student recruiting and marketing director Lemmy Teo.

Agents can make about 10 to 20 per cent of the first-year course fees from PEIs for every student recruited - and the commission is higher from less well-known PEIs which rely more heavily on them to bring in the students.

"For agents that are in it for the money, they don't care about the quality of the school at all. They just recommend schools paying the highest commission," said student agent Yeo Eng Chiang.

For better assurance of quality, students are encouraged to consider PEIs with EduTrust certification, said the Education Ministry.

Also, prospective students seeking the services of recruitment agents are advised to check on the authenticity of the agents and to ascertain that they accurately represent the PEIs and courses they wish to enrol in. One resource they can refer to is the list of Singapore Education Specialists maintained by the Singapore Tourism Board.

Licensing could take regulatory efforts even further, schools felt.

"Licensing agents will make it easier for us as schools to keep track of what they do and tap on agents with the best track records," said TMC Educational Group's Dr Teo.

Mr Daniel Chu, president of the Association of Consultants for International Students (Singapore), agreed, saying that the present situation had too many loopholes for agents to get away with unscrupulous behaviour, even with the EduTrust new requirements.

"It's like why they decided to regulate property agents ... there's no stopping an errant agent from continuing to work as an agent somewhere else even if you sack him," said Mr Chu, whose company recruits foreign students.

The Education Ministry, he added, had not consulted the association when it drew up the Private Education Act. "I think we should have been part of the process, given that we play a crucial role in the industry," he said.

When asked, the Ministry said it had held two public consultation exercises before the Act was enacted. As to whether licensing was an option, it would only say that suggestions will be considered.

Though he was in favour of licensing, Dr Teo felt that getting schools to be accountable for their agents' actions was a good start to regulating the industry.

"Any school that wants to bring in foreign students will need to comply, and that will have a big impact on schools making sure they don't work with rogue agents, so there will definitely be some improvement," he said.

TODAY ONLINE : No deal for Laguna Park as marketing agent throws in the towel

No deal for Laguna Park as marketing agent throws in the towel

05:55 AM Nov 19, 2009

by Tan Hui Leng

SINGAPORE - The closely watched collective sale of Marine Parade condominium Laguna Park has been called off.

The en-bloc tender which started off at a hefty price tag of $1.2 billion and was later revised downwards to $967 million has seen no takers yet.

The marketing agent Credo Real Estate said that even if an offer comes in now it would be too late to crank up the entire process again in time for the Dec 19 deadline, when the collective sale agreement expires.

As a result, Credo has sent out letters to Laguna Park owners on Monday to inform them the collective sales process has ended.

"The sales committee has decided to call it a day," said marketing agent Credo's deputy managing director Tan Hong Boon.

Mr Tan noted that even if an offer is made now or if the sales committee obtains 80 per cent of votes in favour of the new price tag, there would not be enough time to carry out all the processes required before putting in a Strata Titles Board application.

Built in 1977, the seafront development raised eyebrows in September with its jaw-dropping $1.2-billion reserve price tag. The former HUDC project with 528 units sits on a massive plot of 677,493 square feet.

But analysts and observers have deemed it to be too expensive, second only to another former HUDC estate, Farrer Court, which was sold for $1.3388 billion in June 2007.

However, the first tender failed despite a bid for $1.73 billion from an Indonesian-owned locally-incorporated company, as a down payment could not be made in time.

Owners were then asked to consider selling their homes at $967 million - about 19 per cent lower than the initial asking price. The new price tag meant that the home owners stood to gain about $1.8 million for a typical unit instead of the previous range of $2.1 million to $2.3 million.

Mr Tan noted that developers' have become increasingly cautious amid the recent market cooling measures introduced by the Government. TAN HUI LENG

Copyright 2009 MediaCorp Pte Ltd | All Rights Reserved

ST : End the delay and start building

Nov 20, 2009

SPORTS HUB

End the delay and start building

PUSHING back the completion date of the Sports Hub repeatedly from 2010 to 2011, 2012 and now 2013 ('Sports Hub still has financing concerns', Nov 14) is disappointing.

It is unfair to the two unsuccessful bidders as the reason appears to be the Singapore Sports Hub consortium's failure to secure a bank loan to finance the project.

One main criterion in a tender is for a bidder to have firm financial muscle to complete a project.

Did the Singapore Sports Hub consortium make an unrealistic bid for the mega project, which now seems to point to a situation in which it cannot attract bank backing?

If so, the Government should step in and guarantee the loan or build the Sports Hub on its own.

A mega public project that is repeatedly delayed creates an adverse impression on foreign investors and undermines the confidence in the bidding system.

The Government can certainly afford to build the hub without having to resort to the public-private partnership formula.

If the Government can afford to spend $4.5 billion on the Jobs Credit scheme to subsidise employers' wage bills and $600 million to build the Esplanade, which attracted an audience of only 1.7 million last year, there is no reason not to spend less than $1.9 billion to construct the new Sports Hub, which will attract a larger audience and more tourists.

If the Government could afford spending $15 million to host the recent Asian Youth Games, $150 million on the Singapore F1 Grand Prix and $108 million more to host the Youth Olympic Games next year, it does not make sense to repeatedly stymie the start towards building a vital landmark like the Sports Hub.

Construction costs may rise further next year if the global economy picks up, and what then? More delays?

If it is the Government's mission to promote a sports culture, the construction of a new Sports Hub is a necessity, not a luxury.

The project was announced in 2005. How long more must Singaporeans wait for its completion?

I urge the Government to be less exacting in bean-counting the dollars and cents of the project and realise the sense in making Singaporeans justifiably happy and proud by building the hub.

Today : Possible office space shortage

Possible office space shortage

05:55 AM Nov 20, 2009

by Bloomberg

SINGAPORE - Despite the current glut in office space, Singapore may face a shortage in 2014 due to the lack of new supply.

Speaking at a real estate conference in Hong Kong yesterday, Mr Choy Chan Pong, the senior group director of land sales and administration at Singapore's Urban Redevelopment Authority, noted there will a short-term imbalance between demand and supply.

"We have seen 5 million sq ft of demand in 2001 and 3 million sq ft of demand annually in recent years," he said. "So, whatever supply we see now can be quickly absorbed."

However, there is concern that there is no new supply expected in 2014.

"In the last year or so, there have been no new projects," added Mr Choy. "We have developers telling us to better start releasing land for office space."

Copyright 2009 MediaCorp Pte Ltd | All Rights Reserved

BT Letters : URA should review its reserve list policy‏

Business Times - 20 Nov 2009

LETTER TO THE EDITOR
URA should review its reserve list policy

I AGREE with the commentary by Kalpana Rashiwala, 'Don't give up confirmed list card again' (BT, Nov 12).

Our Prime Minister and Minister for National Development have repeatedly stressed the importance of ensuring that residential property prices do not get out of sync with economic growth and that operating costs for business remain stable. The volatility in prices and rentals of residential and commercial properties in the last few years is an indication that the land sales programme needs to be tweaked.

I have written to URA a few times about the need to review the policy of putting sites in the reserve list as I strongly felt that the policy is seriously flawed. URA maintained that the reserve list policy is market-driven.

The property market is dominated by a few big players with large land banks. The motivation of the major developers is to maximise profit and value of their land bank and not to maintain price stability.

Does it make sense to increase supply and thus lower the value of their land bank by making a bid for the sites in the reserve list?

The way the property game is played is intriguing. Developers play with their cards close to their chests. URA not only plays with its cards on the table but also shows its next card. I have decided to bet on the winner and buy property stocks!

In my opinion, URA should scrap its policy of putting sites in the reserve list. URA, with its vast resources and with the help of other government agencies like EDB, should be able to estimate demand and supply of residential and commercial properties.

Based on projected supply and demand, URA should then put up sufficient sites for tender. If demand is weak and the tender price is below the threshold, URA can choose not to award the tender to the highest bidder.

URA should consider the impact of its policy on those who buy properties for their own use, particularly Singaporeans. Sharp hikes in prices result in massive transfer of wealth from buyers to banks and developers. It has also serious social ramifications - on population growth, savings for retirement, and leads to discontentment.

Singapore needs to attract companies, particularly MNCs, to locate their regional HQ in Singapore. Companies need a stable operating environment. Sharp hikes in rentals of offices and apartments will deter companies from setting up or expanding their operations in Singapore. They can also kill small companies operating on thin margins.

Of course, in theory, companies can move to cheaper locations. In reality, it is not so simple.

Philip Ng Lin Ai
Director
OCSC Global

Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.

ST : Demand v supply: A chicken-and-egg situation

Nov 20, 2009

Demand v supply: A chicken-and-egg situation

A LACK of public transport services can hamper development.

Dr Lim Wee Kiak, who is an MP from Sembawang GRC, cites the example of his ward.

'There is no direct bus service from Sembawang town to the eastern sector,' he said. 'And when residents request a service that goes to Changi Airport or the Changi area, the reply from the public transport operators is that they have done a survey and found that there is not enough demand for such a route.'

He likens it to a chicken-and-egg situation.

'It's because there are no buses going that direction, therefore residents are less likely to apply for a job there, or to apply for a school there for their children, or to go there for medical, recreational or whatever reason.'

Dr Lim, who is also head of the Transport Government Parliamentary Committee, believes transportation is a great facilitator for development.

'But if you argue that because there is not enough commuter demand, then seriously, which comes first?'

His views are echoed by other MPs, including Mr Charles Chong (Pasir Ris-Punggol GRC) and Mr Seah Kian Peng (Marine Parade GRC).

Mr Chong was a vocal advocate for the North-East Line's Buangkok station to be opened earlier, while Mr Seah was among those who pushed for Stage 3 of the Circle Line to start running - even though the other four stages are not completed.

They point to examples of how new MRT lines have accelerated the growth of new towns.

On that front, is Singapore's rail expansion plan - as ambitious as it is - enough? Can we build even more sooner?

Dr Lim said: 'To build faster will simply mean that we will suck up a lot of the construction industry's resources. We want to maintain a stable construction or civil engineering industry.

'We don't want to load them with a lot of projects, and then suddenly, no project after that. The current pace is reasonable.

'If there are certain projects that can be faster, I welcome it, but not at the expense of a boom-and-bust situation for the construction industry.'

He added that too much construction activity at one go will also contribute to road diversions and traffic snares.

'It has to be staged carefully,' he said.

BT : Slide in prime office rents levelling off

Business Times - 20 Nov 2009


Slide in prime office rents levelling off

In 1st 6 weeks of Q4, monthly office rents in Shenton fell 0.8%

By EMILYN YAP

FALLS in commercial rents in the Shenton, City Hall and Orchard areas are levelling off, going by mid-fourth quarter figures from Cushman & Wakefield.

The property consultancy found that in the first six weeks of Q4, monthly prime office rents in the Shenton market fell just 0.8 per cent to $5.99 per sq ft (psf) from $6.04 psf in Q3. This decline is much smaller than with the 10 per cent plunge between Q2 and Q3.

Rents held up relatively well even though the Shenton market had a double-digit vacancy rate as new space from buildings such as Mapletree Anson and 71 Robinson came onstream.

There is 'landlord reluctance to lower rents amid signs of improving office space absorption', Cushman & Wakefield said.

According to the Urban Redevelopment Authority last month, take-up of office space turned positive in Q3 after staying negative for three consecutive quarters.

In the City Hall area, monthly prime office rents are also flattening - they dipped just 0.4 per cent to $6.77 psf from $6.80 psf in Q3. This was a big improvement from the 5.4 per cent drop between Q2 and Q3.

Over at Orchard, prime office rents remained relatively stable at $6.89 psf, down marginally from $6.90 psf in Q3. Rents in this market fell 6.3 per cent between Q2 and Q3.

Both the City Hall and Orchard markets have low single-digit office vacancy rates. Cushman & Wakefield research director Ang Choon Beng said lease renewal in these areas has been fairly stable. Also, there is a relative lack of new space, unlike in the Shenton and Raffles Place markets.

Office rents in Raffles Place have yet to flatten out like those in the Shenton, City Hall and Orchard areas. Monthly Raffles Place Grade A rents fell 3.5 per cent to $7.85 psf, from $8.13 psf in Q3. Monthly prime rents there also dropped 2.6 per cent to $7.60 psf, from $7.80 psf in Q3.

Nevertheless, commercial landlords in Raffles Place can take comfort from the fact that the rental declines are smaller than those between Q2 and Q3.

Mr Ang expects prime rents to 'remain soft' for the rest of this year and the first half of 2010. 'We think the influx of 2.2 million sq ft of new prime office space in 2010 needs to be well absorbed before we can see a bottoming of prime office rents,' he said.

In a separate report, Jones Lang LaSalle said: 'In markets with a large supply overhang, such as Singapore, there is likely to be continued upward pressure on incentives as owners seek to secure tenants.'

Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.



Looking up: According to URA last month, take-up of office space turned positive in Q3 after staying negative for three consecutive quarters