BT : All set for the future

Business Times - 24 Nov 2009

INDUSTRIAL SPACE
All set for the future

Despite the downturn, JTC is forging ahead with its new blueprint for an innovative industrial landscape

THE economic downturn curbed many organisation's appetite for growth and risk in the past year. But taking a step back was not an option for JTC Corporation, the agency responsible for spearheading Singapore's industrial development.

JTC is forging ahead with its blueprint for the future - and has a new chief executive to lead.

'For most, staying resilient in the wake of an economic crisis would mean taking measures to reduce costs and holding out until the storm blows over,' JTC said in its fifth Periscope magazine for 2009.

'JTC has done that and beyond. We charted new business territories targeted as future growth industries, while maintaining focus on investing in land infrastructure so Singapore will be ready to ride the next wave when the upturn comes.'

The agency's new chief executive Manohar Khiatani took the helm on Oct 1 - and is ready to take JTC to the next level. Mr Khiatani, who was previously deputy managing director at the Economic Development Board, has more than 20 years' experience in industrial development.

One of his priorities at JTC is to ensure the organisation stays close to its customers and understands their needs, he says in the foreword to Periscope. JTC is now better-positioned for this, having gone through an internal reorganisation recently.

Its business units used to be grouped according to development types, such as industrial parks and specialised parks. But since April, they have been arranged around key clusters such as electronics, info-communication, media, aerospace, marine, clean technology, bio-medicine, chemicals, engineering and logistics.

The reorganisation came after a strategic review, which began last year, to position JTC for the future. The review identified three strategic thrusts, one of which is to focus on economic clusters.

'This allows us to better support you through targeted planning and infrastructural solutions customised for the individual clusters,' Mr Khiatani said, addressing JTC's customers. 'You will have a single point of contact for all your needs and JTC officers will be in a better position to appreciate cluster trends and customer requirements.'

Besides internal restructuring, JTC continued to develop various large-scale cutting-edge projects. The strategic review also highlighted the need for the agency to continue investing in innovation and to optimise long-term land resources.

Projects include Seletar Aero+sPace (SAP), a 300 hectare centre for aerospace maintenance, repair and overhaul services; aircraft systems and components design and production; business and general aviation activity; and aviation research and education. Several aerospace players have signed up for space at SAP, which is expected to create more than 10,000 jobs when it is completed in 2018.

Catering to the budding digital media industry, JTC is also involved in developing the 19 ha Mediapolis at one-north. Collaborating with the Media Development Authority, Infocomm Development Authority and EDB, JTC will help build a centre with interactive digital media research labs, sound stages, media schools and other facilities.

Work on the Jurong Rock Cavern is also progressing. The underground cavern, measuring 27 metres high, 20 metres wide and 300 metres long, will provide secure storage for liquid hydrocarbons such as crude oil and naphtha when it is ready. The first phase will create 1.47 million cubic metres of storage when completed in 2014, and the planned second phase could generate another 1.32 million cubic metres of space.

Underground caverns are particularly functional in land-scarce Singapore - and JTC is coming up with more uses for them. It is exploring the possibility of building an underground science city at Kent Ridge and an underground warehouse-cum-logistics facility at Tanjong Kling.

Out at sea even, JTC is studying the creation of Very Large Floating Structures to provide storage capacity offshore.

'We are looking at creating solutions that will not only help us optimise land use, but also create a unique and differentiating advantage for industry clusters in Singapore,' Mr Khiatani told JTC's customers. 'We look forward to closely working with you to jointly generate and develop new ideas which will ensure that we are 'future-ready'.'

Mr Khiatani added that JTC is working on creating a 'borderless culture' internally and with other government agencies. 'This will enable us better understand and provide seamless solutions for you,' he said.

With its blueprint for the future laid out, JTC is all set for better performance ahead. 'With a strong foundation, we are confident of accelerated growth once global demand builds up again,' it said.





Cluster approach: Catering to the budding digital media industry, JTC is involved in developing the 19 ha Mediapolis (above) at one-north




Out at sea, it is studying the creation of Very Large Floating Structures to provide storage capacity offshore



On strong foundation: One of Mr Khiatani's priorities at JTC is to ensure the organisation stays close to its customers and understands their needs



Artist's impression of the component manufacturing & MRO facility at Seletar Aero+sPace




Underground caverns are particularly functional in land-scarce Singapore - and JTC is coming up with more uses for them

BT : Upgraders sidelined as home prices soar: DTZ

Business Times - 24 Nov 2009


Upgraders sidelined as home prices soar: DTZ

But private home dwellers enjoyed the party in Q3, buying more and paying more

By EMILYN YAP

(SINGAPORE) HDB upgraders account for a shrinking share of private home transactions as property prices rise and mass-market launches taper off.

In contrast, private housing dwellers are buying more property as economic sentiment improves, keeping the real estate market afloat.

According to property consultancy DTZ, buyers with HDB addresses picked up 4,065 private homes in the third quarter. This was 73 units or 1.8 per cent more than in the preceding quarter.

Though still rising in number, these deals are making up a smaller proportion of all sales. They accounted for 37 per cent of private home transactions in Q3, down from 44 per cent in Q2 and the recent peak of 56 per cent in Q1.

This reflects 'the diminishing buying power of HDB upgraders' as property prices rise, DTZ says. It notes that prices of private resale homes have climbed 9-22 per cent from their lows in Q1.

ERA Asia-Pacific associate director Eugene Lim points out that there were fewer mass-market launches in Q3. Encouraged by rising resale flat prices, HDB upgraders had gone for these more affordable projects in the early part of the year, reviving the property market.

But in October, the pricier Core Central Region (CCR) trumped other parts of the island in terms of the number of new private homes launched and sold. Developers pushed out 339 units in CCR, surpassing 40 in the Rest of Central Region (RCR) and 187 in the Outside Central Region (OCR).

Developers also sold 311 units in CCR, compared with 249 in RCR and 251 in OCR.

The buying mood may be wearing thin among HDB upgraders, but it is still strong among private housing dwellers. DTZ found that buyers with private addresses picked up 6,837 units in Q3 - 1,846 units or 37 per cent up from the previous quarter.

These deals accounted for 63 per cent of all transactions in Q3, rising from 56 per cent in Q2 and 44 per cent in Q1.

Buyers with private addresses 'are more excited now', says Jones Lang LaSalle's (JLL) head of South-east Asia research, Chua Yang Liang. This is the result of improving liquidity, buoyant stock markets and rosier economic sentiment, he says.

Not only are private housing dwellers buying more units, they are also paying more. According to DTZ, 66 per cent of them bought units that cost more than $1 million in Q3.

On the other hand, HDB upgraders had smaller budgets. The bulk of them - or 30 per cent - went for homes that cost between $600,001 and $800,000. Just 33 per cent of them paid more than $1 million.

Some 90 per cent of transactions involving buyers with HDB addresses were for homes outside Districts 9, 10 and 11. Many of them were attracted to The Gale in the Upper Changi area, Trevista in Toa Payoh, and Parc Imperial in Pasir Panjang.

Separately, analysing transactions in Q3 according to buyers' nationalities, DTZ found more foreigners were acquiring nests here.

There were 1,069 private home transactions involving foreigners, up 52 per cent from 703 in Q2 and more than six times 174 in Q1.

These deals accounted for 10 per cent of all transactions in Q3, up from 8 per cent in Q2. During the 2007 boom, this figure hit 13 per cent.

Singapore permanent residents (PRs) also became more active in the property market in Q3.

They accounted for 1,404 private home transactions, 27 per cent more than the 1,104 in Q2.

Among foreigners and PRs, Malaysians bought the most homes, accounting for 26 per cent of transactions. Indonesians took second place with a 19 per cent share, followed by mainland Chinese and Indians, with 14 and 12 per cent shares respectively.

Companies are also ramping up property purchases.

DTZ says the number of corporate transactions jumped more than four times to 225 in Q3.

BT : Median resale prices for exec condos soar 63%

Business Times - 24 Nov 2009


Median resale prices for exec condos soar 63%

Caveats lodged for ECs in October 2009 show prices at $519 psf, says CBRE

By UMA SHANKARI

(SINGAPORE) THE median resale prices of executive condominiums (ECs) have increased 63 per cent in the past two years, riding on the bull run in the private residential market, a report says.

Caveats lodged for ECs in the resale market in October 2009 showed prices at $519 per sq ft (psf), says CB Richard Ellis (CBRE). This is 63 per cent higher than at the bottom of the market in Q3 2006, when resale ECs were sold at $319 psf.

CBRE's analysis of caveats lodged between 2004 and early 2007 shows median EC prices in the resale market fluctuated within the $300-400 psf band, bottoming out at $319 psf in Q3 2006.

ECs are a hybrid of private and public housing. They are similar to private condominiums in terms of facilities and amenities, but eligibility requirements are almost similar to those for new HDB flats.

The EC was first introduced in 1996 when the property bull run caused new private condo prices to soar to above $600 psf.

The last EC launched was La Casa in May 2005. It was completed in early 2008. Since then no new EC projects have been launched. Since the second half of 2007, when the private residential market was peaking again, the government has placed up to four EC sites on the reserve list, but there have been no takers.

But in the recently announced government land sales programme for the first half of 2010, the government placed two EC sites on the confirmed list and three others on the reserve list, which is 'a clear signal that the government wants to provide the EC as an alternative housing choice for homebuyers from next year', says CBRE.

Currently, a 14 per cent price gap exists between the median prices of ECs and mass-market non-landed projects in the resale market, CBRE says.

'Our analysis shows that buyers who bought new ECs at various periods from 1996 when EC prices hovered at around $400 psf should benefit from the price appreciation in the past two years,' said Li Hiaw Ho, executive director of CBRE Research. 'The residential market run-up of 2007 lifted new EC prices to above the $500 psf mark.'

Going forward, CBRE says that if the price gap between the next new EC project and a new private non-landed leasehold project in the same location is attractive enough, buyer demand for EC developments will surely return. The firms expects the tender bids for the two EC sites to be offered in January 2010 on the confirmed list - Buangkok Drive/ Compassvale Bow and Yishun Avenue 11 - will be a function of developers' confidence in the EC market and their pricing strategy.

ST : Why raise property tax

Nov 22, 2009
Why raise property tax
By Sue-Ann Chia SENIOR POLITICAL CORRESPONDENT



Mr Lui pointed out that the Government is taking steps to soften the impact of the tax rise early next year. -- ST PHOTO: CHEW SENG KIM

THE property tax of HDB flats is being raised next year partly to avoid having to introduce a bigger increase later should home prices continue to rise, said Acting Minister for Information, Communications and the Arts Lui Tuck Yew.

He gave the reason on Sunday when he was asked, at a dialogue with Aljunied-Hougang residents, whether the Government could have delayed it since the recession has just started to ease.

Noting that the adjustment had been delayed once, in 2008, Rear-Admiral (NS) Lui said: 'The problem is the longer you defer it, the larger the increase will be in the property taxes if HDB prices continues to go up.'

He also pointed out that the Government is taking steps to soften the impact of the tax rise early next year.

It is giving HDB homeowners a one-off rebate, set at 50 per cent of the property tax payable and capped at $120. This means low-income families with homes whose property tax is $50 and less will not have to pay any such tax next year.

Singapore homeowners pay a tax set at 10 per cent of the property's value, which has been rising as HDB flat prices continue to climb despite the downturn.

ST : Offset for corporate tax fall

Nov 23, 2009
Offset for corporate tax fall
By Alvin Foo

A PROJECTED fall in government revenue from a corporate tax cut here will be more than offset by steps taken in recent years to raise revenue from other sources, said Second Minister for Finance and Transport Lim Hwee Hua on Monday.

Her comments coincided with the passing of the Income Tax (Amendment) Bill on Monday, which gave effect to pro-business tax measures announced during the Budget speech in January.

Among other things, the new law exempts companies from paying tax on foreign-sourced income for one year, and allows businesses to claim losses against three previous years of income instead of just one.

It also cuts the corporate tax rate from 18 per cent to 17 per cent, bringing Singapore's rate closer to that of key rival economy Hong Kong, where the rate is 16.5 per cent.

Mrs Lim, who is also Minister in the Prime Minister's Office, said this reduction will cost the Government between $400 million and $500 million a year.

But she assured members of the House that earlier steps - including the raising of the goods and services tax (GST) from 5 per cent to 7 per cent in 2007 - will more than make up for this fall.

ST : PRs own under 5% of flats

Nov 23, 2009
PRs own under 5% of flats
By Jeremy Au Yong



Mr Mah said PRs were already subjected to the same rules as Singaporeans, and that includes the Ethnic Integration Policy (EIP). -- PHOTO: ZAOBAO

PERMANENT residents occupy less than 5 per cent of all Housing Board flats, and are living in estates across the island.

Nevertheless, the Government will keep an eye on the situation to ensure that no PR and foreigner enclaves develop.

National Development Minister Mah Bow Tan said this when responding to Dr Lim Wee Kiak (Sembawang GRC). Dr Lim wanted to know the distribution of PRs across Housing Board estates, as well as whether the Government would consider expanding the current ethnic quota scheme to include PRs.

Mr Mah said PRs were already subjected to the same rules as Singaporeans, and that includes the Ethnic Integration Policy (EIP).

'The EIP was introduced to achieve a healthy racial mix in HDB estates and prevent the formation of ethnic enclaves, regardless of whether they are citizens or PRs,' he said. As of June 30 this year, PRs owned 42,800 flats - or just 4.9 per cent of the nearly 900,000 HDB flats islandwide.

While public housing policies are for the benefit of Singaporeans, Mr Mah stressed that PRs also needed a place to live: 'PR families are not eligible for housing subsidies that Singaporeans enjoy. They are not allowed to buy a new flat from HDB or enjoy any housing grant. However, PRs need to have a home in Singapore. Therefore, they are allowed to buy properties from the open market, including HDB resale flats.'

ST : 12,000 homes over 5 years

Nov 23, 2009
12,000 homes over 5 years
By Jessica Cheam



Mr Mah noted that HDB had responded quickly to the spike in demand for flats this year by upping its planned flat supply of 6,000 for the year initially, to offering 13,500 flats in total for 2009. -- PHOTO: BT

THE Housing Board (HDB) will offer an estimated 10,000 to 12,000 flats yearly for the next five years to meet growing demand and ensure sufficient housing, said National Development Minister Mah Bow Tan on Monday.

But this number is a projection, he emphasised. 'What actually happens a few years down the road is unknown. Also, demand is not constant; it varies from year to year, depending on economic and other factors,' he said.

This medium-term projection serves as a guide for HDB's build-to-order (BTO) scheme, which is flexible, transparent and responsive to actual demand, said Mr Mah.

Mr Mah was addressing a range of housing issues in Parliament on Monday.

He noted that HDB had responded quickly to the spike in demand for flats this year by upping its planned flat supply of 6,000 for the year initially, to offering 13,500 flats in total for 2009.

For the first time, Mr Mah also revealed on Monday that although HDB's policy is not to deliberately have a buffer of ready flats for home buyers, it does have a stock of ready flats making up about 10 per cent of flat supply.

ST : Cool, not crash property market

Nov 23, 2009
Cool, not crash property market
By Jessica Cheam



Such schemes included the Interest Absorption Scheme and the Interest-Only Loans, which allowed home buyers to defer the bulk of the payment on their home purchase. -- ST PHOTO: DESMOND FOO

MEASURES to cool the property market appear to have had some effect in tempering market exuberance for private homes, said National Development Minister Mah Bow Tan on Monday.

But the government's intention is to 'cool the market, not crash it', said Mr Mah, who did not rule out restoring some of the disallowed schemes in the future.

Such schemes included the Interest Absorption Scheme and the Interest-Only Loans, which allowed home buyers to defer the bulk of the payment on their home purchase.

These schemes were banned with immediate effect in September, when the Government also announced the resumption of the Government Land Sales (GLS) programme to put supply on the market.

Mr Mah noted in Parliament on Monday that latest figures from the Urban Redevelopment Authority (URA) show that sales of private homes by developers fell month-on-month by 37 per cent in September, and a further 29 per cent in October.

'The Government will continue to monitor the property market closely and assess the market's response to the measures introduced before deciding whether further measures are necessary to promote a stable and sustainable property market,' he said.

ST l Interest rates to stay low

Nov 23, 2009
Interest rates to stay low
Annual average savings rate this year likely to fall below last year's 0.22%
By Francis Chan



The rates of savings accounts are unlikely to rise - at least in the next six months, experts say. -- ST PHOTO: KUA CHEE SIONG

SAVINGS accounts have seen miserly interest rates of below 1 per cent per annum since 2001 - and people hoping for better yields ahead will be disappointed.

The rates are unlikely to rise - at least in the next six months, experts say.

Monthly average savings rates have been on a downward trend from January to last month. This means the annual average rate for this year is likely to dip below last year's already paltry 0.22 per cent.

Rubbing salt into savers' wounds - inflation is likely to rise next year.

Based on figures from 10 banks and financial institutions compiled by the Monetary Authority of Singapore (MAS), savings accounts earned an average of 0.22 per cent a year in January, before holding at just 0.16 per cent from July to last month.

This is a far cry from the 1.28 per cent savers used to get in 2000, which was the last time interest rates exceeded 1 per cent.

ST : Early boost to Sentosa IR

Nov 23, 2009
Early boost to Sentosa IR



The biggest event, the 11th World Chinese Entrepreneurs Convention, will see 4,000 business leaders gather at the Sentosa integrated resort. -- PHOTO: RESORTS WORLD SENTOSA

IN AN early boost ahead of its opening, Resorts World at Sentosa (RWS) has secured 30 bookings for events to be hosted at the integrated resort starting next year.

The biggest event, the 11th World Chinese Entrepreneurs Convention, will see 4,000 business leaders gather at the Sentosa integrated resort for a corporate pow-wow from Oct 5 to 7.

Securing such business events, known in the industry as meetings, incentives, conventions and exhibitions (Mice), are important as business travellers are bigger spenders and a target group that Singapore Tourism Board wishes to grow.

RWS director of Mice Elena Arabadjieva, said: "As the world's economy recovers, we are getting strong interest from organisers for events from 2010 to as far ahead as 2014 and that gives us great confidence in Singapore's meetings and incentive travel sector in the mid to long term."

Events secured by RWS include the Asia Pacific Retailers Convention in 2011 and the 10th Asia Pacific Congress of Endoscopic Surgery in 2011. Besides inking the 30 contracts, the IR is also in talks with another 150 organisers for events up to 2015.

Marina Bay Sands, too, has been signing up Mice events. The events being lined include the 3rd Sea Asia Conference and Exhibition in 2011, the Industrial Fabrics Association International Expo Asia in 2011 and the 77th UFI Congress by the Global Association of the Exhibition Industry next year.

BT : Curbs on property speculation 'have had some effect': Mah Bow Tan

Business Times - 23 Nov 2009


Curbs on property speculation 'have had some effect': Mah Bow Tan

By EMILYN YAP

The anti-speculative measures implemented by the government in September to cool the property market have worked, said National Development Minister Mah Bow Tan in Parliament on Monday.

'These measures appear to have had some effect in tempering the exuberance in the private housing market,' he noted.

The government on September 14 announced a package of measures to prevent a property bubble from forming. One of these measures was the removal of the Interest Absorption Scheme and the Interest-Only Loans (IOL).

Another was the resumption of land sales on the Confirmed List for the first half of 2010.

BT : HDB does not price flats on cost plus profit basis: Mah Bow Tan

Business Times - 23 Nov 2009


HDB does not price flats on cost plus profit basis: Mah Bow Tan

By EMILYN YAP

The Housing and Development Board (HDB) does not price its flats on a cost-plus-profit basis, but on 'market price less a generous discount', said National Development Minister Mah Bow Tan in Parliament on Monday.

He shared that the total cost of building flats varies depending on when, where and what HDB builds. The cost includes the cost of land as well as the constuction costs of flats and ancillary services. The total cost can vary from $230,000 for a 3-room flat in Punggol to $530,000 for a 5-room flat in Tiong Bahru.

'Together with the Additional Housing Grant which varies from $5,000 -$40,000... on average the subsidies amount to about 20 per cent of the market price for 4-room flats. It will be even more for smaller flats. This is the subsidy given to all first-time buyers, to keep the flats affordable.'

ST : Bugis office block sold to private school

Nov 23, 2009

Bugis office block sold to private school

By Joyce Teo



An artist's impression of the ERC campus in North Bridge Road, which will house state-of-the-art classrooms, a library and cafes. -- PHOTO: ERC INSTITUTE

A DULL-LOOKING office block just behind Bugis Junction has been sold and will be renovated for use as a campus for private school ERC Institute.

ERC Holdings, which owns the school, bought nearly all of the 999-year leasehold building in North Bridge Road for

$46 million earlier this month from City Developments. With 60 units, or 38,534 sq ft, ERC now owns 91.3 per cent of the strata-titled development.

It plans to spend between $3.5 million and $5 million to renovate the six-storey block, said ERC Holdings chief executive Andy Ong.

The price, which works out to about $1,194 per sq ft based on strata area, is considered fair as such space is hard to find in the city, said Mr Shaun Poh of DTZ, who sealed the deal. Mr Ong said he took 15 months to find the space.

Currently, ERC Institute, which has 2,000 students, operates out of two sites: a campus in River Valley Road and an office unit in Robinson Centre. Its most popular programme covers entrepreneurship.

Come September next year, when its long-term lease at Robinson Centre ends, ERC Holdings will give up that space and move to the Bugis building, tentatively named ERC Complex.

'By 2012, we hope to get 6,000 to 8,000 students, of which 3,000 to 4,000 will be in Singapore,' said Mr Ong.

ERC has started operations elsewhere in the region, including in Indonesia.

After the renovation, the new building will offer better facilities than the existing campuses, said Mr Ong.

It will have at least two cafes serving a variety of cuisines, a library, a student rest area and a recreation area.

About 30 to 40 state-of-the-art classrooms will be spread over three levels.

One floor will be reserved for the corporate office of ERC Holdings.

The ground floor has retail space, currently taken by a hair salon and a noodle shop. This Fashion has just moved out.

Nearby, another small office block, Premier Centre, could also be transformed. Budget hotel operator Fragrance Group bought it in July for $18 million, or $1,076 per sq ft, from a Hong Leong Group unit, and might turn it into a hotel.

ST : Timing of HDB tax hike 'avoids bigger increases later'

Nov 23, 2009

Timing of HDB tax hike 'avoids bigger increases later'

By Sue-Ann Chia, Senior Political Correspondent

THE property tax of HDB flats is being raised next year partly to avoid having to introduce a bigger increase later should home prices continue to rise, said Acting Minister for Information, Communications and the Arts Lui Tuck Yew.

He gave the reason yesterday, after being asked at a dialogue with Aljunied-Hougang residents whether the Government could delay it, as the recession has just started to ease.

Noting that the adjustment had been delayed once, Rear-Admiral (NS) Lui said: 'The problem is, the longer you defer it, the larger the increase will be...if HDB prices continue to go up.'

He also pointed out that the Government is taking steps to soften the impact of the tax rise early next year. It is giving HDB homeowners a one-off rebate, set at 50per cent of the property tax payable and capped at $120. This means low-income families with homes whose property tax is $50 and less will not have to pay any such tax next year.

The property tax rate is 10 per cent of a property's annual value, although homes that are owner-occupied enjoy a concessionary 4 per cent tax rate. The annual value has increased with rising property prices.

HDB resale prices have risen a hefty 31.2per cent in the past two years, and a further 3.8per cent in the first nine months of this year.

Hence, the Government has decided to raise the property tax 'to reflect the prevailing movement of HDB prices and also to give rebates', said Rear-Adm Lui.

He also addressed residents' concerns about the affordability of HDB flats.

Noting that existing owners gain from their asset's increasing value, he said: 'If they eventually need to sell...(it) releases more money for their old age.'

But the anxieties of those planning to buy a flat are not lost on him. He assured them that an HDB flat would not be beyond their means, saying that the Ministry of National Development has matched the prices of different flat types against the salaries of different groups of people in the population. 'It tries to make sure that for every group, there is a flat type that meets their needs,' he said.

In doing so, it aims for homeowners to pay no more than 30per cent of their salary every month towards their home loan.

More than 75per cent of HDB dwellers use only the contributions to their CPF savings to make their monthly loan payments, he said, urging residents to buy what is affordable.

BT : Subsales in past 2 quarters among highest since 1995

Business Times - 23 Nov 2009


Subsales in past 2 quarters among highest since 1995

Completion of large condo projects near MRT stations helps to boost demand

By KALPANA RASHIWALA

(SINGAPORE) The number of subsales in the second and third quarters of this year were among the six highest quarterly figures since 1995 - reflecting the build-up in subsale activity that led to the government announcing measures on Sept 14 to cool property prices.

The completion of several condos this year - many of them large projects, close to MRT stations or near new projects launched this year - helped to boost their demand in the subsale market.

As well, the rise in private home prices this year has given sellers an incentive to let go units bought earlier.

Savills Singapore's analysis of caveats captured by URA's Realis system as at Nov 17 showed that 1,249 caveats were lodged for subsales of private apartments and condos in Q3 this year, a tad below the 1,300 caveats in Q2.

Since 1995 (when the Realis caveats database was first set up), there had been four other quarters when subsales of condos/apart- ments exceeded the 1,000 mark - during the 1996 and 2007 property market highs.

In Q2 and Q3 2007, subsales hit 1,857 and 1,534 respectively; in Q1 and Q2 1996, subsales were 1,238 and 1,650.

Projects that topped the subsales charts in Q2 and Q3 this year had generally been launched a few years ago and many of them were completed this year. Examples include Rivergate in the Robertson Quay area, Casa Merah near Tanah Merah MRT Station, City Square Residences along Kitchener Road, The Metropolitan Condo in the Alexandra Road area, The Centris in Jurong and Botannia in West Coast.

Projects that have been recently completed or which are nearing completion offer added appeal to potential buyers keen to move in or rent them out soon.

Giving a seller's perspective, Knight Frank chairman Tan Tiong Cheng said: 'If they bought their properties with the intention of leasing them out and if they find today's rental market challenging, it may make sense to simply cash out, especially if they can make a profit.'

Savills' lists of the most popular projects in the subsale market in Q2 and Q3 2009 did not include developments launched this year, with the exception of The Quartz, which was relaunched this year.

'Those who bought projects launched this year would find it harder to flip because their entry price may already be very high,' says Lee Hon Kiun, owner of Landmark Property Advisers.

Subsales refer to secondary market transactions in projects that have yet to receive Certificate of Statutory Completion. This can take place three to 12 months after Temporary Occupation Permit (TOP).

While subsales are often tracked as a gauge of speculative activity, Mr Lee hesitates to equate the increase in subsales in Q2 and Q3 this year with speculation. 'Those who bought two to three years ago and sold this year... in the Singapore context, that's a very long time,' he chuckled. 'Speculation is when people buy a property and flip it within six months to make a profit,' he added.

Savills senior manager (research and consultancy) Christine Sun said new property launches by developers also fuelled subsale interest for nearby projects released a few years ago. For example, the release of Alexis, Ascentia Sky and Interlace in the Alexandra Road area could have helped subsales at The Metropolitan Condo nearby, which was completed this year.

Agreeing, Landmark's Mr Lee said buyers can pick up more attractive buys in the subsale market for earlier launched projects than at new launches in the same area.

A developer said: 'Personally, I advise friends to buy in subsale projects as prices are discounted to new launches.'

HDB upgraders bought 39 per cent of the 1,300 private apartments/condos transacted in the subsale market in Q2 this year, although the figure has slipped to 36.6 per cent in Q3 and 33.7 per cent in October. Nonetheless, these figures are higher than HDB residents' 20.8 and 23.1 per cent share of subsale purchases during the property bull market in Q2 and Q3 2007.

Analysts say the jump in HDB resale flat prices has narrowed the price gap with private housing and made it easier for HDB dwellers to upgrade to a private home; and the subsale market offers a ready supply of recently completed homes that are ready for occupation.

Secondly, existing HDB flat dwellers looking for a bigger home may be deterred from picking one up from the HDB resale market because of high prevailing cash over valuation premiums. 'If they fork out a little more cash, they could foot the downpayment for a private condo in the subsale market instead,' said the developer.

Savills also provided monthly subsales data for non-landed private homes, which showed that for this year, the figure peaked at 596 in June.

It has since declined to 483 in July, 441 in August, 325 in Sept and just 184 in October - as at Nov 17 when Savills extracted the Realis data. It also observed an increase in the number of foreigners (including permanent residents) snapping up condos and apartments in the subsale market. Their share of purchases in the subsale market rose to about 31 per cent in Q3 this year and 33 per cent in October - from 21 per cent in Q1 2009.

Between 2007 and the first 10 months of 2009, Indonesians were the top buyers in the subsale market, followed by Malaysians, mainland Chinese, Indians and UK nationals.

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

ST LETTER : Cost cap on lift upgrading

Nov 22, 2009

YOUR LETTERS

Cost cap on lift upgrading

I refer to the letter by Mr Michael Yeo, 'Upgrade lifts in ineligible blocks too' (Nov 8).

The Government has set a cost cap of $30,000 for each benefiting unit as an eligibility criterion for the Lift Upgrading Programme (LUP).� The purpose of the cost cap is to maximise the use of the LUP budget, to allow as many residents as possible to benefit from the programme.

This cost cap is necessary because the cost of lift upgrading can be very high, and it is not realistic to provide lift upgrading at any cost. In some cases, the cost can even exceed $100,000 per benefiting unit, or a substantial proportion of the value of the flat.

When the LUP was first introduced in 2001, about 1,000 blocks exceeded the LUP cost cap and were not eligible for the programme. Over the years, HDB has introduced innovative and cost-effective lift solutions so that more blocks can be eligible for LUP.

Today, we have reduced the number of ineligible blocks to just over 200. The HDB will continue to actively explore alternative cost-effective solutions so that more blocks can become eligible for LUP.

HDB is mindful of the need to keep the cost of LUP low so that more lifts can qualify for the programme.

We have reduced the extent of finishes at lift lobbies. We have also made use of bulk procurement arrangements to procure lifts and building contracts to reap economies of scale.

Chee Kheng Chye
Deputy director (Upgrading Programmes Management)
Housing & Development Board

ST : More condos let you walk on air

Nov 22, 2009

More condos let you walk on air

Developers are tempting buyers with skybridges which can house gyms and gardens or host parties

By Terrence Voon




One Shenton, an upcoming condo development, will feature three skybridges connecting two towers. -- PHOTO: CITY DEVELOPMENTS LIMITED

The sky is now a playground for condo residents.

More developers are touting skybridges in new projects, tempting buyers with the promise of greenery, meals and even workouts in mid-air.

These gravity-defying structures, made famous by HDB's Pinnacle@Duxton, will pop up in Lincoln Suites, One Shenton, Sky@eleven and Silversea.

The Quartz near Buangkok MRT station, completed this year, has one too.

One Shenton has three skybridges connecting a 50-storey skyscraper to a smaller 43-storey tower.

Two of the skybridges are part of private residential units, which can be used for dinner parties, while the third, on the 24th floor, features a gym which can be used by all residents.

Said Mr Anthony Chia, deputy general manager of design and projects for City Developments: 'It's an experience akin to the excitement on the Petronas Towers viewing gallery or crossing the Golden Gate Bridge in San Francisco.'

Lincoln Suites, a recently launched offering in Novena, also boasts a gym in the sky. Built using tempered glass and steel, the skybridge on the 24th level has a see-through floor so residents can get a workout with the world literally at their feet.

In the case of Silversea in Marine Parade, the aim was to create a common space on the 11th floor for residents to mingle. 'The design rationale was to link each pair of towers with bridges so that an uncluttered, column-free common space for the residents is created,' said Mr Chng Kiong Huat, executive director of development and planning at Far East Organization.

At Pinnacle@Duxton, 12 skybridges link seven residential blocks on the 50th and 26th floors, forming continuous sky gardens that offer a green sanctuary for residents.

A check with the Urban Redevelopment Authority (URA) and the Building and Construction Authority showed that there are no specific rules that govern the construction of skybridges in high-rise buildings.

Developers are given free rein, as long as they conform to standard building design codes.

But these lofty structures do not come cheap.

Developers estimate that it can cost more than $200,000 to build one, depending on the materials used and design complexity.

Fully covered skybridges are considered part of a condominium's gross floor area, which is pre-determined by the URA.

This means that the floor area occupied by a skybridge could have been used for another apartment unit, giving developers additional income.

At Lincoln Suites, the 32 sq m taken up by the skybridge could have been used for a $700,000 studio apartment. 'It's an extra cost but we wanted something iconic that would be the talk of the town,' said Mr Francis Koh, CEO and group managing director of Koh Brothers, one of four developers involved in the project.

'Buyers today are more sophisticated, so it is important to give them something extra.'

Developers said buyers are swooning over skybridges, and plan to build more.

Even public housing is reaching for the sky.

According to an HDB spokesman, there will be more skybridges soon as part of plans to rejuvenate the heartland. They will likely be seen at the upcoming Dawson estate in Queenstown.

But despite the soaring appeal of such bridges, prospective buyers said they will look at other factors first before signing off on a purchase.

Said corporate trainer Tay Shun Kiat, 42, who is looking for a private apartment for his mother: 'It looks really nice, but location and price are still most important to me.'

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