Jan 20, 2010
Singles need help in public housing
I HOPE the Government will look into the HDB valuation for resale flats and cash-over-valuation (COV) amounts.
HDB valuation has been rising fast over the past two years and with high COV, the selling price of a flat has become exorbitant. The same flat sold two or three years ago can now cost $100,000 more.
The COV amount is easily $25,000 to $50,000 in non-centralised areas and some sellers even ask for more. With such high selling prices, it seems that HDB flats are no longer affordable for some Singaporeans.
Even though the HDB has offered many build-to-order flats in recent years and provided grants to help first-timers own a flat, these moves do not help a certain group of Singaporeans - the singles.
The only grant available to singles is $11,000. And although they should buy a flat that is within their means, in terms of today's market prices, it can be tough. Some may need to empty their nest eggs to buy a flat and tapping the Central Provident Fund (CPF) will leave little savings for retirement later on.
I hope the Government and HDB will consider increasing the HDB loan cap for singles from $3,000 to $3,500 and extend the Additional CPF Housing Grant to this group too.
Similarly, they should consider increasing the singles grant of $11,000 to $30,000 or $40,000.
Take into consideration that singles have to pay the same market price as married couples for a flat but with a smaller grant.
Chen Jin Ping
Wednesday, January 20, 2010
ST : Citizenship caveat?
Jan 20, 2010
OWNING A PUBLIC FLAT
Citizenship caveat?
THE solution to the public housing conundrum is not to build more new HDB flats for sale because the problem lies in the resale market.
The resale market is where Singaporeans must compete with permanent residents (PRs) for a place to live.
Rental housing also sees the same competition, even though there are not enough rental flats to meet the needs of all deserving citizens.
The shortage of rental flats has its history in the HDB's decision to cut back on the building of two-room flats because they did not sell or rent well.
All new flats since then were constructed for sale only. The ratio of flats for sale and those built for rent became more skewed in favour of new sales so much so that upon the influx of PRs, there were not enough for them to rent.
The decision to allow PRs to buy public flats in the open market was because there was no other way to accommodate the new immigrants.
If there was a huge supply of HDB flats of various types for rent for all, including low-income Singaporeans, prices of HDB flats would have stabilised and not have caused consternation to the public housing authority.
These new immigrants could stay in such rented HDB flats until such time when they decide to take up full Singapore citizenship; only then would they be allowed to buy an HDB flat.
Becoming a citizen, therefore, would earn them the right to purchase an HDB flat. The gesture would also demonstrate these immigrants' loyalty which, previously, was just speculation rather than reality.
If building executive condominiums and build-to-order flats are the Government's only way of fighting rising costs in public housing, our children will have to wait for us to pass on before they can inherit a roof over their heads.
Wan Siew Kay
OWNING A PUBLIC FLAT
Citizenship caveat?
THE solution to the public housing conundrum is not to build more new HDB flats for sale because the problem lies in the resale market.
The resale market is where Singaporeans must compete with permanent residents (PRs) for a place to live.
Rental housing also sees the same competition, even though there are not enough rental flats to meet the needs of all deserving citizens.
The shortage of rental flats has its history in the HDB's decision to cut back on the building of two-room flats because they did not sell or rent well.
All new flats since then were constructed for sale only. The ratio of flats for sale and those built for rent became more skewed in favour of new sales so much so that upon the influx of PRs, there were not enough for them to rent.
The decision to allow PRs to buy public flats in the open market was because there was no other way to accommodate the new immigrants.
If there was a huge supply of HDB flats of various types for rent for all, including low-income Singaporeans, prices of HDB flats would have stabilised and not have caused consternation to the public housing authority.
These new immigrants could stay in such rented HDB flats until such time when they decide to take up full Singapore citizenship; only then would they be allowed to buy an HDB flat.
Becoming a citizen, therefore, would earn them the right to purchase an HDB flat. The gesture would also demonstrate these immigrants' loyalty which, previously, was just speculation rather than reality.
If building executive condominiums and build-to-order flats are the Government's only way of fighting rising costs in public housing, our children will have to wait for us to pass on before they can inherit a roof over their heads.
Wan Siew Kay
ST : Analysts bullish on CapitaLand deal
Jan 20, 2010
Analysts bullish on CapitaLand deal
By Robin Chan
INVESTORS and analysts gave the thumbs up to CapitaLand's $3.1 billion acquisition of a Chinese property firm by sending the giant developer's shares up 2 per cent yesterday.
The counter added eight cents to close at $4.36 with 42.1 million shares changing hands, more than double the average daily volume of 18.3 million seen in the past six months, while market experts raised their target price for the stock.
Investors and analysts have been galvanised by news that CapitaLand is buying the property arm of Hong Kong-based shipping and logistics giant Orient Overseas International. The all-cash deal is believed to be the largest property transaction in Singapore's history.
While the bidding process started last November, analysts said the deal came together quickly this month when CapitaLand was invited to submit an offer alongside four other bidders.
The deal will soak up much of the cash it has been sitting on since the successful initial public offering of CapitaMalls Asia last November.
CapitaLand will acquire seven sites in Greater Shanghai and Tianjin, doubling its China property portfolio to 2.8 million sqm in the process. The transaction will also increase its China assets from 28 per cent to 36 per cent of its total business.
While the deal is large, analysts said the value was fair given that CapitaLand is buying properties ready to build in prime sites. It will also put the developer on firmer footing in China's growing property market.
'The acquisition represents... a significant milestone in its commitment for China to account for a considerable 45 per cent of total assets,' said DMG Partners analyst Brandon Lee, who raised his target price of the stock to $5.18.
Mr Lee added that CapitaLand still has up to $4.4 billion in debt leeway for further acquisitions before it breaches a net gearing of 0.6 times.
OCBC Investment Research analyst Foo Sze Ming raised his target price to $5.30 while maintaining a buy call.
'CapitaLand's financial position still remains strong after the acquisition. While hopes of a bumper special dividend may be gone, we believe that this disappointment can be overcome by the potential profits these new projects can bring in,' he said.
But some analysts raised the issue of a property bubble in China which has already prompted regulators to adopt a slew of cooling measures.
One Hong Kong-based analyst said Orient Overseas' decision to sell could have been prompted by uncertainty in the mainland property market.
But OCBC's Mr Foo said CapitaLand has the financial strength to hold on to the land through any near-term uncertainty.
--------------------------------------------------------------------------------
Small player from a powerful empire
LITTLE-KNOWN Orient Overseas Developments Limited stepped into the limelight after being acquired by CapitaLand on Monday.
Although the company is a small player in Chinese property, its parent company, shipping giant Orient Overseas International Limited (OOIL), is a household name in Hong Kong, where it is listed. The OOIL Group has more than 280 offices in 55 countries, with 7,911 full-time employees.
Founded by Shanghai-born shipping magnate Tung Chao Yung in 1947, its container shipping arm, Orient Overseas Container Line, accounts for 99 per cent of its revenue and operates some 270 ships.
OOIL had already planned to spin off its property business, but a protracted slump in the shipping industry meant that the company needed the cash earlier.
The Tungs own 68 per cent of OOIL's assets and are a powerful family with close ties to the mainland. After the elder Mr Tung died, older son Tung Chee Hwa served as chairman and chief executive officer (CEO) until he became Hong Kong's first chief executive in 1997.
Younger brother Tung Chee Chen is currently the chairman and CEO. He has been listed in Forbes as the 23rd richest person in Hong Kong, worth some US$900 million (S$1.2 billion).
ROBIN CHAN
Analysts bullish on CapitaLand deal
By Robin Chan
INVESTORS and analysts gave the thumbs up to CapitaLand's $3.1 billion acquisition of a Chinese property firm by sending the giant developer's shares up 2 per cent yesterday.
The counter added eight cents to close at $4.36 with 42.1 million shares changing hands, more than double the average daily volume of 18.3 million seen in the past six months, while market experts raised their target price for the stock.
Investors and analysts have been galvanised by news that CapitaLand is buying the property arm of Hong Kong-based shipping and logistics giant Orient Overseas International. The all-cash deal is believed to be the largest property transaction in Singapore's history.
While the bidding process started last November, analysts said the deal came together quickly this month when CapitaLand was invited to submit an offer alongside four other bidders.
The deal will soak up much of the cash it has been sitting on since the successful initial public offering of CapitaMalls Asia last November.
CapitaLand will acquire seven sites in Greater Shanghai and Tianjin, doubling its China property portfolio to 2.8 million sqm in the process. The transaction will also increase its China assets from 28 per cent to 36 per cent of its total business.
While the deal is large, analysts said the value was fair given that CapitaLand is buying properties ready to build in prime sites. It will also put the developer on firmer footing in China's growing property market.
'The acquisition represents... a significant milestone in its commitment for China to account for a considerable 45 per cent of total assets,' said DMG Partners analyst Brandon Lee, who raised his target price of the stock to $5.18.
Mr Lee added that CapitaLand still has up to $4.4 billion in debt leeway for further acquisitions before it breaches a net gearing of 0.6 times.
OCBC Investment Research analyst Foo Sze Ming raised his target price to $5.30 while maintaining a buy call.
'CapitaLand's financial position still remains strong after the acquisition. While hopes of a bumper special dividend may be gone, we believe that this disappointment can be overcome by the potential profits these new projects can bring in,' he said.
But some analysts raised the issue of a property bubble in China which has already prompted regulators to adopt a slew of cooling measures.
One Hong Kong-based analyst said Orient Overseas' decision to sell could have been prompted by uncertainty in the mainland property market.
But OCBC's Mr Foo said CapitaLand has the financial strength to hold on to the land through any near-term uncertainty.
--------------------------------------------------------------------------------
Small player from a powerful empire
LITTLE-KNOWN Orient Overseas Developments Limited stepped into the limelight after being acquired by CapitaLand on Monday.
Although the company is a small player in Chinese property, its parent company, shipping giant Orient Overseas International Limited (OOIL), is a household name in Hong Kong, where it is listed. The OOIL Group has more than 280 offices in 55 countries, with 7,911 full-time employees.
Founded by Shanghai-born shipping magnate Tung Chao Yung in 1947, its container shipping arm, Orient Overseas Container Line, accounts for 99 per cent of its revenue and operates some 270 ships.
OOIL had already planned to spin off its property business, but a protracted slump in the shipping industry meant that the company needed the cash earlier.
The Tungs own 68 per cent of OOIL's assets and are a powerful family with close ties to the mainland. After the elder Mr Tung died, older son Tung Chee Hwa served as chairman and chief executive officer (CEO) until he became Hong Kong's first chief executive in 1997.
Younger brother Tung Chee Chen is currently the chairman and CEO. He has been listed in Forbes as the 23rd richest person in Hong Kong, worth some US$900 million (S$1.2 billion).
ROBIN CHAN
ST : Urban Suites selling well despite price hike
Jan 20, 2010
Urban Suites selling well despite price hike
Indonesians make up bulk of the buyers of CapitaLand's project
By Harsha Jethnani
An artist's impression of Urban Suites condominium. Phase 2 of the project attracted keen interest from foreign buyers who snapped up the units despite a price hike. -- PHOTO: CAPITALAND
PHASE 2 of CapitaLand's Urban Suites' launch has attracted keen interest from buyers who have snapped up units despite a hike in prices.
The 50 units released in Jakarta, Indonesia, last week were all sold out, while at home an additional 16 sales have been clinched since Phase 1 of the project's launch closed in early January.
The popularity of the development was undiminished by an increase in prices - from between $2,400 and $2,700 psf in Phase 1, to $2,500 and $2,800 psf in Phase 2 - for the units located in District 9 between Cairnhill, Hullet and Saunders roads.
The latest sales mean that 126 out of the 140 released units in the 165-unit condominium have been sold. The 26 two-bedroom apartments are now completely sold out.
Two of five available penthouses are off the market, with the remaining ones expected to fetch a quantum price of about $9 million. The penthouses range from 3,378 sq ft to 4,715 sq ft and are equipped with private pools.
Though no exact figures were provided, the company said only a few three- and four-bedroom apartments remained to be sold.
CapitaLand will preview the remaining units - by invitation only - to buyers tomorrow. Unlike Phase 1, when only multiple purchases were allowed, units will be open to single-unit purchasers. The 1 per cent discount offered to multiple-unit buyers in Phases 1 and 2 will continue.
Another upward revision in prices is a possibility, according to CapitaLand Residential Singapore chief executive officer Patricia Chia.
The development has attracted a high level of interest from foreigners, with 70 per cent of units bought by those overseas. And most of them were Indonesian, CapitaLand said.
'Indonesians have a preference for freehold if given a choice. This is one of the very rare freeholds on Orchard Road,' said Ms Chia.
The stronger market is set to lead to more high-end project launches from CapitaLand this year.
Urban Resorts - neighbouring Urban Suites and previously Silver Towers - consists of 64 three- and four-bedroom units. Unit sizes are larger than those at Urban Suites, starting at 2,000 sq ft for a three-bedder.
Ms Chia added: 'Everybody expects 2010 to be the return of the high and luxury-end residential market. I think at the right opportunity, we will launch.'
Showflats for units at CapitaLand's Interlace in Alexandra/Depot Road are likely to be ready for viewing after the opening of the Sentosa integrated resort, Ms Chia said.
Details of the company's future launches at Farrer Park and Nassim Hill have not been disclosed.
Urban Suites selling well despite price hike
Indonesians make up bulk of the buyers of CapitaLand's project
By Harsha Jethnani
An artist's impression of Urban Suites condominium. Phase 2 of the project attracted keen interest from foreign buyers who snapped up the units despite a price hike. -- PHOTO: CAPITALAND
PHASE 2 of CapitaLand's Urban Suites' launch has attracted keen interest from buyers who have snapped up units despite a hike in prices.
The 50 units released in Jakarta, Indonesia, last week were all sold out, while at home an additional 16 sales have been clinched since Phase 1 of the project's launch closed in early January.
The popularity of the development was undiminished by an increase in prices - from between $2,400 and $2,700 psf in Phase 1, to $2,500 and $2,800 psf in Phase 2 - for the units located in District 9 between Cairnhill, Hullet and Saunders roads.
The latest sales mean that 126 out of the 140 released units in the 165-unit condominium have been sold. The 26 two-bedroom apartments are now completely sold out.
Two of five available penthouses are off the market, with the remaining ones expected to fetch a quantum price of about $9 million. The penthouses range from 3,378 sq ft to 4,715 sq ft and are equipped with private pools.
Though no exact figures were provided, the company said only a few three- and four-bedroom apartments remained to be sold.
CapitaLand will preview the remaining units - by invitation only - to buyers tomorrow. Unlike Phase 1, when only multiple purchases were allowed, units will be open to single-unit purchasers. The 1 per cent discount offered to multiple-unit buyers in Phases 1 and 2 will continue.
Another upward revision in prices is a possibility, according to CapitaLand Residential Singapore chief executive officer Patricia Chia.
The development has attracted a high level of interest from foreigners, with 70 per cent of units bought by those overseas. And most of them were Indonesian, CapitaLand said.
'Indonesians have a preference for freehold if given a choice. This is one of the very rare freeholds on Orchard Road,' said Ms Chia.
The stronger market is set to lead to more high-end project launches from CapitaLand this year.
Urban Resorts - neighbouring Urban Suites and previously Silver Towers - consists of 64 three- and four-bedroom units. Unit sizes are larger than those at Urban Suites, starting at 2,000 sq ft for a three-bedder.
Ms Chia added: 'Everybody expects 2010 to be the return of the high and luxury-end residential market. I think at the right opportunity, we will launch.'
Showflats for units at CapitaLand's Interlace in Alexandra/Depot Road are likely to be ready for viewing after the opening of the Sentosa integrated resort, Ms Chia said.
Details of the company's future launches at Farrer Park and Nassim Hill have not been disclosed.
ST : Planned leisure hub in bad shape
Jan 20, 2010
Planned leisure hub in bad shape
2 anchor tenants have pulled out of Admiral Hill, and a third is going
By Jessica Lim
THE lifestyle hub that was supposed to come up in Sembawang - troubled from the start - may now be on its last legs.
Two anchor tenants have pulled out, and a third is making tracks to leave.
If that third one goes, all that will remain of the planned leisure hub on Admiral Hill will be a childcare centre and a 40-table steamboat restaurant.
Already, what was touted in 2007 as the Dempsey of the north is looking run-down.
Last month, its biggest tenant, the 900-seat Chinese restaurant Dragon Phoenix, threw in the towel.
Its owner Chris Hooi said he had sunk $1 million into renovating the 15,000 sq ft site, and was already more than $500,000 in the red.
The first to quit was Admiral Bar & Grill, which closed in November last year. It had been bleeding about $3,000 a month.
The next to go could be The Tanjong poolside cafe. Its owner, Mr Lim Hong Wee, said he does not intend to stay on for more than three months.
The developer of Admiral Hill, the Yess Group, won a Singapore Land Authority (SLA) tender to develop the site in 2007. It beat other bidders by offering to pay $40,000 a month in rent, more than $5,000 above the guide rent.
Yess had big plans: It said it would bring in tenants to run restaurants, a country club, rock-climbing facilities, beauty and health centres, and a golf driving range, among other things.
But instead of these lifestyle facilities, an illegal school and a workers' dormitory came up on the site.
Both were ordered to shut.
Mr Hooi, the owner of Dragon Phoenix, said that without the lifestyle attractions, few people came.
He said he had been told to expect corporate functions and families coming in for horse riding, for example.
'You think I wanted to leave? I've put so much money into it,' he said.
In anticipation of corporate clients, Mr Hooi had added seminar rooms to his restaurant and kitted them with audio-visual hardware for meetings.
But no one came.
'I had no choice. There were no customers and there was too much space. We were bleeding,' he said, adding that he met Yess several times to discuss the matter, without success.
Admiral Bar & Grill owner Victor Teo, 41, had a similarly grim tale to tell.
He pumped $150,000 into renovations, but was losing money from the time he opened for business in late 2007.
'There is nothing here to pull in the crowds,' he said.
However, promise seemed to lie in the karaoke rooms, which he said Yess approved. Business picked up when the rooms were added. But Mr Teo said that Yess told him later that an entertainment licence from the SLA was needed for the rooms to continue operating, and that it would help him apply for it.
Mr Teo said he pressed Yess to get the licence to reflect the change of use, but this was not done.
Meanwhile, The Tanjong cafe's Mr Lim said he handed in his quit letter last November, but Yess pleaded with him to stay.
The deal they struck allows the cafe to be open only on weekends and pay only minimal rent.
Mr Lim, 55, said: 'They asked me to stay because they needed someone to service the pool.'
He now sees that the pool is maintained, on top of running the cafe. But even he wants to go in two to three months because there are so few customers.
Contacted yesterday, Yess declined comment.
In a statement, the SLA said it was aware of the recent closures, but stressed that it would not interfere as it is a 'commercial matter between a master tenant and its sub-tenants'.
'It is not appropriate for SLA to speculate on reasons for the cessation of business operations or to interfere, as long as there are no breaches in the terms of the tenancy agreement,' said a spokesman.
He added that Yess had taken action to rectify its past breaches.
Analysts contacted said it was unlikely the area would ever take off at this rate.
Mr Colin Tan, director of research and consultancy at real estate consultancy Chesterton Suntec International, said it was 'highly unlikely that such a leisure hub would materialise'.
The site is also home to the two-storey Old Admiralty House, a national monument, which was built to accommodate Royal Navy officers in 1939, before being converted into a seafood restaurant in the 1970s after the British pulled out.
The house now stands empty.
limjess@sph.com.sg
ADMIRAL BAR & GRILL
Pulled out: November 2009
Owner Victor Teo: 'Business was just so bad, because there is nothing here to pull in the crowds.'
DRAGON PHOENIX RESTAURANT
Pulled out: December 2009
Owner Chris Hooi (above): 'I had no choice. There were no customers... We were bleeding money.'
THE TANJONG
Pulling out: In 'two to three months'
Owner Lim Hong Wee: 'We will stay two or three months more at the most... We are not making money. Now there is no one around, no students and so few tenants.'
If Admiral Hill's third anchor tenant leaves, all that will be left at the site touted in 2007 as the Dempsey of the north is a childcare centre and a 40-table steamboat restaurant. -- ST PHOTO: CHEW SENG KIM
Planned leisure hub in bad shape
2 anchor tenants have pulled out of Admiral Hill, and a third is going
By Jessica Lim
THE lifestyle hub that was supposed to come up in Sembawang - troubled from the start - may now be on its last legs.
Two anchor tenants have pulled out, and a third is making tracks to leave.
If that third one goes, all that will remain of the planned leisure hub on Admiral Hill will be a childcare centre and a 40-table steamboat restaurant.
Already, what was touted in 2007 as the Dempsey of the north is looking run-down.
Last month, its biggest tenant, the 900-seat Chinese restaurant Dragon Phoenix, threw in the towel.
Its owner Chris Hooi said he had sunk $1 million into renovating the 15,000 sq ft site, and was already more than $500,000 in the red.
The first to quit was Admiral Bar & Grill, which closed in November last year. It had been bleeding about $3,000 a month.
The next to go could be The Tanjong poolside cafe. Its owner, Mr Lim Hong Wee, said he does not intend to stay on for more than three months.
The developer of Admiral Hill, the Yess Group, won a Singapore Land Authority (SLA) tender to develop the site in 2007. It beat other bidders by offering to pay $40,000 a month in rent, more than $5,000 above the guide rent.
Yess had big plans: It said it would bring in tenants to run restaurants, a country club, rock-climbing facilities, beauty and health centres, and a golf driving range, among other things.
But instead of these lifestyle facilities, an illegal school and a workers' dormitory came up on the site.
Both were ordered to shut.
Mr Hooi, the owner of Dragon Phoenix, said that without the lifestyle attractions, few people came.
He said he had been told to expect corporate functions and families coming in for horse riding, for example.
'You think I wanted to leave? I've put so much money into it,' he said.
In anticipation of corporate clients, Mr Hooi had added seminar rooms to his restaurant and kitted them with audio-visual hardware for meetings.
But no one came.
'I had no choice. There were no customers and there was too much space. We were bleeding,' he said, adding that he met Yess several times to discuss the matter, without success.
Admiral Bar & Grill owner Victor Teo, 41, had a similarly grim tale to tell.
He pumped $150,000 into renovations, but was losing money from the time he opened for business in late 2007.
'There is nothing here to pull in the crowds,' he said.
However, promise seemed to lie in the karaoke rooms, which he said Yess approved. Business picked up when the rooms were added. But Mr Teo said that Yess told him later that an entertainment licence from the SLA was needed for the rooms to continue operating, and that it would help him apply for it.
Mr Teo said he pressed Yess to get the licence to reflect the change of use, but this was not done.
Meanwhile, The Tanjong cafe's Mr Lim said he handed in his quit letter last November, but Yess pleaded with him to stay.
The deal they struck allows the cafe to be open only on weekends and pay only minimal rent.
Mr Lim, 55, said: 'They asked me to stay because they needed someone to service the pool.'
He now sees that the pool is maintained, on top of running the cafe. But even he wants to go in two to three months because there are so few customers.
Contacted yesterday, Yess declined comment.
In a statement, the SLA said it was aware of the recent closures, but stressed that it would not interfere as it is a 'commercial matter between a master tenant and its sub-tenants'.
'It is not appropriate for SLA to speculate on reasons for the cessation of business operations or to interfere, as long as there are no breaches in the terms of the tenancy agreement,' said a spokesman.
He added that Yess had taken action to rectify its past breaches.
Analysts contacted said it was unlikely the area would ever take off at this rate.
Mr Colin Tan, director of research and consultancy at real estate consultancy Chesterton Suntec International, said it was 'highly unlikely that such a leisure hub would materialise'.
The site is also home to the two-storey Old Admiralty House, a national monument, which was built to accommodate Royal Navy officers in 1939, before being converted into a seafood restaurant in the 1970s after the British pulled out.
The house now stands empty.
limjess@sph.com.sg
ADMIRAL BAR & GRILL
Pulled out: November 2009
Owner Victor Teo: 'Business was just so bad, because there is nothing here to pull in the crowds.'
DRAGON PHOENIX RESTAURANT
Pulled out: December 2009
Owner Chris Hooi (above): 'I had no choice. There were no customers... We were bleeding money.'
THE TANJONG
Pulling out: In 'two to three months'
Owner Lim Hong Wee: 'We will stay two or three months more at the most... We are not making money. Now there is no one around, no students and so few tenants.'
If Admiral Hill's third anchor tenant leaves, all that will be left at the site touted in 2007 as the Dempsey of the north is a childcare centre and a 40-table steamboat restaurant. -- ST PHOTO: CHEW SENG KIM
AsiaOne : I live like a king
I live like a king
Man who "settled" for Yishun flat says he feels like he's living in condo.
Wed, Jan 20, 2010
The New Paper
BY ELYSA CHEN
HE HAD wanted to buy a 4-room flat in Ang Mo Kio, but settled for Yishun instead when he couldn't afford it.
It was probably one of the best decisions that 53-year-old driver Low Hoon Chee made. He saved $50,000 and Ang Mo Kio is just three MRT stops away from Yishun.
With a shopping centre and swimming pool within walking distance, Mr Low said it feels like he has a full suite of condo facilities and added: "I feel like a king, even though I live in a flat."
He is one of many homebuyers who are not willing to pay high prices for flats in central or mature estates.
A two-room HDB flat in Chinatown made headlines after it was sold for $245,000 two months ago. That, to Mr Low, is the height of insanity.
After all, flats in outlying areas tend to be cheaper, bigger and newer compared to their counterparts located in
a more prime location.
When Mr Low sold his three-room flat in Toa Payoh 13 years ago for $168,000, he wanted to upgrade to a four-room flat in Ang Mo Kio, as he and his wife was expecting their second child.
After all, he had made a handsome profit, having bought it for $52,000 seven years earlier. But with his budget of $200,000, he could afford only a three-room flat in Ang Mo Kio.
The four-room flats in Ang Mo Kio and Toa Payoh were going for around $250,000 then, said Mr Low. The couple then decided to look for a unit in Yishun - buying a 84 sq m flat there for just $200,000.
Although his wife, Madam Xu Li Hua, 38, a housewife, found Yishun inaccessible at first, she now prefers her current home to her former flat in Toa Payoh.
She said: "I prefer our flat now, it's much bigger than our old home. I want to live here till I grow old." Mr Low added: "Why should I buy a three-room flat in Ang Mo Kio when I can get a four-room flat in Yishun for just $200,000?"
He not only could get a bigger flat, he even managed to get a unit on a high floor.
Mr Low said: "My wife and I fell in love with the flat when we came to view it the first time. We sat there for
an hour without moving, enjoying the breeze on the high floor. The feeling was so 'shiok'."
His home, which is on the 11th storey of a block along Yishun Avenue 2, is just five to 10 minutes' walk from Yishun MRT station. It is also a brisk 10 minutes' walk to Northpoint Shopping Centre and is close to amenities such as a wet market, coffee shops and two parks - the Yishun Town Garden and the Nee Soon Central Community Park.
Mr Low also goes swimming with his son almost every day because there's a swimming pool just a few minutes' walk from his home.
He added: "It's almost like living in a condominium, just that I don't have to pay maintenance fees. Where else can I find such a good flat?"
And the prices of flats in Yishun might rise even further, especially with the opening of the Khoo Teck Puat hospital this year, and an air-conditioned interchange at Yishun which is due to be completed in 2013.
Mr Low's flat is worth around $270,000 today. Conversely, a four-room flat in Ang Mo Kio 10 minutes' walk away from the MRT station would be worth around $400,000, based on recent transacted prices. That's a $130,000 price difference between two estates just three MRT stations apart.
While some may argue that nothing beats living in a prime location, industry watchers say that moving from a prime location to an outlying one may be a good decision.
Associate director of ERA Asia Pacific Eugene Lim said of home owners in the suburban areas: "The primary motivation for these home buyers is to pay a lower price for more space."
Affordable
Mr Lim said that couples usually start out with a smaller flat in the central area because of convenience.
But some will move towards the suburban areas because units there are more affordable, given the space.
Mr Eric Cheng, CEO of ECG Property, said that four-room flats in Yishun tend to be cheaper than other estates because Yishun is a big town, so the large supply of flats, relative to the demand for flats there, keeps prices low.
The price difference there, as compared to some other housing estates, could range between $40,000 and $100,000.
PRICE VS PLACE
Yishun flats tend to be smaller than Ang Mo Kio flats, but they are newer. Price comparisons were done for flats near the MRT station.
3-ROOM
ANG MO KIO: $310,000
YISHUN: $230,000
4-ROOM
ANG MO KIO: $380,000
YISHUN: $270,000
5-ROOM
ANG MO KIO: $475,000
YISHUN: $415,000
Information taken from HDB website.
Man who "settled" for Yishun flat says he feels like he's living in condo.
Wed, Jan 20, 2010
The New Paper
BY ELYSA CHEN
HE HAD wanted to buy a 4-room flat in Ang Mo Kio, but settled for Yishun instead when he couldn't afford it.
It was probably one of the best decisions that 53-year-old driver Low Hoon Chee made. He saved $50,000 and Ang Mo Kio is just three MRT stops away from Yishun.
With a shopping centre and swimming pool within walking distance, Mr Low said it feels like he has a full suite of condo facilities and added: "I feel like a king, even though I live in a flat."
He is one of many homebuyers who are not willing to pay high prices for flats in central or mature estates.
A two-room HDB flat in Chinatown made headlines after it was sold for $245,000 two months ago. That, to Mr Low, is the height of insanity.
After all, flats in outlying areas tend to be cheaper, bigger and newer compared to their counterparts located in
a more prime location.
When Mr Low sold his three-room flat in Toa Payoh 13 years ago for $168,000, he wanted to upgrade to a four-room flat in Ang Mo Kio, as he and his wife was expecting their second child.
After all, he had made a handsome profit, having bought it for $52,000 seven years earlier. But with his budget of $200,000, he could afford only a three-room flat in Ang Mo Kio.
The four-room flats in Ang Mo Kio and Toa Payoh were going for around $250,000 then, said Mr Low. The couple then decided to look for a unit in Yishun - buying a 84 sq m flat there for just $200,000.
Although his wife, Madam Xu Li Hua, 38, a housewife, found Yishun inaccessible at first, she now prefers her current home to her former flat in Toa Payoh.
She said: "I prefer our flat now, it's much bigger than our old home. I want to live here till I grow old." Mr Low added: "Why should I buy a three-room flat in Ang Mo Kio when I can get a four-room flat in Yishun for just $200,000?"
He not only could get a bigger flat, he even managed to get a unit on a high floor.
Mr Low said: "My wife and I fell in love with the flat when we came to view it the first time. We sat there for
an hour without moving, enjoying the breeze on the high floor. The feeling was so 'shiok'."
His home, which is on the 11th storey of a block along Yishun Avenue 2, is just five to 10 minutes' walk from Yishun MRT station. It is also a brisk 10 minutes' walk to Northpoint Shopping Centre and is close to amenities such as a wet market, coffee shops and two parks - the Yishun Town Garden and the Nee Soon Central Community Park.
Mr Low also goes swimming with his son almost every day because there's a swimming pool just a few minutes' walk from his home.
He added: "It's almost like living in a condominium, just that I don't have to pay maintenance fees. Where else can I find such a good flat?"
And the prices of flats in Yishun might rise even further, especially with the opening of the Khoo Teck Puat hospital this year, and an air-conditioned interchange at Yishun which is due to be completed in 2013.
Mr Low's flat is worth around $270,000 today. Conversely, a four-room flat in Ang Mo Kio 10 minutes' walk away from the MRT station would be worth around $400,000, based on recent transacted prices. That's a $130,000 price difference between two estates just three MRT stations apart.
While some may argue that nothing beats living in a prime location, industry watchers say that moving from a prime location to an outlying one may be a good decision.
Associate director of ERA Asia Pacific Eugene Lim said of home owners in the suburban areas: "The primary motivation for these home buyers is to pay a lower price for more space."
Affordable
Mr Lim said that couples usually start out with a smaller flat in the central area because of convenience.
But some will move towards the suburban areas because units there are more affordable, given the space.
Mr Eric Cheng, CEO of ECG Property, said that four-room flats in Yishun tend to be cheaper than other estates because Yishun is a big town, so the large supply of flats, relative to the demand for flats there, keeps prices low.
The price difference there, as compared to some other housing estates, could range between $40,000 and $100,000.
PRICE VS PLACE
Yishun flats tend to be smaller than Ang Mo Kio flats, but they are newer. Price comparisons were done for flats near the MRT station.
3-ROOM
ANG MO KIO: $310,000
YISHUN: $230,000
4-ROOM
ANG MO KIO: $380,000
YISHUN: $270,000
5-ROOM
ANG MO KIO: $475,000
YISHUN: $415,000
Information taken from HDB website.
CNA : Resale flats commanding more cash-over-valuation, HDB urges caution
Resale flats commanding more cash-over-valuation, HDB urges caution
By Joanne Chan, Channel NewsAsia | Posted: 18 January 2010 1729 hrs
SINGAPORE : Housing analysts said it is a sellers' market right now, with resale flats being a hot commodity lately.
But the Housing and Development Board (HDB) has urged buyers to exercise caution when paying high cash premiums, and to do their homework to determine if a house is truly worth its asking price.
A 4-room flat in Bishan was recently put up for sale. It was valued at S$460,000 by an independent valuer appointed by HDB, and the owners are asking for an additional S$100,000 cash-over-valuation (COV).
The owners, who declined to be named, are a young couple in their 30s who run an F&B business. They claimed to have received three offers so far, but all were rejected.
"The COV is too low. There are those who are asking for S$50,000 to S$60,000. There was one offer which was close, about $95,000. We are not in urgent need to sell. In a way, it's to test the market. If we sell, we sell. If we don't sell, we will just continue to stay," said the owner of the 4-room flat in Bishan.
Analysts said with a continued strong demand for resale flats, owners are taking advantage of the situation to increasingly ask for higher prices.
Based on the latest HDB figures, 78 per cent of home sales transacted in the third quarter of last year were above valuation. That is a 22 percentage-point jump from the second quarter of last year's figure of 57 per cent.
The median COV is also on the rise - jumping from S$3,000 in the second quarter to S$12,000 in Q3.
With HDB resale flat prices hitting an all-time high, housing agents said most flats now command at least S$20,000 to S$30,000 cash-over-valuation.
Units situated at good locations, close proximity to an MRT station and good renovation can see COV go up to S$50,000 to S$70,000.
But there is a limit to how much buyers are willing to pay.
"If it's not to my liking, then I'd have to do up, (renovate) it again. So how much (am I willing to pay)? About $50 to $60,000," said one member of the public.
"It's too high for me. Because of my income I don't think I can afford it," said another.
HDB said only four out of the 13,000 4-room flats sold last year had premiums higher than S$70,000.
And analysts cautioned against jumping into deals that require high cash premiums.
"COV is a premium. Five years down the line, the renovation will deteriorate. And there's no guarantee that you can sell at S$100,000 above the then value. Therefore, buyers should exercise discretion as far as how high you want to pay," said Mohamed Ismail, CEO of PropNex.
HDB said it does not control resale flat prices as they are the result of negotiations between willing buyers and sellers.
It added that intervening in COV means forcing people to buy and sell at fixed prices.
HDB also urge buyers to have the relevant information before negotiating with sellers, and to offer a price within their means. - CNA /ls
By Joanne Chan, Channel NewsAsia | Posted: 18 January 2010 1729 hrs
SINGAPORE : Housing analysts said it is a sellers' market right now, with resale flats being a hot commodity lately.
But the Housing and Development Board (HDB) has urged buyers to exercise caution when paying high cash premiums, and to do their homework to determine if a house is truly worth its asking price.
A 4-room flat in Bishan was recently put up for sale. It was valued at S$460,000 by an independent valuer appointed by HDB, and the owners are asking for an additional S$100,000 cash-over-valuation (COV).
The owners, who declined to be named, are a young couple in their 30s who run an F&B business. They claimed to have received three offers so far, but all were rejected.
"The COV is too low. There are those who are asking for S$50,000 to S$60,000. There was one offer which was close, about $95,000. We are not in urgent need to sell. In a way, it's to test the market. If we sell, we sell. If we don't sell, we will just continue to stay," said the owner of the 4-room flat in Bishan.
Analysts said with a continued strong demand for resale flats, owners are taking advantage of the situation to increasingly ask for higher prices.
Based on the latest HDB figures, 78 per cent of home sales transacted in the third quarter of last year were above valuation. That is a 22 percentage-point jump from the second quarter of last year's figure of 57 per cent.
The median COV is also on the rise - jumping from S$3,000 in the second quarter to S$12,000 in Q3.
With HDB resale flat prices hitting an all-time high, housing agents said most flats now command at least S$20,000 to S$30,000 cash-over-valuation.
Units situated at good locations, close proximity to an MRT station and good renovation can see COV go up to S$50,000 to S$70,000.
But there is a limit to how much buyers are willing to pay.
"If it's not to my liking, then I'd have to do up, (renovate) it again. So how much (am I willing to pay)? About $50 to $60,000," said one member of the public.
"It's too high for me. Because of my income I don't think I can afford it," said another.
HDB said only four out of the 13,000 4-room flats sold last year had premiums higher than S$70,000.
And analysts cautioned against jumping into deals that require high cash premiums.
"COV is a premium. Five years down the line, the renovation will deteriorate. And there's no guarantee that you can sell at S$100,000 above the then value. Therefore, buyers should exercise discretion as far as how high you want to pay," said Mohamed Ismail, CEO of PropNex.
HDB said it does not control resale flat prices as they are the result of negotiations between willing buyers and sellers.
It added that intervening in COV means forcing people to buy and sell at fixed prices.
HDB also urge buyers to have the relevant information before negotiating with sellers, and to offer a price within their means. - CNA /ls
CNA : HDB's BTO projects 5 times oversubscribed
HDB's BTO projects 5 times oversubscribed
By Hoe Yeen Nie/Mustafa Shafawi, Channel NewsAsia | Posted: 18 January 2010 1611 hrs
SINGAPORE: The Housing Development Board's (HDB's) first two Build-to-Order (BTO) projects launched for the year are receiving very favourable responses.
A few hours before the close of applications at 2359hrs on Monday, the 1,291 units being offered at Limbang Green in Choa Chu Kang and Buangkok Vale were more than five times oversubscribed.
The four-room flats were the most popular.
The 188 four-room units in Limbang Green received nearly 2,700 applications, and 458 units in Buangkok Vale received 2608 applications - six times more than units available.
Those who cannot wait are turning to resale flats, and housing analysts said resale prices are likely to remain high because it is a seller's market right now.
By Hoe Yeen Nie/Mustafa Shafawi, Channel NewsAsia | Posted: 18 January 2010 1611 hrs
SINGAPORE: The Housing Development Board's (HDB's) first two Build-to-Order (BTO) projects launched for the year are receiving very favourable responses.
A few hours before the close of applications at 2359hrs on Monday, the 1,291 units being offered at Limbang Green in Choa Chu Kang and Buangkok Vale were more than five times oversubscribed.
The four-room flats were the most popular.
The 188 four-room units in Limbang Green received nearly 2,700 applications, and 458 units in Buangkok Vale received 2608 applications - six times more than units available.
Those who cannot wait are turning to resale flats, and housing analysts said resale prices are likely to remain high because it is a seller's market right now.
CNA : First retail space at Resorts World Sentosa to open on Jan 20
First retail space at Resorts World Sentosa to open on Jan 20
By Imelda Saad, Channel NewsAsia | Posted: 18 January 2010 1744 hrs
SINGAPORE: Visitors to Resorts World Sentosa will be able to shop there when the first of its retail belt opens in time, for its soft launch on Wednesday.
The shopping strip makes up about 20 per cent of the entire retail space at the integrated resort.
As for its casino and the Universal Studio theme park, the company is hoping to open both in time for the Lunar New Year.
Last minute touches are being made to greet guests when Singapore's first integrated resort opens. With just four of its six hotels and 10 restaurants opened, there is already strong interest from both locals and tourists.
Andrew Hickey, vice president (Rooms), Resorts World Sentosa said: "We had over 5,000 room nights booked in the first days of our reservations centre opening. (There is a) strong local demand from the overseas travel trade.
"Chinese New Year is already booked out. Indicators are very very strong. Weekends are filling up obviously".
Resorts World has said it is targeting 12 to 13 million visitors each year, boosting Singapore's visitor arrival numbers.
The Singapore Tourism Board has said that it hopes the two Integrated Resorts, including the one at Marina Bay Sands, will help double visitorship figures to 17 million by 2015.
Also making its grand opening on Wednesday is the Galleria - where retail staff have been put through the paces. This retail belt links the Festive Hotel, the casino entrance and Hotel Michael.
Noel Hawkes, vice president, Resort Operations, Resorts World Sentosa said: "We also have a Swarovski, we have a beauty hall and we have a Swiss shop gallery. We have some very nice new to market brands like Canali, which will open its first retail shop in Singapore as well as a very famous brand from Canada called Damiani, which is a very high-end jewellery shop."
"Apart from these high-end jewellery (shops), we also have our very famous Chihuly gallery. This is going to be very exciting. We have about S$6 million worth of his very beautiful art works and his chandeliers in the casino as well as the Crockfords Tower, and now guests will be able to go and buy smaller pieces which are absolutely fabulous or some of his wonderful paintings.
"We have also got a Michael Graves gallery - first in the world in fact - and Michael Graves is the one who designed this entire project. He will have his own gallery selling stuff that he designed himself like the whistling teapot."
The completed retail stretch at Resorts World Sentosa is about 300 metres long, with over 20 high-end brands including the highly anticipated Victoria's Secret boutique.
Mr Hawkes said: "A lot of the retail here is geared towards our casino customers, (and) impulse buying.
"So that is why we have targeted some of the products. There are very high-end retail, expensive watches, diamonds, jewellery."
About 70 per cent of the resort's entire retail space is expected to be ready by next month.
"Especially if you take into consideration our Universal Studios, which is huge. We have got about 16 shops over there and we have something for absolutely everybody within our retail offerings in Universal Studios," added Mr Hawkes.
But the clincher for most people would be the opening of the theme park and casino.
Ron Lim, general manager, Crossroad Tours & Travel said: "I already got a group of 12 persons coming from Taiwan into Resorts World. From what we see, it is supposed to be good.
"Furthermore, Casino is tied up with a theme park so when the adults play at the casino they will still go to the theme park".
Wendy Leong, general manager, City Tours said: "The main concern right now is when Universal Studio is going to be opened, so that we will be able to package it together including all the hotel stay as well."
Resorts World is currently awaiting licensing approvals from authorities for both the casino and theme park. And when Universal Studios opens, 20 out of its 24 rides will be fully operational.
Over the next two years, visitors can expect phase two of Resorts World Sentosa to be completed. These include two more hotels and the marine life park, the world's largest oceanarium.
By Imelda Saad, Channel NewsAsia | Posted: 18 January 2010 1744 hrs
SINGAPORE: Visitors to Resorts World Sentosa will be able to shop there when the first of its retail belt opens in time, for its soft launch on Wednesday.
The shopping strip makes up about 20 per cent of the entire retail space at the integrated resort.
As for its casino and the Universal Studio theme park, the company is hoping to open both in time for the Lunar New Year.
Last minute touches are being made to greet guests when Singapore's first integrated resort opens. With just four of its six hotels and 10 restaurants opened, there is already strong interest from both locals and tourists.
Andrew Hickey, vice president (Rooms), Resorts World Sentosa said: "We had over 5,000 room nights booked in the first days of our reservations centre opening. (There is a) strong local demand from the overseas travel trade.
"Chinese New Year is already booked out. Indicators are very very strong. Weekends are filling up obviously".
Resorts World has said it is targeting 12 to 13 million visitors each year, boosting Singapore's visitor arrival numbers.
The Singapore Tourism Board has said that it hopes the two Integrated Resorts, including the one at Marina Bay Sands, will help double visitorship figures to 17 million by 2015.
Also making its grand opening on Wednesday is the Galleria - where retail staff have been put through the paces. This retail belt links the Festive Hotel, the casino entrance and Hotel Michael.
Noel Hawkes, vice president, Resort Operations, Resorts World Sentosa said: "We also have a Swarovski, we have a beauty hall and we have a Swiss shop gallery. We have some very nice new to market brands like Canali, which will open its first retail shop in Singapore as well as a very famous brand from Canada called Damiani, which is a very high-end jewellery shop."
"Apart from these high-end jewellery (shops), we also have our very famous Chihuly gallery. This is going to be very exciting. We have about S$6 million worth of his very beautiful art works and his chandeliers in the casino as well as the Crockfords Tower, and now guests will be able to go and buy smaller pieces which are absolutely fabulous or some of his wonderful paintings.
"We have also got a Michael Graves gallery - first in the world in fact - and Michael Graves is the one who designed this entire project. He will have his own gallery selling stuff that he designed himself like the whistling teapot."
The completed retail stretch at Resorts World Sentosa is about 300 metres long, with over 20 high-end brands including the highly anticipated Victoria's Secret boutique.
Mr Hawkes said: "A lot of the retail here is geared towards our casino customers, (and) impulse buying.
"So that is why we have targeted some of the products. There are very high-end retail, expensive watches, diamonds, jewellery."
About 70 per cent of the resort's entire retail space is expected to be ready by next month.
"Especially if you take into consideration our Universal Studios, which is huge. We have got about 16 shops over there and we have something for absolutely everybody within our retail offerings in Universal Studios," added Mr Hawkes.
But the clincher for most people would be the opening of the theme park and casino.
Ron Lim, general manager, Crossroad Tours & Travel said: "I already got a group of 12 persons coming from Taiwan into Resorts World. From what we see, it is supposed to be good.
"Furthermore, Casino is tied up with a theme park so when the adults play at the casino they will still go to the theme park".
Wendy Leong, general manager, City Tours said: "The main concern right now is when Universal Studio is going to be opened, so that we will be able to package it together including all the hotel stay as well."
Resorts World is currently awaiting licensing approvals from authorities for both the casino and theme park. And when Universal Studios opens, 20 out of its 24 rides will be fully operational.
Over the next two years, visitors can expect phase two of Resorts World Sentosa to be completed. These include two more hotels and the marine life park, the world's largest oceanarium.
CNA : Bt Panjang residents complain new bamboo holders hazardous
Bt Panjang residents complain new bamboo holders hazardous
By Ng Lian Cheong and Lynda Hong, Channel NewsAsia | Posted: 18 January 2010 2127 hrs
New bamboo holders at flats at Pending Road
SINGAPORE : New bamboo holders for drying laundry have some residents in Bukit Panjang up in arms.
Residents at Pending Road said their bamboo poles are too big to fit into the new holders, increasing the risk of falling poles.
The new holders are 2.5 mm smaller in diameter than the original holders.
Some 2,900 units at Pending Road had their old bamboo holders changed - for free - after they told the Holland-Bukit Panjang Town Council their holders were corroding.
The change cost the town council an estimated $200,000.
It said the new bamboo holders comply with HDB design requirements.
But the feedback will be channelled to HDB.
And to cope with the smaller holders
By Ng Lian Cheong and Lynda Hong, Channel NewsAsia | Posted: 18 January 2010 2127 hrs
New bamboo holders at flats at Pending Road
SINGAPORE : New bamboo holders for drying laundry have some residents in Bukit Panjang up in arms.
Residents at Pending Road said their bamboo poles are too big to fit into the new holders, increasing the risk of falling poles.
The new holders are 2.5 mm smaller in diameter than the original holders.
Some 2,900 units at Pending Road had their old bamboo holders changed - for free - after they told the Holland-Bukit Panjang Town Council their holders were corroding.
The change cost the town council an estimated $200,000.
It said the new bamboo holders comply with HDB design requirements.
But the feedback will be channelled to HDB.
And to cope with the smaller holders
BT : Conveyancing accounts proposed to hold clients' funds
Business Times - 18 Jan 2010
Conveyancing accounts proposed to hold clients' funds
They will have security measures to ensure lawyers can't abscond with money
By UMA SHANKARI
(SINGAPORE) The Ministry of Law is proposing that law firms set up a new type of bank account - a conveyancing account - for lawyers to hold funds entrusted to them by homebuyers and sellers.
The pilot trial of the new scheme could take place as soon as April this year, with the entire scheme taking off as early as next year, BT understands.
These conveyancing accounts will have a host of security measures in place to make sure that lawyers cannot abscond with clients' money, such as requiring signatures from both the buyer's and the seller's lawyers before any money can be moved.
'A home is often a person's most substantial asset. The money intended for its purchase and arising from its sale should be properly protected,' the Law Ministry said in a statement yesterday.
The proposed changes follow the infamous case involving lawyer David Rasif, who ran off with some $10 million of his clients' money in 2006, as well as other recent cases in which lawyers absconded with their clients' conveyancing money.
Conveyancing money, which is used for housing transactions, includes stamp duty payment and option deposits. A seller receives an option deposit - typically 4 or 9 per cent of the purchase price, which a buyer pays - once the option to purchase is exercised.
The law currently does not prohibit lawyers from holding clients' conveyancing money.
In a public consultation paper released in August 2009, the Ministry of Law suggested prohibiting lawyers from holding any conveyancing money. The Singapore Academy of Law (SAL) will be the main entity appointed to hold conveyancing money, the paper said then.
But after public feedback - which included suggestions to allow banks to hold conveyancing money - the ministry has made revisions to the proposed measures. A second public consultation paper was released today.
Under the newest set of measures, approved banks will be permitted to open conveyancing accounts for law firms. But, as an alternative, buyers and sellers may still choose to use the service provided by SAL to hold option deposits in private property or HDB industrial/commercial property transactions.
The Law Ministry also said that a central signature repository will be established to allow the approved banks and SAL to check the signatures.
A pilot trial of the proposed measures will be conducted soon. BT understands that about 30 law firms and the three local banks - DBS Bank, United Overseas Bank (UOB) and OCBC Bank - will be involved in the pilot, which could take place in April and May this year. The new measures could be implemented in early 2011, sources said.
Lawyers welcome the new proposed measures, though they add that it will mean more time for administrative procedures, such as getting the counter signatures.
They also highlight some concerns. For one thing, they say the cost to customers could increase if banks charge a fee for the conveyancing accounts. For another, the interest earned from these accounts will be kept by the banks, as opposed to the current practice where interest earned from law firms' client accounts is returned to the clients.
Conveyancing accounts proposed to hold clients' funds
They will have security measures to ensure lawyers can't abscond with money
By UMA SHANKARI
(SINGAPORE) The Ministry of Law is proposing that law firms set up a new type of bank account - a conveyancing account - for lawyers to hold funds entrusted to them by homebuyers and sellers.
The pilot trial of the new scheme could take place as soon as April this year, with the entire scheme taking off as early as next year, BT understands.
These conveyancing accounts will have a host of security measures in place to make sure that lawyers cannot abscond with clients' money, such as requiring signatures from both the buyer's and the seller's lawyers before any money can be moved.
'A home is often a person's most substantial asset. The money intended for its purchase and arising from its sale should be properly protected,' the Law Ministry said in a statement yesterday.
The proposed changes follow the infamous case involving lawyer David Rasif, who ran off with some $10 million of his clients' money in 2006, as well as other recent cases in which lawyers absconded with their clients' conveyancing money.
Conveyancing money, which is used for housing transactions, includes stamp duty payment and option deposits. A seller receives an option deposit - typically 4 or 9 per cent of the purchase price, which a buyer pays - once the option to purchase is exercised.
The law currently does not prohibit lawyers from holding clients' conveyancing money.
In a public consultation paper released in August 2009, the Ministry of Law suggested prohibiting lawyers from holding any conveyancing money. The Singapore Academy of Law (SAL) will be the main entity appointed to hold conveyancing money, the paper said then.
But after public feedback - which included suggestions to allow banks to hold conveyancing money - the ministry has made revisions to the proposed measures. A second public consultation paper was released today.
Under the newest set of measures, approved banks will be permitted to open conveyancing accounts for law firms. But, as an alternative, buyers and sellers may still choose to use the service provided by SAL to hold option deposits in private property or HDB industrial/commercial property transactions.
The Law Ministry also said that a central signature repository will be established to allow the approved banks and SAL to check the signatures.
A pilot trial of the proposed measures will be conducted soon. BT understands that about 30 law firms and the three local banks - DBS Bank, United Overseas Bank (UOB) and OCBC Bank - will be involved in the pilot, which could take place in April and May this year. The new measures could be implemented in early 2011, sources said.
Lawyers welcome the new proposed measures, though they add that it will mean more time for administrative procedures, such as getting the counter signatures.
They also highlight some concerns. For one thing, they say the cost to customers could increase if banks charge a fee for the conveyancing accounts. For another, the interest earned from these accounts will be kept by the banks, as opposed to the current practice where interest earned from law firms' client accounts is returned to the clients.
TODAY Online : New system to safeguard property deals
New system to safeguard property deals
05:55 AM Jan 18, 2010
SINGAPORE - For property deals in future, both buyer and seller will have to give the go-ahead before any payment can go through. This new two-party signatory system forms the centrepiece of measures that the Law Ministry is seeking to roll out to tackle the longstanding problem of crooked lawyers absconding with clients' cash.
The last five years has seen a handful of rogue lawyers skipping town with almost $20 million - the most memorable being David Rasif, who disappeared with about $11 million in 2006.
MinLaw is seeking a second round of public feedback on the revised enhancements, which will see banks playing a central role in safeguarding money meant for property transactions that lawyers are entrusted with. Under the latest recommendations, lawyers cannot hold any conveyancing monies - option deposits, stamp duties, balance sales proceeds, for example - in their regular client account.
Other than holding up to $5,000 for last-minute disbursements - not unusual in property deals - in their client accounts, law firms have to open a separate type of bank account to hold remaining funds.
Anyone breaching this may be jailed up to three years or fined up to $50,000. The money may also be held in an escrow account between lawyers for both parties.
Either way, to deposit or release any funds from the account, lawyers for both buyers and sellers of properties need to sign off on prescribed forms.
Banks will validate the signatures against a Central Signature Repository - which will be set up in due course - before pay-out is made to approved parties, such as sellers, mortgage banks or others as indicated. Payment will only be through cashier's orders.
Banks will also show on their website a list of law firms that have conveyancing accounts with them, as well as the account numbers, to enable property buyers to make verifications.
So far, only DBS, UOB and OCBC have signed up for the scheme, but MinLaw expects foreign banks to be involved eventually. Although the stringent checks will cause some delays initially, lawyers say this is a worthy trade-off for buyers and sellers.
Rodyk & Davidson partner Norman Ho said: "If there's cooperation between the bank and the lawyers and among the lawyers working on the transactions, and with the understanding of the public, there should be no issue. Ultimately, the result to be achieved is to ensure that monies are safeguarded."
Law Minister and Second Minister for Home Affairs K Shanmugam said it is all a matter of balance: "In the end, you cannot completely eliminate fraud. You can only try and put in rules to make sure it makes it more difficult to commit fraud. And at the same time, 99 per cent of the transactions go through without problems or have gone through without problems. And in order to try and catch the small number of situations where that hasn't worked, you must make the rules unworkable." TEO XUANWEI
A pilot trial involving selected law firms and the three banks will be held from April to May. The trial is expected to process around 400 cases. For details on the proposed measures, visit www.minlaw.gov.sg. The public can fax feedback to 6332 8842 or email MLAW_Consultation@mlaw.gov.sg by Feb 12.
05:55 AM Jan 18, 2010
SINGAPORE - For property deals in future, both buyer and seller will have to give the go-ahead before any payment can go through. This new two-party signatory system forms the centrepiece of measures that the Law Ministry is seeking to roll out to tackle the longstanding problem of crooked lawyers absconding with clients' cash.
The last five years has seen a handful of rogue lawyers skipping town with almost $20 million - the most memorable being David Rasif, who disappeared with about $11 million in 2006.
MinLaw is seeking a second round of public feedback on the revised enhancements, which will see banks playing a central role in safeguarding money meant for property transactions that lawyers are entrusted with. Under the latest recommendations, lawyers cannot hold any conveyancing monies - option deposits, stamp duties, balance sales proceeds, for example - in their regular client account.
Other than holding up to $5,000 for last-minute disbursements - not unusual in property deals - in their client accounts, law firms have to open a separate type of bank account to hold remaining funds.
Anyone breaching this may be jailed up to three years or fined up to $50,000. The money may also be held in an escrow account between lawyers for both parties.
Either way, to deposit or release any funds from the account, lawyers for both buyers and sellers of properties need to sign off on prescribed forms.
Banks will validate the signatures against a Central Signature Repository - which will be set up in due course - before pay-out is made to approved parties, such as sellers, mortgage banks or others as indicated. Payment will only be through cashier's orders.
Banks will also show on their website a list of law firms that have conveyancing accounts with them, as well as the account numbers, to enable property buyers to make verifications.
So far, only DBS, UOB and OCBC have signed up for the scheme, but MinLaw expects foreign banks to be involved eventually. Although the stringent checks will cause some delays initially, lawyers say this is a worthy trade-off for buyers and sellers.
Rodyk & Davidson partner Norman Ho said: "If there's cooperation between the bank and the lawyers and among the lawyers working on the transactions, and with the understanding of the public, there should be no issue. Ultimately, the result to be achieved is to ensure that monies are safeguarded."
Law Minister and Second Minister for Home Affairs K Shanmugam said it is all a matter of balance: "In the end, you cannot completely eliminate fraud. You can only try and put in rules to make sure it makes it more difficult to commit fraud. And at the same time, 99 per cent of the transactions go through without problems or have gone through without problems. And in order to try and catch the small number of situations where that hasn't worked, you must make the rules unworkable." TEO XUANWEI
A pilot trial involving selected law firms and the three banks will be held from April to May. The trial is expected to process around 400 cases. For details on the proposed measures, visit www.minlaw.gov.sg. The public can fax feedback to 6332 8842 or email MLAW_Consultation@mlaw.gov.sg by Feb 12.
ST Forum : Agents shouldn't refer sellers to moneylenders
Jan 18, 2010
Agents shouldn't refer sellers to moneylenders
I REFER to last Monday's report, 'Moneylenders target HDB sellers', which mentioned that 'agents...introduce desperate sellers to moneylenders, and may get a fee for the referral, usually about $500 a customer'.
The Singapore Accredited Estate Agencies does not support the practice of estate agents obtaining referral fees from moneylenders for introducing their clients to them.
Estate agents should not introduce HDB sellers to moneylenders for a referral fee as this is not within the ambit of their job and the real estate brokerage service rendered. Estate agents who do so may also breach ethical obligations to their clients.
Instead, according to the HDB resale checklist for sellers, estate agents should, among other duties, help HDB sellers work out their estimated sales proceeds before selling, and upon resale, sellers have to discharge their outstanding mortgage loan and refund the Central Provident Fund monies used to buy the flat with interest to their CPF accounts.
Estate agents should also advise sellers to plan for their next home before they sell their flat, and should the sellers wish to buy another HDB flat, they will need to know if they are eligible for an HDB or bank loan.
Consumers are encouraged to report estate agents who may, for their personal benefit, use pressure tactics to induce them to take up loans with moneylenders.
Agents shouldn't refer sellers to moneylenders
I REFER to last Monday's report, 'Moneylenders target HDB sellers', which mentioned that 'agents...introduce desperate sellers to moneylenders, and may get a fee for the referral, usually about $500 a customer'.
The Singapore Accredited Estate Agencies does not support the practice of estate agents obtaining referral fees from moneylenders for introducing their clients to them.
Estate agents should not introduce HDB sellers to moneylenders for a referral fee as this is not within the ambit of their job and the real estate brokerage service rendered. Estate agents who do so may also breach ethical obligations to their clients.
Instead, according to the HDB resale checklist for sellers, estate agents should, among other duties, help HDB sellers work out their estimated sales proceeds before selling, and upon resale, sellers have to discharge their outstanding mortgage loan and refund the Central Provident Fund monies used to buy the flat with interest to their CPF accounts.
Estate agents should also advise sellers to plan for their next home before they sell their flat, and should the sellers wish to buy another HDB flat, they will need to know if they are eligible for an HDB or bank loan.
Consumers are encouraged to report estate agents who may, for their personal benefit, use pressure tactics to induce them to take up loans with moneylenders.
ST : $310m building plan for City Harvest
Jan 18, 2010
$310m building plan for City Harvest
Large complex in 'central south' district will also house shops, restaurants
By Yen Feng
CITY Harvest Church has announced a $310 million expansion plan to buy land, and to erect a building that will house shops, restaurants and a 12,000-seat auditorium.
Founder Kong Hee, 45, said during church services yesterday and last Saturday that the land sale would be completed later this month. He did not specify the location, but said the site would be in the 'central south' district.
He described the site as 'super large'. It is believed the site covers an area as large as three football fields - six times the size of the Protestant church's current home in Jurong West Street 91, which it owns.
'This is truly amazing,' Dr Kong said yesterday at the Singapore Expo, where it has been renting a hall for services. 'Finally, we will have a church in the marketplace, for the marketplace, to penetrate the marketplace.'
The church's plans to incorporate retail elements into its building project follow similar plans announced in 2007 by New Creation Church, another large Christian group in Singapore.
New Creation has teamed up with mall developer CapitaLand Retail to build an 'integrated hub' at Buona Vista. The $1 billion project, when ready in 2012, will house shops, a concert hall and a theatre.
Details of the City Harvest project remain fuzzy. It is not known how many floors the building will have, how much space will be for retail and religious use, or when construction will start and end.
It is also unclear if the church will rope in partners, as New Creation did, to develop the site.
In response to queries from The Straits Times, Reverend Derek Dunn, City Harvest's executive pastor, said yesterday that a non-disclosure agreement prevented him from commenting on the project.
At yesterday's service, Dr Kong said only that there would be 'ample parking', and that the building would have 'eateries, restaurants and world-class facilities'. The news surprised many churchgoers, who cheered and waved their hands.
Last Saturday night, Dr Kong posted a message on his Twitter service that proclaimed: 'Told them the great news. People were laughing, crying, clapping. A new day for City Harvest Church.'
Yesterday, he told the congregation that expansion plans had been germinating since 2005, when the church began renting a hall at Singapore Expo to hold additional services for its growing congregation - now 27,000 strong. The Jurong West church seats only about 2,400.
According to City Harvest financial statements, it spent $3 million on rent from July 2007 to October 2008.
Dr Kong said he had considered 25 potential sites, including the Capitol Theatre at Stamford Road, The Pines Club at Stevens Road and the Toa Payoh Sports Complex, but had found them all unsuitable.
At $310 million, the proposed facilities would cost each member about $11,000 if they divided the amount equally.
Member donations make up more than 95 per cent of the church's annual income.
The church plans to pay for the project over seven to 10 years, although it has set an initial target of $17 million by June.
Members were optimistic, despite the recession, that they would reach the target. They also pointed to how New Creation Church members managed to raise $19 million in just one day last year in March - at a time when banks were failing and millions worldwide were out of jobs.
$310m building plan for City Harvest
Large complex in 'central south' district will also house shops, restaurants
By Yen Feng
CITY Harvest Church has announced a $310 million expansion plan to buy land, and to erect a building that will house shops, restaurants and a 12,000-seat auditorium.
Founder Kong Hee, 45, said during church services yesterday and last Saturday that the land sale would be completed later this month. He did not specify the location, but said the site would be in the 'central south' district.
He described the site as 'super large'. It is believed the site covers an area as large as three football fields - six times the size of the Protestant church's current home in Jurong West Street 91, which it owns.
'This is truly amazing,' Dr Kong said yesterday at the Singapore Expo, where it has been renting a hall for services. 'Finally, we will have a church in the marketplace, for the marketplace, to penetrate the marketplace.'
The church's plans to incorporate retail elements into its building project follow similar plans announced in 2007 by New Creation Church, another large Christian group in Singapore.
New Creation has teamed up with mall developer CapitaLand Retail to build an 'integrated hub' at Buona Vista. The $1 billion project, when ready in 2012, will house shops, a concert hall and a theatre.
Details of the City Harvest project remain fuzzy. It is not known how many floors the building will have, how much space will be for retail and religious use, or when construction will start and end.
It is also unclear if the church will rope in partners, as New Creation did, to develop the site.
In response to queries from The Straits Times, Reverend Derek Dunn, City Harvest's executive pastor, said yesterday that a non-disclosure agreement prevented him from commenting on the project.
At yesterday's service, Dr Kong said only that there would be 'ample parking', and that the building would have 'eateries, restaurants and world-class facilities'. The news surprised many churchgoers, who cheered and waved their hands.
Last Saturday night, Dr Kong posted a message on his Twitter service that proclaimed: 'Told them the great news. People were laughing, crying, clapping. A new day for City Harvest Church.'
Yesterday, he told the congregation that expansion plans had been germinating since 2005, when the church began renting a hall at Singapore Expo to hold additional services for its growing congregation - now 27,000 strong. The Jurong West church seats only about 2,400.
According to City Harvest financial statements, it spent $3 million on rent from July 2007 to October 2008.
Dr Kong said he had considered 25 potential sites, including the Capitol Theatre at Stamford Road, The Pines Club at Stevens Road and the Toa Payoh Sports Complex, but had found them all unsuitable.
At $310 million, the proposed facilities would cost each member about $11,000 if they divided the amount equally.
Member donations make up more than 95 per cent of the church's annual income.
The church plans to pay for the project over seven to 10 years, although it has set an initial target of $17 million by June.
Members were optimistic, despite the recession, that they would reach the target. They also pointed to how New Creation Church members managed to raise $19 million in just one day last year in March - at a time when banks were failing and millions worldwide were out of jobs.
ST : Proposed law changes to protect clients in property deals
Jan 18, 2010
Proposed law changes to protect clients in property deals
By K.C. Vijayan, Law Correspondent
THE Law Ministry has tweaked proposed changes restricting lawyers' access to their clients' money in property deals and is going for a second round of public consultation before finalising changes.
The new suggestions will let conveyancing lawyers hold their clients' money, although a string of safeguards will be put in place to make it that much harder for them to run off with the funds.
In the first round of public consultations last August, the ministry had suggested that lawyers no longer be able to deposit conveyancing money into their regular clients' accounts and that the Singapore Academy of Law (SAL) be the main entity to hold it.
But after feedback, the ministry tweaked the measures to allow clients to choose to leave money matters with their lawyers but to be kept in approved banks, or leave it in the hands of the SAL.
The moves are geared towards providing a final solution to the longstanding problem of lawyers running off with their clients' money. In the last six years, at least four rogue lawyers have fled with almost $20 million in funds meant for property transactions and held in client accounts in their law firms.
Conveyancing funds include the option to buy deposits, purchase and CPF money as well as the stamp duty payable on the deals. These typically come up to at least a six-digit sum for an average private property transaction.
Last year, about 33,000 private homes were sold. In addition, the HDB recorded some 28,441 flat resale deals, based on its last annual report ending March 2009.
Under the new proposals, law firms will have to open up a separate conveyancing account in approved banks which is separate from the client's account.
Money from such conveyancing accounts can be withdrawn only with the signature of the lawyers of both parties of the property transaction and the payout will be only via cashier's order.
In addition, the ministry will also appoint a party to set up a central signature repository of lawyers' signatures to allow the banks and the SAL to check the counter-signatures against the records.
Lawyers will be allowed to hold up to $5,000 of their client's money in their regular accounts, if their clients approve, to deal with last-minute payments and miscellaneous costs incurred in transactions.
For en bloc projects, they will be allowed to keep up to $2,000 per unit, subject to a $200,000 cap.
To give the changes bite, new legislation will be tabled in due course to subject those who breach the rules against keeping such conveyancing funds to fines of up to $50,000 or three years' jail.
The proposals are not expected to slow down the transactions, which typically take two to three months to complete.
A trial run involving SAL and the three local banks - DBS, OCBC and UOB - on 400 new property deals will be conducted in April and May to iron out any kinks in the system.
Proposed law changes to protect clients in property deals
By K.C. Vijayan, Law Correspondent
THE Law Ministry has tweaked proposed changes restricting lawyers' access to their clients' money in property deals and is going for a second round of public consultation before finalising changes.
The new suggestions will let conveyancing lawyers hold their clients' money, although a string of safeguards will be put in place to make it that much harder for them to run off with the funds.
In the first round of public consultations last August, the ministry had suggested that lawyers no longer be able to deposit conveyancing money into their regular clients' accounts and that the Singapore Academy of Law (SAL) be the main entity to hold it.
But after feedback, the ministry tweaked the measures to allow clients to choose to leave money matters with their lawyers but to be kept in approved banks, or leave it in the hands of the SAL.
The moves are geared towards providing a final solution to the longstanding problem of lawyers running off with their clients' money. In the last six years, at least four rogue lawyers have fled with almost $20 million in funds meant for property transactions and held in client accounts in their law firms.
Conveyancing funds include the option to buy deposits, purchase and CPF money as well as the stamp duty payable on the deals. These typically come up to at least a six-digit sum for an average private property transaction.
Last year, about 33,000 private homes were sold. In addition, the HDB recorded some 28,441 flat resale deals, based on its last annual report ending March 2009.
Under the new proposals, law firms will have to open up a separate conveyancing account in approved banks which is separate from the client's account.
Money from such conveyancing accounts can be withdrawn only with the signature of the lawyers of both parties of the property transaction and the payout will be only via cashier's order.
In addition, the ministry will also appoint a party to set up a central signature repository of lawyers' signatures to allow the banks and the SAL to check the counter-signatures against the records.
Lawyers will be allowed to hold up to $5,000 of their client's money in their regular accounts, if their clients approve, to deal with last-minute payments and miscellaneous costs incurred in transactions.
For en bloc projects, they will be allowed to keep up to $2,000 per unit, subject to a $200,000 cap.
To give the changes bite, new legislation will be tabled in due course to subject those who breach the rules against keeping such conveyancing funds to fines of up to $50,000 or three years' jail.
The proposals are not expected to slow down the transactions, which typically take two to three months to complete.
A trial run involving SAL and the three local banks - DBS, OCBC and UOB - on 400 new property deals will be conducted in April and May to iron out any kinks in the system.
ST : Wrong to accuse them of driving up costs: Shanmugam
Jan 18, 2010
ISSUE #1: FOREIGNERS TO BLAME FOR HIGH HDB PRICES?
Wrong to accuse them of driving up costs: Shanmugam
Non-PRs cannot buy HDB flats, and PRs too few to impact prices
By Jeremy Au Yong
MIDWAY through a 11/2-hour dialogue with Law Minister K. Shanmugam yesterday, 58-year-old Wee Kai Fatt stood up and gave voice to the claims of many coffee shop pundits here.
The senior engineer complained about the foreigner-fuelled population boom, saying he was shocked when he heard there were five million people living in Singapore.
This influx of foreigners, he added, had caused HDB home prices to rocket.
Taking it all in, Mr Shanmugam took pains to clarify what he said were several misconceptions in Mr Wee's statement.
The Law Minister's key message: Do not cast foreigners as the villains driving up the prices of HDB flats.
Speaking at the end of his three-hour visit to Yew Tee constituency in Hong Kah GRC, he said: 'The first misconception is that somehow there are five million people and that is putting pressure on all of us. It doesn't.'
Of the five million, 3.2million are citizens, and roughly 500,000 are permanent residents (PRs).
The remaining 1.3million are here on temporary work permits, and they 'impose no burden' on the public housing system, said Mr Shanmugam, who is also the Second Home Affairs Minister.
The reason: These foreigners are not allowed to buy any public housing flats, whether directly from the HDB or in the resale market.
As for the PRs, who can buy resale flats, he said they form too small a number at the moment to have any significant impact on prices.
So, who is supporting the high HDB prices?
Just last week, there were media reports of a two-room HDB flat in Chinatown selling for $245,000, or $45,000 more than the flat's valuation.
Mr Shanmugam's hunch is that Singaporeans are the likely culprits.
Asked by another Yew Tee resident about the high prices, he responded: 'You say maybe foreigners are paying these high valuations. I think if you check, you'll find that the majority are Singaporeans. The foreigners who come here and look at HDB flats generally buy the lower value flats.
'You'll see that they are spread out in the suburban areas, and their salaries tend not to be that high. They don't get the kind of grants we give Singaporeans. And it's not so easy for them. I haven't done an analysis of the statistics, but I'd be prepared to say that it is primarily Singaporeans who are paying these prices.'
He added that it would be difficult for the Government to step in and impose some sort of limit on resale flat prices.
'It requires the Government to intervene and for every one person you want to make happy, you will make another person unhappy,' he said.
The Government's approach instead was to give Singaporeans a leg up with concessionary loans and housing grants which can amount to as much as $40,000 just for young couples seeking to live near their parents.
Mr Shanmugam also noted that eight in 10 Singaporeans pay their HDB monthly mortgages completely with funds from their CPF savings and do not cough up any additional cash. All in, he said, flats remain affordable.
This year, the Government is ready to launch up to 12,000 build-to-order units to keep up with demand. In fact, HDB launched a new project in Yew Tee two weeks ago.
Yesterday's dialogue highlighted again the simmering tension between foreigners and locals here, as the issue dominated the meeting with around 150 residents.
In the past year, the surge in foreigners has been blamed for various ills - from the rise in home prices to a lack of jobs for Singaporeans.
Mr Shanmugam's remarks mark the latest attempt by a political leader to clarify the issue. He noted the Government need to work harder on getting across the message on the role of foreigners.
He said: 'Politics is, in fact, the art of communication, and this question shows how much misconception there is on the ground, and that is one of the problems a Government has and must overcome.'
jeremyau@sph.com.sg
--------------------------------------------------------------------------------
THE SELF-SERVICE WAY
'Let me pose a question back to you - 'What do you think is the solution if we can't get Singaporeans who all speak English? Then we have to get foreigners. Where do you think we can get them from, and can we educate all of them in English?' Therefore, if you are given a choice, either there is someone there to serve you, which is Singapore's style, or like in many Western countries, you do self-service.
I suspect...most Singaporeans will say 'OK, never mind, even if he can't speak English, I will prefer that to a self-service situation'. '
Mr Shanmugam, on foreign workers in the service sector who cannot speak English well
GOVT WILL PROVIDE OPPORTUNITIES
'What the Government can do is to provide a secure environment, good education, housing and health care. Then it is up to the individual to take advantage of that situation. We are a global city and we have to compete globally...Can the Government ensure the person who is not so well qualified earns the same as the person who can go to (work in) New York or London? We can't do that. If we did, we'll be finished as a city.
But we live together. We can't have some people doing very well and a lot of people suffering. So we have to ensure basic affordable housing, health care and so on. All that the Government will do, and upgrade and give opportunities to our people so that they can have a very high quality of life.'
Mr Shanmugam, on the Government's role in narrowing the widening income gap
BILINGUAL POLICY GIVES AN EDGE
'Our emphasis on second language has put us in good stead because as China is developing, the fact that Singaporeans are well-educated, hard-working, honest and have the ability to speak Mandarin, gives us tremendous advantage. Certainly, our businesses in China tell us that.
So I don't think the bilingual policy is wrong. Maybe requiring you to master it at a very high level, writing as well as speaking, may have to be changed. The policy is not a mistake, but the expectations that were placed, in terms of the proficiency that was expected, may have been too high.'
Mr Shanmugam, answering a student who asked if the Government's bilingual policy, in particular, the teaching of the Chinese language, is a mistake
ISSUE #1: FOREIGNERS TO BLAME FOR HIGH HDB PRICES?
Wrong to accuse them of driving up costs: Shanmugam
Non-PRs cannot buy HDB flats, and PRs too few to impact prices
By Jeremy Au Yong
MIDWAY through a 11/2-hour dialogue with Law Minister K. Shanmugam yesterday, 58-year-old Wee Kai Fatt stood up and gave voice to the claims of many coffee shop pundits here.
The senior engineer complained about the foreigner-fuelled population boom, saying he was shocked when he heard there were five million people living in Singapore.
This influx of foreigners, he added, had caused HDB home prices to rocket.
Taking it all in, Mr Shanmugam took pains to clarify what he said were several misconceptions in Mr Wee's statement.
The Law Minister's key message: Do not cast foreigners as the villains driving up the prices of HDB flats.
Speaking at the end of his three-hour visit to Yew Tee constituency in Hong Kah GRC, he said: 'The first misconception is that somehow there are five million people and that is putting pressure on all of us. It doesn't.'
Of the five million, 3.2million are citizens, and roughly 500,000 are permanent residents (PRs).
The remaining 1.3million are here on temporary work permits, and they 'impose no burden' on the public housing system, said Mr Shanmugam, who is also the Second Home Affairs Minister.
The reason: These foreigners are not allowed to buy any public housing flats, whether directly from the HDB or in the resale market.
As for the PRs, who can buy resale flats, he said they form too small a number at the moment to have any significant impact on prices.
So, who is supporting the high HDB prices?
Just last week, there were media reports of a two-room HDB flat in Chinatown selling for $245,000, or $45,000 more than the flat's valuation.
Mr Shanmugam's hunch is that Singaporeans are the likely culprits.
Asked by another Yew Tee resident about the high prices, he responded: 'You say maybe foreigners are paying these high valuations. I think if you check, you'll find that the majority are Singaporeans. The foreigners who come here and look at HDB flats generally buy the lower value flats.
'You'll see that they are spread out in the suburban areas, and their salaries tend not to be that high. They don't get the kind of grants we give Singaporeans. And it's not so easy for them. I haven't done an analysis of the statistics, but I'd be prepared to say that it is primarily Singaporeans who are paying these prices.'
He added that it would be difficult for the Government to step in and impose some sort of limit on resale flat prices.
'It requires the Government to intervene and for every one person you want to make happy, you will make another person unhappy,' he said.
The Government's approach instead was to give Singaporeans a leg up with concessionary loans and housing grants which can amount to as much as $40,000 just for young couples seeking to live near their parents.
Mr Shanmugam also noted that eight in 10 Singaporeans pay their HDB monthly mortgages completely with funds from their CPF savings and do not cough up any additional cash. All in, he said, flats remain affordable.
This year, the Government is ready to launch up to 12,000 build-to-order units to keep up with demand. In fact, HDB launched a new project in Yew Tee two weeks ago.
Yesterday's dialogue highlighted again the simmering tension between foreigners and locals here, as the issue dominated the meeting with around 150 residents.
In the past year, the surge in foreigners has been blamed for various ills - from the rise in home prices to a lack of jobs for Singaporeans.
Mr Shanmugam's remarks mark the latest attempt by a political leader to clarify the issue. He noted the Government need to work harder on getting across the message on the role of foreigners.
He said: 'Politics is, in fact, the art of communication, and this question shows how much misconception there is on the ground, and that is one of the problems a Government has and must overcome.'
jeremyau@sph.com.sg
--------------------------------------------------------------------------------
THE SELF-SERVICE WAY
'Let me pose a question back to you - 'What do you think is the solution if we can't get Singaporeans who all speak English? Then we have to get foreigners. Where do you think we can get them from, and can we educate all of them in English?' Therefore, if you are given a choice, either there is someone there to serve you, which is Singapore's style, or like in many Western countries, you do self-service.
I suspect...most Singaporeans will say 'OK, never mind, even if he can't speak English, I will prefer that to a self-service situation'. '
Mr Shanmugam, on foreign workers in the service sector who cannot speak English well
GOVT WILL PROVIDE OPPORTUNITIES
'What the Government can do is to provide a secure environment, good education, housing and health care. Then it is up to the individual to take advantage of that situation. We are a global city and we have to compete globally...Can the Government ensure the person who is not so well qualified earns the same as the person who can go to (work in) New York or London? We can't do that. If we did, we'll be finished as a city.
But we live together. We can't have some people doing very well and a lot of people suffering. So we have to ensure basic affordable housing, health care and so on. All that the Government will do, and upgrade and give opportunities to our people so that they can have a very high quality of life.'
Mr Shanmugam, on the Government's role in narrowing the widening income gap
BILINGUAL POLICY GIVES AN EDGE
'Our emphasis on second language has put us in good stead because as China is developing, the fact that Singaporeans are well-educated, hard-working, honest and have the ability to speak Mandarin, gives us tremendous advantage. Certainly, our businesses in China tell us that.
So I don't think the bilingual policy is wrong. Maybe requiring you to master it at a very high level, writing as well as speaking, may have to be changed. The policy is not a mistake, but the expectations that were placed, in terms of the proficiency that was expected, may have been too high.'
Mr Shanmugam, answering a student who asked if the Government's bilingual policy, in particular, the teaching of the Chinese language, is a mistake
ST Letters : Loan sharks turn dream home into family nightmare
Jan 17, 2010
YOUR LETTERS
Loan sharks turn dream home into family nightmare
My family moved into our dream home, a terrace house, in the east last year.
Our joy turned to shock when we woke up one morning to find our front gate and yard covered with red and blue paint.
There was also a note with the name of the former owner, his mobile phone number and the symbols 'O$P$'.
We realised immediately that this was the work of loan sharks.
We called the former owner immediately and he readily admitted that he had borrowed money from unlicensed moneylenders.
We asked him to inform the loan sharks that his house had been sold to us and to stop harassing us, but the harassment continued.
In the next four months up till last week, my house was splashed with paint in six more incidents.
Once, our main gate was chained with a bicycle lock. Another time, my car was splashed with red paint.
Our neighbours were also not spared. At least four other households were victims of the harassment and vandalism, because of the same borrower.
I have reported all the cases to the police, as well as appealed to my MP for help, but the situation has not improved. I pasted a sign on my gate saying that the former owner had already moved out, but it has not helped.
I also made the mistake of calling one of the loan sharks in an attempt to appeal for his understanding that I am the new owner.
Since then, he has been calling me and threatening to continue the harassment until he is paid.
The police have installed closed-circuit television (CCTV) cameras in my house but another case of harassment happened on the day of the installation.
Clearly the loan sharks are not afraid, since all the police can do is arrest the runners. The loan sharks can just get other runners to continue the harassment.
I am truly fearful for the safety of my family.
In the latest case, the loan sharks threw two beer bottles filled with paint into my front yard. The glass fragments were scattered all over the yard and could have injured my family.
I cannot imagine what the perpetrators will do next. Will they set fire to my house or break the doors and windows?
My family has been living in a state of fear. Our beautiful house has now turned into a mess with paint all over. I have given up cleaning because I know the loan sharks will strike again.
Right now, I see no end to my misery, and I have not received any updates on my case. I do not know when and how all this will end. What else can I do?
YOUR LETTERS
Loan sharks turn dream home into family nightmare
My family moved into our dream home, a terrace house, in the east last year.
Our joy turned to shock when we woke up one morning to find our front gate and yard covered with red and blue paint.
There was also a note with the name of the former owner, his mobile phone number and the symbols 'O$P$'.
We realised immediately that this was the work of loan sharks.
We called the former owner immediately and he readily admitted that he had borrowed money from unlicensed moneylenders.
We asked him to inform the loan sharks that his house had been sold to us and to stop harassing us, but the harassment continued.
In the next four months up till last week, my house was splashed with paint in six more incidents.
Once, our main gate was chained with a bicycle lock. Another time, my car was splashed with red paint.
Our neighbours were also not spared. At least four other households were victims of the harassment and vandalism, because of the same borrower.
I have reported all the cases to the police, as well as appealed to my MP for help, but the situation has not improved. I pasted a sign on my gate saying that the former owner had already moved out, but it has not helped.
I also made the mistake of calling one of the loan sharks in an attempt to appeal for his understanding that I am the new owner.
Since then, he has been calling me and threatening to continue the harassment until he is paid.
The police have installed closed-circuit television (CCTV) cameras in my house but another case of harassment happened on the day of the installation.
Clearly the loan sharks are not afraid, since all the police can do is arrest the runners. The loan sharks can just get other runners to continue the harassment.
I am truly fearful for the safety of my family.
In the latest case, the loan sharks threw two beer bottles filled with paint into my front yard. The glass fragments were scattered all over the yard and could have injured my family.
I cannot imagine what the perpetrators will do next. Will they set fire to my house or break the doors and windows?
My family has been living in a state of fear. Our beautiful house has now turned into a mess with paint all over. I have given up cleaning because I know the loan sharks will strike again.
Right now, I see no end to my misery, and I have not received any updates on my case. I do not know when and how all this will end. What else can I do?
ST Letters : HDB can still rectify Pinnacle's railings
Jan 17, 2010
YOUR LETTERS
HDB can still rectify Pinnacle's railings
I read with interest the article 'High anxiety at Pinnacle over short railings' last Sunday.
When I visited my long-awaited new home recently at Pinnacle@Duxton, I was dismayed to see such railings for both the middle units on every floor.
The height is definitely a design and security flaw. I believe anyone can do a 'Spiderman' stunt to enter our unit.
I also noted that painting work on my block was being rushed, and there were still workers around, taking naps and lunch breaks on my floor outside the other units.
Before I left my unit, I left a pineapple in the kitchen. I did not lock the courtyard door as it was not locked before I entered my unit. Also, there was nothing else in my unit.
However, when I went back to my new place two days later, I found that the pineapple was gone.
In the article, the Housing Board spokesman said the Pinnacle has 'no design flaw' and that 'safety and security are major considerations in the design of HDB flats'.
Yet the board has also said that residents can install grilles with locks and security appliances 'to make their homes more secure'.
So does this mean I can install full grilles for my unit now, in view of this break-in?
The HDB should have done a floor-to-ceiling railing instead of the current 1.8m-high one.
The middle units are very vulnerable to break-ins. Anyone can hang around the corridor, monitor the unit and climb in.
It is not too late for the HDB to rectify this design flaw.
Desmond Teo
YOUR LETTERS
HDB can still rectify Pinnacle's railings
I read with interest the article 'High anxiety at Pinnacle over short railings' last Sunday.
When I visited my long-awaited new home recently at Pinnacle@Duxton, I was dismayed to see such railings for both the middle units on every floor.
The height is definitely a design and security flaw. I believe anyone can do a 'Spiderman' stunt to enter our unit.
I also noted that painting work on my block was being rushed, and there were still workers around, taking naps and lunch breaks on my floor outside the other units.
Before I left my unit, I left a pineapple in the kitchen. I did not lock the courtyard door as it was not locked before I entered my unit. Also, there was nothing else in my unit.
However, when I went back to my new place two days later, I found that the pineapple was gone.
In the article, the Housing Board spokesman said the Pinnacle has 'no design flaw' and that 'safety and security are major considerations in the design of HDB flats'.
Yet the board has also said that residents can install grilles with locks and security appliances 'to make their homes more secure'.
So does this mean I can install full grilles for my unit now, in view of this break-in?
The HDB should have done a floor-to-ceiling railing instead of the current 1.8m-high one.
The middle units are very vulnerable to break-ins. Anyone can hang around the corridor, monitor the unit and climb in.
It is not too late for the HDB to rectify this design flaw.
Desmond Teo
ST : Good class bungalows may become pricier
Jan 17, 2010
property special
Good class bungalows may become pricier
They are evergreen investments with no oversupply problem
By Douglas Wong and Han Huan Mei
Good class bungalows (GCBs) enjoy a unique status in the Singapore residential market. These detached houses are highly exclusive as there are only around 2,400 units in the whole of Singapore.
They typically have a minimum plot size of 1,400 sq m, or 15,070 sq ft, and are distributed in 39 designated areas. The GCB market is stable and resilient because GCBs are evergreen investment products that are preferred by ultra-high net worth individuals.
GCBs are limited in supply in urban Singapore where landed housing is scarce. There will never be an oversupply situation. For the buyer, the odds of prices appreciating are better than that of them depreciating.
Most GCB owners have strong holding power, reducing the risk of falling prices during a downturn. Fire sales are thus hard to come by. This has been especially apparent in the recession year of 2009.
Despite the bleak economic outlook, last year was a brilliant year for the GCB market. The total value chalked up was in fact the highest since data was first made available in 1996, with 100 transactions amounting to $1.59 billion, far surpassing market expectations.
The month of July, in particular, saw the highest-ever number of 23 GCB caveats lodged in a single month. As economic fundamentals catch up with sentiment in the residential market this year, the outlook for the GCB market remains healthy.
Given an expected stable GCB market this year, the total transacted value could range from $1.2 billion to $1.4 billion with 80 to 90 transactions. This is lower than last year as the majority of buyers could have already made their purchases in 2009 itself. Buyers who had earlier anticipated that prices of GCBs would dip may have bought these properties last year, before GCB prices increased further along with the improvement in the equity market and market sentiments.
The recent financial crisis caused many investors to recognise GCBs as stable investments that are comparatively less risky than other forms of investments. With such optimism in the market, prices of GCBs could go up further this year.
While it is not possible to pinpoint the price increase on a per sq ft basis due to the unique features and rules governing the sale of GCBs, anecdotally, an overall quantum of $20 million and above per transaction has been occurring more frequently. Last year, there were 20 GCBs sold at a price of $20 million and above, compared to only 12 transactions in 2008, nine in 2007, and a mere four in 2006.
Basically, GCB prices are determined by three factors.
The first of these is location. While there are 39 designated bungalow areas in Singapore, some addresses are more exclusive than others, such as those in districts 10 and 11 compared with those in districts 20, 21 and 23. This explains the popularity and higher volume of transactions in the Nassim, Dalvey and Tanglin areas, which are the prime pickings from the GCB crop.
The second factor is the land on which the bungalow sits. Considerations to take into account here include the shape of the land, its terrain, its frontage and its potential for sub-division.
The final factor is the actual house on site: whether it is single- or double-storey, and how old it is.
Previously, before the escalation of construction costs in 2007, the actual bungalow on a GCB site made up around 20 to 25 per cent of its total price, with the land itself accounting for the rest. But in recent months, this proportion has risen to 25 to 30 per cent.
Most GCB sellers are people who have owned their GCBs for around 10 years, and who bought their homes when prices were lower. They usually own more than one GCB. With the current high profit margins, they are prepared to cash out and invest in other areas.
As for buyers, there are two categories. One group is young professionals in their late 30s who buy for their own stay. While in the past the typical age of a GCB buyer would be in the mid-40s, it is now not unusual to find GCB buyers in their late 30s.
The second group consists of ultra-high net worth individuals who buy for long-term investment, and eventually pass on the GCBs to the next generation.
In recent months, young professionals and entrepreneurs, as well as permanent residents, have been observed to show keen interest in the GCB market, driving up demand in a market that already has a limited supply.
This trend is expected to continue in 2010, as younger affluent home buyers recognise the investment value of GCBs.
The writers are CB Richard Ellis' director of luxury homes and associate director of research.
property special
Good class bungalows may become pricier
They are evergreen investments with no oversupply problem
By Douglas Wong and Han Huan Mei
Good class bungalows (GCBs) enjoy a unique status in the Singapore residential market. These detached houses are highly exclusive as there are only around 2,400 units in the whole of Singapore.
They typically have a minimum plot size of 1,400 sq m, or 15,070 sq ft, and are distributed in 39 designated areas. The GCB market is stable and resilient because GCBs are evergreen investment products that are preferred by ultra-high net worth individuals.
GCBs are limited in supply in urban Singapore where landed housing is scarce. There will never be an oversupply situation. For the buyer, the odds of prices appreciating are better than that of them depreciating.
Most GCB owners have strong holding power, reducing the risk of falling prices during a downturn. Fire sales are thus hard to come by. This has been especially apparent in the recession year of 2009.
Despite the bleak economic outlook, last year was a brilliant year for the GCB market. The total value chalked up was in fact the highest since data was first made available in 1996, with 100 transactions amounting to $1.59 billion, far surpassing market expectations.
The month of July, in particular, saw the highest-ever number of 23 GCB caveats lodged in a single month. As economic fundamentals catch up with sentiment in the residential market this year, the outlook for the GCB market remains healthy.
Given an expected stable GCB market this year, the total transacted value could range from $1.2 billion to $1.4 billion with 80 to 90 transactions. This is lower than last year as the majority of buyers could have already made their purchases in 2009 itself. Buyers who had earlier anticipated that prices of GCBs would dip may have bought these properties last year, before GCB prices increased further along with the improvement in the equity market and market sentiments.
The recent financial crisis caused many investors to recognise GCBs as stable investments that are comparatively less risky than other forms of investments. With such optimism in the market, prices of GCBs could go up further this year.
While it is not possible to pinpoint the price increase on a per sq ft basis due to the unique features and rules governing the sale of GCBs, anecdotally, an overall quantum of $20 million and above per transaction has been occurring more frequently. Last year, there were 20 GCBs sold at a price of $20 million and above, compared to only 12 transactions in 2008, nine in 2007, and a mere four in 2006.
Basically, GCB prices are determined by three factors.
The first of these is location. While there are 39 designated bungalow areas in Singapore, some addresses are more exclusive than others, such as those in districts 10 and 11 compared with those in districts 20, 21 and 23. This explains the popularity and higher volume of transactions in the Nassim, Dalvey and Tanglin areas, which are the prime pickings from the GCB crop.
The second factor is the land on which the bungalow sits. Considerations to take into account here include the shape of the land, its terrain, its frontage and its potential for sub-division.
The final factor is the actual house on site: whether it is single- or double-storey, and how old it is.
Previously, before the escalation of construction costs in 2007, the actual bungalow on a GCB site made up around 20 to 25 per cent of its total price, with the land itself accounting for the rest. But in recent months, this proportion has risen to 25 to 30 per cent.
Most GCB sellers are people who have owned their GCBs for around 10 years, and who bought their homes when prices were lower. They usually own more than one GCB. With the current high profit margins, they are prepared to cash out and invest in other areas.
As for buyers, there are two categories. One group is young professionals in their late 30s who buy for their own stay. While in the past the typical age of a GCB buyer would be in the mid-40s, it is now not unusual to find GCB buyers in their late 30s.
The second group consists of ultra-high net worth individuals who buy for long-term investment, and eventually pass on the GCBs to the next generation.
In recent months, young professionals and entrepreneurs, as well as permanent residents, have been observed to show keen interest in the GCB market, driving up demand in a market that already has a limited supply.
This trend is expected to continue in 2010, as younger affluent home buyers recognise the investment value of GCBs.
The writers are CB Richard Ellis' director of luxury homes and associate director of research.
ST : Is private housing rally sustainable?
Jan 17, 2010
Is private housing rally sustainable?
There's still housing demand but heavy reliance on investor buyers poses risks
By Colin Tan
In July last year, a buying wave of tsunami proportions drove developers' sales for the month to an astounding 2,772 units.
To put that into context, the number was huge even for a quarter, let alone a single month. It is easily more than three times the monthly average sales of 700 to 900 units over the past decade.
If robust sales for the previous five months - averaging over 1,400 units per month - had not made policymakers sit up, this result certainly caught everyone's attention.
Was it pent-up demand? Quite a few thought so. Speculative? The Government thought so. It announced measures in September to 'temper the exuberance in the market and pre-empt any speculative bubble from forming'.
Developers were dismayed, thinking the measures were a death knell for the fragile market. Actually, the impact was more psychological than real, because the measures were aimed at pure speculative plays, not investors.
Have the measures worked? It is hard to tell. Sales in the following months fell, but they would have come down anyway, with or without the measures. July's figures were simply too high.
Many predicted even fewer sales with the approaching year-end holiday period. But November's figures showed a solid 600 units sold. Considering it was a 'slow' month, sales were good as they were achieved despite rising prices.
The actual price rise in the fourth quarter of last year will probably be more than the 7.3per cent estimate last month. Certainly, this is not a market which has seen better days.
Will buying continue? There is no reason why not. Investors are buying, not speculators, so the cooling measures have little impact.
Chinese investors in particular are leading the charge. Many have taken profit in China's real estate boom, and their funds are now moving into Hong Kong and spilling over to Singapore.
So what might happen this year? Unless there are alternative channels for this massive liquidity, the buying will likely continue until the authorities are forced to step in to limit the risks arising from the banking sector's increased exposure to the property sector.
As I see it, there are two possible scenarios for this year: continued healthy growth, or a sharp correction.
Demand still genuine
There is genuine pent-up demand for homes as there has been a rapid increase in the number of households over the past two years. Many are buying now instead of renting, with the majority buying for their own occupation.
While incomes have not risen as rapidly as prices, most buyers are sitting on accumulated wealth. In the case of new permanent residents, many have made huge capital gains on properties in their home countries.
The opening of the integrated resorts will bring in more employees. Even if these are not of managerial level, they will stoke the Housing Board resale market, which in turn supports the private housing market as HDB upgraders cross over.
The economy's exposure to property will be moderate as most buyers are not borrowing up to the 80per cent allowed, as they are using their accumulated wealth to lower their loan-to-price ratio.
Importantly, the economy is growing again. So will incomes, even if both are expected to see slow growth. The widening gap between home prices and economic fundamentals will narrow eventually.
Money from China and elsewhere is flowing in in search of long-term investments. Even if they are not living here now, most investors intend to make Singapore their home in the not-too-distant future. Many are not likely to pull out their funds at the drop of a hat.
Investing in property is a hedge against inflation. Where stock prices may go down, property will hold its value. Investing in property is a sure thing if you hold it long enough.
Over-reliance on investors?
But part of the capital inflow that is driving up property sales and prices is hot money seeking high yields. If returns are better elsewhere, it could leave quickly.
Liquidity also feeds on confidence. When that is lost, funds move out, such as in Dubai.
At current price levels, most genuine owner-occupiers have been crowded out. This explains the sudden popularity in HDB resale flats and the sharp rise in resale prices.
Many of those still buying homes are investors. Developers recognise this and are focused on the investor buyer: apartment sizes have shrunk to as little as 300 to 400 sq ft to raise affordability and some sales previews are limited to buyers interested in multiple units.
If investors form the bulk of buyers, who will occupy the completed units? Private rentals are not moving up just yet. Traditionally, owner-occupiers form the bedrock of property purchasers. When that balance is heavily distorted, you can expect serious repercussions.
Also, property prices move in cycles. Gone are the days when prices moved up in a straight line. Buying at the peak means waiting a full cycle before prices come up again. In the meantime, will rentals cover investors' loan repayments?
The stimulus packages rolled out by governments worldwide helped save the financial system from collapse. However, this situation is unsustainable and the stimulus will need to be rolled back eventually, leading to rising interest rates.
With rates so low now, any big increases could translate to a doubling or even tripling of mortgage payments.
Even if Singapore manages its asset inflation situation prudently, a domino effect is still possible if overseas property bubbles burst.
To sum up, the health of the market depends on the number of investors versus those buying for their own use. But even if there are many more investors, it still does not guarantee that the market will correct immediately, although cracks will eventually surface.
The writer is director and head of research and consultancy at Chesterton Suntec International.
--------------------------------------------------------------------------------
Hot money may not stay
'Part of the capital inflow that is driving up property sales and prices is hot money seeking high yields. If returns are better elsewhere, it could leave quickly.'
Is private housing rally sustainable?
There's still housing demand but heavy reliance on investor buyers poses risks
By Colin Tan
In July last year, a buying wave of tsunami proportions drove developers' sales for the month to an astounding 2,772 units.
To put that into context, the number was huge even for a quarter, let alone a single month. It is easily more than three times the monthly average sales of 700 to 900 units over the past decade.
If robust sales for the previous five months - averaging over 1,400 units per month - had not made policymakers sit up, this result certainly caught everyone's attention.
Was it pent-up demand? Quite a few thought so. Speculative? The Government thought so. It announced measures in September to 'temper the exuberance in the market and pre-empt any speculative bubble from forming'.
Developers were dismayed, thinking the measures were a death knell for the fragile market. Actually, the impact was more psychological than real, because the measures were aimed at pure speculative plays, not investors.
Have the measures worked? It is hard to tell. Sales in the following months fell, but they would have come down anyway, with or without the measures. July's figures were simply too high.
Many predicted even fewer sales with the approaching year-end holiday period. But November's figures showed a solid 600 units sold. Considering it was a 'slow' month, sales were good as they were achieved despite rising prices.
The actual price rise in the fourth quarter of last year will probably be more than the 7.3per cent estimate last month. Certainly, this is not a market which has seen better days.
Will buying continue? There is no reason why not. Investors are buying, not speculators, so the cooling measures have little impact.
Chinese investors in particular are leading the charge. Many have taken profit in China's real estate boom, and their funds are now moving into Hong Kong and spilling over to Singapore.
So what might happen this year? Unless there are alternative channels for this massive liquidity, the buying will likely continue until the authorities are forced to step in to limit the risks arising from the banking sector's increased exposure to the property sector.
As I see it, there are two possible scenarios for this year: continued healthy growth, or a sharp correction.
Demand still genuine
There is genuine pent-up demand for homes as there has been a rapid increase in the number of households over the past two years. Many are buying now instead of renting, with the majority buying for their own occupation.
While incomes have not risen as rapidly as prices, most buyers are sitting on accumulated wealth. In the case of new permanent residents, many have made huge capital gains on properties in their home countries.
The opening of the integrated resorts will bring in more employees. Even if these are not of managerial level, they will stoke the Housing Board resale market, which in turn supports the private housing market as HDB upgraders cross over.
The economy's exposure to property will be moderate as most buyers are not borrowing up to the 80per cent allowed, as they are using their accumulated wealth to lower their loan-to-price ratio.
Importantly, the economy is growing again. So will incomes, even if both are expected to see slow growth. The widening gap between home prices and economic fundamentals will narrow eventually.
Money from China and elsewhere is flowing in in search of long-term investments. Even if they are not living here now, most investors intend to make Singapore their home in the not-too-distant future. Many are not likely to pull out their funds at the drop of a hat.
Investing in property is a hedge against inflation. Where stock prices may go down, property will hold its value. Investing in property is a sure thing if you hold it long enough.
Over-reliance on investors?
But part of the capital inflow that is driving up property sales and prices is hot money seeking high yields. If returns are better elsewhere, it could leave quickly.
Liquidity also feeds on confidence. When that is lost, funds move out, such as in Dubai.
At current price levels, most genuine owner-occupiers have been crowded out. This explains the sudden popularity in HDB resale flats and the sharp rise in resale prices.
Many of those still buying homes are investors. Developers recognise this and are focused on the investor buyer: apartment sizes have shrunk to as little as 300 to 400 sq ft to raise affordability and some sales previews are limited to buyers interested in multiple units.
If investors form the bulk of buyers, who will occupy the completed units? Private rentals are not moving up just yet. Traditionally, owner-occupiers form the bedrock of property purchasers. When that balance is heavily distorted, you can expect serious repercussions.
Also, property prices move in cycles. Gone are the days when prices moved up in a straight line. Buying at the peak means waiting a full cycle before prices come up again. In the meantime, will rentals cover investors' loan repayments?
The stimulus packages rolled out by governments worldwide helped save the financial system from collapse. However, this situation is unsustainable and the stimulus will need to be rolled back eventually, leading to rising interest rates.
With rates so low now, any big increases could translate to a doubling or even tripling of mortgage payments.
Even if Singapore manages its asset inflation situation prudently, a domino effect is still possible if overseas property bubbles burst.
To sum up, the health of the market depends on the number of investors versus those buying for their own use. But even if there are many more investors, it still does not guarantee that the market will correct immediately, although cracks will eventually surface.
The writer is director and head of research and consultancy at Chesterton Suntec International.
--------------------------------------------------------------------------------
Hot money may not stay
'Part of the capital inflow that is driving up property sales and prices is hot money seeking high yields. If returns are better elsewhere, it could leave quickly.'
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