High-end Homes Lure Institutional Investors

Straits Times: High-end homes lure institutional investors

By Esther Teo

Institutional investors have become more active in the high-end home market, with the segment trading at a discount to its peak.

The Straits Times understands that 20 units at Paterson Suites were snapped up by Singapore-based investment fund Real Estate Capital Asia Partners (Recap) last month at an average price of $2,700 per sq ft (psf).

Recap is believed to have paid $118 million for the 20 four-bedroom apartments across the 2nd to 21st storeys with a total strata area of about 44,000 sq ft.

The price represents a discount of about a 10 to 15per cent on what the units would have cost individually, sources said.

The fund's substantial purchase has helped boost total sales at the high-end condo to 64 out of its 102 units as of last month. Bukit Sembawang's Paterson Suites was launched in 2007 and completed in the third quarter.

Property consultancy Savills is believed to have brokered the deal but could not be reached for comment yesterday.

The Straits Times previously reported that 38 of the 41 units sold in total at Paterson Suites last month were bought by a handful of private investors. The 41 units sold at a median price of $2,661 psf last month.

The 20 units that Recap bought were part of the 38 units sold.

Experts believe that increasing interest in the high- end apartment segment is likely to be due to prices of such homes languishing below their 2007 peaks, providing an opportunity for capital gain. Also, the Singdollar, which is expected to strengthen further, provides investors with an opportunity for currency gain, further sweetening the deal, they added.

Excerpt from Straits Times FRI, DEC 24, 2010.

Completing soon

The Ritz-Carlton Residences had it's 'topping out' ceremony yesterday where guests and staff  of the developer, KOP Properties, gathered on the roof of the 36-storey development's penthouse to witness the pouring of the final bit of cement.

Leny Suparman, its chief executive, is upbeat about the prospects of Singapore's luxury residential market.

The 58-unit Ritz-Carlton Residences, located at Cairnhill Road, is about 40 per cent sold and units are now selling for about $3,300 per square foot (psf) each, Ms Suparman said.

Ms Suparman said that sales will pick up as the project nears completion, which is targeted for June next year: 'We are quite confident that sales will be brisk from now on and that the project will achieve the price that it deserves.'

The developer's other project, the 56-unit The Hamilton Scotts, is also about 40 per cent sold, Ms Suparman said.

KOP Properties is part of KOP Group, an integrated real asset investment company. KOP Group is 51 per cent owned by Dubai Group, a unit of Dubai Holdings.

Adapted from the Business Times, Tuesday, December 21, 2010. 

Straits Times: Europe's stiff rules spell bonus for Asia

By Gabriel Chen

Bank talent, even banks, may be driven to Singapore and Hong Kong by moves to curb bonuses.

Bankers reckon the likes of HSBC and Standard Chartered may want to move their corporate headquarters to Asia to avoid applying the rules to their large numbers of employees located outside Europe.

*Note: Excerpt only, please refer to www.straitstimes.com for the complete article.

This will certainly benefit Singapore and Hong Kong. Moreover, the personal income and corporate tax rates are far more attractive than the European countries. Attracting these banks here will also give a boost to GDP and luxury-end property prices. Prices of these properties in Singapore still have some catching up to do with respect to other financial centers like London and New York. -Farrand

London Bankers to Spend $1.6 Billion of Bonus Payout on Homes

Source: Bloomberg

Dec. 10 (Bloomberg) -- London bankers and other financial- services employees will spend about 1 billion pounds ($1.6 billion) of their 2010 bonus money on homes in the U.K. capital, 17 percent less than last year, Savills Plc said.

The purchases may not stop prices of London luxury homes from falling next year, though the drop probably won't exceed 1 percent, Savills said in a statement. Values rose about 2 percent this year, helped in part by approximately 1.2 billion pounds of 2009 bonus money, the broker estimates.

This year's payments won't trigger a "measurable price rise as seen in the past," Yolande Barnes, head of residential research at the London-based property adviser, said in the statement. "Rather, we anticipate that bonus money will be fed into the market over a longer time period."

Bonus-earners typically account for half of the buyers of London homes costing more than 1 million pounds, according to Savills. Record payouts in 2006 and 2007 -- which the Centre for Economics & Business Research says totaled 11.5 billion pounds each year -- sent property values surging to all-time highs in neighborhoods such as Chelsea, Belgravia and Kensington.

The CEBR expects bonuses for the 300,000 financial-services workers in London to total 7 billion pounds before taxes in 2010, about 5 percent less than in 2009, according to Savills's report.

Companies have slashed bonuses to weather the global financial crisis. They're also now deferring payments or offering shares in response to pressure from politicians and regulators. Since April, the tax rate for incomes exceeding 150,000 pounds increased to 50 percent from 40 percent.

Deferred Payments

"General caution and the method and timing of the payouts mean that only a portion will be invested in property," Barnes said. That means home sales in the second quarter, which is usually when bonuses for the previous year get paid, are unlikely to jump, she said.

Though the amount of 2010 bonus money expected to be spent on property has shrunk, deferred bonus payments from previous years or money from increased salaries may also go into real estate, Barnes said.

Lindsay Cuthill, head of Savills's southwest London sales offices, said the broker has started receiving the first offers from purchasers anticipating bonuses after viewings in November increased fourfold from October.

"We're seeing buyers circling properties" in the 2.5 million-pound price band, he said.

Battersea, Chiswick

Changes in bonus pools have the most effect on real estate in southwest London. Owner-occupiers employed in banking and financial services tend to favor neighborhoods such as Battersea, Wimbledon and Chiswick because of the relatively high proportion of family homes and good schools.

Prices in this part of London rose 12 percent in the third quarter from a year earlier, the biggest gain in Britain, Savills estimates. Prime property here costs an average of about 1.3 million pounds, less than the 2 million pounds or more needed to buy a similar home in central London.

Bonuses have been less of a driving force for prime residential property values in central London. Overseas buyers have been lured to those neighborhoods by the pound's weakness and price declines during the height of the financial crisis.

Savills estimates that 60 percent of prime central London property purchases are made by people outside the U.K.

Competition for a limited number of luxury homes for sale has limited the price decline since the peak to 5 percent, said Liam Bailey, head of residential research at competitor Knight Frank LLP. The number sold in the second and third quarters was 30 percent less than the same periods in 2007.

No signs of hot money inflows yet

Due to the developed counties perusing an easy monetary policy, many expects the hot money to flow into Asia and drive up asset prices. However, in the recent UBS research report:

"Capital inflows in to Singapore, while rising, are far from levels that cause concern. So far, base money growth is muted, and inflows appear concentrated in the bond market. Equity market volume is up 43% QTD from 1H10, but remains 15% below the average in 2H07. Foreign purchases of residential homes are 22% of the total, in line with the 10-year historical average (see chart below)."

Foreign Purchase of Singapore Properties. (Reproduced from UBS Investment Research: Singapore - Outlook 2011)

Adapted from UBS Investment Research: Singapore - Outlook 2011, dated 1st December 2010.

Some speed bumps ahead

Business Times Reports: New rule may weigh on prices of luxury condos
By KALPANA RASHIWALA

The prices of luxury condos have continued to rise this year but a new rule may soon tie the hands of the developers. Till now, many have picked their time to launch developments when sentiments are good and decent prices can be charged. But under the rule changes which are expected to kick in early next year, they may lose this luxury.

If they bust the project completion period on sites bought from private sector sources, they stand to lose not just the 10 per cent bankers' guarantee for land cost, but could also end up making huge payments for time extension. All this could force them to launch earlier than they might like and affect prices, market watchers said. The median price of new luxury condo transactions stood at $3,265 per square foot in Q3 this year, an increase of 18.7 per cent year to date, according to CB Richard Ellis' analysis. However, the figure is still about 13 per cent shy of the peak achieved in Q4 2007.

A question mark now hangs over whether the previous peak median price of $3,750 psf can be scaled next year. CBRE's compilation shows about 1,500-odd luxury non-landed homes could be generated on projects that have received planning approval from Urban Redevelopment Authority and which have yet to be launched. These include five projects in the Ardmore Park area alone, the Westwood site at Orchard Boulevard, the former Parisian plot at Angullia Park and Ho Bee's and IOI's 302-unit condo on the Pinnacle Collection plot at Sentosa Cove.

CBRE executive director (residential) Joseph Tan says: 'Developers' strategy in the first instance, would be to hold off launching these projects as long as they can until sentiment improves further in this segment.' Agreeing, Wheelock Properties (Singapore) CEO David Lawrence says: 'Traditionally, developers know that for really high-end projects on very good sites like Ardmore Park, if you just keep them in your pockets, eventually prices will come up and they make money. But developers can't do that anymore.'

The catch is the amendment to the Residential Property Act that will apply to private residential projects undertaken by foreign housing developers with Qualifying Certificates (QCs), a category which effectively covers all listed developers. Such projects, built on residential sites bought from private-sector sources, will in future have to be completed within the stipulated project completion period (PCP). Otherwise, the developers may not only lose their bankers' guarantees as is the case currently but also have to pay the state for any time extension.

This is similar to the scheme for sites sold through the Government Land Sales Programme. Developers have to pay 8 per cent of the tendered land price for the first year of PCP extension. They must pay 16 per cent for the second year's extension and 24 per cent per annum for the third and subsequent years. CBRE's Mr Tan estimates that since it takes 30-36 months to complete a typical high-rise condo, and assuming developers need to attain Temporary Occupation Permit (TOP) by 2014-2015, construction would have to begin around 2011-2012.

That still leaves some room to avoid a bunching of project launches given that on average, developers have been able to sell an average of about 650 non-landed homes per year at above $2,000 psf over the past five years. One way that deep-pocketed developers may get out of the bind is to build their projects first - and meet PCP deadlines - but launch them for sale only when the sentiment is good.

For this reason, most property consultants don't expect developers to drop prices. 'But there's a good chance they may have to reduce their profit expectations if they wish to clear the units,' says Knight Frank managing director (residential services) Peter Ow. While he's betting there's a fair chance that the market could revisit the 2007-high in luxury condo prices next year, others are less sanguine.

As Mr Lawrence puts it: 'Prime property in the long term will still do very well in Singapore, but it's a difficult period at the moment. There's plenty of demand. I think prices won't come down much, but they won't go up to the level that developers are expecting; perhaps (they'll have to) make much finer profit margins.' There have been 'one-off' cases of high-priced transactions lately - such as a high-floor apartment at Boulevard Vue that Far East Organization sold last month for $4,800 psf reportedly to a foreign buyer. 'However, we'll need to see more foreign money flowing into Singapore. Right now, Singapore luxury condo prices are still below those in other major cities including London, where prime apartments are going for about £2,500-4,000 psf' (S$5,205-8,329) says CBRE's Mr Tan.

DTZ South-east Asia research head Chua Chor Hoon said: 'With the major economies still weak, foreign buyers have not come back to Singapore in a big way yet.' Knight Frank's Mr Ow is hopeful that 'property curbs in China and Hong Kong could divert some moneys to Singapore and boost our high-end market'.

Source: Business Times, TUE, NOV 30, 2010.

Singapore's Economy to Expand 4% to 6% in 2011

The economy will continue to expand next year; extending an expansion that has already prompted the central bank to allow the currency to rise to a record to damp inflationary pressures.

Won't rising exchange rates coupled with already rock-bottom interest rates accelerate asset price inflation?

A stronger Singapore Dollar might curb imported inflation but will also dampen exports & tourism. The Singapore Dollar has gained about 8 percent against the U.S. dollar this year, and closed at a record S$1.2835 on Nov. 4.

Property Market Update

October 2010 primary private sales market volume was up 16% month on month to 1,058 units compared to last month's 911 units - a rather strong recovery. Strong sales of 529 units of Executive Condominiums (EC) units contributed to the total primary market sales of 1,587 units in October. The strong sales were despite the Singapore government’s recent property cooling measures – suggesting HDB upgraders' demand could be stronger than expected. 

Sales are again weighted to the Outside Central Region (OCR), though sales in Core Central Region (CCR) picked up to 21% of all new sales - driven mainly by two projects: The Glyndebourne and Suites at Orchard. Aborted sales options returned fell to 29 units from 65 units compared to the previous month, signaling less uncertainty in the market outlook. Sentiment certainly has improved markedly since the new measures were announced.

New sales since the beginning of this year now stands at 13,860 compared to 14,688 in 2009.

Recently launched projects in November like KeppelLand's Lakefront Residences (mass market:; average selling price of $1,020 psf) and UOL's Spottiswoode Residences (mid-market; average selling price of $1,700 psf) are witnessing healthy demand. However, pricing appears to be flat to marginally positive for new
launches, and secondary market volumes are down by an anecdotal 25%.

Looking ahead, sales volumes could hold up but price growth is likely to remain muted. Also, it is likely that  the government will continue to push out more land supply to cater to this demand - which will cap rhe mass market residential price growth. More onerous demand-side measures might be on the cards if prices rise sharply. The high-end residential market, which has been rather muted this year, will start to show more signs of life going forward and into 2011.

GCB owners cashing in

Straits Times: Bought: $20m in June 2009, Sold: $37m in Oct 2009
By Esther Teo
Good-class bungalow owners are cashing in on rocketing property prices.
A CB Richard Ellis (CBRE) analysis of Urban Redevelopment Authority (URA) Realis caveats shows that good-class bungalows are netting bumper profits for owners who have seen average per sq ft (psf) prices rise almost 30 per cent over the past year.
Several have taken to buying and selling their good-class bungalows within a period of less than two years.
At least seven good-class bungalows bought since May last year have been sold within 18 months of purchase, with four sold within a year, with a profit of as much as 85 per cent over the purchase price.
This massive gain was seen by a 40,677 sq ft good-class bungalow property on Ridout Road near the Holland area, translating to a $17 million gain within a four-month span.
At least one home, on Nassim Road, has even been sold five times within the past six years - soaring from $9.8 million in 2005 to $43.5 million this year.
It sold at $1,800 psf in April this year - almost 4.5 times the $405 psf it was sold for in February 2005. The 24,186 sq ft property had changed hands at $620 psf in August 2006, $760 psf in December the same year, followed by $1,000 psf in June 2007.
Experts said that good-class bungalows have turned out to be one of this year's star investment propositions.
URA data shows that non-landed home prices inched up 1.6 per cent in the third quarter, while prices of detached homes rose 8.4 per cent over the same period.
CBRE said that while the 109 good-class bungalow sales last year had been transacted at $831 psf on average, the 86 transactions this year to September, which totalled $1.6 billion, were done at an average of $1,055 psf - a 27 per cent surge over the previous year.
This increase is one of the steepest over the last 15 years, said Cushman and Wakefield's senior manager of Asia-Pacific research, Mr Ong Kah Seng.
He noted that the keen buying interest in good-class bungalows was being driven by limited supply, making it the safest buy for a home buyer not limited by affordability.
'(Even with) developers' concerted efforts to brand condominiums with innovative concepts, the product is fairly homogeneous...On the other hand, buyers of good-class bungalows, in addition to being proud owners of the land, will be able to highly customise their homes to be materially different from another,' he said.
Mr Douglas Wong, CBRE director of luxury homes, said that the approximately 2,400 good-class bungalows, which can be found in 39 prime gazetted areas such as Nassim, Dalvey and Tanglin, are owned by only about 1,000 individuals.
These owners are usually ultra-high net worth Singaporeans, who are mostly professionals, businessmen or entrepreneurs, he said.
'Many of the buyers might have purchased their homes with the intention of long-term investment, but when the market moves, they might seize the opportunity to make some profits instead,' he added.
Mr Alexs Chua, managing director of property agency AC MacGyver, a specialist in landed homes, said that about 20 per cent of homes sold last year have been put on the market again, although many owners may just be testing the market.
He expects prices to rise another 10 per cent by March next year.
But CBRE's Mr Wong reports that demand had slowed in the third quarter, when 19 good-class bungalows were sold compared to 36 in the second quarter and 31 in the first quarter.
'This could be attributed partly to cautious sentiments and partly to the widening price gap between good-class bungalow owners' expectations and buyers' offers,' he said.
However, he expects the market to achieve about 100 to 120 transactions amounting to about $1.8 billion this year.
Typically, only Singapore citizens can own a good-class bungalow, but permanent residents may obtain permission to buy small bungalows with land areas of about 15,000 sq ft.

Rush to launch

BT: Developers eye project releases before holidays
By KALPANA RASHIWALA

As City Developments (CDL) announced yesterday that about 75 per cent of the 150 units at its freehold Glyndebourne condo have been sold since the preview began on Friday, some other developers are rushing to try to release projects before the year-end holiday season sets in.

UOL Group is expected to preview the freehold Spottiswoode Residences condo next week, and the price is expected to be about $2,000 per square feet (psf). About 90 per cent of the 351 units comprise one-bedroom, one-bedroom-plus-study and two-bedroom apartments.

The project, a 36-storey tower, is next to Spottiswoode Park, a green lung in the area, and close to Tanjong Pagar, which is slated to be transformed into a new bustling waterfront district after the container terminals in the vicinity eventually move out.

The Tanjong Pagar Railway Station site is also expected to be redeveloped after Keretapi Tanah Melayu vacates the site under a historic land-swap deal between Singapore and Malaysia announced in September.

Over at Robinson Road, agents are said to be gathering interest for the freehold Robinson Suites at prices ranging from $2,300 psf to $3,300 psf. The 42-storey project, to be developed on the VTB Building site, comprises 167 apartments and three ground-floor shop units. All the apartments are either one-bedroom-plus-study units or two-bedders. Unit sizes start at 484 sq ft.

The developer - a consortium whose shareholders include Cheong Sim Lam (whose family developed International Plaza), Fission Holdings, Tan Koo Chuan and Saw Pik Kee - is pitching the project as the 'first-ever freehold apartments along Robinson Road'.

CapitaLand, meanwhile, is getting ready to release the first phase of its 1,715-unit condo on the 99-year-leasehold Farrer Court site. The 36-storey Zaha Hadid-designed project will feature one to four-bedroom apartments, penthouses and six pairs of strata semi-detached houses.

In the mass-market segment, Sim Lian is said to be gunning to release Waterview, a 99-year-leasehold condo comprising 696 units at Tampines Ave 1/10 facing Bedok Reservoir, as soon as it gets all the necessary approvals from the authorities.

The project will comprise two, three and four-bedroom apartments and penthouses. The average price is expected to be in the $820-920 psf range.

Meanwhile, CDL said yesterday it sold 112 units at its 150-unit Glyndebourne condo on Dunearn Road between Friday and Sunday.

'All one-bedroom-plus-study, two-bedroom and three-bedroom-plus-study units have been snapped up. A wide spectrum of other unit types was also sold, including 10 out of the 23 penthouses,' CDL said in a statement yesterday.

Seventy per cent of the buyers are Singaporeans, with permanent residents and foreigners from Malaysia, the United States, Indonesia, China, India, Myanmar, Korea, Thailand, Taiwan and Brunei making up the remaining 30 per cent.

CDL began previewing the project on Oct 29 on behalf of its London-listed hotel unit Millennium & Copthorne Hotels, which owns the freehold site on which the condo will be developed.

The Copthorne Orchid Hotel Singapore on the site will be closed at the end of March 2011 to make way for the redevelopment of the site into Glyndebourne.

CDL said the 112 units sold were at prices ranging from $1,900 to $2,350 psf, or at an average price of about $2,100 psf.

BT: Jittery developers go low-rise on confidence

BT: Jittery developers go low-rise on confidence
By KALPANA RASHIWALA

The worst- kept secret in the property market is out in the open. Not only are developers less upbeat about the future but a third of them actually expect prices of new homes to decline. And market performance for the suburban residential sector may be the worst hit.

This dose of pessimism was reflected in the latest readings of Real Estate Sentiment Index (RESI) put out by the developers body and NUS.

In the wake of the Aug 30 cooling measures, some 34 per cent of developers polled for Q3 expect prices for new residential launches to decline, albeit by less than 10 per cent, over the next six months. None of the developers surveyed in Q1 and Q2 had predicted price drops.

Just 44 per cent expect more new residential units to be launched over the next half year, down from 68 per cent in the previous quarter.

The sentiment indices slipped below the psychologically significant mark of 5 in Q3, indicating respondents were less upbeat in the quarter and expect more uncertain market conditions over the next six months.

The consensus as indicated by net balances is generally weaker.

Polled on how the suburban residential sector would perform, the net balance in Q3 was -43 per cent. This means that most expect the sector to perform worse over the next six months. In Q2, this net balance was +27 per cent, hinting at better future performance.

'The strong historical price growth in the sector is not likely to be sustained moving forward. Downward adjustment to the price growth, if it occurs in the next few months, will ease some pressure on the affordability level of mass-market residential properties in suburban areas,' said Associate Professor Sing Tien Foo of NUS.

The net balance for the future market performance of the prime residential sector, while still in positive territory, has also been declining significantly, from +54 per cent in Q1 to +32 per cent in Q2 and +3 per cent in Q3.

About 70 per cent of the developer respondents in the latest survey were concerned that the government could intervene to dampen the property market further.

They also cited other factors that could hurt sentiment over the next six months. The concerns included a slowdown in the global economy (cited by 60 per cent), an increase in the supply of development land (53 per cent), too many new property launches (49 per cent), rising interest rates (47 per cent) and tightening financing/liquidity in the debt market (40 per cent).

Eighty-four per cent of all survey respondents consider it likely and very likely that there will be a further increase in the supply of development land over the next six months. An even higher proportion, 90 per cent, of respondents expect the government to further boost the supply of Build-to-Order and Design, Build and Sell Scheme public housing flats as well as executive condo (EC) units.

Recent government steps to cool the market are expected to have most impact on the HDB resale and mass private housing market segments. About 76 and 64 per cent respectively of survey respondents rated their impact on these two market segments over the next six months as significant. Conversely, the measures are expected to have the least impact on the high-end/luxury segment with 64 per cent predicting minimal impact. For the mid-end private housing segment, 79 per cent foresee only moderate impact.

Real Estate Developers' Association of Singapore and NUS' Department of Real Estate polled slightly over 70 respondents for their latest Q3 survey, similar to the size for the Q1 and Q2 surveys.

The Current Sentiment Index, where respondents are asked to rate overall Singapore real estate market conditions now compared with six months ago, fell from 5.8 in Q2 to 4.8 in Q3.

The Future Sentiment Index, where respondents rate overall property market conditions over the next six months, also slipped from 5.9 in Q2 to 4.8 in Q3. As a result, the Composite Sentiment Index (the average of the two indices), also declined to 4.8. The index ranges from 0 to 10 with a score below 5 indicating deteriorating market conditions.

Redas CEO Steven Choo said: 'The RESI was able to track closely the immediate impact the cooling measures has on sentiments in the property sector.'

Agreeing, Knight Frank chairman Tan Tiong Cheng said: 'The findings are not surprising. Just look at the amount of land government has been releasing and the supply of new HDB flats and ECs they're planning, plus the demand-side measures. People have put on their thinking caps to figure out how they'll be affected, whether they are HDB upgraders, buying a second/investment property, or even downgrading.

'The latest survey results are a clear signal to government that the measures are having an impact,' he added.

Separately, the NUS' Institute of Real Estate Studies yesterday released its monthly Singapore Residential Price Index tracking prices of completed non-landed private homes. The overall index rose one per cent month on month in September, slightly slower than the 1.1 per cent increase in August.

NUS' sub-index for Central region, which covers a basket of properties in districts 1-4 and 9-11, increased 0.6 per cent in September, the same pace as in August. The sub-index for Non-Central region appreciated 1.4 per cent in September, slightly slower than the 1.6 per cent gain posted in August.

The last 30 units of CityVista

BT: Last 30 CityVista Residences units sold for about $147m
By KALPANA RASHIWALA

A joint venture involving Chip Eng Seng has sold the last 30 units at CityVista Residences for about $147 million, BT understands. The 20-storey freehold project of 70 units at Peck Hay Road in the Cairnhill area received Temporary Occupation Permit (TOP) recently.

The buyer is said to be a property fund managed by Alpha Investment Partners. Alpha is a unit of Keppel Land.

The transaction involves 28 apartments (three and four-bedders) and two penthouses. The price for the apartments is thought to be about $1,850 per square foot (psf). The psf price for the two penthouses is said to be much lower as they come with substantial roof terrace areas, making up about half of their saleable area.

Each duplex penthouse, which has five bedrooms and a private pool, has an area exceeding 9,000 square feet.

Last month, four units in the project were sold at $1,900-1,980 psf, according to developers' monthly sales data released by the Urban Redevelopment Authority. The Chip Eng Seng-Lehman venture began selling the project in June 2007, with 21 units sold at prices ranging from $2,397 psf to $2,828 psf.

Market watchers suggest that with the project receiving TOP, it made sense for the partners to give a bulk discount and offload the remaining units so that they can clear this portfolio, repay bank loans and move on to other things.

Chip Eng Seng has been successful at state land tenders of late. This year alone, it has clinched 99-year-leasehold executive condominium development sites in Pasir Ris and Punggol in partnership with NTUC Choice Homes. On its own, too, Chip Eng Seng was awarded a 99-year private condo site in Simei.

Savills is understood to have been involved in the deal for the last 30 units at CityVista Residences.

Meanwhile, billionaire Peter Lim is said to have been the buyer of 20 units sold last month at Sui Generis, a freehold condo at Balmoral Crescent which received TOP a few months ago.

The former 'remisier king' paid around $95 million or $1,935 psf in the secondary market deal.

Property market shows signs of cooling as measures take effect

TODAY: Property market shows signs of cooling as measures take effect

by Jonathan Peeris | Oct 16

SINGAPORE - The Republic's property market met a frosty reception last month as the Government's cooling measures appear to have tempered demand.

Data released on Friday by the Urban Redevelopment Authority (URA) showed that 911 private homes were sold last month - a 27-percent drop compared to August, when 1,259 units changed hands.

The September figure was the second-lowest monthly sales recorded this year. In June, when the World Cup was held, only 847 units were sold.

In the prime districts, only 84 units were sold out of the 109 launched. The city fringes and outlying areas saw 226 and 601 units sold respectively. The most expensive property sold was at the Orchard Residences where a unit went at a median price of $4,258 per square foot.

"The luxury market is still hovering at about 12 to 13 per cent well below peak value, so I think there are some rich pickings in the Singapore market that could be of interest to the regional investors in that sense," said Cushman & Wakefield managing director Donald Han.

The decline in sales volume is expected to continue. Analysts estimate launches and sales in the fourth quarter to hover between 800 and 1,000 per month. Still, they expect sales for the whole of the year to exceed 14,000 units.

And sentiment will likely improve in the first three months of next year, analysts said.

Looking ahead, buyers would be watching interest rates closely, said Dr Chua Yang Liang, Jones Lang LaSalle's Head of Research for South-east Asia.

Said Dr Chua: "As total returns compress, interest rates are expected to play a bigger role in influencing buyers' decisions. The impact of state intervention on home demand and prices may thus be cushioned in light of today's falling interest rates."

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Economy pauses

TODAY: Economy pauses for breath after Q2's breakneck pace

Oct 14

Despite Q3 contraction, Singapore still on track to meet 2010 forecast: MTI

SINGAPORE - The Ministry of Trade and Industry (MTI) announced this morning that the Singapore economy remains on track to achieve the overall growth forecast of 13 to 15 per cent for the whole of 2010.

Advance estimates showed that the economy expanded by 10.3 per cent in the third quarter of 2010 compared to the same period a year ago. However, on a seasonally-adjusted quarter-on-quarter annualised basis, the economy contracted by 19.8 per cent, a reversal from the growth of 27.3 per cent in the previous quarter.

The median forecast of 19 economists surveyed by Bloomberg News was for a 15.7-per-cent contraction.

"The decline in growth momentum was an expected correction from the exceptional growth in the first half of the year," noted the MTI in its press release.

Asian nations from Thailand to Japan have taken steps in the past month to cool the appreciation in their currencies, which is threatening exports at a time when global growth is slowing. Prime Minister Lee Hsien Loong has said Singapore's economy may "moderate" in the coming months after a record first-half expansion, citing risks from the Europe and the United States.

"Singapore is typically a bellwether for the region's export outlook and it is the first to show cracks as global growth slows," economist Alvin Liew of Standard Chartered said before the report. Threats to Asian growth include "the fading impact of stimulus packages, stubbornly high unemployment rates and austerity measures that are likely to crimp consumption in the West," he added.

On a seasonally adjusted quarter-on-quarter annualised basis, the manufacturing sector contracted by 57 per cent in the third quarter, after expanding by 67 per cent in the preceding quarter. This decline is largely attributable to the biomedical manufacturing cluster, the MTI said.

The construction sector also contracted on a seasonally adjusted quarter-on-quarter annualised basis, by 12 per cent, compared to an expansion of 29 per cent in the preceding quarter. This was mainly due to the completion of key commercial and industrial building projects earlier in the year.

The services producing industries registered a modest sequential growth of 1.6 per cent, following a 13 per cent expansion in the previous quarter. Growth in trade-related services sectors, such as wholesale trade and transport and storage moderated from the high growth seen in the first half of the year.

Growth in the rest of the year will be underpinned by a number of industry-specific factors, noted the Trade Ministry. In particular, continued growth in global demand for electronic products will lend some support to the electronics and precision engineering clusters.

Increasing visitor arrivals driven by a resurgent Asian market and new tourism product offerings such as the Integrated Resorts will continue to bolster the tourism-related sectors, the Ministry added.

MTI will release the preliminary GDP estimates for the third quarter of 2010, next month in the Economic Survey of Singapore.

BT: SC Global sells Cuscaden Walk penthouse for $30m

BT: SC Global sells Cuscaden Walk penthouse for $30m 

By KALPANA RASHIWALA

There seems to be a bit more buzz at the high-end condo market again.

SC Global is understood to have sold a penthouse at The Boulevard Residence recently for $30 million or $4,242 per square foot. In both absolute quantum and unit price terms, this is the highest achieved in the development.

The latest transaction involves a 7,072 sq ft triplex unit with five bedrooms and an 11-metre lap pool. Sources suggest that the buyer is from China but intends to live here.

It was the final unit to have been sold by the developer in the freehold condo at Cuscaden Walk which has 46 units. The 36-storey project was completed in 2005.

The unit is one of two identical 'super penthouses' in the development. SC Global sold the first such penthouse back in 2006 for $16 million to Yoshiaki Murakami, a Japanese fund manager who was in the limelight a few years ago for an insider trading prosecution in Japan.

That was the highest transaction in absolute price quantum in the development, prior to the latest deal. In unit price terms, too, the $4,242 psf achieved for the most recent transaction is the highest at The Boulevard Residence, surpassing the $3,933 psf that a three-bedroom standard apartment of 2,034 sq ft sold for in late 2007.

Another top-end condo deal recently took place at The Orchard Residences, where a 40-plus storey unit sold for $4,260 psf. The total price for the 1,808 sq ft unit, which has three bedrooms, was about $7.7 million. It was sold by the developer of the project, which is expected to receive Temporary Occupation Permit this month.

Property agents also highlighted another record of sorts that was set for a penthouse at The Ardmore Park condominium in July. The 8,740 sq ft unit sold for $30 million or $3,432 psf. Prior to this, the most expensive penthouse in the development was $20.5 million or $2,345 psf in 2007, the peak year for the Singapore luxury housing market.

The buyer in the latest deal is understood to be a Hongkonger, who is also a Singapore permanent resident. According to caveat records, the unit previously changed hands in December 2006 for $17.3 million, reaping the seller a cool profit. The seller is said to be a company controlled by Yunus Gafulbhai Bilakhiya. A person bearing almost the same name but with the family name spelt slightly differently, as Bilakhia, founded the Bilakhia Group of India, which is involved in the inks, agro chemicals, medical devices, education and investment businesses.

While it remains to be seen if these deals will mark a definitive return of interest in the luxury condo sector which was dominated by foreigners in the 2007 boom, Knight Frank managing director (residential services) Peter Ow says: 'This is the ultra luxury residential sector we're talking about, where buyers won't be affected by ups and downs in the property market. Singapore has opened up a lot in recent years and we're drawing foreigners keen to park their monies as well as live here.'

While the ultra luxury condo market may be starting to see a revival in activity, the price benchmarks achieved recently appear to be still slightly short of the records set earlier. In terms of absolute price quantum, the title is still held by an 8,051 sq ft unit at Boulevard Vue at Cuscaden Walk which was sold in November last year for $33.4 million.

In unit price terms, the record price was $5,600 psf for a 53rd level penthouse at The Orchard Residences sold by the developer in October 2007, although its buyer, who is said to have picked up the unit on the deferred payment scheme, has yet to lodge a caveat.

An update of sales since the new property measure took hold

ST: Weekend sales for ECs slow
By Joyce Teo

Weekend sales for executive condominiums (ECs) slowed somewhat after a burst of excitement last Friday when the first new EC in five years went on sale.

Still, experts expect demand for ECs - a hybrid between public and private housing - to remain relatively strong.

The 406-unit EC project The Canopy in Yishun Avenue 11 has attracted 250 applicants since viewing started last Friday. Prices are from $600 to $700 per square foot (psf) and bookings start this Saturday.

This response seems less enthusiastic than that for the recently launched EC project Esparina Residences in Sengkang, though an industry source noted the latter - near an MRT station - is better located.

Last Friday, buyers had snapped up 344 units of Esparina, near Buangkok MRT station. Another 20 units of the 573-unit project were sold over the weekend, said developer Frasers Centrepoint.

It had received 1,155 applicants in all. Prices are from $730 to $750 psf.

New ECs have initial sale restrictions similar to those for other public housing, and they are cheaper than new mass market condos.

On the private condo front, Far East Organization released 110 units of The Lanai in Hillview Avenue at a preview over the weekend and has sold 76 units, including a bulk buy.

The 999-year leasehold condo is priced from $1,290 psf and will be launched this weekend, it said.

At the freehold Vacanza@East in Lengkong Tujoh, another 20 units or so were sold over the weekend, taking total sales to 130 units, said Hoi Hup Sunway.

The 473-unit project started its preview late last month, when it moved nearly 90 units. It is priced at slightly more than $1,000 psf on average.

'The effect of the property measures has sunk in. Investors are a bit more cautious,' said Cushman and Wakefield managing director Donald Han.

'Speculators are out, so that took some wind out of the market. The good thing is we have not seen prices coming down.'

The Government implemented measures to cool the market on Aug 30.

Mr Han said developers will now take a longer period to sell units. 'It's all about pricing. Prices in some locations may come down slightly but overall, it's going to be a flat fourth quarter.'

ST: The housing bubble trouble

A very good article and balanced views from Professor Joseph Gyourko, although I wouldn't agree with some of the points he raised. Much to learn from him.

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ST: The housing bubble trouble
By Tan Hui Yee, Correspondent

In most parts of the world, a government that intervened in the property market three times in one year would heighten uncertainty.

But not so in Singapore, observes Professor Joseph Gyourko, a housing economist from the University of Pennsylvania who was in town recently to speak at a forum conducted by the National University of Singapore's (NUS) Institute of Real Estate Studies.

He says: 'If the government gets into a habit of intervening all the time, it will harm market development. Investors won't want to invest because they can't be sure what the government is going to do Monday versus Friday.'

But the picture is clearly different in Singapore, he notes. The Government tried to temper speculation by abolishing developers' interest absorption schemes in September last year, and followed that with two additional rounds of measures in February and August this year that made it increasingly expensive for speculators to flip properties.

'You are sending a clear signal to investors that you are going to stop the price boom. The fact that you're doing the third round is a signal that you are going to do whatever it takes,' he says.

'And that actually may be providing clarity. You are telling everyone, 'Okay, we're just not stopping, we'll come up with something else down the road.''

This show of political will may just be what it takes to deflate Singapore's property bubble, he says.

Prof Gyourko, 54, knows bubbles intimately, having studied the sizzling property market in China and being privy to local developments as a board member of NUS' real-estate institute.

He believes home prices in Hong Kong, Singapore and China are being driven up by a mixture of real economic growth and short-term capital flows.

'Singapore's inflation rate is above the rate banks pay on deposits. When that happens, people want to put their money elsewhere. And one of the few alternative investments you can make is in housing.

'That's shifting a lot of money into homes. And that's not permanent or sustainable,' he says.

When the economy grows rapidly again, companies will ramp up production, the competition for capital will heat up, interest rates will rise - leaving over-leveraged property buyers in danger of defaulting on their loans. That could send property prices into a tailspin.

That said, he concedes that housing bubbles are by nature unpredictable, and the fact the Government here had to intervene three times indicates it had difficulty calibrating the measures required to tame the beast.

'Clearly, if the Singapore Government had known, it would have introduced Round Three right up front,' he says.

He rejects claims that rising property prices widen inequality, based on his experience in the United States market.

'The housing market is cyclical, so the claim is not true in the long run. In the US, when we had the boom...people were worried about wealth gains along coastal California and the East Coast of the US, which had the highest price rises. But prices cycle, and guess what?

They fell - by a lot. What generates long-run inequality are skill differences, not home ownership,' says Prof Gyourko.

He predicts property prices in Hong Kong, China and Singapore will take a hit in the next one to three years, effectively canceling out the gains owner-occupiers have made in the recent run-up.

'I don't worry about the fact that people got a bunch of capital gains because I think they are going to lose those capital gains,' he says, pointing out that these are paper gains.

But although property gains and losses even out over a lifetime, the resulting short-term frustrations may be hard to handle. 'It's easy for an academic to go, 'Don't worry, this stuff cycles.' If you are a politician, you've got to worry about that person being angry now because he has the vote, and you've got an election coming up.'

He acknowledges that while land in Singapore is scarce and property prices can be chased up without adequate control, the Government here has tried its best to make housing affordable through its public housing program.

'You guys do public housing about as good as it's done anywhere in the world,' he says. 'For such a small place, it's well-planned. It's affordable to people with modest incomes,' says Prof Gyourko.

But one suggestion he has is that Singapore could be more flexible about the housing grants or similar subsidies it gives households, to give them more freedom over what homes they can buy and where they can live.

Currently, subsidized households can use their housing grant of $30,000 to $40,000 to buy only HDB resale flats. With a voucher system, they would not be limited to government housing.

He also questions Singapore's system of allowing Central Provident Fund savings to be used to pay for homes. This encourages people to base a huge chunk of their retirement savings on the fortunes of the property market in a tiny country. In investment speak, this is considered 'undiversified'.

'That's a really risky thing to do. What happens if there is a housing market collapse?' he asks.

The Singapore property market has had its hairy moments: Housing prices plunged after the 1997 Asian financial crisis, although they have since bounced back and even surpassed 1996 levels.

Singaporeans, he says, have to understand that the CPF housing scheme amounts to an 'implicit subsidy' as it lowers the interest payable on bank loans by reducing a home buyer's loan amount.

'I view housing as a consumption good. I view it literally as 'I'm eating my house.'' That means retirement savings should be kept separate from housing expenditure, he says.

In his view, owner-occupied homes especially are not investments that can yield returns, so people should not devote their retirement savings to their homes in the hope of growing their money.

Asked about the attributes of an ideal housing system, he offers a verbal sketch of its key planks: It should be equitable, responsive and flexible.

This means society would have to determine some minimum quality of housing that everyone should be entitled to. Households that cannot afford to pay for this minimum standard would get subsidies. Poor households with children would get more subsidies because 'kids do not get to pick their parents, and thus, are not responsible in any way for their poverty'.

Ideally, housing supply should be plentiful, in the sense that the rules should allow developers to easily ramp up home building to meet increased demand.

This moderates housing prices, he says, as it will allow prices to be close to or at the level required to cover land costs, construction costs and a builder's usual profit.

Finally, an ideal system would offer different kinds of housing - including rental housing - to meet the needs of the population over its life cycle. It is also one where the population is 'educated on the true benefits and costs of the different types of housing'.

He accuses governments worldwide of a bias 'towards encouraging owning' homes instead of being upfront on the opportunity cost of doing that.

As a result, most people underestimate the costs of owning a property, he says. They forget the transaction costs of buying and selling a home are 'quite high', and it does not occur to them to set aside money for long-term maintenance.

Buyers also risk getting stuck with their homes if a sharp drop in prices pulls the value of their homes below the mortgage amount.

Unless a home owner in such a predicament has enough cash to make up the shortfall, he cannot move house. Some academics have fingered such 'underwater' mortgages as a possible explanation for stubbornly high unemployment figures in the US, as it means people living in declining cities cannot move to places where jobs are more plentiful.

In Singapore, which takes just about an hour to cross by car, the problems posed by such immobility are less serious. Still, he thinks being stuck in such 'underwater' homes could result in longer commutes to workplaces and stop families from moving close to the school they want their children to attend.

Prof Gyourko - a home owner himself in Philadelphia - is careful to declare he has nothing against home ownership, especially as it makes someone a stakeholder in his community. In the case of Singapore, it makes one a stakeholder in the nation.

But the goal of the Government should be to get people to 'make the right choice about owning versus renting, not that owning always is better'.

In sum, housing choices should follow people's needs over their lifetime, instead of determining how they have to live their lives.

Young people, he says, make 'natural renters' instead of home buyers because this arrangement allows them to respond quickly to changing circumstances.

'You can move to opportunity. You can get married. You can do all types of different things instead of being stuck in a house,' he says.

Bloomberg: H.K. Builders May Offer Financing to Counter Curbs

Sept. 28 (Bloomberg) -- Hong Kong developers may offer property buyers secondary financing to counter government market-cooling efforts that have cut transactions by about a third, the city's two biggest real-estate brokers said.

Cheung Kong Holdings Ltd., the builder controlled by billionaire Li Ka-shing, is providing buyers at its Oceanaire project in the Ma On Shan district in the city's north with as much as 10 percent additional financing on top of their bank mortgages, the company said in a Sept. 21 statement.

Home transactions in the city have contracted about 33 percent since Aug. 13 when the government raised down-payment ratios and pledged to increase land supply to rein in home prices, according to Centaline Property Agency Ltd. The government has said it may introduce more measures to curb home values that have surged about 47 percent in 21 months to the highest since the last peak in 1997.

For the full article, please visit www.Bloomberg.com

CNA - China announces rules to curb land hoarding

China on Monday unveiled new rules to curb land hoarding by developers, its latest efforts to pop a feared speculative bubble in the nation's soaring real estate sector.

Developers will be banned from bidding for more properties if they have lands idle for more than a year, illegally transferred lands, or developed land in breach of agreements, two Chinese ministries said.

Read more at http://www.channelnewsasia.com/stories/afp_asiapacific_business/view/1083641/1/.html

BT: Stage set for up market property launches

BT: Stage set for up market property launches
By UMA SHANKARI

Developers here plan to launch another 34 residential developments with more than 8,800 units by June 2011, data compiled by Knight Frank shows.

Most of the new projects rolled out will be mid-tier and high-end developments. Knight Frank's list shows that 21 out of the 34 possible launches are located in the up market districts of 1, 2, 4, 9, 10 and 11.

Developers BT spoke to trust that the latest round of government measures to dampen demand for private homes and HDB flats announced on Aug 30 will impact mostly mass market home buyers.

They are hopeful that new launches, which are mostly for homes in the mid-tier, high-end and luxury segments, will see healthy take-ups.

'I believe that the hardest hit projects will be the mass market ones,' said EL Development managing director Lim Yew Soon. 'For the mid to high-end projects, the impact will be somewhat lesser.'

The large number of upcoming mid-tier and high-end developments is not a reaction to the latest round of property measures, developers and analysts said. Rather, having pushed out numerous projects targeted at upgraders, many property groups are left with pending mid-tier and high-end project launches. 

CB Richard Ellis executive director Joseph Tan said that many developers who bought mass market sites launched them within nine-12 months, with some even pushing out their projects in six-seven months to ride on the exuberant upgrader market.

'The fourth quarter will see more of the mid to high-end launches,' Mr Tan said.

Added one developer: 'Most developers rushed to launch mass market projects last year when that segment of the market was very hot, so there are mostly mid-tier and high-end projects that are waiting to be launched now anyway.'

But, many developers did not want to commit to a firm launch date - even though in some cases, show flats are ready and brochures have been printed.

CapitaLand recently said that it will go ahead with the launch of its new 1,715-unit condominium on the former Farrer Court site in Farrer Road by the end of this year.

The chief executive of the group's Singapore residential arm, Wong Heang Fine, said that while the new government measures have created some 'flux' in the market, things should 'settle in a couple of months'.

The launch of the Farrer Road project will be closely watched as it is the largest single residential development likely to be offered to home buyers in the near future.

CapitaLand is likely to hedge its bets by rolling out the development in phases, similar to what City Developments and the Hong Leong Group did with their 642-unit NV Residences in Pasir Ris.

EL Development's Mr Lim also said that he intends to launch his 115-unit freehold project on the site of the former Diamond Tower in Jalan Rajah, in the Balestier area, in Q1 2011. But, despite the more bullish outlook for the mid-tier and high-end segments, several large suburban projects will be launched soon.

Esparina Residences, a 573-unit executive condominium (EC) project at Sengkang by Frasers Centrepoint and Lum Chang Building Contractors, will be launched next month.

Major private suburban launches in Q4 2010 include Hoi Hup Sunway Property's 473-unit Vacanza @ East at Lengkong Tujoh; Far East Organization's 214-unit The Lanai at Hillview Avenue; and Keppel Land's yet-unnamed residential development at Lakeside Drive, which will have more than 600 units.

On Aug 30, the government said that it will now disallow concurrent ownership of HDB flats and private residential properties within the specified minimum occupation period.

Other measures were aimed at potential buyers of second homes. Those with an existing mortgage can now borrow only up to 70 per cent of a property's value for a second home, down from 80 per cent previously. They must also pay 10 per cent in cash, up from 5 per cent.

Developers and analysts said then that the measures will hit prices and sales of private homes, but mostly in the mass market segment.

TODAY: August NODX up 31%

August NODX up 31%
by Ephraim Seow Siew Lee | Sep 18

SINGAPORE - Singapore's non-oil domestic exports (NODX) surged last month by the most in nearly five years, driven by shipments of pharmaceuticals and electronics.

International Enterprise (IE) Singapore, said NODX grew 31.2 per cent last month compared to August last year, up from the revised 18.3 per cent increase in July. The stellar performance was the best since Dec 2005. On a month-on-month seasonally adjusted basis, August NODX rose 10 per cent, reversing the negative trend of the past three months. In July, NODX fell 3.9 per cent from the previous month.

To read the complete article, please visit http://www.todayonline.com

TODAY: Property expert says prices may collapse by up to 50 per cent in the next year or two

30, 40, 50% drop?! That sounds a little preposterous and plucked from the sky...but who am I to argue with an expert.
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Property expert says prices may collapse by up to 50 per cent in the next year or two

by Ephraim Seow Siew Lee | Sep 17

The dizzying rise in property prices here is not sustainable and the market may be heading for a hard landing in one to two years' time.

When that happens, property values may fall by as much as 50 per cent, according to an expert at a real estate forum yesterday.

Property experts speaking at the National University of Singapore's Institute of Real Estate Studies Forum said that excess liquidity in the market is the main factor that has been driving up property prices recently.

This liquidity may originate from prudent savings during the financial crisis, gains from the stock market run-up last year and foreign funds flowing here in search of better returns in Asian and emerging markets.

Mr Beat Lenherr, global chief strategist of LGT Capital Management, said: "I think that the money is finding a way around specific pointed measures and the money is just going to all the segments, micro-markets or micro-sectors."

Mr Lenherr also reckoned that the recent rally is not well supported and has been too fast, paving for a harder fall.

"If you look at the developments over the last four years, you clearly see elements of exaggerations where it doesn't make sense to buy in terms of rental yields or expected capital gains," Mr Lenherr added.

As such, he said property prices may "collapse by 30, 40 or 50 per cent" in the next one to two years.

Other speakers at the forum also said that the Singapore Government is still holding back on several other drastic measures such as the capital gains tax, which could dampen the property market abruptly if introduced.

They said the Government has so far been successful in building good neighbourhoods and community in its housing policies beyond controlling prices.

"I think the local market has been kept quite steady. I think the Government can indeed take pride in being able to making available affordable housing to more than 70 or 85 per cent of the masses," said Professor Bernard Yeung, Dean of NUS Business School.

TODAY: Improved economy, one of the factors for property prices?

So, we can expect higher psf, smaller units and smaller quantum going forward...

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Improved economy, one of the factors for property prices?

by Rachel Adrienne Kelly | Sep 17

SINGAPORE - The recent property-cooling measures are not likely to have a significant long-term impact on the overall real estate market in Singapore, with global economic issues playing a larger role, property experts speaking at an industry seminar said yesterday.

"Generally, the property price is affected by external factors or the growth of the Singapore property prices is because of the improved economy. People's incomes increase, people's wealth increase, that's why they are buying," said Mr Alfred Chia, chief executive of SingCapital, at a forum organized by Propertyguru.com.

However, the Aug 30 property cooling measures are expected to reduce the cash-over-valuation (COV) of HDB resale flats and they will put a damper on demand for the rest of the year.

Market-watchers at the event expect COVs to decline by 10-per-cent this year from current levels, with a further 10 per cent drop next year.

Meanwhile, smaller properties are expected to be at a relative advantage.

"For people with a housing loan and on a tighter budget, they will have to lower their budget to buy another property," said Ms Chua Chor Hoon, head of Research, South East Asia at DTZ.

"That means if originally they were looking at a $1 million house, now they will have to look at something between $500,000 and $750,000 so you will see a shift in demand to smaller units," she added.

While the market adjusts to the new measures, the volume of mass market property sold is expected to decline by 10 per cent from now until the end of the year, according to some analysts' estimates.

No impact is expected in the high-end property market.

SIBOR drops to record 0.51%

This means cheap mortgage for home buyers, greater return for landlords, but dismal returns for cash holders.

My view is that it is as good as it gets...the rates can't really go much lower from here. The important question is how long this will last? Every Asian governments knows that we have a liquidity bubble going on here which is fueling asset price (specifically real estate, since other assets seem to be under performing).

Measures to dampen the property market have so far only a muted effect on prices but this could be the soft landing we are all hoping for.

CNA: Rental rates set to rise with 80,000 foreigners

Totally agree, rental units are being snapped up very quickly and at close to asking rent.
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CNA: Rental rates in the private property market are poised to rise with the expected influx of some 80,000 foreign workers this year. Analysts said this is because of the shortage of private housing. And the supply situation may not improve this year as only 5,000 private housing units are expected for completion by year's end.

Read more at http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1081453/1/.html

BT: 80.4% of Aug developer sales still over $1,000 psf

BT: 80.4% of Aug developer sales still over $1,000 psf

By KALPANA RASHIWALA

An analysis of developers' monthly sales information released yesterday by the government showed that 80.4 per cent of the 1,248 private homes sold in August were priced above $1,000 per square foot (psf).

This is the second month running that the share of this price band has surpassed 80 per cent. In July, 84.7 per cent of the 1,549 homes sold by developers were above $1,000 psf, according to an analysis by Colliers International. Market watchers suggest this pattern is being caused by the popularity of small-format apartments as well as more transactions in the high-end segment. 

Information released by the Urban Redevelopment Authority (URA) yesterday showed that developers sold a higher-than-expected 1,248 private homes (excluding executive condos) in August as buyers brushed aside taboos about the Hungry Ghosts Month in the face of strong market sentiment at the time. 

The figure, however, was 19.4 per cent below the previous month's and takes developers' sales in the first eight months of this year to 11,190 units, following last year's strong sales of 14,688 units.

Most analysts expect sales to slow for the September-to-December period, on the back of the property market-cooling measures announced on Aug 30. However, with the strong sales already chalked up between January and August, the full-year tally could still come in at around 14,000 units, they say.

Colliers director for research and advisory Tay Huey Ying pointed to signs of confidence returning to the higher-end market, with the number of new units sold above $1,500 psf increasing 81 per cent month on month from 175 units in July to 317 in August.

The most expensive transaction last month was $3,434 psf for a unit at the Orchard View development at Angullia Park, followed by $3,159 psf at The Laurels on Cairnhill Road, and $3,133 psf at Tomlinson Heights, being developed by Hotel Properties Ltd on the former Beverly Mai site.

CBRE Research noted that a whole suite of projects with shoebox units was launched in August - including Centra Suites (62 units sold), Suites @ Topaz (41 units), Dorsett Residences (35 sales), Studios @ Tembeling (22 units) and Opal Suites (19 units), all with a median price of between $1,200 psf and $1,750 psf. In addition, the top two selling projects for August - The Greenwich in the Seletar Hills area (207 units sold at a median price of $1,095 psf) and Viva Vista on South Buona Road (139 units at a $1,509 psf median price) - have a substantial number of smallish units and set benchmark prices for their respective locations.

URA's statistics also revealed that 35 units in Dorsett Residences above Outram MRT Station were transacted in August at a median price of $1,749 psf - contrary to the project's marketing agent Knight Frank's earlier news release that all 68 apartments in the project were sold out at its preview on Sept 1. The firm yesterday clarified that it brokered the sale of 34 units for which options were issued on Aug 31, inclusive of 30 units sold to a Singapore-registered company. The balance of units in the project were sold on Sept 1.

Property consultants expect developer sales to be clipped in September following the cooling measures. PropNex predicts 700 to 850 units could be sold this month, followed by perhaps 500 to 800 units per month for the fourth quarter. Colliers is predicting average monthly sales of about 800 units per month for the last four months of this year. Most consultants reckon full-year sales are likely to be of the order of about 14,000 units.

The jury is still out on the extent of impact of the latest cooling measures on prices. Says DTZ SE Asia head of research Chua Chor Hoon: 'Whether developers are unsure, pessimistic or optimistic about the impact of the measures, if they choose to proceed with launches, they're unlikely to push for new benchmark pricing levels. They will either price the same as before or slightly lower to entice buyers.'

The Core Central Region accounted for only 12.4 per cent or 155 units of the 1,248 units sold in August with the Rest of Central Region and Outside Central Region each having roughly equal split at 546 and 547 units respectively.

Developers launched a total of 1,326 units in August, a tad lower than the 1,336 units for July. Market watchers note that the ratio of units sold to units launched eased from 1.16 in July to 0.94 in August.

TODAY: Hungry Ghost month fails to spook buyers

Hungry Ghost month fails to spook buyers
by Ephraim Seow | Sep 16

SINGAPORE - The Singapore housing market was well and alive during the Hungry Ghost Month as demand for new private homes continued to be strong in the month of August, with sales staying above the 1,000 level.

Latest figures from the Urban Redevelopment Authority revealed 1,248 units were sold last month, a 19-per-cent dip from the 1,549 sold in July.

In total, 1,326 units were launched in August with buyers snapping up 94 per cent of the new units launched.

Traditionally, demand for homes are more sluggish during the Hungry Ghost Month. The Government's package of anti-speculation measures, however, had come on the second-last day of August, meaning market watchers would have to wait another month before confirming its impact on market sentiment.

The strong sale was well beyond analyst expectations of 500 to 800 units and brought the number of new homes sold in the first eight months of this year to 11,381 units.

"There is a lot of liquidity out there and a lack of financial investment alternatives with the low interest rates," said Ms Chua Chor Hoon, senior director of research at property consultancy DTZ.

She added many still see property as a safe haven, citing its potential for capital appreciation and rental yield of 3 to 3.5 per cent - higher than savings and housing loan rates.

The hottest development last month was The Greenwich at Yio Chu Kang and Seletar Road, which sold 207 units for a median price of $1,095 per square foot (psf). The units ranged from 616 square feet (sq ft) to 738 sq ft.

Viva Vista at South Buona Vista Road came in second as it sold 139 units of between 334 sq ft and 485 sq ft. at the median price of $1,509 psf.

"Their attraction lies in the affordable price quantum as well as proximity to major transport nodes," said Mr Li Hiaw Ho, executive director, CBRE Research.

Property consultancy Jones Lang LaSalle said the Core Central Region remained the quietest despite the 406 units launched by developers to stir up the market. Only 155 units from Core Central Region were sold there. This is much lower than the 1,093 units sold in both the Rest of Central Region and Outside Central Region.

Market experts said the latest URA figures showed escalating prices, where 88.2 per cent of units sold had a median per square foot price of over $1,000.

However, looking ahead, observers expect the recent cooling measures by the government to impact buying sentiments. Jones Lang LaSalle estimates September private home sales to contract 30 to 35 per cent on-month as the policy takes effect.

"Although the full quarter numbers have not been released, we estimate resale volume (for all residential properties excluding executive condominium) in the third quarter could decline by 20 to 25 per cent quarter-on-quarter or 25 to 35 per cent year-on-year," said Dr Chua Yang Liang, Head of Research South-east Asia at Jones Lang LaSalle.

BT Reports: Bulk deals for high-end apartments picking up By KALPANA RASHIWALA

BT Reports: Bulk deals for high-end apartments picking up By KALPANA RASHIWALA

on Wednesday, September 15, 2010 at 11:51am

Bulk deals involving high-end apartments are gathering pace again. Some property funds which invested in Singapore's upmarket residential sector are taking advantage of a price recovery in this segment to exit their investments.

In the Draycott Park area, a German core fund managed by Morgan Stanley is understood to have recently sold 23 apartments it owned in the Draycott Eight condo for slightly over $157 million or about $2,300 per square foot (psf) of strata area.

The buyer is understood to be a fund managed by Alpha Investment Partners, which is part of Keppel Land group.

The German fund incurred a small loss on its late-2007 purchase price of $2,600 psf. Market watchers say the $2,300 psf sale reflects a discount of perhaps 10-15 per cent to what the units could have fetched if they had been sold on an individual basis. But the divestment reflects the fund's ongoing plan to monetise assets globally.

Savills Singapore is understood to have brokered the deal, but it declined to comment.

The 23 apartments transacted, most of which are currently leased, are in the same block. Another Morgan Stanley-managed German core fund owns the remaining 23 units in the block, which were purchased at the same time in 2007 at the same $2,600 psf price. For now, the plan is to hold these units, BT understands.

Draycott Eight comprises three 24-storey blocks with a total 136 units. The project, developed by Wing Tai, was completed in 2005 and its site has a balance lease term of about 86 years.

In the Balmoral Road area, Real Estate Capital Asia Partners (Recap), a Singapore-based investment fund, is said to have recently sold 20 apartments at the Sui Generis freehold condo for around $95 million or $1,935 psf. The buyer is understood to be a Singaporean investor.

Recap earlier sold one unit, a 2,594-sq-ft ground floor unit, in June for $4.9 million or $1,889 psf.

The sales represent a nice profit for Recap, which bought 21 units in the project for about $1,260 psf or $65 million in August last year from the project's developers, United Engineers and Kajima. Sui Generis received temporary occupation permit (TOP) recently.

Recap is headed by Suchad Chiaranussati, who is married to a niece of City Developments executive chairman Kwek Leng Beng.

Meanwhile, Hasetrale Holdings - the controlling shareholder of Napier Properties, developer of the 8 Napier project opposite the US Embassy - has acquired back the 19 freehold units that Napier Properties had sold to an MGPA fund three years ago. This was done in July through Napier Properties director Mark Wee and Hasetrale buying Botanic Investments, the company through which MGPA bought the 19 units in late 2007 at an average price of $3,550 psf.

Botanic had paid a 20 per cent deposit and was due to pay the rest of the purchase price when the project received TOP in June this year. Napier Properties still has some units to sell in the 46-unit project and rather than risk MGPA attempting a subsale below its purchase price, Hasetrale struck a deal to buy MGPA's stake in the 19 units via Botanic Investments, BT understands.

In another bulk purchase, Arch Capital, linked to the Ayala Group of the Philippines, recently bought all 34 units in Royal Oak at Anderson - formerly known as Anderson Green - for about $200 million or an average price of $2,337 psf.

Some investors who bought apartments in bulk are seeking to sell the units individually to secure higher prices than if they were to divest en bloc.

The ARA Asia Dragon Fund, which purchased 53 units at the Grange Infinite condo in early 2008, has begun to sell the units at an average price of about $3,200 psf, on individual unit basis. The fund's average purchase price was earlier reported to be in the $2,600-$2,700 psf range.

Above Outram MRT Station, a local investor entity is said to have picked up 30 units earlier this month at Dorsett Residences at an average price of slightly above $1,700 psf during the project's launch. The units have since been advertised for sale. Most of the units have apparently already been flipped and asking prices for the remaining units are said to be slightly over $2,000 psf.

BT Reports: Market flux will settle soon: CapitaLand exec

Ah...looking forward to the Farrer Court new launch! The proposed 1,715 units development will be positioned as an up market condo, which is designed by well-known architect Zaha Hadid. Stay tuned for more news about this exciting new launch.

BT Reports: Market flux will settle soon: CapitaLand exec By UMA SHANKARI

Recent policy moves to cool the local property market have created some 'flux', but things should 'settle' in a couple of months, the chief executive of CapitaLand's Singapore residential arm said yesterday.

'We think there is currently some flux in the (property) market,' said Wong Heang Fine.

'People are not really sure what to expect from the recent government measures. But we think it will settle in a couple of months.'

CapitaLand will go ahead with the launch of its condominium project on the former Farrer Court site in Farrer Road by year-end.

CapitaLand paid a record $1.3 billion for the 99-year leasehold site in a collective sale in 2007 and now intends to build more than 1,500 units on it.

The prices of units have not been fixed yet, Mr Wong said.

Market sources say that besides the Farrer Road project, CapitaLand is getting ready to roll out The Nassim, a 55-unit project in Nassim Hill on the former ANA Hotel site.

CapitaLand also gave the media and analysts an update yesterday on its plans for a mixed-use site at Bedok Town Centre which it bought this month in a government tender.


CapitaLand and its retail spin-off CapitaMalls Asia submitted the top bid of $788.9 million or $841 per square foot per plot ratio (psf ppr) - 21 per cent higher than the second-highest bid of $650.9 million or $694 psf ppr.
 
Mr Wong said the joint bid was bullish because the 99-year leasehold site has great potential.

The plan is to build a three-storey shopping mall and a condominium with around 500 units on it.

The mall, which will be linked to a bus interchange and Bedok MRT station, is projected to have a capital value of around $3,000 psf of net lettable area when it is completed in 2014.

And the residential component - which will consist of mainly two- and three-bedroom apartments - could be launched as early as next year.

TODAY: Aggressive $258m top bid for Eunos site

Aggressive $258m top bid for Eunos site

Sep 08

SINGAPORE - A week after last Monday's property market curbs were announced, developers have showed a mixed appetite for land, with the five bids received for a Jalan Eunos plot at the close of tender yesterday spanning a wide range of $258 million to $152 million.

The highest bid for the 99-year leasehold site was jointly submitted by Tuas Technology Park, a unit of Glory Realty, and OPH Marymount, a unit of Far East Organization's publicly-listed Orchard Parade Holdings.

The 444,132-square-feet site can be built up to a maximum gross floor area of 621,788 sq ft, the Urban Redevelopment Authority (URA) said. Developers can build a 5-storey condominium or 3-storey strata landed housing, with the project expected to yield an estimated 525 units.

The top bid translates to $415 per square foot per plot ratio and this is 26 per cent higher than the second-highest bid of $204 million, submitted by Guocoland's First Capital Development.

Property consultant CB Richard Ellis said the top bid reflected a breakeven cost of around $720 to $760 psf and units in the new project could possibly sell from $850 psf onwards.

Industry experts said the top bid was aggressive, although the other developers seemed to be cautious. Mr Colin Tan, Chesterton Suntec International's research and consultancy director, said: "The latest bidding results showed that there is still liquidity in the market and developers can still absorb the land parcels. The cooling measures appear to have no effect on the supply side although it is set to control the demand."

"One possible explanation is that the site can be used to target two different markets since it can be developed for condominiums or landed housing," he added.

The URA will decide on the winning bidder at a later date. Ephraim Seow

ST: Sparks fly as electronics giants make property forays

When you start seeing outsiders jump into the property development bandwagon, you know things are getting hot and a little out of hand.

SAT, SEP 4, 2010 Straits Times

Landlords with no real estate background accused of risking shareholders' funds.

These new landlords are sniffing out lucrative opportunities now that many big state-owned enterprises have exited the property market.

- the above is just an excerpt, please refer to the papers for the full article.

TODAY: Early signs of a slowdown?

Early signs of a slowdown?
by Millet Enriquez | Sep 03

SINGAPORE - Early signs of the expected slowdown in the Singapore economy may be on the horizon.

A slowdown in demand for electronics in key regions has caused the local manufacturing sector to snap a 15-month growth streak.

The Purchasing Managers' Index (PMI) showed that last month's manufacturing economy came in at 49.4 - a decline of 2.8 points over the previous month.

A reading above 50 indicates that the manufacturing economy is expanding, while a number below indicates a contraction.

Demand from the United States, China and Europe has been slipping in the last few months and factory output, especially for the electronics sector, has declined substantially, said Ms Janice Ong, executive director at the Singapore Institute of Purchasing and Materials Management (SIPMM), which releases the data every month.

"Hopefully, this one-time contraction in the overall PMI is only short-lived and demands from the foreign markets will pick up in the months ahead," Ms Ong said.

The article above is an excerpt, for the full article please visit http://todayonline.com

TODAY: Buyers may prefer 'software' to 'hardware'

Post a comment on what features you are looking for when searching for your dream home.

Greenery is one of the most sought-after feature and understandably so, since Singapore is such a built-up country. Even homes with green or unblocked views tend to fade with time since the march of development will slowly eat away the precious greens.

Being a project marketing agent, I've also encounter yet another source of angst and frustration for buyers when they learn that the new condo that they're eyeing has one-to-one car park lots. Developers want to maximize profits, home owners want to own multiple cars, visitors want to park within the condo...

But according to a couple of condo management firms, most of the condos units don't own one car each and only a handful own two cars or more. Still, I've been to viewings at certain condos over the weekends and had some trouble finding a lot at the visitor's lots.

* feel free to contact me regarding some of the properties mentioned in this news articles as I'm directly involved in marketing it.

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Buyers may prefer 'software' to 'hardware'
by Christine Sun | Sep 03

The recent move by the Government to cool the residential market is a measured one, targeted at property speculators. It is unlikely to deter genuine home buyers from shopping for their dream home.

We believe this group of buyers are now better placed as they could be more selective and choose where and what they want to buy.

So, what type of private homes would continue to entice buyers? What can developers do to differentiate their projects and entice buyers to opt for their project? After all, property purchases should be treated with a mid- to long-term investment horizon.

A survey was conducted by Savills Research and Consultancy in the first week of last month to explore what buyers would like to have when they buy a new private home, apart from common provisions such as swimming pools, tennis courts, kitchen appliances, wardrobes and air-conditioning.

The poll was done at various prime residential locations, heartland areas and new property show flats, comprising a good mix of different age groups, nationalities, housing types and gender. Of these demographics, 64 per cent of respondents were HDB upgraders versus 36 per cent private home owners.

Topping the wish list of 220 respondents was more greenery in their homes. Specifically, 57 per cent of respondents opted for "gardens and greenery". This was followed by "shuttle services to main shopping belts" (53 per cent), "services for housekeeping, laundry, car washing and child care" (45 per cent) and "more car park lots" (43 per cent).

Private homes adorned with lush landscaping will, therefore, remain popular among buyers here.

This could be a reason why many private homes that draw inspiration from a "green" theme have appealed to buyers. Some well received projects include The Tree House, Park Natura, Meadows Pierce and Nassim Park Residences.

These developments have either integrated their landscape into the surrounding natural greenery or have created their own expansive canopy of roof gardens, sky terraces or sprawling green fields within their premises.

Homes that come with verdant landscaping usually command a premium for their green tranquility and exquisiteness.

However, it seems that such serene living is not appreciated by private home owners alone (64 per cent) as HDB upgraders are found to have a strong preference too (54 per cent). Mass market homes which are predominantly bought by HDB upgraders could, therefore, incorporate more greenery to boost sales.

The survey also found that contrary to popular belief, buyers may have a stronger preference for "software" than "hardware" provisions.

"Software"provisions encompass branding, advertising efforts and personal services, while "hardware" offerings cover physical peripherals such as facilities, finishes, fittings, fixtures and landscaping.

Traditionally, developers differentiate their products by enhancing their "hardware".

For example, many developers have upgraded the types of swimming pools provided in new developments - from a simple lap pool to an array of water features like spa, dip, fun, heated, lounge and infinity pools. For some, hydro-therapeutic jets, spa equipment, aqua gyms and water playgrounds are incorporated.

Barbecue pits have also been outmoded by modern epicurean gourmet kitchens.

These entertainment pieces designed to impress guests are now stylized with different thematic cooking functions to serve tandoori, Japanese teppanyaki, Western BBQ and Italian cuisines. Brand appeals have also been raised by employing world-renowned architects, branded fittings and importing quality marble slabs from East Mediterranean countries.

But are these what buyers really want? According to the findings, common "hardware" items such as "imported quality marble tiles and timber flooring" (20 per cent), "spa facilities" (23 per cent) and "more or bigger balconies" (23 per cent) were not as popular among respondents.

Instead, they preferred "more car park lots" (43 per cent). The scarcity of both private and public parking spaces could have made this a precious commodity among buyers.

The other "hardware" item respondents chose is "white plans" (35 per cent), a relatively new concept where owners are given the flexibility and freedom to design, create and carve out their home layouts.

As this customization usually entails higher construction costs, only some luxury homes like The Alba, Boulevard Vue and Skyline Orchard Boulevard offer such privileges. More developments could incorporate such design flexibility, perhaps within the confines of limited layout choices to contain costs.

Interestingly, the second and third most popular wish list items were "software" items that encompass personal services that can enhance a dweller's daily convenience. These items include "shuttle services to main shopping belts" (53 per cent) and "services such as housekeeping, laundry, car-washing or child care services" (45 per cent).

These personal services were more popular among both private home owners and HDB upgraders than other commonly provided "software" items such as homes being "designed by renowned architects" (21 per cent) and "concierge services" (15 per cent).

Unfortunately, a comprehensive range of these personal services are not always available in developments.

Individual pockets of services are, however, found in selected private homes such as Bayshore Park, that has some laundry services, or The Minton, which is said to be contemplating some child care services from within its premises.

Moving forward, new developments could enhance their marketing strategies and forge new partnerships to enhance the palette of personal services provided for discerning home owners and investors.

After all, as society advances and competition intensifies, it would not be surprising that condominium development may incorporate the provision of services as well.

More studies can, therefore, be done to better understand the spectrum of "software" that buyers want and their impact on the buying decision.

The writer is senior manager at Savills Research and Consultancy.

Pessimism in equities brightens September outlook

Chart provided by Bloomberg's Dave Wilson of Taking Stock.

The chart displays the percentage of bulls and bears in the association's data. Last week's results showed the fewest bulls since March 4, 2009, five days before the Standard
& Poor's 500 Index hit bottom at a 12-year low.

TODAY: More pay for fresh grads

by Ong Dai Lin | Sep 02

SINGAPORE - Fresh graduates this year are getting more pay, but only marginally. According to a survey by the management consulting firm, Hay Group Singapore, this year's graduates command an average starting pay of $2,461 - only $28 more from $2,433 last year.

However, those graduating next year, could expect lower starting salaries.

Mr Chan said that due to uncertainties in the global economy, companies will be more cautious. He expects starting salaries for bachelor's and master's degree-holders to fall.

- this is an excerpt, visit Today Online to get the full article.

Press Statements on the new property measures

MND Press Statement

HDB Press Statement

Annex: Stamp Duty Calculation Examples

New government measures for the property market

THE Ministry of National Development (MND) announced on Monday several measures that would maintain a 'stable and sustainable' property market, that will take place with immediate effect.

In a statement issued on Monday morning, MND said it would increase the holding period for the imposition of Seller's Stamp Duty (SSD) on residential properties sold from one year to three years.

The SSD levied will vary according to the term of occupancy. If the property is sold in the first year of purchase, the full SSD will be levied - one per cent for the first $180,000 of the consideration, two per cent for the next $180,000, and three per cent for the balance. Two-thirds of the SSD will be levied for properties sold in the second year of occupancy and one-third for properties sold in the third year of occupancy.

The extended SSD will not affect HDB lessees as the required Minimum Occupation Period for HDB flats is at least 3 years.

For property buyers with outstanding housing loans, the Minimum Cash Payment has been increased from five per cent to ten per cent of the valuation limit. This measure is applied only to buyers of private residential properties, Executive Condominiums, HUDC flats and HDB flats (including those under the Design, Build and Sell Scheme) who are taking housing loans from MAS-regulated financial institutions who already have one or more outstanding housing loans.

For this group, the Loan-to-Value (LTV) limit has been lowered from 80 per cent to 70 per cent. Borrowers who do not have any outstanding housing loans will continue to have an LTV cap of 80 per cent. Loans granted by HDB for HDB flats (including DBSS flats) will still have an LTV cap of 90 per cent.

HDB loans are offered to eligible first-time flat buyers and second-timers who are right-sizing their flats to meet their housing needs. They are required to utilise all of their CPF Ordinary Account balance before HDB loans will be granted.

In their statement, the MND said lowering the LTV limit would 'send a clear signal' to financial institutions to maintain credit standards, and also encourage greater financial prudence.