Tuesday, September 28, 2010

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.

Monday, September 27, 2010

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

Tuesday, September 21, 2010

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.

Friday, September 17, 2010

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

Thursday, September 16, 2010

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.

Wednesday, September 15, 2010

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.

Tuesday, September 14, 2010

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.

Tuesday, September 7, 2010

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

Saturday, September 4, 2010

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.

Thursday, September 2, 2010

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.

Wednesday, September 1, 2010

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.