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Old 14-07-2007, 12:08 PM   #46
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Industry players back idea to regulate property agents

13 July 2007 2017 hrs

SINGAPORE: Industry players have given the thumbs-up to the idea of regulating property agents.

The suggestion follows letters to Singapore's newspapers on how agents are cashing in on the property boom and that it is time to license them.

Singapore's property market is red-hot, and the conduct of some real estate agents has left a few consumers red in the face.

In the first six months this year, the Consumers Association of Singapore (CASE) received 49 complaints against agents and their companies, compared to 28 in the same period last year.

But industry players said the increase in complaints could be due to the rise in transaction volume.

Still, they were all for regulating property agents and that it should go beyond the current accreditation scheme under the Singapore Accredited Estate Agencies where companies must ensure agents pass a professional examination and keep to a strict code of ethics.

Mohamed Ismail, CEO of PropNex, said: "What is the point of having any form of accreditation when it's only a minority - 20% support the idea while 80% still do not abide by whatever the guideline there is. Therefore, for the industry to progress positively, I honestly think there must be a regulatory body."

Industry watchers, like the Institute of Estate Agents (IEA) and Singapore Accredited Estate Agencies, supported the move.

They said that there was no rising trend on cases pertaining to professional misconduct among members.

Complaints were usually related to service levels and commissions, but IEA hopes to rally the industry and government to enhance professionalism.

It is also going all out to recruit more members and educate consumers about engaging agents registered with IEA.

Chandran Pillay, Honorary Secretary, Institute of Estate Agents, said: "Sit down with us, talk to us and we (will) come up with a framework, minimum entry criteria, minimum standard and some kind of a tracking system, that's why we are proposing the individual licensing.

"We have already started with our CRS - Central Registry System - database which proved to be very good. Because we have a lot of duplicate data, now the company bosses realise that there are some agents that are actually listed with more than one company....we are regulating, but we just need more support from government authorities and a bit more power."

Still, industry players say buyers and sellers must also play their part as well by being better informed about the property market.

They should also exercise prudence and be realistic about transaction prices.

Agents also warn buyers against going into a bidding war as this will drive up prices and could overheat the market. - CNA/ir
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Old 14-07-2007, 12:32 PM   #47
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July 14, 2007
Sub-sales of private homes hit 10-year high
Consultants say numbers are surprising, but they are not worried about Govt intervention yet


By Fiona Chan
THEY have not even been built yet, but apartments at popular new projects like The Sail @ Marina Bay are changing hands at a rate not seen in almost a decade.
Sales of these uncompleted homes, known in the industry as sub-sales, almost doubled to 1,184 between April and last month for private non-landed homes, according to new figures released by property firm Savills Singapore yesterday.

Such transactions comprised 13.9 per cent of all private home sales in the June quarter - up from 6.3 per cent in the first three months of this year and the highest level in almost 10 years.

Sub-sales are often used to measure speculative activity in the private home market and as such are closely watched - now more than ever, as the Government tries to gauge how far it should go to calm the red-hot property market.

The latest figures show that more buyers are quickly reselling recently-bought homes, adding to the growing property frenzy.

But while the numbers are rising fast, property consultants are not too concerned yet.

'It's surprising that sub-sales have doubled in three months, but they still haven't reached the same levels as in 1996, which triggered government intervention,' said Mr Nicholas Mak, director of research and consultancy at Knight Frank.

At the height of the property boom in 1996, sub-sales reached 28.4 per cent of all home sales.

But Mr Mak warned: 'If it keeps going at this rate, the authorities may step in.'

At projects such as the uncompleted Sail, sub-sales have been roaring along. There were 61 Sail units resold three times each in the last two years, according to investment bank JP Morgan.

Six more units changed hands four times, and one unit found new buyers five times.

Most of these sellers made big bucks, thanks to escalating prices - some units have tripled in price since their 2004 launch.

One buyer paid $750,000 for a unit in early 2005 and resold it for $1.8 million recently, said Savills.

But not all sub-sales turn profits.

At Icon in Tanjong Pagar, one seller made more than $314,000 in three months, while another resold his unit at a $348,000 loss after two months.

Savills, whose estimates were taken from the Urban Redevelopment Authority's caveat database ahead of official Government figures due on July 27, pointed out that more sub-sales do not necessarily imply more speculation.

'These sellers may not have bought their units with the intention to speculate,' said Mr Ku Swee Yong, Savills' director of marketing and business development.

'But prices have risen so quickly that they are tempted to cash in.'

Indeed, projects in the prime districts - where home prices have shot up the fastest - made up the bulk of the sub-sales in April to June, said Savills.

More than half the sub-sales in the period took place in Districts 1 to 4 and 9 to 11, which cover Orchard, River Valley, Bukit Timah, Newton, Shenton Way, Marina Bay and Tanjong Pagar.

Sub-sales accounted for about one in five of all home sales in these areas. But some districts saw higher figures of up to 80 per cent.

In District 2, where Icon is located, four out of every five sales were sub-sales. In District 1, where The Sail is, the figure was 64 per cent.

The proportion of sub-sales was a lower 25 per cent in District 9 and only 11 per cent in District 10.

The Sail and Icon topped the sub-sale list in the quarter, with 81 and 71 deals, respectively. Sky@Eleven in Thomson Road was third with 51, while City Square Residences and Citylights in the Jalan Besar area saw 40 deals each.

With most of these projects due to be completed soon, Mr Ku added that the spike in sub-sales could backed by genuine buying demand from displaced collective sale sellers.

This may be a balm to the Government, which has periodically referred to low levels of sub-sales as a sign that rising property prices are fuelled by genuine home demand.

Last year, there were just 989 sub-sale deals, accounting for a mere 4.1 per cent of total private home sales.
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Old 17-07-2007, 06:17 PM   #48
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Not as hot as you think ...

30% of HDB resale flats sold at or below valuation, according to new data

Tuesday • July 17, 2007

Tan Hui Leng
huileng@mediacorp.com.sg

IN ANOTHER cautionary move to address the sizzling property sector, the Government yesterday released more data to give buyers and sellers a clearer picture on recent transactions in private and public homes.


Despite reports of high-selling prices for isolated cases, the Housing Development Board (HDB) said not all resale flats that changed hands in the second quarter were transacted above valuation — only 70 per cent were, with the remaining 30 per cent sold at or below valuation.

The average Cash-Over-Valuation (COV) was $10,000 — with five-room flats in the central region registering the highest COV, at $33,600.

The detailed publication of property pricing data — meant to help those in the market make "informed decisions" — is the first such move by the statutory board, amid recent reports such as the five-room flat in Kim Tian Road which sold for a record $720,000.

HDB also added that overall resale flat prices rose by about 4.2 per cent in the first half of this year.

Earlier in the day, the Urban Redevelopment Authority (URA) also released more data on uncompleted private residential projects here. To be released on the 15th of each month, the figures show the number of units launched and sold by developers, as well as the median, lowest and highest price of the units sold.

A check showed that prices in a single condominium project can vary widely.

The Marq On Paterson Hill made headlines last month with the sale of a unit at $5,100 per square foot (psf), but the full range of sale prices — starting at $3,604 psf, with a median price at $4,044 psf — makes for more modest reading.

"Members of the public are encouraged to make use of this new information, rather than rely solely on information from media reports which may highlight only the prices of the most expensive units sold in selected projects," said the URA. The agency also issued a new Home Buyers' Guide, which provides information on the home-buying process.

Analysts welcome the latest measures to provide more timely information.

"They are responding very quickly to recent euphoria that has taken place in HDB resale market," said ERA Singapore's assistant vice-president Eugene Lim. "With the record prices recently, we have people all the way from the central area to Jurong East starting to ask for prices way above valuation. It's gone a bit berserk in the last two weeks."

The HDB is also quelling concerns that there may not be enough flats available.

It said it has offered some 1,400 new flats under the Build-to-Order (BTO) exercises in the first half and is planning to offer about 3,000 new flats in the second half. It added that there are currently some 760,000 flats eligible for transactions in the resale market.

Property analysts viewed the Government publication of detailed property pricing data as a way to balance the bullish market without intervening in the market directly.

Said Cushman and Wakefield Singapore's managing director Donald Han: "The Government is trying to calm the market."

In the '90s, the Government stepped in to cool the property market — for example, by implementing tax on capital gains within a certain period. This time round, however, the measures seem to be softer.

"It's a much better approach to leave it to the private market to find its own level," said Mr Han. "What everyone fears is if the Government comes up with bold, excessive measures. This buoyant market is only in its first year and you don't want to upset the market with strong physical measures."

But some are calling for a further breakdown of HDB resale data, beyond its five geographical regions.

For example, Clementi and Jurong West are two of the areas grouped under the western region — but the average resale price for a five-room flat can vary from $377,200 in Clementi to $268,800 in Jurong West, said PropNex CEO Mohamed Ismail.

"Such grouping of information may lead first-time buyers to think that the sellers are quoting prices that are too high — but this may not be true," he said.
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Old 17-07-2007, 06:18 PM   #49
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July 16, 2007
Property boom to yield record stamp duty
Tax revenue could hit $5 billion as housing market continues to sizzle

By Fiona Chan

WITH the property market setting new records each month, government revenues from stamp duty look set to reach new highs this year.
Property deals in the first five months of this year have yielded more than $1.7 billion in stamp duty. At this rate, the government coffers could get a $4 billion boost for the entire year.

The takings for the first five months of this year have already surpassed the $1.3 billion for all of last year, the latest official statistics showed.

And this is just 7.7 per cent shy of the record $1.8 billion in 1996, the last property market peak.

But with the pace of transactions hotting up over the past few months, some analysts are predicting that the stamp duty collected could rise even more.

'If the property market continues as it is now - and we are only starting to see it pick up - we are looking at somewhere in the order of

$4 billion to $5 billion in stamp duty,' said Mr Song Seng Wun, economist and research head at stockbroking house CIMB-GK.

Stamp duty is a tax on commercial and legal documents used in certain transactions. The bulk of it comes from property purchases. Stamp duty ranges from 1 per cent to 3 per cent of the purchase price.

The latest surge in stamp duty is largely due to the jump in property prices and transactions. 'Stamp duty reflects increased economic activities everywhere, but the main contributor has certainly been the property market,' said Mr Song.

Mr Nicholas Mak, director of research and consultancy at property firm Knight Frank, also sees a surge in stamp duty, though he is slightly less bullish than Mr Song.

He expects a record 33,000 private homes to be sold this year. The average value of each home is also likely to be higher than in the past, he noted.

This would increase stamp duty, as it is calculated as a percentage of a property's price. Based on this, he projects tax takings of about $3.2 billion.

A recent tweak in stamp duty rules may also contribute to the boost. In December, the Government stopped deferring stamp duty payments on property sales - a practice started in 1998 that allowed buyers to put off paying it for up to a few years.

Now, property buyers have to cough up stamp duty within 14 days of agreeing to buy. But those who bought properties before December still enjoy deferments.

This means that the stamp duty takings so far this year come not only from new property sales in the first five months, but also from deferred sales in past years, bumping up the figure.

Economists say stamp duty is set to become the third biggest contributor to government operating revenue this year, from being one of the smallest in the past.

It is projected to surpass customs and excise duties, motor vehicle taxes, property taxes and betting taxes. Since 2000, it has consistently fallen behind all four categories.

Analysts also noted that with the bumper take from stamp duty, as well as projected higher takings from the goods and services tax and income tax, government revenues are likely to surpass the $32 billion collected last year.
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Old 17-07-2007, 06:21 PM   #50
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July 16, 2007
Singles feel the heat from sizzling private home rentals
Some are having to downgrade or move back to parents' homes to lower living expenses
By Jessica Cheam
THE boomtime in Singapore's property market is hitting one group of house-hunters hard: singles.
Across the private market, property agents said prices in the past three months have gone up by as much as 40 per cent, with rents at some locations even doubling.

These singles, usually professionals in their 20s to 40s, now face the prospect of downgrading from their current rented homes, sharing with others, or moving back in with their parents in order to reduce living costs.

In the first quarter of this year, Urban Redevelopment Authority (URA) figures revealed that private residential property rents rose 7.6 per cent from the previous quarter, compared with a 5.3 per cent increase in the last quarter of last year.

Second-quarter figures are expected at the end of this month.

Recent trends show that these private property tenants have downgraded to renting Housing Board (HDB) flats - or pooling together resources to purchase flats in either the private or HDB resale market, said Mr Eric Cheng, the senior division director of property agency PropNex.

According to PropNex's surveys, singles account for 16 to 17 per cent of total property transactions - but this has since risen by 2 to 3 percentage points in the last three months.

Mr Dennis Yong, the president of real estate company HSR Group, also noted that the rentals of private studio apartments, which used to be around $1,100 a month, are climbing upwards of $2,000. As a result, many tenants have downgraded and the take-up rate of HDB flats has been 'crazy', he said. 'You advertise in the morning and it's snapped up in the afternoon.'

Flight steward Joe Tan, for example, said he was forced to move out of his two-room, 960 sq ft apartment at Bayshore Park last month when his monthly rent was raised from $1,600 to $2,800 at the end of his lease.

Unable to afford the new rent, the 36-year-old has opted to rent a smaller HDB flat in Tampines for $1,100 a month. He is thinking of buying a property.

Another local, Mr Kevin Lim, 35, a freelance media producer, said that he was now looking for an affordable flat after his landlord raised the rent for his private apartment in Novena from $1,800 to $3,500.

Mr Tan said the increase was unreasonable for the standard of his flat. 'There are no affordable private flats for us any more, unless we move out to the sticks,' he said.

Knight Frank director of research and consultancy Nicholas Mak said the rental squeeze was due to demand surpassing supply, which has been aggravated by a massive reduction in flats as a result of the recent collective sales frenzy.

With property values going up, landlords expect higher returns, he said.

The increasing number of expatriates working in Singapore, many of whom have a higher income because of relocation packages, also exerts pressure on the market.

While HSR's Mr Yong said the rental hikes have also affected the outskirts, Mr Mak felt that affordable flats were still available further away from the city. He expects the demand to ease after 2009, when more residential projects will be completed.

'Then, there will be a real test of the sustainability of current rental market prices,' he said
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Old 17-07-2007, 06:22 PM   #51
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July 17, 2007
Newly privatised Laguna now prime collective sale target
But owners of 30-year-old HUDC estate have mixed feelings about selling homes
By Nicholas Fang
THE Housing Board (HDB) announced yesterday that Laguna Park has been privatised, bringing mixed reactions from the owners of the 528-unit HUDC estate in Marine Parade.
The conversion to a strata-titled estate - it means owners now hold the title to their units as well as the common property - clears the way for a potentially lucrative collective sale.

Property consultants say they have been approached by owners at Laguna Park in recent months to discuss the estate's collective sale potential but some were not sure if they wanted one.

Of the six owners The Straits Times spoke to last night, three viewed the possibility positively while the others were not keen at all.

However, they were united in their affection for and emotional attachment to the 30-year-old estate with its sea views and prime East Coast location. And all of them expressed reservations about having to move should it be sold en bloc.

Retired pilot Tony Tan, 54, who has owned a 23rd-floor apartment for 20 years, said he would be interested in the possibility of a collective sale if the price was right.

'When I bought the place 20 years ago, I paid about a $50,000 premium over the going rate of about $350,000 at the time, just so that I could have a seafront view,' said Mr Tan, who lives there with his wife and two children.

'I truly love this place with the breeze and spectacular views, and I will be very sad to leave.'

Remisier Tan Thong Hian, 58, who also lives on the 23rd floor, felt that a collective sale was a definite possibility.

'The estate is old and some people could use the money. I think there will be no problem getting 80 per cent approval for a collective sale if the price is attractive.'

However, he also admitted he, his wife and son were facing a dilemma should the decision to sell en bloc is taken.

'I don't think we can find another place like this that is so big, quiet and has such views.'

Both Mr Mayur Vora, a self-employed commodities broker, and Mr S.C. Lim, managing director of management consultants Henry Noon & Co, were sceptical of an attempt at selling the estate en bloc due to the strong emotional attachment many residents felt to their home.

Mr Steven Ho, chairman of the Management Corporation Strata Title for the project, said that Laguna Park residents were to meet last night to discuss the latest developments but he declined to elaborate.

'As details and plans are not confirmed, I cannot comment as it depends on the owners,' he said. He did, however, confirm that there have been talks about the collective sale potential and admitted that there had been 'a lot of speculation'.

Property consultants DTZ Debenham Tie Leung and Credo Real Estate have both been approached by Laguna Park owners recently to potentially market a collective sale.

DTZ director Shaun Poh said: 'We were invited to do a presentation and hand in a proposal but we haven't heard anything official yet.

'Based on the site area of more than 677,000 sq ft and plot ratio of 2.8, we estimate that approximately 1,140 units of an average size of 1,500 sq ft can be built.'

Credo Real Estate managing director Karamjit Singh said that his firm was approached by residents just last month but that nothing official had been announced.

When asked how Laguna Park compared with Farrer Court, a former HUDC estate that was put up for sale at a whopping $1.5 billion in May, Mr Singh said: 'Right now, I would rate Farrer Court higher as it has a more central location.

'But if the market keeps going up, not just Laguna Park but any good-sized HUDC estate could surpass Farrer Court in time.'

Laguna Park is the 11th HUDC estate to be privatised since the Government's privatisation programme started in 1995.

Remaining estates such as Shunfu, Serangoon North and Eunosville are in various preparatory stages of the privatisation exercise, the HDB said.
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Old 17-07-2007, 06:25 PM   #52
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July 17, 2007
Keep it open to foreigners
RESENTMENT over foreign purchases pushing up apartment prices is still only murmured about, but it will be out in the open if the price spiral continues at its present clip. The agencies tracking the property market will then face pressure to restrict sales to non-Singaporeans. The property firm Colliers International reckons that seven in 10 of these deals done this year in the upper price band were for investment and not occupation, a fact that could only harden opinion against outsiders feasting at the table. It is to be hoped public sentiment never gets that misguided. It is conceded the resentment is instinctive and quite natural, as happened when the pre-Hong Kong handover immigration wave in the 1990s stoked price pandemonium in the favoured Asia-Pacific destination cities of Vancouver, Sydney and Auckland. Any clamour to curb foreign interest in strata-title developments in Singapore should be resisted as counter-productive. It would be bad for the market, a blow to the economy and ultimately harmful to Singapore's reputation for being welcoming of capital and talent. Foreign interest in any metropolitan city's residential scene is a crucial stimulus not only for enhancing real estate value, but also for its catalytic effect of making a striving city a throbbing one and of keeping a great city great. Singapore in fact would gain a premium if foreign buyers of condominiums extended beyond South-east Asians to include more Japanese, Europeans and North Americans. That would be a triple-A rating in the confidence stakes.
Unlike limited landed property for which restrictions on foreign buyers should on no account be relaxed, the supply of apartments is ample. This makes the price frenzy an irrational one. First-time buyers, assuredly a constituency the Government must watch over, are not in the market for those luxury residences that keep setting new psf benchmarks and average transacted prices. But their worry that high-end price behaviour will influence the mass market of condos starting at about $600 psf will need careful tending by the Government. Some 23,000 condos due for completion by 2010 are unsold in this crazy market, but first timers' jitters persist. Why? The answer may lie in the anxiety whipped up by news of ever more en bloc sales removing supply and upping sellers' replacement cost. To get through this boom cycle without mishap, it is preferable that collective sales slow down until replacement supply appears in four to five years. There are signs these sales are decelerating as a new realism about illusory riches takes hold. The best thing that could happen now is an end to the en bloc round through natural attrition.
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Old 18-07-2007, 04:01 PM   #53
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July 18, 2007
Development charge for new buildings up to 70%

THE government has raised the Development Charge (DC) for new building projects to 70 per cent from 50 per cent.
The revised rates will apply to development applications where provisional permission is issued from Wednesday.

They will also apply to cases that are granted a second or subsequent extension to their provisional permission on or after this operative date.

A statement from the National Development Ministry (MND) on Wednesday said the DC rates have been revised to reflect the appreciation in land value, and is a reinstatement of what it was in 1985.

For land with title restrictions on the use and intensity, which are subject to a levy of Differential Premium by the Singapore Land Authority, it will similarly be adjusted to the 70% rate.

The land value of a site can be enhanced due to the government's action in rezoning the site to a higher value use or increasing the plot ratio.

The DC system, where a part of the enhancement in land value is taxed, allows the state to have a share of the gains from the value enhancement arising from its grant of planning approval.

The portion of the gain taxed by the government can then be used to offset expenditure on infrastructure movements, such as road and rail works, as well as utilities, to support the higher land zoning or intensification of land.

The balance of the gain is retained by the owner and provides and incentive for him to undertake the development work.
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Old 19-07-2007, 01:22 PM   #54
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July 19, 2007
Property charge hike may cool en bloc fever
Tax payable to enhance use of sites to be raised from 50% to 70%
By Joyce Teo
THE Government sprung a surprise on property developers yesterday by dramatically ramping up a tax payable to enhance the use of a site.
The move triggered a selldown of property shares on the Singapore Exchange.

Developers pay the tax - called a development charge - if they want to enhance the value of a site by building a bigger project, for example.

The rise in the land's value was taxed at 50 per cent, but will now be levied at 70 per cent, similar to what it was in 1985. The same rate will also apply to fees paid to rewind a site's lease back to 99 years.

For example, a site that rises in value by $2 million will now be taxed $1.4 million, compared to $1 million previously.

Its broader effect will be to make certain sites more costly, and perhaps take some heat out of a roaring property market that has seen record prices across many housing types.

Analyst David Lum from Daiwa Institute of Research said the move is 'another piece of evidence that the Government might be a little uncomfortable with the rapid appreciation in certain segments of the market'.

An immediate casualty could be the buoyant en bloc market, which has seen developers pay huge sums for estates over the past 12 months.

And by stemming en bloc sales, which reduce housing stock in the short-term, the hike may even take pressure off rents.

Developers will have to recrunch their numbers now - and hopeful owners might have to lower expectations of a bumper en bloc bonanza.

Sing Holdings said yesterday that with the change, it expects the land cost for acquiring Hillcourt Apartments to rise by about 1.2 per cent - from $1,444 per sq ft of potential gross floor area to $1,461.

'The rate revision will add a few percentage points to the total costs of some developments,' said a Savills Singapore director, Mr Ku Swee Yong, who felt the impact on developers will not be great.

Knight Frank's head of research and consultancy, Mr Nicholas Mak, agreed: 'There was a knee-jerk reaction, but it's not going to derail the property boom.'

Still, property shares took a hit yesterday. Giants such as CapitaLand and City Developments fell by around 2 per cent or more, while the sector index plunged 2.7 per cent.

The rate rise is a double whammy for some firms. Deve- lopment charges are reviewed every six months, with new rates due on Sept 1.

These charges are designed to mirror property values and are almost certain to rise, given the surging market, thus adding more costs to developers over and above yesterday's rise.

Yesterday's change took immediate effect.

It will hit developments that have yet to receive provisional permission to enhance land value, or those granted an extension to their provisional permission from yesterday.

This means developers which have done deals over the past two to three months could be hit, said Credo Real Estate managing director Karamjit Singh
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Old 19-07-2007, 01:31 PM   #55
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July 19, 2007
TAKING STOCK
News of higher development charges hurts property shares

By Arthur Poon
THE property engine that has driven share prices for many months slammed into reverse yesterday and left the market nursing its biggest one-day fall in three months.
The sell-off was so extensive - and panicked - that trading records were comprehensively smashed.

About 9.14 billion shares worth $4.31 billion were traded, easily eclipsing the old benchmark, set only on Tuesday, of 6.42 billion shares worth $3.05 billion.

And all this stemming from an afternoon government announcement that development charges for new building projects will jump from 50 per cent to 70 per cent, hitting developers' bottom lines. A charge is levied if the value of a site rises because of rezoning.

That post-lunch bombshell sent The Straits Times Index (STI) into a nosedive and stripped it of 67.08 points, or 1.84 per cent, to 3,583.97. Losers easily beat gainers 931 to 132. The previous biggest single-day fall was the 109.13-point plunge on April 19.

Property counters took the full force of the hit yesterday. But penny shares, which have seen a run-up this week, were also cast overboard by traders rushing for the exit.

'Property developers may need to raise their sale prices to pass on the additional costs to buyers, or come up with more innovative marketing and sale strategies for future projects to avoid having their margins squeezed too badly,' said CIMB-GK head of research Song Seng Wun.

SC Global, down 45 cents to $6.25, and Bukit Sembawang Estates, off 40 cents to $13.20, were among the big losers.

City Developments slid 40 cents to $15.90, while Orchard Parade Holdings plunged 37 cents, or 12.8 per cent, to $2.51. Fellow developer Wing Tai Holdings also finished lower at $3.70, down 26 cents.

Banking stocks were also dragged down by the weak market sentiment. United Overseas Bank declined 50 cents to $22.60, and DBS Group Holdings was down 20 cents at $23.40.

Also down was information technology firm Sinobest Technology Holdings, which fell two cents to 17.5 cents. It had issued a profit warning for the first half of this year, owing to the 'continuing fierce competitive environment'.

But there were winners amid the carnage. Singapore Petroleum Co rose 15 cents to a record $6.30 on expectations that second-quarter earnings will be boosted by a surge in refining margins.

Sports fashion footwear maker China Sports International, which made its debut yesterday, closed at $1.46, an 82.5 per cent premium over its 80-cent offer price.
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Old 19-07-2007, 01:32 PM   #56
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July 19, 2007
New hotel site near Hong Lim Park up for tender
Demand may not be as strong as for housing plots, says consultant
By Fiona Chan


A NEW hotel may soon rise beside Hong Lim Park near Chinatown on a fairly large site that the Government released for sale yesterday.
The 74,905 sq ft plot is bounded by Upper Pickering Street and Upper Hokkien Street.

It carries a 99-year lease and has a plot ratio of 4.2, giving it a total potential gross floor area of 315,000 sq ft.

A three-star hotel with 450 to 500 rooms can be built on the site, said Mr Donald Han, managing director of property firm Cushman & Wakefield.

Part of the building may go up to 20 storeys. The height of its other parts, however, has been capped at only 16 storeys.

Mr Han expects bids for the site to come in at about $450 to $500 per sq ft per plot ratio (psf ppr) or about $141.5 million to $157.3 million.

But despite a boom in Singapore's hotel sector, he believes that interest in the site will be lukewarm at best.

'I don't think we'll see a whole lot of bidders as we would see for commercial or residential sites,' he said.

'The thing is, although there are a lot of investors looking at hotels to buy, a developer buying a site to build a hotel would have to be in it for the long term.'

Mr Han predicted that 'fewer than five bids' would be submitted for the site, adding that the last hotel site released in nearby Tanjong Pagar area attracted only two bids.

The contract to develop that site went to the Carlton hotel group last month. The group's $123 million bid worked out to about $573 psf ppr.

The hotel industry in Singapore is seeing a good year. Hotel room rates have reached record highs for the second time this year on the back of rising occupancy rates and a tourism boom.

The Upper Pickering site, however, has been on the Government's reserve list for land sales for a year without any takers.

Under the current system, a site can be put up for sale only if a developer commits to bid for it at a minimum price acceptable to the Government.

But no developer came forward for the Upper Pickering site. This led the Government to transfer the plot to its confirmed list last month, which meant the site would be put out in the market at a fixed date regardless of developer interest.

fiochan@sph.com.sg

NOT A SHORT-TERM BONANZA

'The thing is, a developer buying a site to build a hotel would have to be in it for the long term.'
MR HAN, on why he expects the site to attract fewer than five bids despite a boom in the hotel sector
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Old 19-07-2007, 07:50 PM   #57
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Development tax raised to achieve more equitable sharing of property gains: URA

19 July 2007 1438 hrs

THERE has been much speculation that the Government — concerned over rising property prices — would do something to tame the property bulls.

Still, market-watchers were taken by surprise when the Government announced yesterday that it will be raising development charges by 20 percentage points, bringing them back to the pre-1985 rate of 70 per cent.

While the revision is unlikely to have a drastic impact on property sales, analysts believe it will slow down the en-bloc frenzy as it will now be more expensive for developers to buy land.

The development charge taxes the appreciation in land value. It was lowered from 70 per cent to 50 per cent in 1985 due to the economic recession.

Yesterday's announcement by the Ministry of National Development — that the charge would be raised with immediate effect — not only caught property analysts and developers off-guard, but the stock market was surprised too, causing prices of property stocks to fall.

The same rate of 70 per cent will also apply to differential premium, which is a tax paid by a lessee of State land to top up his lease or remove any restrictions on land usage.

The new rate will bring the charges in line with the buoyant market, said the ministry.

An Urban Redevelopment Authority (URA) spokesperson said the move was "timely", and that the previous 50-per-cent development charge was "inadequate" in achieving an equitable sharing of the land appreciation value between the Government and the owner.

However, Chesterton International research director Colin Tan pointed out that the Government could also be concerned with the "economic waste", given the number of fairly new properties going under the wrecking ball.

Citing the example of the six-year-old Portofino apartments going up for collective sale, Mr Tan added: "If everyone is redeveloping, it will add to the demand for construction materials."

Currently, the development charges — which vary according to land use and location — are revised twice a year on March 1 and Sept 1 to keep in pace with the market.

But the latest announcement is a "policy change", said the URA spokesperson.

The 20-percentage-point rise in the tax rate would effectively mean a 40-per-cent increase in the charges that developers have to pay.

While the increased charges would not greatly affect developers' "fairly healthy" profits, Cushman and Wakefield's managing director Donald Han said that for projects in Districts 9, 10 and 11 and the downtown areas — where prices are still rising — the increased costs could be passed on to the end-buyer.

Under the revised rate, for instance, the charge for commercial use in Orchard Road would rise from $3,100 to $4,340 per square metre. In comparison, the increase in charges for various land usages in outlying areas would be in the range of a few hundred dollars per square metre.

In contrast to the Government's "more aggressive" measures in 1996, where the imposition of stamp duty and capital gains tax affected buyers and sellers, the increase in development charges "is more of a pricing factor that developers have to take into account", said Mr Han.

Still, he noted that the hike was the latest in a "package" of measures to manage the property market, including earlier moves to provide greater supply and more transparency. A spokesperson for City Developments Limited told Today that the higher charges would have an "insignificant impact on our existing projects" but it would "take this increase into consideration for future acquisitions".

However, Knight Frank research director Nicholas Mak saw the move as more of "a taxation exercise".

According to his calculations, the average development charges paid by developer in the collective sales over the last six months worked out to be about $21 million per transaction.

A 40-per-cent increase would amount to an additional $8.4 million.

"There were about 70 en-bloc sales last year. If you multiply that by $8 million, it would mean additional tax revenue of $560 million," said Mr Mak.

Likening the move to the increase in Goods and Services Tax, he said: "When is the best time to raise GST? When the economy and job market are doing well. Chances are less people will complain. The best time to raise taxes in the property market is when the market is doing well."
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Old 20-07-2007, 10:39 PM   #58
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July 20, 2007
Horizon Towers minority owners bid to delay hearing fails

In yet another twist to the controversy over the sale of the Horizon Towers condominium, a High Court bid by minority owners for more time to present their case to the Strata Titles Board has failed.
The minority owners, who object to the sale, wanted a judicial review of the Board's decision not to postpone a hearing.

They will now have to present their case next week instead of in September as they wanted.

The $500 million deal for the two blocks at Leonie Hill, which was struck on Feb 12, has to be finalised by Aug 11. If the High Court had ruled in favour of the minority owners, the deal would have been effectively scuttled.

The 99-year leasehold property has been pledged to be sold enbloc to HPL, Morgan Stanley Real Estate and the Qatar Investment Authority, the investment arm of the Gulf Arab state of Qatar.

The deal was backed by 84 per cent of the owners. This is above the 80 per cent requirement, but it still needs the approval of the Strata Titles Board. Previously, the Board set the hearing for September, but later moved it forward.

Through lawyers from Tan Kok Quan Partnership and Harry Elias Partnership, the minority owners argued that they needed more time to prepare their objections to the deal.

They therefore sought leave from the High Court for a judicial review of the Board's decision to bring the hearing forward.

But according to court documents filed by the purchasers, the the deal would have been scuttled if the objectors request had been granted.

The purchasers, who were represented by Senior Counsel K Shanmugam, argued that if this happened,the majority owners who consented to the sale would be unwilling to extend the deadline for the en-bloc deal.
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Old 20-07-2007, 10:43 PM   #59
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July 20, 2007
Minority owners go to court to revoke en bloc sale
$287m sale not made in good faith, say seven owners

By Elena Chong
MINORITY owners of the Futura condominium, which was sold en bloc last year for $287.3 million, have gone to court, claiming that the sale was not made in good faith.
The seven dissenting owners of the freehold condominium in Leonie Hill Road are appealing against an order by the Strata Titles Board (STB) on May 23 approving the collective sale.

Among other things, the STB has ordered all owners, including those who have not signed the collective sale agreement, to be bound by and comply with the terms and conditions of the sale.

An application by the seven, represented by Mr Henry Heng Gwee Nam from Tan Peng Chin LLC, to dismiss the order and suspend the sale pending the final determination of the appeal is to be heard before Justice Woo Bih Li today.

The development, comprising 69 units and three penthouses, was completed in 1976.

Occupying an 87,034 sq ft site, it has a plot ratio of 2.8 and a maximum gross floor area of 243,695 sq ft.

The condominium was put up for collective sale at $295 million in a tender last year.

A subsidiary of City Developments, City Sunshine Holdings, clinched the deal at $287.3 million last October.

Each flat owner will get about $3.7 million while penthouse owners will get $9.4 million each.

Court documents filed by the applicants say the STB failed to consider that the $287.3 million was not secured in good faith.

Within three hours on Oct 23 last year, the amount was reduced from the initial price of $291 million.

The minority shareholders allege that no land survey was done, and no minutes were kept of the sales committee meeting. Nor was a meeting of owners called before the reduced price was accepted.

The appellants say the STB failed to take into account or give significant weight to the allegation that the sales committee failed to discharge its obligations.

Thus, they argue, the sales committee's decision to accept the $287.3 million was unauthorised.

Based on the affidavits, it appears that the grounds of decision by the STB have not yet been published.

Mr Matthew Saw from Lee & Lee is appearing for the majority owners.
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Old 20-07-2007, 10:51 PM   #60
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July 20, 2007
HDB rents hit a ten-year high, $2,000 per month



PUBLIC housing rents have hit a ten-year high, with monthly rates pushing northwards of $2,000 for the first time in recent memory.
Islandwide, Housing Board (HDB) flats near the city, or near MRT stations, are being snapped up to the tune of more than $2000 a month in several locations.

This is due to increased demand fuelled by a spillover from the sizzling private market, and the influx of foreigners to Singapore, say property experts.

One 4-room 82 sq m HDB flat at Crawford Lane in North Bridge Road, for example, was rented out last month at a rate of $2,800 a month, said senior division director Eric Cheng of property agency PropNex.

Even in the outskirts, leases were - and are still being signed for a monthly $2,400 for a Bedok North 4-room flat, and $2,500 for a 3-room flat in Jurong East.

Such rates have been 'unheard of' since the last property peak in 1996, and this is rising in tandem with property prices, said Mr Andy Low, marketing director of property agency EM Services, an HDB subsidiary.

Average rents, though below $2,000, are climbing steadily, said Propnex's Mr Cheng.

If rents in the private sector continue to rise, more tenants will enter the HDB market and this will cause a further supply crunch and cause rents to rise further.

But property watchers say rents still have a 15 per cent buffer of growth before hitting the 1996 peak prices.

Then, a 5-room flat averaged $2,200 a month. The present average is about $2,000, he said.

This is above HDB's average rental rates for each estate published quarterly on its website. For the second quarter, monthly rent for a 5-room ranged from $1,200 to $1,700.
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