Property News!

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June 27, 2007
DBS first to make home loan rates transparent

http://www.straitstimes.com/STI/STIMEDIA/pdf/20070627/rates.pdf

Its mortgage offers will use just one variable rate pegged to interbank rate
By Grace Ng
DBS Bank has become the first bank in Singapore to adopt full transparency in home loans by pegging all its packages to a public benchmark rate.

The move - described by DBS as 'creating a new playing field' - means it will use just one single variable rate in its new mortgage packages which will be pegged to the 12-month Singapore Interbank Offered Rate (Sibor).

Sibor is the rate at which banks lend to each other and because it is publicly disclosed, customers can get a clear indication of how their mortgage rate is calculated.

But it may not mean cheaper loans as Sibor reflects market forces, so customers may in fact be paying more than existing rates at certain times. But if Sibor falls, DBS customers could benefit more as other banks may be slower in lowering rates in tandem with market rate movements.

DBS' move kicked in on June 15, the same day new industry guidelines took effect to give customers more clarity on how their mortgage rate changes over time.

DBS said its new policy is designed to 'give customers more certainty about how their rates are determined'.

Its new floating rate loans will now be pegged to the 12- month Sibor - which is now at about 2.56 per cent plus a mark-up of 1.25 per cent added by DBS. This gives a floating rate of 3.81 per cent.

In contrast, OCBC Bank's floating rate package is 3.25 per cent in the first year but hits 4 per cent in the third.

The 12-month Sibor for new packages is revised monthly depending on interest rate movements while DBS can alter the premium component as it wishes.

'This is what customers have been asking for...we are now taking the lead to set a new standard for more benchmarked board rates,' said DBS' head of home loans, Mr Koh Kar Siong.

New customers will also avoid volatility as the 12-month Sibor for their particular package is adjusted annually in line with market forces, while the premium part is fixed for the loan duration.

DBS will also continue to offer its POSB Home Ideal package pegged to the Central Provident Fund rate, which is highly stable.

Consumer Association of Singapore executive director Seah Seng Choon praised DBS' move: 'We believe consumers will benefit as the interest rates are better understood. We expect the other banks to announce their own formula so that overall transparency will be enhanced.

But other banks are not following suit just yet. OCBC said the needs of customers 'have become increasingly diverse' so it is keeping its suite of fixed and variable rate packages and loans pegged to the Swap Offer Rates. These comprise the Sibor plus a bank's lending costs.

'On occasion, our loan packages may come with promotional interest rates that will be lower than our regular board rates,' said Mr Gregory Chan, OCBC's head of consumer secured lending.

Mr Kevin Lam, head of United Overseas Bank's loans division, said the bank reviews its packages to ensure they are competitive.

Banking analysts noted that DBS had undertaken 'a bold move' as the effective rates of its new packages could in fact be higher than those of its rivals that have not pegged their rates to the Sibor. They may even be higher than DBS' previous rates.

But Mr Koh said there cannot be 'a direct apples-to-apples comparison' between DBS' Sibor-linked rates and other banks' rates. 'You would just be comparing DBS' clear box to other banks' black box.'

One analyst noted that DBS may have to offset a 'marginal loss of market share with the higher spreads it can earn from charging a premium on the Sibor'.

graceng@sph.com.sg

 

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June 28, 2007
Apartment sale smashes record at $5,100 psf
SINGAPORE'S most expensive condominium project - The Marq on Paterson Hill - has been fully sold in its first phase, with one unit fetching a record $5,100 per sq ft (psf).
This smashes the week-old record of $4,653.50 psf set by an apartment from St Regis Residences.

The new record set by The Marq also breaches. for the first time, the $5,000 mark for the highest psf unit price.

The Marq's initial phase, which consists 21 units - or a third of all available apartments - achieved an average selling price of $4,137 psf, said developer SC Global in a statement.

The most expensive condominium sale on record is the uber penthouse at Marina Bay Residences, which was said to have fetched about $28.6 million, or $2,600 psf.

On a psf basis, only three projects have breached the $4,000 level: Orchard Residences in Orchard Turn, Parkview Eclat in Grange Road and St Regis Residences in Cuscaden Road.

Previews to The Marq's first phase was offered to invited buyers only, said SC Global.

Of the 21 units sold, eight apartments were within The Signature Tower, housing a 15-metre private lap pool in every unit.

The rest of the 21 units were from Premier Tower.

The record-smashing $5,100 psf sale came from an apartment in The Signature Tower.

Prices for the entire development ranged from approximately $11 million to $31 million.

The three penthouses on the top two floors of the 24-storey-high building and apartments on the higher floors were not released in the first phase, SC Global said.

The Signature Tower will be home to 21 five-bedroom apartments averaging 6,195 sq ft.

Beside it will stand the Premier Tower with 42 four-bedroom apartments averaging 3,000 sq ft.

SC Global Developments said it has no confirmed date for the release of the second phase of units.

 

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June 28, 2007
Land-use intensity: No sudden changes
THE Government has no plans for a major exercise to raise plot ratios anytime soon.
In the lead-up to next year's announcement of the Master Plan for Singapore's physical development, National Development Minister Mah Bow Tan quashed expectations in some quarters that plot ratios are headed upwards.

This was to make room for a future population of 6.5 million.

The plot ratio of a site decides how much total floor area it can support.

In other words, whether its buildings can be high-rise or low-rise.

It is also known as a site's development intensity.

In an interview this week, Mr Mah said there was no need for a massive across-the- board change in development intensity.

This is because the land available today is more than enough to meet needs over the next 10 to 15 years.

That is the time-frame for the upcoming Master Plan 2008, to be unveiled around the middle of next year.

The statutory document regulates what land parcels across the island can be used for and their density.

It is reviewed every five years.

 

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June 28, 2007
Farrer Court en bloc sale reaps $1.34 billion

PROPERTY giant CapitaLand paid $1.34 billion for the sprawling Farrer Court estate on Thursday - the biggest lump sum ever shelled out for a residential site here.

Owners at the 618-unit complex will get about $2.15 million each, depending on the size of their flats, which range from 1,453 to 1,615 square feet.

The bumper price for the ex-HUDC block beat the reserve of $1.2 billion but fell short of the owners' $1.5 billion asking price.

It also signals how high and how fast prices have risen this year. The owners' had demanded $900 million earlier this year but revised that to $1.5 billion when the estate was put up for sale in May.

The deal broker Credo Real Estate said the sale is also the largest in terms of land area, number of units and buildable gross floor area.

Farrer Court, which is 30 years into a 99-year lease, sits on 838,488 sq ft near the junction of Farrer and Holland Roads and the upcoming Farrer MRT Station.

CapitaLand plans to build a 36-storey condominium with about 1,500 flats on the site, which will be ready for launch in early 2009.

Existing Farrer Court owners will have first right of refusal to buy units at the new development.

Capitaland president and chief executive Liew Mun Leong said the deal would further jack up its residential landbank, allowing it to benefit from Singapore's 'growth story'.

The site also gives the firm the chance to work with world-renowned architects to create a unique landmark project, said Mr Liew.

The Farrer Court tender closed on Wednesday and attracted two bids, both above the reserve.

 

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Detailed information on property market to be out in July

28 June 2007 1719 hrs


SINGAPORE: More comprehensive data on the property market will be available from July, enabling the government and the public to better gauge the health of the sector.

There have been concerns that the recent run-up in home prices is a bubble waiting to burst.

National Development Minister Mah Bow Tan said more options, such as Executive Condominiums (EC), will be made available to help keep private housing affordable.

Private home prices have risen over 20 percent in the past three years and are forecast to spike by another 25 percent this year, leading to concerns that the residential sector is overheating.

To get an even more comprehensive picture of the market, the government has asked developers for more details about their sales.

Mr Mah said: "We watch the situation closely. We look at the economy and various indicators. It's important for us to make sure that the data we get is accurate, comprehensive and that it's reaching us in a timely manner so that we can make those decisions.

"Once we get that data, we want to push it out into the market to let the public know what is happening so that they will have access to the same kind of information to make considered, rational and prudent decisions."

The minister said more information would be available from July, including pricing details and sales numbers for all new projects.

Mr Mah said: "The worst thing is for people to panic due to incomplete or selective information. If we can provide the data, information, imminent 3-year supply for office and residential, people will realise that there is no point rushing."

He notes that, by and large, property developers have been cooperative.

The minister said: "We've explained to them that a transparent market is good for everybody. They understand that and they are providing us with the data, which we're collating and pushing out."

Mr Mah also added that with the widening price gap between private and public housing, the government will strive to provide more affordable housing options for young couples and HDB upgraders.

These options include Executive Condominiums (EC) and apartments under the Design, Build & Sell Scheme.

He said: "2005 was the last time that we put out an EC site for sale. But now the gap is starting to widen, so I think it is time for us to replenish the EC stock. And that's the reason why we had one site in Punggol for the ECs in the last GLS (Government Land Sales Programme)."

More sites for these apartments will be released if there is demand.

 

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June 30, 2007
Conflict of interest: Guilty lawyers may be struck off rolls
Courts may go further than suspension, warns appeals judge
By K.C. Vijayan
A JUDGE has warned lawyers who place themselves in potential conflict-of-interests dilemmas, by acting for multiple clients, that they may be struck off the rolls.

This latest caution from the judiciary about 'troubling patterns in legal practice' and their impact on public confidence came from Judge of Appeal V.K. Rajah in a judgment published yesterday.

He said: 'Left unchecked, such misconduct will inexorably undermine the dignity of the legal profession and erode the very essence of the solicitor-client relationship.'

So far, lawyers have only been suspended from practice in such cases, the latest being Mr Tan Phuay Khiang. He must cease practising for two years after being found guilty of professional misconduct.

Justice Rajah warned that the courts may go further in future when he explained why a Court of Three Judges presided by Chief Justice Chan Sek Keong, in April, found Mr Tan's behaviour reprehensible.

The lawyer of 13 years' standing had acted for a couple in the sale of their Housing Board flat in Choa Chu Kang Street 51.

The couple had allegedly been cheated by a moneylender, who advanced them a bridging loan to buy an HDB flat, and then collected the sale proceeds from their previous flat without refunding them the difference.

The moneylender was able to do this because the couple signed papers prepared by Mr Tan allowing someone else to collect the money.

In the end, the couple, who made $142,000 from the HDB for the sale of their flat, ended up with just $48.11 after the parties took their cuts.

Mr Tan also failed to highlight to his clients the potential conflict of interest, because he also worked for other parties involved in the sale.

Justice Rajah described the persistent attempts by Mr Tan to justify his actions as 'disconcerting', instead of 'acknowledging his lapses at the first available opportunity'.

His remarks come in the wake of an increase in the number of probes against lawyers. There were 28 last year, more than twice the number a year earlier.

The concern over falling standards led to the CJ launching a personal guidebook on Ethics and Professional Responsibility, for practising lawyers last month.

 

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July 2, 2007
UPFRONT
Bishan no longer property hotspot
By Lin Xinyi
BACK in 1997, Mr Felix Chua and his wife Margaret paid $730,000 for a 14th floor, 146 sq m executive maisonette in Bishan.
Both property agents, they believed they had struck a good deal.

They had earlier missed out on two flats in the same block - an 18th floor unit which sold for $750,000, and another on the eighth floor that went for $720,000.

Today, their flat is not worth anything close.

Property analysts put the current value of executive maisonettes at Bishan Street 23 at about $480,000 - already 10 per cent more than at the start of this year, when prices were closer to $440,000.

So buyers - especially those now flush with cash from the collective sale of their old homes - thinking of paying top dollar for resale flats might well take this as a cautionary tale.

Last month, a six-year-old 115 sq m Housing Board flat at Kim Tian Place went for $720,000 - setting a record for five-room flats.

The buyer had cash from a collective sale to blow; the seller pocketed a tidy profit of $350,000.

Residents in this Tiong Bahru neighbourhood are not short of interested buyers, some of whom are willing to pay $60,000 to $70,000 above the valuation of about $530,000 - all in cash.

Almost every day, residents receive fliers from various real-estate companies in their mailboxes. Property agents have also shown up in person at their doors.

Occasionally, these residents get handwritten notes slipped in under their doors from buyers looking for a quick purchase without going through a property agent.

Just down the road from Kim Tian, at the Jalan Membina HDB estate, a buyer paid $675,000 for a 16th floor unit last month.

Property analysts are surprised by these purchases.

Chesterton International research director Colin Tan said such prices are not justified by the expected rentals.

He said: 'Sometimes, people do pay 10 per cent more for benefits such as staying near their parents or being near a school.

'But if they are thinking of paying 50 per cent more, there are alternatives in the resale market.'

Analysts say the recent rash of collective sales is fuelling this buying frenzy.

PropNex chief executive Mohamad Ismail said: 'If not for that, I do not think anyone will pay $700,000 for a five-room flat.'

He said that while those who have windfalls from properties sold en bloc will not feel the pinch because they are paying just a fraction of what they have made, HDB upgraders in the market for resale flats do need to worry about paying such high prices, he said.

Even though he expects HDB prices to go up over the next two to three years, he reckons that buyers who paid more than $100,000 above valuation previously will not be able to sell at today's prices.

Retiree Alan Pwee, 63, has been down that very road.

In 1997, he upgraded from a five-room flat in Bishan Street 23 to a $760,000 top-floor maisonette a few blocks away.

The maisonette is now worth only $480,000.

'Of course, I regret buying at that price. It was partly an investment. Now, I have no choice but to take it as a paper loss,' he said resignedly.

Mr Pwee and the Chuas are among those who bought homes during the last property boom a decade ago.

Mr Ismail said: 'Anyone who bought in 1996 will not make a dollar's profit today.'

However, those in Bishan are counting bigger paper losses. The inflated prices back then came from the demand for five-room and executive flats in the estate.

A decade ago, Bishan was a new satellite town.

Demand for homes there was jacked up because of its good location: It is served by expressways and the MRT, and amenities and premier schools - such as Raffles Institution and Catholic High School - are in the neighbourhood.

The only comfort from the paper loss for Mr Chua, now 50, is that he and his wife feel they 'got what they wanted'.

But given a chance, they would like to downgrade to a four-room flat.

Those hoping to 'let go' properties they paid a high price for are saying they will wait out the current market.

Mr John Ching moved into Bishan about 10 years ago when he bought a maisonette at $620,000.

'I won't sell unless the price is about $600,000,' said the 59-year-old retiree.

But property analysts say Bishan residents would have to wait for the economy to improve further to stand a chance of breaking even.

Mr Ismail noted that the price index is 20 per cent lower than in 1996.

And Bishan is no longer the estate buyers are eyeing.

The choice locations now are Telok Blangah, Redhill and Tiong Bahru because they are near the city and the upcoming integrated resorts, said Mr Ismail.

Mr Nicholas Mak, director of research and consultancy at Knight Frank, said: 'Flats are not an ageless commodity like gold.

'Bishan is no longer the hot area as flats there are much older now.'

 

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July 2, 2007
Luxury bungalows enjoy strong demand in buoyant market

Average asking prices now close to $1,000 psf on the back of rising land values, larger plots
By Joyce Teo

DEMAND for prime bungalows is still high and prices show no sign of easing either - no surprise given the property market's resurgence.
So far this year, 47 deals for good class bungalows have been done to the tune of $560 million, said CBRE Research.

This compares with 55 deals worth $564 million completed in the same period last year.

Good class bungalows are defined as those on at least 15,000 sq ft of land in 39 designated areas.

Asking prices for bungalows in coveted areas such as Nassim Road, Dalvey Estate, White House Park and Cluny Park now average $900 per sq ft (psf) to $1,000 psf, said Mr Douglas Wong, who heads PropNex Grandeur Homes.

This is up from transacted prices of $400 psf to $450 psf three years ago when the market for good class bungalows showed its first signs of recovery, he said.

Savills Singapore's director of marketing and business development, Mr Ku Swee Yong, said asking prices for Nassim Road have crept up to about $1,200 psf.

Average total prices for good class bungalow deals this year have crossed the $12 million mark, compared with last year's average of $10.8 million and the 2005 average of $8.5 million, he said.

A bungalow on 15,075 sq ft in next door Dalvey Estate in district 10 was sold for $1,091 psf of land area in March. This brought the average price of done deals in the area to $898 psf this year.

It represents an 83 per cent rise from the average price of $501 psf recorded for five deals done last year, said ** Richard Ellis Research (CBRE Research).

Another Dalvey Road bungalow with a land area of 20,139 sq ft was sold in April for $14.2 million, up 63 per cent from the $8.7 million price that the seller paid last February, it said.

The Binjai Park area in district 21, near Bukit Timah Road, has also seen a significant price increase this year.

Three deals worth an average of $666 psf have been done compared with an average of $363 psf for three sales last year.

Higher-priced deals are being recorded because of rising land values, larger plots being sold and newer houses on those plots, said Savills Singapore's Mr Ku.

Some owners who had bought a few years ago rebuilt or renovated their homes before putting the properties back on the market at higher prices, he said.

The prime bungalow market had a record year last year with 119 deals worth $1.23 billion.

But it cannot be compared with the condominium market as it is largely restricted to local buyers, consultants said.

Foreigners have to be permanent residents and apply for special approval to buy landed homes on mainland Singapore, with Sentosa Cove being the only location where non-PR foreigners can purchase landed property.

Foreigners are further restricted to landed properties with a land area of no more than 15,000 sq ft.

CBRE Research said good class bungalow sales this year would be similar in value to those of last year, but the number of sales may not be as high as the 119 recorded last year.

'That is because sellers' expectations are now much higher than before, given the very positive outlook,' it said.

Nevertheless, where value is concerned, there is still room to move up, said Mr Wong, who predicts a 5 per cent to 10 per cent rise in bungalow prices for the rest of the year.

Prices could move even higher next year given that 99-year leasehold Sentosa Cove bungalow plots have sold for higher prices than good class bungalow plots.

'Good class bungalows are a unique product. There are only 2,500 units in Singapore and all are freehold,' said Mr Wong.

 

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July 3, 2007
Private home prices up 7.9% across the board

Second-quarter rise highest since 1999; spillover seen in HDB resale prices

http://www.straitstimes.com/STI/STI... - 02_07_2007 - 22.47.40 - property_chart.pdf

By Joyce Teo

PRIVATE home prices have shot up across the board with everything from luxury condos to humble suburban homes reaping the benefits.
Figures out yesterday - still just estimates at this stage - for the April-June period show that private property is on a dramatic upswing with plenty of momentum.

Prices rose 7.9 per cent - the biggest jump since the third quarter in 1999, when the market staged a brief recovery before sliding into a lengthy slump.

The increase comes on top of a 4.8-per-cent rise in the first three months this year.

'We are clearly in the middle of a property boom now and the growth is escalating,' said Knight Frank head of research Nicholas Mak.

The central core region, scene of some eye-catching condo launches and collective sales, turned in another solid performance, according to the Urban Redevelopment Authority (URA) yesterday.

Prices of non-landed private homes in the core zone - it includes districts 9, 10, 11, downtown and Sentosa - rose 7.6 per cent in the second quarter, compared with a 5.5-per-cent rise in the first.

But for all this area's golden glow, the figures that stood out were from areas outside the central core. Non-landed homes in the rest of the central region - this includes areas like Toa Payoh - saw prices leap 7.9 per cent, well up on the 3.7-per-cent increase in the first quarter.

Rises were even more impressive outside of central, where non-landed home prices surged 6.5 per cent in the second quarter, trumping the anaemic 2-per-cent effort in the first.

There was occasional panic buying as some feared they could miss bargains, said agents.

Yet despite the positive numbers, private home prices are still about 18.8 per cent below the 1996 peak.

The positive sentiment has also spilled over to HDB resales, where prices rose 2.85 per cent - again, the highest growth since the third quarter of 1999 - and up from a 1.25-per-cent rise in the first.

'We're seeing a broad-based recovery plus a tiny spurt from the HDB side,' said Savills Singapore marketing director Ku Swee Yong. The climb in the high-end market, where prices have hit $5,100 psf, is likely to be sustained, he said.

Property experts are looking at a 20- to 25-per-cent rise for private homes for the whole year. They said the strong collective sales market - with about 30 to 40 more estates waiting to hit the market in the next year - will keep demand for suburban and HDB flats chugging along.

PropNex chief executive officer Mohamed Ismail expects HDB prices will clock up a 10-per-cent rise this year.

The URA statement yesterday also touched an issue vexing many - is the market overheating and should some cold water be thrown over it?

It said the Government would continue to monitor the market 'very closely' and ensure there is sufficient supply to meet demand.

Many residential sites have been released in Government land sales (GLS) programmes with more earmarked for next year if there is a need.

The URA said the good stock of private housing and more GLS sites in the pipeline means supply should keep up.

Or as Mr Mak puts it, there is no need to rush in.

 

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July 3, 2007
HDB resale prices show steady growth, up 2.85% in second quarter
Demand is picking up due largely to better economy and upbeat sentiment: Analysts
By Joyce Teo
THERE has barely been a pulse in the public housing scene for the past couple of years but the beast is stirring and showing distinct signs of life.
It is certainly attracting more attention, thanks to some cashed-up collective-sale sellers picking up Housing Board (HDB) flats at mind-boggling prices.

Fortunately, the action is not just limited to those infrequent deals. Demand has largely picked up with a better economy and greater market confidence, said property experts.

It is all a far cry from the grim days of about three years ago when HDB prices were artificially inflated by rampant cash-back arrangements.

These illegal deals involved the seller declaring a higher price in order to secure a bigger loan for the buyer and so facilitating the sale. Rules were introduced in April 2005 to curb these deals.

Preliminary government estimates yesterday showed a 2.85 per cent rise in HDB resale flat prices in the second quarter, up from 1.25 per cent in the first.

Experts are forecasting continued price growth in line with Singapore's positive economic outlook.

The HDB resale market is experiencing a 'filter-down effect' from the strong private property market, said ERA Singapore's assistant vice-president, Mr Eugene Lim. 'Homebuyers who are priced out of the private property market will be looking at the larger flat types such as the five-room and executive flats.'

The asking prices of these larger flats have already risen to as much as $50,000 to $150,000 above valuation, he said.

In the past, weak demand meant that many flats, particularly the larger ones, were selling at levels below valuation.

Things have perked up since with units now largely selling above valuation, and some flats in the outlying areas going for about $10,000 to $30,000 above valuation, consultants said.

Some sellers are asking for very high prices, hoping to land a windfall similar to those two owners who hit the headlines last month after reaping prices of $675,000 and $720,000 for their conveniently-located flats.

But these deals are not everyday occurrences, said Mr Lim, and sellers must be realistic as the typical flat buyer depends a lot on bank financing.

If the resale flat is not a standout - that includes having unblocked panoramic views and a snazzy decor - rational buyers would not pay a high premium for a 99-year property, he said.

And only flats in certain areas such as Tiong Bahru and Redhill, which are near collective-sale sites, appear to be attracting higher prices, said PropNex chief executive Mohamed Ismail.

He noted that not all sellers in collective sales are taking the HDB route; some are buying into ageing suburban condominiums which offer facilities like a pool.

He described the price rise in the HDB resale market as 'fair' as prices had been lagging behind those of private properties.

For the full year, HDB resale prices may rise by about 10 per cent, said property experts.

A HDB market with steady growth would help support the private property market, added Savills Singapore's director of marketing and business development, Mr Ku Swee Yong.

The official figures for the second quarter will be released at the end of the month.


http://www.straitstimes.com/STI/STIMEDIA/pdf/20070703/affordable.pdf

 

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July 3, 2007
Govt reassures buyers: Plenty of new homes in the pipeline

THE Government has taken the unusual step of reassuring private home buyers that there are plenty of brand-new unsold units in the pipeline - about 22,700 of them.
It offered this new figure in what is being seen as a move to calm the booming property market, even as the latest estimates show that private home prices shot up 7.9 per cent over the last three months.

In an unusual addendum to the price estimates released yesterday, the Urban Redevelopment Authority (URA) reassured home buyers that the supply of homes over the next few years will be plentiful.

It reiterated that around 42,200 new homes will be completed between now and 2010. Of these, slightly more than half have yet to be sold, it said.

These include units that have already been launched but not yet taken up, as well as those that have not yet been launched for sale.

While the URA did not provide details of where these homes will be located, property consultants estimated that most of them will be in the central areas.

For the rest of the island, the Government has already taken steps to alleviate the situation. Last month, it announced it will release a slew of land plots in the second half of this year, enough for developers to build about 8,000 homes.

This comes as some property watchers issue alerts of a potential supply crunch of homes in the market, following an unprecedented wave of collective sales that will lead to thousands of homes being torn down.

But the Government was quick to assure buyers that 'it will continue to monitor the market very closely'.

'The Government will ensure that there will be sufficient supply of residential space to meet demand,' the URA said. 'If necessary, the Government will make available even more sites for private residential development... next year.'

It added that 'prospective home buyers should take into consideration the sufficient pipeline supply of private housing, as well as the potential supply... when deciding to make a property purchase'.

Dr Chua Yang Liang, head of Singapore research at Jones Lang LaSalle, saw the Government's statement as 'quite a strong indication to tell the market there is adequate supply, and not to go on a panicked buying spree'.

The URA also appeared to be addressing fears of a property bubble in its statement. It was quick to say that the jump in home prices was due to strong fundamentals. 'The increase in private housing prices in recent quarters is in line with greater economic growth and rising confidence,' it said.

'Private housing prices are now increasing at a faster pace because of good economic prospects going forward and the increasing attractiveness of Singapore as a global city.'

 

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July 3, 2007
Several launches achieve prices close to records

THE roaring market shows no signs of easing, going by recent project launches.
New developments around the country have started to reach prices not seen since the property peak of 1996.

Units in Duchess Residences in Bukit Timah, for instance, have crossed the $2,000 per sq ft (psf) mark - the first time homes in the area have done so in almost a decade.

More than 80 per cent of the project's 120 units have been sold since they were put up for sale last week, with all the smaller three- and four-bedroom units sold, said developer UOL Group.

Singaporeans were the main buyers but 20 per cent of the homes were sold to buyers from Hong Kong, Malaysia and Indonesia, said UOL, adding that many of them were from the finance industry.

Developer Wing Tai, meanwhile, has quietly sold all 50 units it has released in Helios Residences in Cairnhill.

The Straits Times understands that the units were priced at around $3,000 psf - also a benchmark for the area.

Prices for two-bedroom apartments are believed to start from $3.51 million.

Wing Tai said it would release the rest of the project's 140 units soon, although it did not specify a date.

But the central areas are not the only ones doing well.

In the relatively quieter Kembangan, a 32-unit boutique project called D'Oasia had half its units sold for as much as $1,003 psf, said Savills Singapore, which is marketing the project at Lorong Melayu.

Despite prices in the area hovering around $700 psf or lower for several years, D'Oasia developer Monfort Land has managed to sell 15 units of the freehold project at an average of $950 psf.

And strata-bungalow development Dunsfold 18 has enjoyed a good take-up in Lorong Chuan.

Since mid-May, 10 of its 18 bungalows have been sold at prices ranging from $3.08 million to $3.56 million each, or an average price of $770 psf.

 

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July 3, 2007
Prices in Bedok, West Coast, Thomson lagging behind market
By Fiona Chan
HOME seekers need not despair at the rapid rise in home prices shown by the latest estimates released yesterday.
They can turn to a number of residential areas and developments that are still lagging behind the market, with one area even falling in price, according to a study by Savills Singapore.

The property firm noted that in areas such as Bedok and the West Coast, average home prices have risen by less than 5 per cent over the last 12 months.

In contrast, home prices across Singapore have surged by about 20.6 per cent in the same period, boosted by a 7.9 per cent jump in the last three months alone.

For suburban areas as a whole, home prices have gone up by slightly more than 11 per cent over the last year, according to figures released by the Urban Redevelopment Authority yesterday.

But Savills data shows that in Bedok, home prices inched up only 4.9 per cent in the period. In the West Coast, the increase was about 4.8 per cent.

And in Upper Thomson, prices in the general area actually fell by 4.1 per cent, said Savills.

'There hasn't been much attention paid to these areas because there haven't been many new launches there,' said Mr Ku Swee Yong, director of marketing and business development at Savills Singapore.

Also, in areas such as Paya Lebar, home sales and prices have been affected because of the Circle Line MRT construction that has been going on for a few years, he pointed out.

According to Savills, home prices in Paya Lebar have gone up by only about 7.5 per cent in the last year.

'If HDB flats can go to the $700,000 type levels, units in these areas are also good buys,' said Mr Ku.

In a market where values of popular condominiums rise by the week, the slow price climb of developments in these areas serves as a reminder that there is no need to panic, he added.

'Many homebuyers don't bother to do their homework,' he said. 'If they haven't heard of a development, they just write it off even though it might be of good value.'

Many of these more affordable projects are fairly new. Some are even freehold but have suffered from a lack of publicity.

There are even developments in these and other areas that have fallen in price over the last 12 months. In the Upper Thomson area, Savills singled out Bullion Park in Lentor Loop, where average prices have slipped by 1 per cent from $520 per sq ft a year ago to $515 psf now.

The Linear in Upper Bukit Timah has also seen average prices dip by 0.7 per cent in the same period, said Savills. Prices were about $564 psf a year ago but are $560 psf now.

Slower increase
SAVILLS Singapore data shows that in Bedok, home prices inched up by only 4.9 per cent over the past year. In the West Coast, the increase was about 4.8 per cent. In Upper Thomson, prices actually fell by 4.1 per cent.
In contrast, home prices across Singapore have surged by about 20.6 per cent in the same period, boosted by a 7.9 per cent jump in the last three months alone.

For suburban areas as a whole, home prices have gone up by slightly more than 11 per cent over the last year.

 

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July 5, 2007
DBS wary amid surge in lending to property speculators
By Grace Ng
BUYERS dipping into the resurgent property market to snap up investment properties now account for one in five of all mortgages at DBS Bank.
And DBS expects this proportion to rise as more Singaporeans take out loans to pay for homes purchased using deferred payment schemes. But it says it is maintaining a cautious approach over lending funds for speculative buying of high-end properties.

Mr Edmund Koh, DBS head of regional consumer banking, said yesterday the proportion of its Singapore loans used to finance homes for investment purposes has been 'creeping up' recently to about 20 per cent.

But a further spike in home loans could come later, when investors on the deferred payment scheme for property need to finance their purchases, he noted.

Still, the bank is taking a cautious stance over its loans exposure to the more frothy part of the property market - high-end residential units which have attracted speculative activity.

'Our strategy...is to concentrate on owner-occupied properties, but still catering to the needs of customers who want to buy homes for investment. So we optimise risk,' said Mr Koh, at a press conference to discuss DBS' retail banking developments yesterday.

He added that the bank makes sure its portfolio is spread out between these two segments of properties, to avoid suffering losses for bad loans if the property market goes south and home-speculators take a hit.

This careful stance has not changed over the past five years. 'During the Sars and 9/11 crises, our losses on mortgages were lower than those of the market,' Mr Koh said.

This was because DBS had proportionately more loans for owner-occupied properties compared to other banks.

DBS has 'guidelines in place to manage risks' in its real estate loans exposure. It considers the ability of customers who service their total debt, the loan-to-value ratio of their properties and trends in asset price inflation.

DBS' consumer banking group contributed 39 per cent of the group's total profits at the end of last year, up from 17 per cent at the end of 2003.

Over the same period, the return on equity for the consumer banking segment rose from 14 per cent to 43 per cent, reflecting the strong growth and transformation of this business, said Mr Koh.

DBS has been improving customer service and 'diversifying its income streams'.

For instance, the bank's credit card business now derives 50 per cent of its revenues from the traditional business of providing revolving credit and the rest from fee income, said Mr Raymond Ang, the bank's managing director for cards and unsecured loans.

DBS launched a credit card yesterday in a tie-up with American Express that is targeted at frequent travellers.

 

[jq75]

July 5, 2007
Incoming: More than 22,000 new private homes
Could Singapore possibly face a housing crunch? Not when 22,674 new units are up for grabs soon, says URA


http://www.straitstimes.com/STI/STI...527 - 04_07_2007 - 23.59.55 - NEWCondos05.pdf

 

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July 6, 2007
Think hard before buying that property
THE article, '40-storey condo-like blocks for Boon Keng' (ST, June 21), stated that it would work out to about $645,000 for a 1,290 sq ft five-room flat, and that a 29th-storey five-room flat in Kim Tian Place was sold for a record $720,000.
The property market is all the rage nowadays, with almost-weekly media reports of record prices.

The current less than two-year-old bull market may need to be reflected upon, in view of the fact that we went through an almost decade-long bear market from 1996.

At its worst, the private-property index was down by about 40 per cent. Even with all the euphoria now, we should not forget that the market is still about 20 per cent below its peak in 1996.

If we compare Singapore with the United States, ours is one of the longest property bear markets in history, as we are still under water.

The worst housing bust in US history took place during the Great Depression when 'the average price of a home fell 24 per cent from 1929 to 1933' ('When does a housing slump become a bust?'; International Herald Tribune, June 17).

Singapore's decade-long bear market, which is still recovering, may pale in comparison. When a market is 20 per cent down, it would take another 25 per cent jump before it breaks even to the 1996 level. When will this happen - after 12, 13 years or longer?

Practically every week in my volunteer work doing financial counselling of bankrupts, I meet people who have lost their homes and CPF and have been made bankrupt by the mortgagee.

How many Singaporeans have lost their homes, CPF, and maybe made bankrupt too through buying property?

Leong Sze Hian

 

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July 7, 2007
Check rising property, office prices or lose competitiveness: MM Lee

MINISTER Mentor Lee Kuan Yew warned that rising property prices and rents have to be kept in check, or Singapore will lose its competitiveness.

In the strongest comments from a minister on the red hot property sector so far, Mr Lee said the influx of top foreign financial executives have fuelled a demand for high end office and residential space.

Some of the cash rich home owners, who have sold their condominiums in en bloc sales, are, in turn, buying higher end HDB flats, pushing up their values.

'We must check this spike in rents for office and residential space or we will lose our competitiveness,' said Mr Lee.

His remarks come after a series of steps taken by the Government to cool the property sector that has seen office rents and property prices soaring.

On Monday, the Urban Redevelopment Authority (URA) assured private home buyers that there are still 22,700 unsold units in the pipeline for the next three years.

And on Wednesday, it launched a plot of land in Scotts Road to be used as temporary office space to meet the acute shortage.

Mr Lee noted the Government is releasing more land for new office blocks and condos.

'We must not allow our rents to shoot up as high as in Hong Kong,' said Mr Lee

 

[jq75]

July 8, 2007
Check property prices to stay competitive: MM

His comments come on the back of recent Government moves to cool red-hot market

By Aaron Low

RISING property prices and rents have to be kept in check, or Singapore will lose its competitiveness, Minister Mentor Lee Kuan Yew said last night.
In the strongest comments yet from a minister on the red-hot property sector, he said Singapore 'must not allow our rents to shoot up as in Hong Kong'.

Property analysts say prime office rents in the territory average $25 to $30 per sq ft - almost double that of Singapore.

Mr Lee, who was speaking at a Tanjong Pagar GRC event, noted that Singapore had attracted many foreign professionals, especially top financial executives, and this was contributing to a demand for office and residential space.

Foreign institutions have been moving their people and headquarters here to manage the wealth flowing in from the Gulf states, the United States, the European Union and Japan.

'Demand for high-end office and residential accommodation has increased,' Mr Lee said.

'Many homeowners who sold their condos in en bloc sales have received windfall gains. Some of them in turn are buying upper-end HDB executive and five-room flats, pushing up their values.

'We must check this spike in rents for office and residential space or we will lose our competitiveness.'

Mr Lee's remarks come on the back of a series of recent steps by the Government to cool a property sector that has seen office rents and property prices soaring.

There has been concern that rising rental costs may erode Singapore's attractiveness as a business centre.

On Monday , the Urban Redevelopment Authority (URA) assured potential home buyers that there were more than 42,000 units of private housing being completed in the next three years.

On Wednesday, it released a plot of land next to Newton MRT station to be developed as temporary office space. More such sites, where low-rise offices can be built quickly, will be released if the move is popular.

According to one property consultancy, prime office rents in May jumped by 85 per cent compared to a year ago.

The Government also announced that Jurong and Paya Lebar - with potentially cheaper office space - have been designated as new business hubs.

The URA also took the unusual step of advising the public to interpret rental projections by consultants with caution.

It was referring to a report by a property firm which warned that Singapore's office rents could surpass Hong Kong's by the end of next year.

In his remarks yesterday, Mr Lee also noted that the Government was releasing more land for office blocks and condos.

Property analysts contacted last night saw Mr Lee's comments on the steps that the Government had been taking as a reassurance to the market over rising prices.

They believed that the Government's measures thus far were adequate.

Knight Frank's director for research and consultancy, Mr Nicholas Mak, said the signals from the Government were 'not to panic'.

'Last week we had URA do a few things. Now, Mr Lee is giving an assurance that the Government has the sector under control.'

Mr Lui Seng Fatt, regional director at Jones Lang LaSalle, believes that rents and property prices here are currently far from the levels in Hong Kong.

'On average, prime office space in Hong Kong may be $25 to $30. It is about $12 to $15 here,' he said.

'That's a 70 per cent difference and does not take into account the measures the Government is taking to address the issue.'

 

[jq75]

July 8, 2007
TOP OF THE NEWS
Singapore in a golden period, says MM Lee

By Aaron Low

FRAMED against a Saturday night Orchard Road crowd, Minister Mentor Lee Kuan Yew last night sketched a rosy picture of a more vibrant Singapore in five years' time - if it took full advantage of the opportunities now before it.
Investors from developed countries are pouring money into the region and Singapore is enjoying good economic growth and social development.

Economic giant China is pulling in foreign investments of US$70 billion (S$106 billion) and India, US$10 billion a year. Foreign direct investments here have maintained at about S$6 billion to S$7 billion.

The stock markets of some Asean countries have risen by an average of 48 per cent. Asian current accounts are running surpluses with reserves doubling since 2003 to US$2,500 billion.

'If there are no wars or oil crises, this golden period can stretch out over many years,' he said.

The key is having a good government which will get its policies right, to encourage economic growth.

Singapore's economic growth this year will be around 5 per cent to 6 per cent - 'not bad' for a maturing economy with a per capita income of over US$25,000, he said at a Tanjong Pagar GRC event in Ngee Ann City's civic plaza.

'Once you have growth, all problems can be managed. When you have no growth and you have unemployment and no jobs, then all problems become intractable,' he said.

Mr Lee told the sizeable crowd, many of them younger Singaporeans, that they were luckier than him when he was a young man.

'You got the best schools, technical colleges. Nobody is deprived of an education in Singapore and you can go abroad if you do well with bursaries and scholarships.'

He had this message for those in their teens and early 20s: 'You're a generation that is especially blessed. You have ahead of you 10, 15, 20 years.'

Singapore was able to push ahead when China and India adopted wrong economic policies. Although they have recovered and are growing strongly, Singapore is still ahead 'and our job is to stay ahead, and I believe we can'.

Mr Lee said Singapore is in this enviable position today because it had taken 'painful and unpopular measures' after the 1997 Asian financial crisis to get the economy into shape.

The data tells the story: some 9.7 million visitors came here last year; unemployment is at a low 2.9 per cent and 49,000 jobs were created between January and March.

More important, he said, the Government has revised its vision of Singapore - to turn it into a city with a lively night life, a more liberal arts and entertainment scene, the building of the two integrated resorts and the introduction of Formula 1 racing here next year.

'I believe you're going to see a transformation in Singapore. It'll be the most vibrant lively city in this part of the world. And I believe in the next five years, we'll see it evolve.'

 

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July 10, 2007
Don't overstretch to get flat in hot spot: Experts
Go for sensible loan, location instead, flat buyers urged
By Malini Nathan & Jennani Durai

YOU can buy a five-room flat on a high floor, with a view, near an MRT station, shops and other facilities, and pay $610,000.
That is if you want to live in Clementi.

For about $200,000 less, you can have a high-floor flat with a good view in Bedok.

And for as little as $235,000 you can have a great view across to Johor Baru, if you live in Woodlands.

HDB flat buyers keen on a home with a view can pay widely varying sums for their new home. Intense interest in what your money will buy in terms of a high-floor HDB flat grew recently when a five-room flat in Kim Tian Road near Tiong Bahru MRT station sold for a record $720,000.

But financial experts say finding the right home all depends on where you want to live and what you can sensibly afford to fork out in loan repayments.

They warn that home buyers should be careful not to borrow too much just to buy a home in the latest fashionable hot spot, which could change over time in any case.

Investment firm Providend director Eleanor Ng said: 'The worst that could happen is for one to lose one's regular income source and therefore not be able to service this monthly debt commitment.'

Mr Leong Sze Hian, president of the Society of Financial Service Professionals, also warned of the dangers of borrowing too much. 'Buy what you can afford. Although some areas may follow a vicious circle and continue to lag behind more desirable areas, one may want to focus on the flat as a home forever rather than as an investment.'

The $610,000 Clementi flat has an asking price well above recent average sale prices.

Typical five-room flats in Clementi have been fetching about $445,000, according to data from PropNex and ERA, but these sellers think their flat has almost everything that Kim Tian has to offer.

They cite the location and view of Bukit Timah Hill afforded by their 29-year-old flat.

Owner Angeline Sim, 32, also believes the flat has 'a third factor most HDB flats don't have' - condominium-like interior decor. She explained that they were asking a higher-than-average price because they had bought the flat at a high price at the end of 2001.

'We also spent around $60,000 on the renovation,' added Mrs Sim, a housewife.

A couple in Bedok are asking $400,000 for their high-floor flat with a good view. It is within walking distance of a market, schools, a swimming pool, a stadium and Bedok interchange shops.

In Woodlands, the asking price for a five-room flat is even lower. The Straits Times found a couple asking just $235,000 for a flat with an unobstructed view of the Causeway and Johor Baru.

'I am a little sad to sell because I love the view. It's so beautiful,' said owner Evelyn Chua, 33, who is looking for a bigger flat for her family.

Mr Leong warned that, while many are scrambling to take advantage of the property market's current buoyancy, basic precautions should not be forgotten.

'The recent AXA Global Retirement Study showed that Singaporeans are one of the greatest savers yet end up with the lowest income for retirement. It's because they put so much of their nest egg into their flat,' he said.

He advises home hunters to consider carefully their income relative to the anticipated monthly payments before deciding on a five-room flat.

He said: 'If we take the general guidelines that home mortgage payments should not exceed one-third of our income, then households earning less than $4,328 a month may want to consider very carefully before buying a flat priced at, say, $400,000.

'That would mean, for instance, a $360,000 loan at 2.6 per cent HDB concessionary loan rate for 30 years would translate to a monthly repayment of $1,441.'

Asked about the rising trend of sellers asking for cash above the valuation amount and buyers dipping into their savings to pay the excess, Mr Leong said: 'Unless you have spare cash to pay above the valuation amount, think carefully about borrowing through other means, like unsecured credit.'