Property News!

[jq75]

Jun 22, 2011
Khaw Boon Wan's blog postings rattle developers, but buyers welcome them
By Esther Teo, Property Reporter
NATIONAL Development Minister Khaw Boon Wan's frequent blog postings about the property market are making some developers jittery, with one even branding the comments as 'scary'.

Property players say Mr Khaw's online musings - which are coming at a rate of up to four updates a week - blur the line between personal opinion and official policy.

They also fear his comments have already swayed market sentiment and are turning buyers more cautious.

But others in the industry welcome a new line of communication, while home buyers seem to relish the air of candour from the ministry.

One of the minister's most pointed blog entries was written earlier this month, when he fanned fears of more cooling measures by stating that 'sharp property price increases cannot go on forever'.

He also sounded an alert that a hefty 53,000 new homes will be looking for buyers over the next few years.

Mr Khaw used his blog to announce last month that the construction of build-to-order Housing Board (HDB) flats would be ramped up to a record 25,000 units this year, with the pace of building expected to continue next year.

Property agents and developers reported slower sales after Mr Khaw's remarks, while early signs indicate that land bids have turned cautious as developers await clearer moves from the Government.

Mr Jonathan Phua, general manager of business development at developer Tee International, said the minister's blog has cast a shadow over the market.

'I think, from now, most developers will be more prudent in bidding for land, and we can expect to see home prices stabilising,' he said.

A managing director of a boutique developer said the blog was 'scary' and 'too fluid', adding that the postings seemed like an unofficial press release.

He also said the blog, by hinting at more measures, had itself created a cooling effect, possibly reducing the need for additional intervention.

'There needs to be a clear line on whether his blog is just consultative or official,' he said on condition of anonymity. 'It is not fair to developers and stakeholders to try to keep track. I would prefer a more consistent direction coming from the National Development Ministry instead.'

The blog's address - at mndsingapore.wordpress.com - seems to indicate that the entries are being written in Mr Khaw's capacity as minister, rather than merely reflecting his personal views.

Another blog issue that has developers concerned involves the review of HDB's $8,000 monthly income ceiling for buyers of new build-to-order flats.

Mr Khaw's blog has made the ceiling increase sound inevitable, from what was a 'review' previously, developers say.

However, no indication has been given on when this might happen, what the ceiling might be raised to or if the ceiling for design, build and sell scheme (DBSS) flats and executive condos will be affected.

Yet, developers say, they have to figure out a way to price these uncertainties into their land tenders.

Some are also uneasy about the time lag between when Mr Khaw's thoughts are published online and an actual policy shift. Small- to mid-sized companies that lack deep pockets are more concerned.

However, other developers are less perturbed over the blogging minister, saying the advent of social media meant the faster dissemination of information was inevitable.

Roxy-Pacific executive chairman and chief executive Teo Hong Lim said the basis of the Government's policy - to achieve a stable market - has not changed. The blog also provides another line of communication, making Mr Khaw more accessible, he added.

Mr Teo stressed that his company has always adopted mid- to long-term planning strategies to take it beyond any possible short-term measures or changing sentiments caused by Mr Khaw's blog.

'There are ways that we can manage our risks. For example, we can choose to buy freehold land to differentiate ourselves from government land sales sites or buy sites in locations where HDB flats will not be built... Life goes on,' he said.

Most home buyers also welcome the blog, saying its frequent updates and easy access - compared to sporadic official press releases - allow them to be more informed of possible policy shifts.

Marketing manager Leonard Chong, 28, said: '(Mr Khaw's) postings seem to be more candid, which makes him more personable... His frequent updates suggest that he is tracking closely what is happening on the ground.'

 

[jq75]

Jun 22, 2011
Two choice sites in Serangoon for sale
Landed housing plot in Serangoon Garden likely to attract strong interest
By Esther Teo, Property Reporter

TWO choice sites in Serangoon are up for sale, with experts expecting healthy interest despite the recent bumper land supply rolled out by the Government.

The sites, both of which are 99-year leasehold plots, can yield about 410 homes in total and are on the confirmed list of the government land sales (GLS) programme for the first half of the year.

A 0.87ha site at the junction of Upper Serangoon Road and Pheng Geck Avenue, next to Potong Pasir MRT station, can accommodate about 330 flats in blocks of up to five storeys.

The other sale site is a 2.84ha plot at Serangoon Garden Way and is zoned for landed housing. About 80 homes can be built on it, but strata-landed houses will not be allowed, the Urban Redevelopment Authority (URA) said yesterday.

Experts expect this site to receive a lot of interest, as demand for such properties has been strong given the limited supply.

Mr Nicholas Mak, head of research at SLP International, said that landed home prices have risen by 70 per cent in the past two years.

Bids of $480 to $520 per sq ft (psf) of land area - or up to about $160 million - can be expected, with between six to 12 bidders, Mr Mak said.

Mr Ong Teck Hui, Credo Real Estate's head of research and consultancy, expects bids to come in above $100 million - or around $320 psf of land area.

The site's proximity to the Central Expressway is a drawback as some homes could be affected by noise and dust pollution, experts said.

Mr Ong added: 'Nevertheless, as the market has been starved of landed housing sites and this is a Serangoon Garden location, we are likely to see fair interest.'

The last landed housing site put on sale was in September last year at Sembawang Greenvale. The plot, which could accommodate 115 homes, went for $546 psf of land area on average.

Another site at the junction of Chestnut Avenue and Almond Avenue that can fit 35 landed homes is expected to go on sale in October.

Mr Ong said the other Serangoon site is also expected to receive up to eight bids. However, developers are likely to be more cautious in view of the growing supply from earlier GLS tenders, impact from the possible raising of the HDB income ceiling and the increased supply of build-to-order flats, he said.

Mr Ong expects a top bid of $500 to $600 psf per plot ratio (ppr) - or up to $196 million.

This unit price is in line with the $607 psf ppr bid received for a nearby site sold in June last year, which has since been developed into Nin Residence.

 

[jq75]

Jun 22, 2011
Robinson Road building up for sale at $678m
Its recent sales history reflects movements in the local office market
By Esther Teo, Property Reporter

Marketing agent Colliers is inviting expressions of interest from developers for the 35-storey former SIA building at 77 Robinson Road. -- PHOTO: COLLIERS INTERNATIONAL

THE former Singapore Airlines (SIA) building at Robinson Road has been put up for sale with a guide price of about $678 million.

The 35-storey block at 77 Robinson Road in the central business district (CBD) sits on 32,435 sq ft, and has a total net lettable area of about 295,000 sq ft. There are about 82 years left on the lease.

Its recent sales history reflects the movements in the local office building market.

SIA sold the block in June 2006 for $344 million, or about $1,165 psf of net lettable area, to a CLSA Capital Partners- linked fund, which in turn sold it 10 months later for $526 million, or $1,783 psf, to its current owner, German fund manager SEB.

Now, SEB is hoping to get $678 million, or about $2,300 psf of net lettable area, for the building, said Ms Tang Wei Leng, executive director of investment services at marketing agent Colliers.

This is in line with the most recent office sales transaction involving Capital Square at $889 million - which also had a unit price of $2,300 psf, she said.

Colliers said the building, which has a gross floor area of 380,999 sq ft, is 92 per cent leased to tenants including Adidas, Rabobank Group and Royal & Sun Alliance Insurance.

Ms Tang said the office market is expected to remain buoyant, with strong demand from both tenants and investors.

'With Grade A office rents currently 45.7 per cent below the previous peak in the first quarter of 2008, it is predicted that rents for the whole of this year will continue to enjoy an expansionary mode, supporting a 15 per cent to 20 per cent growth,' she added.

The highest price achieved for a CBD office building was $3,125 psf, paid by Commerz Real for 71 Robinson Road in April 2008.

Ms Tang said she is confident of keen interest from both local and foreign institutional investors. Colliers is inviting expressions of interest from developers.

Net yields for office investment sales in the CBD hovered between 2.5 per cent and 4 per cent from January to May and were 'encouraging' to such investors, she said.

The building's 180 carpark spaces - which gives it one of the highest ratios of parking spaces per square foot leased in CBD office buildings - is also a key draw for developers and tenants, considering the area's parking crunch, Colliers added.

Besides 77 Robinson Road, SEB also has a 55 per cent stake in 79 Anson Road, 12 floors of Springleaf Tower, a 60 per cent stake in the consortium that owns Chinatown Point mall, and Starhub Green, an Ubi Avenue industrial building.

 

[jq75]

Jun 23, 2011
MAS wants home loan facts spelt out
It proposes two-page list so buyers can have a reality check before borrowing from bank
By Gabriel Chen, Finance Correspondent
THE Monetary Authority of Singapore (MAS) wants all home buyers to take a reality check before they take a bank loan for their property.

It thinks banks should sit their customers down and use a fact sheet to run through the facts and figures of exactly what borrowing will entail.

That means getting to grips with much more than the loan quantum, the period of repayment and what the immediate monthly payments will be.

MAS also wants customers to be aware that their financial situation could change severely should interest rates go up and monthly repayment amounts balloon.

'A residential property loan is a long-term financial commitment. The current low global interest rate environment will not continue indefinitely,' the central bank warned yesterday.

'The fact sheet is intended to help consumers understand that higher interest rates could have severe implications if they overextend themselves.'

The move comes amid a surging real estate market that has seemed to defy four rounds of cooling measures imposed since September 2009.

Some economists have also started flagging the possibility that the ultra-low borrowing rates in Singapore could soon start rising. The three-month Singapore dollar Swap Offer Rate (SOR), a popular benchmark rate used for home loans, hovers at just 0.2 per cent today, but was at more than 3 per cent just five years ago.

Interest rates have been rising in other markets like Hong Kong and Malaysia. Recently, Bank of America Merrill Lynch economist Chua Hak Bin noted demand for loans here was rising quickly, which could prompt some banks to raise rates.

A sharp rise in rates can add quickly to a borrower's monthly financial burden, given the popularity of loan packages with fluctuating rates.

The ultra-low SOR currently may mean that a borrower with a 35-year, $1 million loan could pay just 1 per cent interest in the first year - working out to a monthly instalment of just $2,823.

But every 1 percentage point increase in the SOR will add more than $500 to the instalments. If rates rose back to 2006 levels of about 4 per cent, he would end up paying more than $4,300 monthly.

Mr Justin Chiu, executive director of Hong Kong property developer Cheung Kong, also reckons that residential prices here may fall by up to 6 per cent when interest rates begin rising. This could have serious implications for buyers who cannot sell in a falling market, yet have overextended themselves with big home loans on the belief that interest rates will stay at rock-bottom levels.

In view of this, MAS is proposing that banks issue a new two-page standardised fact sheet to all prospective borrowers that draws up different scenarios, so that borrowers can clearly see the impact of an interest rate rise.

The sheet should also list all essential information for customers who want a housing loan, it added. This includes the loan amount, how long the loan is for and whether there is a lock-in period during which the borrower cannot re-finance the loan without paying a penalty.

It should also list all the fees payable, including those for loan processing, late payment and loan restructuring.

The fact sheet should be provided when the bank opens discussions with a borrower on the key features of a mortgage, and the language used should be concise and reader-friendly, MAS said.

While most banks already provide home buyers with documents explaining aspects of a mortgage, they can vary in details and complexity, it added. And banks generally do not provide information on how monthly instalments vary with different interest rate levels.

MAS is seeking feedback from the banking industry and the public on its proposal until July 22. Once it finalises the format, it will issue a regulatory notice implementing the proposal.

Bank officials contacted yesterday called the fact sheet a good initiative which will further enhance transparency and consistency. Said Ms Helen Neo, head of consumer banking of Maybank Singapore: 'As an industry measure, it will promote customer education at a faster pace with common terminology and similar presentation of information being applied across all financial institutions.'

Analysts said the fact sheet is timely given that there could be households being kept afloat by very low rates of interest that will not be sustained.

'This isn't a direct cooling measure, but certainly it works towards providing more information to the consumer on the potential risks in property purchase when interest rates rise,' said United Overseas Bank senior economist Alvin Liew.

Having the sheet should have 'almost no impact on the property market', added SLP head of research Nicholas Mak.

'In the first place, we have to take it that property buyers are buying the largest single financial investment they make in their lives, and they should be in possession of all the relevant information.'

 

[jq75]

Jun 23, 2011
Condo, resident clash over land purchase
He refuses to pay levy, questions management's right to represent him
By K.C. Vijayan, Law Correspondent
A RESIDENT of Lagoon View executive apartments is being taken to court by his residents' association over the purchase of the common areas of the development.

Mr S.V. Chandran, 75, has refused to pay the $35,500 sought from every owner in the five apartment blocks, which would amass the $16 million needed to buy the common-area land from its owner, the Ministry of Finance (MOF).

The move by the Lagoon View Owners' Association (LVOA) to buy this land paves the way for the privatisation of the estate in Marine Parade Road.

Privatisation opens up options for apartment owners to redevelop the land by adding new amenities or re-landscaping or to go for a collective sale.

The LVOA said it had in May last year obtained the approval of the estate's residents at a general meeting to buy over the common-area land, but Mr Chandran now says he will not pay up because he did not agree to the LVOA representing him in talks with MOF over the sale.

The LVOA thus filed court documents last month to seek payment from him.

Mr Chandran, a retired police officer, has lived there with his wife for 34 years.

All but four owners in the estate's 481 units have paid up the $35,500 'privatisation levy'; other than him, the other three have delayed payment for reasons other than objection to the purchase.

Mr Chandran pointed out in defence statements filed last Friday through his lawyer Vijai Parwani that MOF requires the LVOA to show that it represents all residents if it wants to buy the common-area land.

At issue in this test case, therefore, is whether a residents' association can force all owners into a collective purchase.

The LVOA, in court documents filed by its law firm Joseph Tan Jude Benny, said that a 'substantial majority' of the residents had voted in favour of privatising the estate in a special general meeting last year. Mr Chandran was thus bound by the resolutions passed then, it added.

The meeting also authorised the management committee to collect payment from owners who had yet to pay the levy.

The LVOA said it held another meeting in June last year to explain again the resolutions passed at the earlier meeting, and Mr Chandran was among the 170 who attended.

As owners had agreed to the purchase and the minimum 80 per cent had paid, the privatisation exercise went ahead.

But Mr Chandran said in court papers filed that he did not accept the terms of the draft sale agreement and questioned the mandate of the committee to enter into a sales agreement for him.

He pointed out that the LVOA had independently managed the estate and everyone there had enjoyed the 'free and unfettered use' of the common areas without interference from MOF since 1977. He said that as far as he knew, the LVOA was not paying the ministry for the use of the common areas.

He said yesterday that he objects to the purchase on principle: 'I see no real tangible benefit.'

Last Friday, a public notice announced that strata-title certificates will be issued by the Registrar of Land Titles to owners following a land sale, unless objections are filed within six weeks.

 

[jq75]

Jun 23, 2011
Balmoral Condo sold en bloc, Tulip Gdn cuts asking price
THE owners of Balmoral Condominium in Balmoral Road stand to receive about $3 million per unit now that their estate has been sold en bloc.

The 45-unit freehold development was sold for $141 million to a consortium comprising the Tong Eng Group, Clarus Corporation and Yuan Ching Development, marketing agent Savills Singapore said yesterday. Yuan Ching is a wholly owned subsidiary of Singapore-listed Tiong Seng Holdings.

The price works out to $1,546 per square foot per plot ratio (psf ppr), said Savills' director of investment sales Suzie Mok. 'This transaction should give a boost to the high-end residential segment as current prices are still below the peak levels seen in 2007,' she added.

Each owner of the District 10 condo is set to reap between $2.85 million and $3.26 million, depending on unit size.

The site has a land area of 57,005 sq ft and a maximum gross floor area of 91,208 sq ft. It can be redeveloped into 80 apartments averaging 1,100 to 1,200 sq ft, Savills said.

The property firm estimates the break-even price for the new development to be about $2,200 to $2,300 psf.

Meanwhile, the owners of another freehold condo in District 10 are relaunching their estate for collective sale at a lower price.

They are hoping to get $600 million for Tulip Garden along Farrer Road, down from their previous price-tag of $650 million.

The owners have noted that over the last 18 months, smaller projects of below $200 million in value have been more successful in going en bloc than larger ones, said Credo Real Estate, which is marketing the 164-unit development.

At $600 million, the 316,708 sq ft site would cost $1,153 psf ppr. This compares with $1,250 psf ppr for a $650 million asking price.

 

[jq75]

Jun 23, 2011
Commercial property gaining favour
Investors deterred by Asian govts' moves to cool housing markets
By Esther Teo, Property Reporter

Cheung Kong's newest project, Thomson Grand in Upper Thomson, will have 339 apartments and 22 strata-titled terraced units. -- PHOTO: CHEUNG KONG HOLDINGS

THE heavy hand of the government in some Asian housing markets has made commercial property look more attractive, Cheung Kong Holdings executive director Justin Chiu said yesterday.

Governments in countries like Malaysia, Singapore and China have already introduced measures to cool the housing market, which they are 'bound to do' when it gets too heated, he said.

'So of course if you're talking about short-term investment, then the commercial sector should perform better because it is more or less policy-free to a certain extent,' Mr Chiu added.

Even if the office market gets too hot, the Government intervenes by releasing more land, rather than putting a cap on land prices or rents, he said. While he expects housing markets to cool, however, he does not foresee a collapse.

The senior executive added that home prices here might also fall by up to 6 per cent should interest rates rise.

'In Singapore, because the Government has always been paying attention to the housing market, I would say the fluctuations would be much smaller, in the single-digit range,' he said, adding that sale volumes have already fallen.

If the 'market gets very hot, or if prices run again', then additional measures here will not be surprising, Mr Chiu said.

He was speaking at the unveiling of Cheung Kong's newest project, Thomson Grand in Upper Thomson, which will have 339 apartments and 22 strata-titled terraced units. The apartments will be priced at an average of $1,400 per sq ft for the initial launch of about 50 units next month. The prices of the terraced homes have not been finalised.

Mr Chiu stressed, however, that Hong Kong-based Cheung Kong will continue looking across all property sectors here - apart from the industrial sector - for good opportunities.

Cheung Kong Real Estate director Francis Wong added that good-quality residential sites and larger commercial projects in prime locations are preferred, as the company's relatively small size here compels it to be selective.

But as a foreign developer, smaller projects are unsuitable as they would mean higher overheads, making the project economically unsound.

Instead, commercial sites of about 1 million sq ft of gross floor area - such as the Tanjong Pagar mixed-use site recently won by Guocoland - and niche residential projects are more ideal.

Commercial sites near the Marina Bay Financial Centre - which Cheung Kong jointly developed with Keppel Land and Hong Kong Land - are also preferred, as they are in an area the company is already familiar with, Mr Chiu said.

But mass-market homes are not on the cards despite the Government's recent bumper release of suburban sites. 'We don't want to compete in the mass market with the local developers who have been doing a very good job in supplying such homes on a steady basis. We don't want to, and I think we cannot, compete with them,' he added.

Thomson Grand will feature larger-size apartments of from 904 sq ft to 2,314 sq ft, while its landed terraces will be up to 6,566 sq ft in size.

 

[jq75]

Jun 23, 2011
Soaring office rents may drive HK firms to S'pore
By Mark Tay
THE high cost of office rents in Hong Kong could drive business and financial firms to jump ship to Singapore, according to a property expert yesterday.

Hong Kong office rents have risen drastically in the past two years, noted Mr Simon Smith, Savills' senior director of research and consultancy.

Central office space hit a record HK$120 per sq ft (S$19 per sq ft) in the second quarter.

Hong Kong-based Mr Smith said the rise was 'driven by mainland (initial public offerings), growth in the financial services sector and also the demand from mainland institutions'.

'There are already concerns that firms (in Hong Kong) will soon not be able to afford rent and will therefore have to limit expansion plans and limit their growth,' Mr Smith said.

While the outlook for the office rental market in Hong Kong looks gloomy for tenants, Mr Smith said Singapore could be one of the beneficiaries of pricey Hong Kong office space.

'At the moment, Singapore is providing ample amounts of very good quality, highly specified office space in core locations at half the price of Hong Kong,' he said.

Mr Smith said firms in Hong Kong could opt to send middle to back-end offices to Singapore, as they will want to keep their mainland Chinese market.

Mr Chris Marriott, Savills' chief executive of South-east Asia, added: 'The businesses in Hong Kong are focused on a greater China play. The businesses in Singapore tend to be focused on an Asia-Pacific play.'

Mr Marriott, who is based in Singapore, cited as an example Barclays Capital, which occupies more office space here than in Hong Kong.

'If you look at someone like Barclays Capital, they occupy 450,000 sq ft in Singapore... in Hong Kong, (they have) about 130,000 sq ft,' he said.

Mr Marriott described Singapore's commercial property as 'stable and in a very healthy place'.

'There is stock available for expansion but there is not an oversupply,' he said.

 

[jq75]

Jun 24, 2011
Moderate bids for Clementi residential site



A CROWDED field of 12 developers lined up for a residential site in Clementi but their moderate offers suggest an air of caution has entered the mix.

Far East Organization topped the tender with a bid of $175.8 million - or $461 per sq ft (psf) per plot ratio (ppr).

This was 1 per cent higher than second-placed Centurion Re's $173.9 million bid but still below market expectations of up to $220 million. Other bidders included Chip Eng Seng, MCL Land, EL Development and Allgreen Properties.

Mr Ong Teck Hui, Credo Real Estate's head of research and consultancy, noted that while interest was keen with 12 bidders - more than the three to four bids in recent tenders - bid prices were not excessive.

'The (bids) for this site and the Flora Drive site suggest that developers could have become more selective,' he said.

'Mediocre sites could see low interest level with subdued bids while more attractive sites are able to generate stronger participation with moderate bidding.'

** Richard Ellis Research executive director Li Hiaw Ho had estimated bids of between $214 million and $221 million - or $560 to $580 psf ppr - for the land at the junction of West Coast Link and West Coast Crescent.

This is the second residential site tender to close after the Government announced a bumper release of land.

The Flora Drive residential site tender in Upper Changi closed last week with three bids and at the lowest unit price since last November.

Some experts say that the bids for both sites indicate that developers expect prices to soften.

Colliers International's director of research and advisory, Ms Chia Siew Chuin, said the Clementi project is likely to break even at about $800 psf to $840 psf and sell for up to $940 psf.

This would be lower than prices achieved at nearby 99-year leasehold projects. Caveats lodged last month show that a unit at The Vision sold at $1,106 psf while those at Blue Horizon were transacted at an average of $970 psf, she said.

Mr Chng Kiong Huat, Far East's executive director of development and planning, said the proposed development will consist of one tower of serviced apartments, a second tower of one- to four-bedroom units and possibly some townhouses.

 

[jq75]

Jun 25, 2011
Shoebox Units: How small is too small?
Let market forces decide, Khaw says
By Esther Teo & Ian Poh

SUITABLE FOR SINGLES

'I don't really find the place claustrophobic or unliveable, I think it's suitable for singles who don't have much to clean up. Personally, I like it but, if prices go down, I would be open to moving out to have a bit more space.'

Mr Kenneth Wong, 37, who lives in a 450 sq ft unit at Thomson V One


THERE are no plans to impose a minimum size on increasingly popular shoebox flats, according to National Development Minister Khaw Boon Wan yesterday.

Mr Khaw wrote on his blog that he is inclined to let market forces determine if such flats, which are smaller than 500 sq ft, have a place in the property spectrum. A standard HDB three-room flat is about 700 sq ft.

'Some analysts wonder aloud if buyers know what they are in for. Some have suggested that the Government should step in to impose a minimum size,' the minister noted. 'My instinct is not to second-guess the market. Some shoebox units do add to the diversity of housing options here. But we are closely watching its development.'

But he did sound a warning, urging buyers to 'go in with eyes open'.

Mr Khaw wrote that while 1,100 flats have already been built, the figure is expected to balloon to 3,800 by 2014.

Newer shoebox projects are also in the suburbs, with their appeal to tenants untested, he said, adding that it is important for potential buyers to weigh the benefits and risks carefully.

Sales of shoebox flats have increased more than six times, from 300 units in 2008 to 1,900 last year. They represented 6 per cent of new private home sales in 2008, but 12 per cent last year.

Their small size also means higher per sq ft prices but low overall values - often below $1 million - providing an affordable quantum for buyers.

In fact, Singaporeans made up 80 per cent of shoebox home buyers, presumably making the purchase as an investment in the hope of renting it out to expatriates or singles, Mr Khaw said. He added that some developers who bid high prices for land sites might be planning to build shoebox units, which will further add to the build-up of stock.

While the Government will stay its hand for now, the minister touched on the roles that different stakeholders can play - to empower home buyers and to better assess the situation.

'On our part, we are requiring developers to give buyers an accurate representation of the units they are buying, both within the showflats and in the sales materials,' he added.

'Analysts can also help refine their analysis by including separate analyses for each category of housing products. Comparing price per sq ft for different products is like comparing apples with oranges.'

The Urban Redevelopment Authority told The Straits Times yesterday that these units accounted for only 8 per cent of all sale transactions in the first half of this year, and so there is no need for a separate index for shoebox flats,

Experts say tenant demand for shoebox flats remains healthy due to the strong economy and tight labour market, which has brought more foreigners to Singapore.

Global Property Strategic Alliance chief executive Jeffrey Hong said a shoebox unit in Balestier can be rented out for about $2,300 to $2,600 a month.

He expects the upcoming supply - especially for larger shoeboxes of more than 400 sq ft - to be absorbed should the economy continue to power ahead.

But Mr Nicholas Mak, head of research at SLP International, reckons that shoeboxes will be the first casualties if rental demand falls: 'The segment itself could become a bubble drawing in overly optimistic investors... They might find that their initial expected returns will not be met.'

Civil servant Kenneth Wong, 37, said he bought a shoebox unit as it was small and easy to maintain. He has lived in the 450 sq ft apartment at Thomson V One in Sin Ming Road for the past two years.

'I don't really find the place claustrophobic or unliveable, I think it's suitable for singles who don't have much to clean up,' he said. 'Personally, I like it but, if prices go down, I would be open to moving out to have a bit more space.'

 

[jq75]

Jun 25, 2011
PROPERTY
Caution takes hold in property sector
Measured bids for recent land tenders show prices likely to stabilise: Experts
By Esther Teo, Property Reporter
STILL EARLY DAYS

'The recent bids reflect their expectations and outlook for the next one to two years. But it might take two quarters of falling sales volume before selling prices might actually shift downwards.'

Mr Nicholas Mak, head of research at SLP International

THE talk was all about booms a few months ago but the muted response to two recent land tenders has brought a distinct air of caution to the property sector.

There are even suggestions that prices are likely to flatline as the new sentiment takes hold.

Developers are rapidly redoing their sums in the wake of a combination of factors weighing on the market.

There is the bumper supply of recently released state land, those four rounds of cooling measures, the expected easing of the Housing Board's $8,000 income ceiling, and the unexpected element - National Development Minister Khaw Boon Wan's cautionary remarks on his blog.

Experts say that while it is still early days, the more measured bids from developers indicate that prices are likely to stabilise or inch only slightly upwards in the next 12 months.

The clearest signs of cooling for some experts came when two government sites in Clementi and Upper Changi attracted bids below market expectations.

That prompted some observers to label the sales as turning points in the price cycle for mass-market condominium sites.

But Mr Nicholas Mak, head of research at SLP International, emphasised that while developers have factored in the possibility of prices softening, low land values do not necessarily mean low selling prices.

'The recent bids reflect their expectations and outlook for the next one to two years. But it might take two quarters of falling sales volume before selling prices might actually shift downwards,' he said.

Cushman & Wakefield Singapore vice-chairman Donald Han said new public housing projects, in particular, are expected to be launched in line with existing prices.

'The Government is keeping a close eye on the public market... The private market, however, might still see benchmark prices being set if its product is differentiated enough,' he added.

While some upcoming launches seem to be in line with existing prices, others look likely to be setting benchmark values for their areas.

Cheung Kong Holdings' 361-unit Thomson Grand in the Upper Thomson area, for example, is expected to be launched at an average of $1,400 per sq ft (psf) next month - a record for the area.

The freehold Skyline Residences in Telok Blangah will also be launched on the high side, at $1,900 psf on average, after an early-bird discount of 3 per cent, according to sales agents.

One-bedroom apartments at the Bukit Sembawang project will cost up to $1.2 million, while four-bedroom apartments will set buyers back up to $3.23 million.

Yet selling prices at Far East Organization's Seastrand in Pasir Ris - which began its preview on Thursday - started at $787 psf, according to agents.

A 710 sq ft two-bedroom apartment, for example, will cost about $656,000.

PropNex chief executive Mohamed Ismail said developers have different strategies in pricing.

'If buyers see value in a product, such as high-quality furnishings - even with higher prices - they will still bite,' he added.

 

[jq75]

Jun 27, 2011
SONS, MISTRESS TUSSLE OVER $7M HOUSE
Sons, mistress tussle over $7m house
Siblings suing the companion of once famous psychiatrist
By K. C. Vijayan, Law Correspondent

Madam Ling Ai Wah, 60, who lived with Dr Wong Yip Cheong, 81, for 36 years, stands to own the Chancery Hill Road house (above) upon his death. Dr Wong is now suffering from Alzheimer's disease. Dr Wong founded and built Adam Road Hospital and testified in famous court cases as an expert witness. -- PHOTO: LIANHE ZAOBAO



A trial - over ownership of a Chancery Hill Road house worth more than $7 million - starts today.

It will pit two sons of once prominent psychiatrist Wong Yip Cheong against his long-time mistress. Dr Wong, 81, now suffers from Alzheimer's disease.

Madam Ling Ai Wah, 60, who lived with Dr Wong for 36 years and bore him a son, stands to own the property upon his death after he signed a document in 2004 making her joint owner.

But his sons Meng Cheong, 54, a neurologist, and Meng Leong, 49, a general practitioner, want the High Court to declare the document void.

In his heyday, Dr Wong testified in several seminal court cases as an expert witness, including in the murder trial of Freddy Tan in 1968 which led to the abolition of the jury system.

He also founded and built Adam Road Hospital and served in several organisations, including the Singapore Chess Federation, Singapore Medical Association and Medico-Legal Society.

The plaintiffs are suing as members of the Committee of Persons of the Person and Estate of Dr Wong. They were appointed by the court in 2005 under the Mental Health Act.

Such a move is made to manage the assets of a person who is mentally incompetent.

A third person in the committee, Mr Wong Meng Weng, 35, who is the plaintiffs' half-brother and Madam Ling's son, refused to accede to the suit and was named as second defendant.

The plaintiffs claim Dr Wong did not know what he was doing when he signed the transfer deed in 2004 and allege he was unduly influenced by Madam Ling, according to court documents filed.

They want the court to declare the transfer document void or, alternatively, convert the ownership into a shared tenancy between Dr Wong and Madam Ling and have the property sold to enable each to get a share. Represented by Senior Counsel Andre Maniam of WongPartnership, they want the sales proceeds to be used to help in the maintenance and upkeep of Dr Wong.

Madam Ling, defended by Senior Counsel Cavinder Bull and lawyers from Drew & Napier, is denying the claims, pointing out that Dr Wong had gifted a Whitley Road bungalow to her in 1976, about a year after their son was born and some three years into their relationship.

The bungalow was sold in 1981 and the proceeds were used to buy the Chancery Hill Road house in 1981. The house was placed in her name initially and it was where they lived with their son.

Dr Wong had, at the time, maintained a home in Goldhill Avenue for his wife, Madam Tan Kim Yam, and their four children.

He started a relationship with Madam Ling some years after she started working for him at his clinic in 1969. They lived in the Chancery house with their son until February last year when Dr Wong was taken away by his son Meng Cheong to live with him.

She claimed that Dr Wong would often visit the Goldhill house during their cohabitation years to ensure his wife, whom he married in 1955, and children were well taken care of.

Madam Ling and her son continue to live in Chancery Hill.

She said any Alzheimer's disease which Dr Wong may have been suffering from 2002 was mild and did not affect his mental capacity to conduct his affairs. He continued to practise actively at Adam Road Hospital the following year and even took part in a TV interview on the Sars outbreak in 2003, among other things.

She is counter-claiming for a declaration that she is the beneficial owner of the Chancery Hill Road property as well as a condo unit at Draycott Towers, which the plaintiffs had wanted to be sold.

Her son, in his defence statement submitted through lawyer Daniel Koh of Eldan Law, said his father was able to manage his daily activities without assistance till late 2008 and had the mental capacity to sign the transfer document in 2004.

The hearing is set for 12 days before Justice Lai Siu Chiu.

 

[jq75]

Jun 28, 2011
Son in $7m house tussle 'not frank' in court actions
No full disclosure in past three court applications: Lawyer for dad's mistress
By Selina Lum
THE hearing into a tussle between once-prominent psychiatrist Wong Yip Chong's two sons and his longtime mistress over a $7 million house began yesterday - with the younger son accused of not being completely frank in three previous court actions.

Dr Wong, now 82 and suffering from Alzheimer's disease, had lived in the Chancery Hill Road house with Madam Patricia Ling Ai Wah, 60, for the past 30 years.

His sons - neurologist Meng Cheong, 54, and general practitioner Meng Leong, 49 - are suing Madam Ling and their half-brother Meng Weng, the 35-year-old son of the senior Wong and Madam Ling.

The two brothers want a document signed by their father in 2004, making her the joint owner of the property, to be declared null and void, a move also opposed by their half-brother.

The house was bought in 1981 in the name of Madam Ling - once the senior Wong's clinic assistant - then transferred to his company, and later to himself, before being put in their joint names.

The suit over the house, currently valued at about $7 million, is the latest in a string of court actions taken by the brothers in recent years.

In 2005, before their falling out, Meng Cheong, Meng Leong and Meng Weng applied to be appointed as members of a committee to manage their father's financial affairs, on the basis he was mentally incompetent.

In 2006, the committee got a court order to withdraw $1.06 million from their father's estate as a loan repayment to Meng Cheong in connection with a family company. But Meng Weng now says he did not know the actual situation as he was in America and relied on what Meng Cheong told him.

Last year, the committee obtained powers to sell their father's assets on the grounds that he was running low on cash.

Yesterday, Meng Leong, who does not have an active medical practice and described himself as a project director for the family investment company, was the first witness to take the stand.

Madam Ling's lawyer Cavinder Bull took him through the past three court actions and pointed out that he had failed to notify her of the series of applications.

The lawyer also asserted that Meng Leong had failed to give full and frank disclosure to the court while making these applications.

For instance, the reason given for seeking a court order to allow the sale of their father's assets was that funds were needed for his daily upkeep, with the senior Wong incurring $17,000 a month in expenses.

But Mr Bull put it to Meng Leong that this figure was inflated. He also noted that Madam Ling offered to pay the property tax on the house but the brothers rejected this, which went against their committee duty. Meng Leong replied that they were afraid that if she paid, it would undermine their father's claim to the property.

Mr Bull contended that Meng Leong kept Madam Ling out of the loop in the 2005 application. He replied that he did not mean to exclude her but felt it unnecessary to tell her as it was an 'unconventional family'.

He did not elaborate but, when asked about it again, said 'she was not technically a family member'.

 

[jq75]

Jun 28, 2011
River Valley walk-up flats seal collective sale
$70.5m deal brings total for first half to $1.73b, as market gathers pace
By Esther Teo, Property Reporter

The 40-unit block, one of the first residential projects in the 1960s, has a lease of 999,999 years. Each owner will get gross proceeds of $1.75 million to $1.77 million. -- PHOTO: CREDO REAL ESTATE

A WALK-UP apartment block in River Valley Road has sealed its collective sale, bringing the total value of en bloc deals for the first half of the year to $1.73 billion - just below last year's total.

Alliance Land paid $70.5 million, or $1,035 per sq ft (psf) per plot ratio (ppr), for the 40-unit project. This included a 10 per cent balcony allocation.

Each owner will get gross proceeds of $1.75 million to $1.77 million.

Marketing agent Credo Real Estate said yesterday that the 22,107 sq ft site can be redeveloped into 130 apartments of about 500 sq ft each. The block, one of the first residential projects in the 1960s, has a unique lease of 999,999 years.

The en bloc market has gathered pace from last year, when 36 deals worth $1.77 billion were sealed after a slow 2009. But the $1.73 billion so far is still low compared with the boom of 2007, when 87 sites worth $11.4 billion were transacted.

Credo managing director Karamjit Singh said the 32 deals completed in the first half of this year are relatively small, with low absolute values. The buyers have tended to be small to medium-sized developers unable to bid for larger government residential sites, he noted.

'In 2007, the top five deals were worth over half a billion dollars each. Over the last 18 months, each of the top five deals ranged from $137 million to $214 million only,' he said.

The average collective-sale deal this year is $54 million, up slightly from last year's $49 million. In 2007, the average deal size was $131 million.

Credo said the past 18 months have been challenging for larger collective-sale sites, as potential buyers have been daunted by high absolute land values.

The aggressive government residential land sales programme has also diverted interest from collective-sale sites, especially the larger ones.

The new market reality has dawned on the owners of these bigger estates and some have begun readjusting their reserve prices, Credo added.

Pine Grove, Pearl Bank Apartments, Laguna Park, Hawaii Tower and Tulip Garden have all launched en bloc attempts priced at more than $500 million.

Tulip Garden in Farrer Road initially priced its sale at $650 million, but recently relaunched it at $600 million.

New collective-sale sites have continued to stream into the market.

Royalville in Bukit Timah Road expects bids of between $370 million and $400 million, or $1,383 psf ppr to $1,495 psf ppr. The break-even cost is expected to be above $1,900 psf, Credo said.

St Patrick's Garden off East Coast Road is on the market at an indicative price of $188 million, or $888 psf ppr. Owners expect to receive between $1.55 million and $2.1 million each, said marketing agent Savills. The break-even price is estimated at about $1,440 psf.

Mr Singh said the outlook for the market for the rest of this year is positive. 'With owners becoming more realistic on reserve prices and sustained interest from developers, we expect deals in the second half to be at similarly healthy levels.

 

[jq75]

Jun 28, 2011
Pasir Ris project sells 103 units at weekend launch
By Cheryl Lim
BUYERS were out in force at a suburban property launch over the weekend.

Seastrand, a 473-unit project in Pasir Ris, moved 103 of the 190 units released during its weekend launch, averaging $877 per sq ft (psf).

The development is a joint venture between Far East Organization and Frasers Centrepoint and consists of one-, two-, three- and four-bedroom apartments. The two-bedroom units, ranging in size from 883 sq ft to 1,066 sq ft, were the most popular, with 54 of 57 units released sold so far.

Dennis Wee Group director Chris Koh said there is still a healthy interest in condominium launches.

'It's not unusual to see some projects sell almost 50 per cent of their units over the launch weekend,' he said.

Eleven@Holland, a cluster-housing project developed by Clydesbuilt Group, sold another two units at the weekend. This brings the total number of homes sold to 16, at an average of $1,050 psf.

The units at the project are four- and five-bedroom houses ranging from 3,692 sq ft to 4,349 sq ft.

The Woods in Jurong, a cluster-housing development, recorded another four sales. This brings the total home sales for the development to 34.

 

[jq75]

Jun 28, 2011
Son in $7m house tussle 'not frank' in court actions
No full disclosure in past three court applications: Lawyer for dad's mistress
By Selina Lum
THE hearing into a tussle between once-prominent psychiatrist Wong Yip Chong's two sons and his longtime mistress over a $7 million house began yesterday - with the younger son accused of not being completely frank in three previous court actions.

Dr Wong, now 82 and suffering from Alzheimer's disease, had lived in the Chancery Hill Road house with Madam Patricia Ling Ai Wah, 60, for the past 30 years.

His sons - neurologist Meng Cheong, 54, and general practitioner Meng Leong, 49 - are suing Madam Ling and their half-brother Meng Weng, the 35-year-old son of the senior Wong and Madam Ling.

The two brothers want a document signed by their father in 2004, making her the joint owner of the property, to be declared null and void, a move also opposed by their half-brother.

The house was bought in 1981 in the name of Madam Ling - once the senior Wong's clinic assistant - then transferred to his company, and later to himself, before being put in their joint names.

The suit over the house, currently valued at about $7 million, is the latest in a string of court actions taken by the brothers in recent years.

In 2005, before their falling out, Meng Cheong, Meng Leong and Meng Weng applied to be appointed as members of a committee to manage their father's financial affairs, on the basis he was mentally incompetent.

In 2006, the committee got a court order to withdraw $1.06 million from their father's estate as a loan repayment to Meng Cheong in connection with a family company. But Meng Weng now says he did not know the actual situation as he was in America and relied on what Meng Cheong told him.

Last year, the committee obtained powers to sell their father's assets on the grounds that he was running low on cash.

Yesterday, Meng Leong, who does not have an active medical practice and described himself as a project director for the family investment company, was the first witness to take the stand.

Madam Ling's lawyer Cavinder Bull took him through the past three court actions and pointed out that he had failed to notify her of the series of applications.

The lawyer also asserted that Meng Leong had failed to give full and frank disclosure to the court while making these applications.

For instance, the reason given for seeking a court order to allow the sale of their father's assets was that funds were needed for his daily upkeep, with the senior Wong incurring $17,000 a month in expenses.

But Mr Bull put it to Meng Leong that this figure was inflated. He also noted that Madam Ling offered to pay the property tax on the house but the brothers rejected this, which went against their committee duty. Meng Leong replied that they were afraid that if she paid, it would undermine their father's claim to the property.

Mr Bull contended that Meng Leong kept Madam Ling out of the loop in the 2005 application. He replied that he did not mean to exclude her but felt it unnecessary to tell her as it was an 'unconventional family'.

He did not elaborate but, when asked about it again, said 'she was not technically a family member'.

Jun 29, 2011
Debate over dad's mental state in $7m house tussle
Doctor accused of lying to deny father's mistress a stake in shared home
By Selina Lum
IN SWORN court statements, the second son of once-prominent psychiatrist Wong Yip Chong has described how his father's mental health showed signs of deterioration back in 1998.

Among other things, locum doctor Wong Meng Leong, 49, said his father showed 'marked memory and cognitive impairment', was 'strikingly forgetful' and that 'his driving was very erratic'.

Yet, the senior Wong practised medicine until 2005, and in 2001, Meng Leong was the one who certified his father fit to drive, the High Court heard yesterday.

During the second day of a hearing into a tussle over a $7 million house, Senior Counsel Cavinder Bull said this did not square with the picture Meng Leong had painted of his father's poor mental state.

Mr Bull is acting for Madam Patricia Ling Ai Wah, 60, the senior Wong's long-time mistress, who lived with him in the Chancery Hill Road house for 30 years.

Meng Leong and his older brother, neurologist Meng Cheong, 54, are suing Madam Ling and her son with the senior Wong, entrepreneur Wong Meng Weng, 35. The brothers are contesting the validity of a transfer document their father signed in 2004 making Madam Ling joint owner of the house.

They contend that their father was mentally incapable of understanding what he was signing, or that he acted under Madam Ling's 'undue influence'.

Dr Wong, 82, who founded the Adam Road Hospital, has Alzheimer's disease.

Yesterday, Mr Bull sought to show that Meng Leong was exaggerating or lying about his father's mental health as he wanted to challenge the transfer.

Meng Leong disagreed.

In an affidavit in July last year, Meng Leong said that as early as 1998, his father's driving was 'very erratic'.

But it was later discovered that he had certified his father fit to drive in 2001.

'If someone was driving erratically, you would still certify them fit to drive?' asked Mr Bull. Meng Leong said erratic to him meant 'not as patterned and calm and composed as before'.

The lawyer pointed out that Meng Leong's subsequent affidavits no longer mentioned 'erratic driving', and suggested that this was because his lie had been found out. Meng Leong disagreed.

Mr Bull also noted that the senior Wong was signing corporate documents relating to his company, Wong Yip Chong Private Limited, around the time he signed the house transfer document.

But Meng Leong said corporate documents required a lower level comprehension and that his father was signing them 'almost in a ceremonial mode'.

Mr Bull noted that in the same month he signed the transfer document, the senior Wong signed a resolution diluting his shareholding in the company from 90 per cent to 15 per cent.

As a result, his sons could buy into the company for the first time, at a 50 per cent discount to the shares' face value.

When questioned, Meng Leong said his father was perfectly capable of understanding this document, to which Mr Bull countered: 'Even though you stood to gain from the resolution, you were in a position to protect your father?'

Meng Leong said that with his father ill, no one but the family could run the business.

 

[jq75]

Jun 29, 2011
For sale: Tanjong Pagar office site with dual frontage
By Esther Teo, Property Reporter
A COMMERCIAL site in Tanjong Pagar has been put up for sale with some bids expected to top $530 million.

The 0.29ha site fronting both Robinson and Cecil Streets can be developed into a good quality office development of up to 35 storeys, the Urban Redevelopment Authority said.

At least 80 per cent of the maximum permissible gross floor area of about 32,800 sq m must be used for offices while the remaining space can be developed for more offices, retail or food and beverage uses. Building homes, however, will not be allowed.

Experts say that the 99-year leasehold site in the central business district is expected to draw big landlords such as UOL, CapitaLand, City Developments, Royal Brothers, and Frasers Centrepoint as it is a prime plot with dual frontages.

Ms Tang Wei Leng, Colliers International executive director of investment services, said: 'We think the bids are likely to be in the region of $1,250 per sq ft (psf) per plot ratio (ppr) but to win, it would have to be closer to $1,500 psf ppr.

Mr Alan Cheong, Savills associate director of research and consultancy, however, expects a lower bid of $925 psf ppr - or about $325 million - while Mr Nicholas Mak, head of research at SLP International, expects bids of up to $382 million.

Separately, the Housing Board (HDB) is releasing a 14,344 sq m residential site at Punggol Field Walk for sale today. The 99-year leasehold site can yield about 550 condominium units.

Savills' Mr Cheong expects average bids of $245 psf ppr - or $129 million.

'This is taking into account more conservative bids as developers factor in the possibility of lower sales volumes in the future in the light of the cautious sentiment in the market due to policy risks,' he added.

SLP's Mr Mak, however, expects a modest level of interest from developers with a top bid of up to $220 million.

 

[jq75]

Jun 29, 2011
Property stocks sink as cooling measures bite
Double-digit falls seen amid fears of further govt measures
By Goh Eng Yeow, Senior Correspondent
NO GLUT EXPECTED

'We estimate that the deficit in housing units is in excess of 50,000 currently and that this under-supply situation will likely take several years to clear, just like the over-supply situation in the early 2000s.'

Citi Investment Research analyst Wendy Koh


NO RELIEF FOR PROPERTY STOCKS

PROPERTY counters have suffered a bruising drop in price in the past two months, even though blue-chips have largely stayed on an even keel despite the sluggish market conditions.

Since May 9, just after the general election, GuocoLand - which is developing Singapore's tallest high-rise residential complex in Tanjong Pagar - is down an alarming 21.7 per cent.

Other property giants which have suffered double-digit percentage drops include CapitaLand which has dived 13.4 per cent and Keppel Land, which is down 11.4 per cent in the same period.

In contrast, the benchmark Straits Times Index is down only 1.5 per cent in the same period, even though investors' appetite for stocks has been spooked by a renewed flare-up of the sovereign debt crisis in Europe.

The only property counters to buck the bearish trends are upmarket developers such as Wing Tai Holdings and Wheelock Properties, whose prices have stayed relatively unscathed by the sell-off.

Both counters are considered to be possible candidates for privatisation, following a move by sugar king Robert Kuok last month to buy the rest of Allgreen Properties and delist it.

Analysts have blamed the recent lacklustre performance of property counters on fears that the Government may take further measures to cool the red-hot residential market.

DBS Vickers analyst Lock Mun Yee noted in a recent report that investors are adopting a 'wait-and-see' stance where property counters are concerned.

'The market has shown some signs of cooling on the back of overhanging government policy risks, with some new launches seeing slower take-up rates,' she said.

Although the property sector is trading at a 32 per cent discount to its revalued net asset value, there is a lack of near-term catalysts to lure investors into buying property stocks.

What is dampening investors' appetites is a fear of over-supply in housing, following the Government's decision to ramp up the building of HDB flats.

'Inclusive of a targeted 26,000 units of public housing for sale this year, medium term supply, particularly of low-end private housing and HDB apartments, is on the rise, and this is likely to cap the upside to this segment of home prices,' said Ms Lock.

But Citi Investment Research analyst Wendy Koh believes that the increase in new supply of HDB flats and private homes will not result in a housing glut in two or three years, contrary to what most investors are fearing.

'We estimate that the deficit in housing units is in excess of 50,000 currently and that this under-supply situation will likely take several years to clear, just like the over-supply situation in the early 2000s,' she said.

Even with the new HDB supply and an increase in income ceiling for new HDB flats from the current $8,000, possibly to $10,000, she estimated that HDB resale transactions would be reduced by only 7 to 15 per cent.

'The impact on the private property market would be even smaller,' she said.

Ms Koh is also optimistic that the demand for small units and mass market units as investments will stay strong, as 'occupancy rates for mass-market properties are at an all-time high of 97.5 per cent, and offer yields averaging 4.2 to 4.5 per cent versus mortgage rates of just 1.2 to 1.6 per cent'.

Yet, despite her optimism that there will be no housing glut, even she could find few reasons for property counters to shake off their lethargy.

'Although property stocks appear to be cheap, they traditionally outperform when property prices are on the rise. With any property price rise likely to be met with more policy measures from the Government, we see little room for Singapore residential developers to outperform,' she said.

 

[jq75]

Jun 29, 2011
New guidelines for ethical property advertising
By Branden Ho



THE Council for Estate Agencies (CEA) issued two practice guidelines on Wednesday to promote ethical advertising in the real estate agency industry and to guide the use of prescribed estate agency agreements.

According to the new guidelines effective from Aug 1, misleading headlines and claims such as 'advance loans available' and 'king of (named) estate' will not be allowed in advertisments and publicity collaterals.

They are applicable to all modes of advertisements, including classified advertisements, pamphlets or flyers, online advertising, short messaging services (SMS) and social media.

Estate agents and salespeople will have to display their details such as name, registration number and contact number. SMS text advertisements must provide a mobile telephone number for consumers to opt out of future SMS advertisements. No SMS advertising or cold calling after 10pm.

Advertisements will also have to contain accurate information. Claims such as rates of return and yield rates must be indicated and substantiated. Photographs and graphics will also have to be accurate depictions.

The above changes are among many that Mr Lee Say Kee, chairman of CEA's Ethical Advertising Work Group, says 'will provide clarity...thereby raising professional and ethical standards in the industry'.

For more details, visit www.cea.gov.sg.

Jun 30, 2011
No more property 'specialists' from Aug 1
New guidelines aim to put a stop to misleading ad claims
By Daryl Chin
Some dos and don'ts

ADVERTISEMENTS for 'specialist' or 'expert' agents should soon be a thing of the past.

And publicity materials should no longer guarantee sellers of HDB flats a certain cash over valuation - the amount paid over and above the property's value.

Ads which include figures such as expected rates of return, yield or capital gains will need to refer to credible sources.

Agents will no longer be allowed to attempt to get around the law with promises to sell a flat before the minimum occupancy period is up.

They will also be banned from publicising the full address of properties or their floor levels without the client's approval, and will have to ensure that photos of the properties are not misleading.

Text message ads will need to allow consumers to opt out of receiving further ads, and there should be no messages or cold calls from 10pm to 9am.

Fliers and pamphlets should have the property agent's name, registration number and contact details, as well as those of the firm he works for.

The same rules apply to ads on online property sites such as Property Guru and iProperty.

Agents who use social media networks such as Facebook for work purposes will have to clearly display their registration numbers and those of their firms on their profiles.

From Aug 1, in publicity material such as fliers like this, property agents can no longer call themselves specialists, have to source figures properly and cannot make promises about cash premiums. -- ST PHOTO: ALPHONSUS CHERN

PROPERTY agents will no longer be allowed to make grandiose advertising claims when new guidelines come into force in a month's time.

They will be banned from giving themselves misleading titles such as 'specialist' or 'expert'.

All figures in their publicity materials will have to be properly sourced and they will no longer be able to promise that HDB flat sellers will receive a certain cash premium.

The guidelines, which kick in on Aug 1, follow a rising number of complaints about misleading property advertisements which make exaggerated or unsubstantiated claims.

The Council for Estate Agencies (CEA) announced the new guidelines in a statement yesterday.

They apply to print, online and mobile phone advertisements. Agents who infringe the rules can be fined up to $75,000, suspended or have their licences revoked.

CEA's director of regulatory control Lee Say Kee said: 'The guidelines will provide clarity on the dos and don'ts of advertising, thereby raising professional and ethical standards in the industry.'

Some guidelines had already been spelt out in the Estate Agents Act last year, but the latest measures flesh them out in more detail.

Larger property firms told The Straits Times the move will help make sure members of the public are not misled.

Dennis Wee Group director Chris Koh said: 'The previous guidelines were still vague, and some of my agents have approached me for clarification.

'Now at least, they can refer to the official set of rules. It's also good to do away with terms like 'specialists' as there is no clear definition of it.'

PropNex chief executive Mohamed Ismail said the firm took steps in April to ensure the existing rules were followed to the letter.

'We hired more staff to vet new marketing materials and also organised talks to educate the agents,' he added.

Bosses of smaller firms also welcomed the new guidelines.

Ms Janice Chan, director of Asia Breeze, said: 'It's obvious hogwash when people promise a guaranteed sale, so this is a step in the right direction.

'Now the question lies in how these rules are enforced.'

Mr Lee said the CEA will conduct random checks on publicity materials put up by property firms and their agents, and act on tip-offs from the public.

Some websites are already taking steps to make sure agents are really who they claim to be.

An iProperty spokesman said the company has made it compulsory for agents to display their registration numbers on its online advertisements.

The site has about 74,000 property listings from more than 14,000 agents.

House hunter Melanie Khoo, a 25-year-old creative executive, said the new guidelines could not have come at a better time as she is looking to buy a house this year.

'The more honest the ads are, the less time I need to sift through them and check if they are legitimate. I can also make better buying decisions then,' she said.

As well as advertising, the guidelines touch on the sale, purchase and lease of residential properties.

Since Jan 1, all property agents have had to be registered with the CEA, and since March 1, they have had to carry an Estate Agent Card which displays their name and licence number and recent photograph.

The CEA, which started work in October last year, is part of the Government's bid to raise the industry's professionalism through regulation and disciplinary powers.

So far, it has issued 23 letters of advice, which carry no penalty, to property firms and agents after receiving more than 100 complaints relating to misleading ads.

It took its first unregistered property agent to court earlier this month.

According to the latest published figures, there are 1,515 licensed property firms and 32,221 registered property agents in Singapore.

Anyone with information on property agents who break the rules can visit www.cea.gov.sg to file their complaints.

 

[jq75]

Jul 21, 2011
Keppel Land to launch new project in Sengkang

Mr Wong said property in some suburban regions will still draw interest despite cooling measures.

PROPERTY firm Keppel Land will launch a new 620-unit Sengkang project by the end of this year, despite a cooling market.

The announcement yesterday came on the day the company said its second-quarter net profit fell 65 per cent, largely due to the adoption of a new accounting policy.

Earnings were $50.5 million for the three months up to June 30, down from $143.8 million a year earlier, while revenue was down 67 per cent to $104 million.

The accounting change requires developers to recognise revenue and profit only on completion of certain projects. In the past, developers had smoothed out their revenue streams from projects, progressively recognising income over the contract period as certain milestones were met.

Keppel also faced slower home sales in China after a raft of cooling measures. It sold 400 homes in China in the first half of this year, well under the 1,200 sold in the corresponding period last year, but the firm said it does not plan to cut prices.

Group chief executive Kevin Wong said while cooling measures here and the impending supply from government land sales dampened Singapore's private home sales in the first six months of the year, property in selected suburban regions and near MRT stations will still attract interest.

Healthy economic growth, a buoyant job market, ample liquidity, a low interest rate environment and the sustained influx of foreigners will also provide support for the residential market here, said chief financial officer Lim Kei Hin.

The company sold 160 homes here in the first half of the year, with a total value of $245 million.

Mr Wong said future investments - whether here or overseas, commercial or residential - will simply depend on opportunities. 'In China, we started doing some commercial developments. In the past, we had not gone in in any big way; we focused on residential because that was a market that we thought had the most profits.

'And of course, now with all these cooling measures, there are locations and opportunities where commercial markets will become attractive.'

Net profit for the six months fell 34 per cent to $134 million from a year earlier. Revenue rose 9 per cent to $462 million.

Earnings per share for the half-year dipped to 9.1 cents from 14 cents last year, while net asset value per share was $2.72 as of June 30, down from $2.85 as of Dec 31.

ESTHER TEO