Property News!

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Feb 8, 2009
ERA imposes stricter ethics guidelines
ERA Realty Network has implemented stricter ethics guidelines for its 3,000 agents.
It has also suspended the two agents involved in the case - Mr Jeremy Ang and Mr Mike Parikh.

The property agency will now require all agents to sign an undertaking at the start of each sale transaction, assuring customers that all possible conflicts of interest will be 'properly disclosed to the best of the agent's knowledge', ERA said in a press statement last Friday night.

This disclosure, modelled on similar forms used in the insurance and financial services industries, will assure clients that they are the top priority of their respective agents, it added.

Every time a buyer makes an offer to buy a property marketed by ERA, he will also have to sign a declaration that he is not an ERA agent or a member of an agent's immediate family.

A similar disclosure is already in place for buyers who purchase their units directly from property developers, although resale transactions do not require this.

The property agency will also implement an 'extended' code of ethics for agents and customers, ERA president Jack Chua said. This will be finalised within the next three months.

The other measures will come into effect immediately, he added, pointing out that the new ethical measures were 'not about whether we were right or wrong in the court case'.

'They are to tighten the whole selling process, and to improve transparency and accountability.'

Mr Chua added: 'We just want to make it clear so in future, we don't have to dispute whether there are conflicts of interest. At the moment I think there are some grey areas.'


Feb 8, 2009
THE SELLERS
They thought they had good deal
By Debbie Yong
Her name was Natassha Sadiq.
They thought that sounded like she was from the Middle East, which meant she had to be rich and could afford to pay top dollar for their property.

And so the Yuens told their property agent: Okay, done deal.

But six months after Mr Yuen Chow Hin, 50, and his wife Wong Wai Fan, 48, sold their Riverside Piazza apartment to Madam Sadiq for $688,000, they discovered their error.

Madam Sadiq was actually the wife of the boss of their property agent.

And even before she had inked the deal to buy their unit, she had already resold it for $945,000.

That turn of events eventually led to a High Court case that ended last Thursday with the judge ordering property agency ERA Realty Network to pay the Yuens the $257,000 difference.

The saga began in June 2007.

Less than a fortnight after the Yuens engaged ERA property agent Jeremy Ang to sell their Riverside Piazza apartment near Clarke Quay, they were told that a buyer had been found.

Mr Ang said a regular client of his was offering $650,000 for the two-bedroom unit, which is just below 1,000 sq ft.

He added that OCBC Bank had valued the flat at between $650,000 and $700,000.

When the couple asked why they were not offered $700,000, Mr Ang said it was because they had recently renewed a two-year lease with their tenant Yuji Kubo, a 57-year-old Japanese trader. The couple charged him $2,000 in monthly rent.

Madam Wong told The Sunday Times yesterday that she took Mr Ang's word about the price, and did not check with other property agents if this was an industry norm.

'We had no reason to be suspicious. Our main thought was that agents will try to get the best price for us because it means they get a higher commission too,' she said.

Of the potential buyer, she noted: 'Jeremy said Madam Sadiq had bought many properties from him before and, judging by her last name, we got the impression that she was a rich Middle Eastern woman who regularly invests in property. We assumed we were getting a fair price.'

The housewife and her husband, a vice-president in an information technology firm, live with their two teenage sons in a terrace house in Serangoon Gardens.

The couple had bought the Riverside Piazza property in 1995 as an investment - the first time they had done so - paying about $609,000.

They decided to sell it to help pay for a new condominium unit in Serangoon, jointly owned by Mr Yuen and his sister, for Mr Yuen's aged parents to live in, said Madam Wong.

'I had told Jeremy to liaise directly with Mr Kubo about scheduling visits from potential buyers. Once, Mr Kubo complained to me that Jeremy had turned up at the flat without notifying him first, so I assumed Jeremy was doing his job,' she added.

She said they did not set any price and had asked Mr Ang to obtain a bank valuation.

The Yuens offered to sell the flat to Madam Sadiq for $688,000 on July 12. The latter said 'yes' on July 26. The couple did not meet Madam Sadiq in person.

'For most lay people, once the price is agreed upon, you hand it over to the lawyers, banks and the CPF Board. It's a process that you don't think about because it's too complex,' said Madam Wong.

In October 2007, the Yuens received a call from the Central Provident Fund Board about the discrepancy between the value of the flat - based on a valuation done by the new owner's bank - and the amount they had sold it for. That was when they sensed that something was amiss.

After getting their lawyers to check on the caveat lodged on the property, they tracked down the new owner, engineer Teo Su Kee, 48, at his Toa Payoh home.

They discovered that the transaction was handled by ERA agent Mike Parikh, who had put up newspaper advertisements - dated July 7, 9 and 14 - for their unit.

They also found that Mr Teo exercised his option to buy the flat from Madam Sadiq on July 25 - a day before she agreed to buy it from the Yuens.

Suspecting an internal arrangement among the parties, the Yuens checked with the Registry of Marriages and found out that Madam Sadiq was married to Mr Parikh.

It was a 'surprise', said Madam Wong. Mr Parikh had handled the sale of her brother-in-law's HDB flat in Pasir Ris in 2006.

Mr Parikh had also recommended Mr Ang, his subordinate, to handle the sale of her mother-in-law's HDB flat in Hougang in early 2007.

The smooth transactions led the Yuens to entrust Mr Ang to sell their property as well.

They wrote to ERA about their findings and refused to pay Mr Ang's commission of $7,361.

'We tried to arrange a discussion with their directors. We only wanted some accountability and answers,' said Madam Wong.

ERA wrote back to say that the two agents had done nothing wrong. In January last year, it made a claim against the couple at the Small Claims Tribunal for failing to pay the commission.

It was this that prompted the Yuens to file the lawsuit against the company.

Now that the judgment has been passed, Madam Wong said she feels some relief as the saga had caused her sleepless nights.

But with ERA saying last Thursday that it intends to appeal against the court's decision, she acknowledged that 'it's not over yet'.

'We don't know what the next step will be, but we will try to put it aside for now and get on with our Chinese New Year celebrations,' she said, adding that she has not made any plans for the money yet.

'I will be more careful the next time and definitely not be so trusting,' she added.



Feb 8, 2009
CURRENT OWNER
Buyer dragged into legal tussle
All Mr Teo Su Kee wanted was to buy an apartment in the Clarke Quay area to invest in. He got more than he bargained for.
The engineer was dragged into a lawsuit between the previous owners of his two-bedroom apartment and property giant ERA Realty Network, over the latter's unethical behaviour.

Mr Teo, 48, who works in a multinational company, was called to appear in court to give his account of how he bought the flat.

'I am just an innocent buyer, I do not wish to be involved in this. I am very frustrated,' he said of having to take time off work to testify.

In July 2007, Mr Teo responded to an advertisement put up by ERA senior group division director Mike Parikh for the sale of a Riverside Piazza apartment.

He told The Sunday Times yesterday that he checked out the apartment with Mr Parikh and another man, whom he could not remember.

Mr Teo had been eyeing several apartments in River Place and Riverwalk that were going for more than $1,000 per sq ft (psf). When Mr Parikh offered him $998 psf for the flat, he accepted readily.

'It was a good deal as I had been surveying the prices of several properties in this area, and it was within the market value,' he said.

He learnt about seller Madam Wong Wai Fan's plight only when she visited him at his Toa Payoh home.

'I was surprised that she sold the apartment at a price that was way below the market rate,' he said.

There was another twist to the tale - Mr Teo found out from his wife that Madam Wong used to be her boss in a recruitment agency.

With the court case over, he wants to put the experience behind him.

He intends to sell the flat, but not immediately after his tenant, Mr Yuji Kubo, moves out. He also does not know the price he might get.

A resident at Riverside Piazza, who got a valuation from a bank, told The Sunday Times yesterday that the unit is likely to fetch only about $860,000 now.

Hua

ng Huifen

THE TENANT

'All I know is that there has been a change of ownership, but I'm still paying the same rent, thus it is nothing related to me.'
MR YUJI KUBO, 57, tenant of the Riverside Piazza apartment, on the legal tussle between the unit's previous owners and ERA

 

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Feb 8, 2009
Other dirty tricks some agents play
REFUSING TO CO-BROKE A PROPERTY

Co-broking is when more than one agent is involved in a property transaction - for example, if one agent introduces a buyer to another agent.

Because the commission from a co-brokered sale will have to be shared, some agents may refuse to meet or follow up on clients from other agents, to avoid splitting up their commission.

'This prevents a client's property from getting maximum exposure and is not in his best interests.

'To see if this is the case, clients can call their agent from an unknown number, pretend to be another agent, and see what they say,' said Mr Mohamed Ismail, chief executive officer of PropNex.

OVERPROMISING

'Some agents tell sellers they have a ready buyer for a very high price so that sellers will appoint them exclusively for a period of time,' said Ms Florence Choo, a real estate agent in her 50s.

'It may then turn out they did not actually have a ready buyer, and sellers may be forced to settle for a lower price as they cannot hold on to the property any longer.'

WORKING FOR MORE THAN ONE COMPANY

Agents should work for only one company, but some carry more than one name card - that is, they get to access more than one firm's client listings.

Because different agencies have different pay structures, such an agent may take a client under one agency's listing but close the deal under another agency which pays him better.

In such a situation, the client may not suffer a loss but the affected property firm gets the bum rap.

HIJACKING

Hijacking refers to an agent going behind another agent's back and stealing his clients by promising them a better deal and urging the clients to sign with him instead.

'It's really not nice and unethical of some agents to approach the seller on their own without notifying the original agent and stealing their client,' said Ms Susan Lim, 28, a property agent.

This is an example of the cut-throat competition among property agents.


Feb 8, 2009
Seller, protect yourself
A property agent should work in his client's best interest, so look out for anything that indicates otherwise.
1 Do your homework. Always get a valuation done on the property so you know if you are being cheated, said

Mr C.M. Tan, 64, a retired bank manager who has worked on home loans.

2 Don't rush to appoint an agent. Meet a few and have detailed discussions with them before deciding on one, said Ms Ivy Lee, chief executive of Ivy Lee Realty.

3 Get a reputable agent from recommendations by friends.

4 If an agent is unwilling to advertise or co-broke your property, he is not exposing it to a maximum number of buyers, said experts.

5 Be wary of agents who make promises that sound too good to be true, said Ms Lee.

6 Do not leave your agent alone to do his work. Check up on him every two weeks or so to ensure that he is working hard to sell the property

 

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Feb 4, 2009
Court hears two collective sale
HORIZON TOWERS: 2-year battle to kill deal will end on Friday
By Joyce Teo
ONE of the most protracted en-bloc sale disputes in years entered its final act yesterday when dissenters of the Horizon Towers deal opened their last-ditch court bid to kill the deal.
The four owners want the Court of Appeal to throw out a decision handed down last July that backed the $500 million sale of the property to Hotel Properties (HPL) and its partners, Morgan Stanley Real Estate and Qatar Investment Authority.

Objectors have been fighting for two years to have the deal overturned - a battle that has ridden right through the market slump, its boom and now back into the downcycle.

Their key objection is the loss of their homes, particularly at what they see as a giveaway price and by a process they feel was badly handled.

Owner Rudy Darmawan, who is representing himself in court, told the judges: 'I am here because I want to protect my home.'

Retiree Vincent Wong, 65, said: 'We are not here to profit...We are really fighting for our homes.'

The saga began in January 2007 when the majority owners accepted a price of just under $850 per sq ft (psf) of gross floor area for the 99-year leasehold estate in Leonie Hill. The 199 apartment owners would each have pocketed about $2.3 million while the 11 penthouse owners would have received at least $4 million each.

But when the property market began climbing after the deal was signed, many owners believed their $500 million reserve price was too low.

A series of court challenges culminated last July when the High Court dismissed a contention by sale objectors that the deal had been done in bad faith.

Yesterday, the objectors again argued that point during a hearing involving Senior Counsel. They said a higher offer of $510 million from Hong Kong firm Vineyard Holdings was not taken seriously.

About 50 people, including residents and HPL executive director Christopher Lim, were in the gallery.

The court will hand down its judgment on Friday.

HPL has just obtained provisional permission to turn the Horizon Towers site into 253 flats and eight detached houses.

So far, its sale price has held up. Credo Real Estate executive director Tan Hong Boon believes the $500 million price tag remains reasonable - at least as far as the buyer is concerned.

'They can break even at $1,300 to $1,400 psf and are still able to make a profit when the market recovers,' he said.



Feb 4, 2009
Court hears two collective sale
GILLMAN HEIGHTS: Final bid by 10 owners to end transaction
By Jessica Cheam
A LAST-DITCH attempt by 10 minority owners of units in former HUDC estate Gillman Heights to stop its collective sale was heard by the Court of Appeal yesterday.
This appeal is the last recourse for the owners who have fought the $548 million sale at every turn since it was approved by the Strata Titles Board (STB) in 2007. Some owners had appealed against STB's decision previously in the High Court, but this was dismissed by Justice Choo Han Teck last June.

The fate of the 607-unit, 99-year leasehold estate at Alexandra Road will be sealed today, as the judges are due to make a ruling at 4.30pm.

Senior Counsel Michael Hwang, engaged by law firm Tan Chin Hoe & Co to act for the 10 minority owners, argued yesterday that collective sale laws introduced in 1999 by Parliament had not been intended to cover HUDC estates.

Another point of contention at the hearing was the date used to calculate the age of the development. This determines if the estate needed an 80 or 90 per cent level of consent to be sold en bloc.

Currently, 80 per cent is needed if the development is more than 10 years old, 90 per cent if it is less than that.

Mr Hwang argued in the packed courtroom that because Gillman Heights obtained its certificate of statutory completion only in 2002, it needed 90 per cent. Currently, about 87.54 per cent of owners have signed the collective sale agreement.

Representing the majority owners, Mr Quek Mong Hua of Lee & Lee said, however, that it was an 'indisputable fact' that Gillman Heights was completed in 1984, making it more than 22 years old in 2007.

Senior Counsel Andre Yeap of Rajah & Tann, acting for the purchasers - CapitaLand, Hotel Properties and two private funds - argued that as homes in HUDC estates, upon privatisation, become strata-titled units, they are covered by the 1999 laws on collective sales.

Analysts that The Straits Times spoke to said the $548 million price tag is 'more attractive now than before' given the current market situation.

Owners stand to reap about $870,000 to $950,000 per unit from the sale. Chesterton Suntec International's Mr Colin Tan said that the current market favours the sellers, while buyers CapitaLand might have to put redevelopment plans on hold.

For some owners at the estate, however, it was never a question of money. One said at the earlier High Court hearing: 'The price was never our problem...You can't find another place like this.'

Feb 9, 2009
Gillman Heights en bloc saga
Appeal dismissed
By Jessica Cheam
SINGAPORE'S highest court on Monday dismissed the appeal by minority owners to stop the en bloc sale of Gillman Heights.
This brings the former HUDC estate's two-year en bloc saga to an end.

CapitaLand and Hotel Properties, with two private funds, inked the $548 million deal to buy the estate in 2007. But a group of minority owners, in a last-ditch attempt to stop the collectve sale, went ot the Court of Appeal to try and overturn the previous High Court's ruling which gave the greenlight.

The main contention was the date used to calculate the age of the estate, and to a larger extent, the level of consent that was required for the sale to go ahead.

Monday's ruling sets a precedent for all other HUDC estates which want to go en bloc, and clearly demarcates what criteria should be used in the future.

In Gillman Heights' case, the judges ruled that 80 per cent was required.

 

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Feb 17, 2009
The murky world of real estate practices
'Secret profit' case sheds some light on the agent-agency relationship

By Tan Hui Yee
THE world of Singapore real estate can seem all too murky to many, with opaque institutions and questionable deals.
There is no one single authority - either from the industry or the Government - with enough clout to decide who gets to ply the trade and who gets kicked out because of wrongdoing.

The regulatory vacuum means common practices that raise eyebrows are never discussed and analysed with a clear resolution. Questions like 'Should an agent get a commission from both the buyer and seller?', or 'Should an agent be allowed to buy property from his seller?' elicit robust views from both sides.

Earlier this month, we came a bit closer to getting some answers after a couple took housing agency ERA Realty Network to court over the conduct of their agents.

Mr Yuen Chow Hin and Madam Wong Wai Fan, who sold their downtown apartment for $688,000 in 2007, learned subsequently that their home was bought and resold almost immediately by the wife of their agent's boss for $945,000.

They claimed a conflict of interest and sued ERA for $257,000 - the difference between the two sale prices and about $7,300 in commission.

High court judge Choo Han Teck agreed with the couple and ordered that $257,000 be returned to them. ERA has indicated that it may appeal against the ruling.

The case was significant not because a housing agent had been found 'flipping' a property. Professional agents often invest in property themselves, sometimes buying directly from owners they represent. Rather, the case was valuable for the public nature of the disclosures and resolution.

Whether such 'flipping' by housing agents can be considered ethical depends on each transaction. But the line between what is right and wrong has never been drawn clearly because of the freewheeling nature of the industry.

Buyers and sellers who seek a clear resolution are forced to turn to the courts, but many often do not have the stomach, cash or legal muscle to do so. They fight shy of the stress of legal proceedings and settle away from the public eye, leaving other buyers and sellers none the wiser.

The Yuens didn't. This case let the public hear - for the first time in recent years - a large, well-established property firm argue that it is not liable for the actions of its agents because they are considered independent contractors.

The statement may sound surprising to many buyers and sellers who often hire an agent based on a firm's reputation. But the reality is that all agencies - not just ERA - hire agents as independent contractors and take a cut from their commissions. In return, the firms offer agents infrastructure and administrative support.

In the agent-agency relationship, the former has the upper hand because the departure of a star can hit the bottom line.

In the cut-throat world of real estate agencies, losing a top performer could mean also losing hundreds of agents working under him to a rival agency.

It means most property firms are loath to let top performers go, even if they are caught red-handed for unethical practices.

In 2006, for example, veteran ERA agent Syed Abdullah Alhamid was jailed for a month for being part of a scam which helped flat buyers secure loans with fake documents. He returned to ERA not long after being released from jail.

In the Yuens' case, Justice Choo was blunt in rejecting ERA's assertion that it was not liable, given that the transaction documents and advertisements gave the impression that the agents had the backing of the agency.

The fallout from the disclosure of ERA's 'independent contractor' argument is considerable.

It begs these questions: What does it mean when a large, well-established company claims to have a solid reputation, high service standards, and a good track record? How much value can someone place on such assertions, if the 'independent contractor' argument can be pulled out of the hat when things go wrong?

Justice Choo's judgment aside, the case was invaluable for helping to shake the average buyer and seller out of their complacency.

Singaporeans tend to forget that the clear rules and strong institutions they are so used to in their daily lives do not apply in the property industry. The safety nets are so small and legal recourse so fragile that the best bet one probably has is to pick the right agent in the first place.

It doesn't help that rivalry between different factions makes self-regulation near impossible.

The Institute of Estate Agents, formed in 1998 to try to centralise control over agents, has only a small fraction of the more than 20,000 agents in the industry on its membership roll. Since membership is not compulsory, it has no power to keep errant agents out of the industry.

Meanwhile, there is confusion over what it takes to be an accredited agency.

The voluntary Singapore Accredited Estate Agencies scheme, when launched in 2005, required accredited housing agencies to have all their agents pass the Common Exam for House Agents (Ceha) by this year. Last year though, it introduced a scaled-down test, the Common Examination for Salespersons (CES), after feedback that the Ceha was deemed 'too academic'.

This left many agents at a loss over which qualification to try for as it was not clear if Ceha was still necessary for a housing agency to get accredited.

Meanwhile, the Consumers Association of Singapore says it has been in talks with various government agencies to work on yet another accreditation scheme. Whether that - when it takes shape - will be made compulsory remains to be seen.

Until something concrete comes about, laymen will still have to rely on property owners with deep enough pockets to fight court cases for their answers.

 

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Feb 17, 2009
Private home sales at new monthly low
Only 107 units sold last month, but sales for February good so far
By Joyce Teo
THE property market continues its downward spiral with only 107 new private units sold last month - the lowest monthly total since data was made available in 2007.
A lack of launches from developers was partly behind the anaemic figure, which was well under the 131 sales in December and the previous low of 118 sales in October.

About 204 units were launched last month, up from 157 in December, but lower than the 12-month average of 518 units. No new prime projects were launched last month.

'An ominous pall of uncertainty is hanging over the industry,' said Knight Frank director of research and consultancy Nicholas Mak.

'The diminishing number of units sold in the market not only reflects a heightened sense of prudence, but also an increased anticipation for prices to fall, thus causing potential buyers to stay on the sidelines.'

Last month's top sellers included Nova 88 in Balestier and The Aristo @ Amber, which sold 16 units and 14 units respectively.

The stronger demand for these projects could be down to their improved affordability, with median prices having eased slightly, said Jones Lang LaSalle's head of research for South-east Asia, Mr Chua Yang Liang.

But while last month was something of a dead loss, sales this month are already looking up, thanks to two successful launches.

The 712-unit Caspian - a short walk from Lakeside MRT station in Jurong - has racked up sales of 470 units since its release earlier this month. Prices at the 99-year leasehold condo started at $580 per sq ft (psf), and are now at $600 psf.

The 293-unit Alexis @ Alexandra, released for sale last week, is said to have been 100 per cent sold by last Saturday.

It was priced at $850 to $1,100 psf, but most of the units were small, and so came with a relatively low absolute price.

Prices ranged from $450,000 for one-bedroom units to nearly $1.8 million for the penthouses.

'Certainly, there is renewed confidence in the market for properties that are priced right, as many HDB upgraders and investors are able to pick up such units at a lower quantum,' said Mr Mohd Ismail, chief executive of PropNex, which co-marketed Caspian with ERA.

CBRE Research executive director Li Hiaw Ho said the success of the two projects could be attributed to their good locations, competitive prices and a creative mix of units.

The tie-up between banks and developers to offer the interest absorption scheme also helped stimulate sales, he said.

Some property consultants expect February to register the highest number of monthly transactions since late 2007.

But this performance is likely to be a one-off for now, said Mr Mak, who added that sales could begin to slow to a more sustainable pace.

Mr Li said: 'While the Singapore economy remains in recession, the continued moderation of prices should encourage potential buyers to come forward.'

That could drive first-quarter sales to 1,000 to 1,200 units, he said. Last year, developers sold just 4,287 new homes, down from a record 14,811 in 2007.

 

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Feb 23, 2009
Crisis delays Asian projects
THE simple sign announces 'South Beach' and calls it 'Singapore's New Lifestyle Quarter' but there is little sign of life at the collection of dilapidated military buildings.

The abandoned camp was to become a US$1.1 billion (S$1.7 billion) luxury hotel, office, retail and residential project known as South Beach.

Instead, it has become a symbol of the global economic downturn. Construction of South Beach has not yet begun.

Cautious Asian property developers are delaying some residential projects and reconsidering others during the worldwide crisis which has tightened funding and crimped buyer interest, industry players said.

Tight lending conditions during the worst economic crisis since the Great Depression of the 1930s are partly to blame for deferrals, industry players said.

Pairote Sukjan, president of Buathong Property in Bangkok, told AFP the crisis prompted Thai banks to cut back on lending to both condominium developers and buyers.

'Several condominium projects were delayed or cancelled because developers could not get loans from banks easily,' Mr Pairote said.

Real estate companies are still having difficulty securing debt at reasonable spreads, Macquarie Research said.

Developers 'must face reality'
According to media reports, China's biggest property developer by market value, China Vanke, said it postponed two residential projects last year, one each in Shanghai and Shenzhen.

The company's Shanghai-based spokesman, Li Yan, confirmed this without giving specific reasons.

China Vanke said in its third-quarter financial report that it would adopt a more cautious approach towards expansion.

'Together with other strategies such as cutting prices, property developers are trying out all kinds of means to endure this cold financial winter,' said

Hui Jianqiang, an analyst with the research firm Shanghai E-house R&D Institute.

India's top listed property firm, DLF, recently reported that consolidated net profit for the third quarter fell 68.7 per cent, hit by a liquidity crunch and a slowdown in large construction projects.

Rajiv Singh, the firm's vice chairman, said it would exercise caution and focus on timely completion of existing projects.

Malaysia will face delays in completion as developers cope with a tight credit market and large future supply, said Chua Chor Hoon, senior director for DTZ Research.

But the situation in Hong Kong is more positive, analysts said. 'In Hong Kong, the future supply is tight due to shortage of land supply. Hence there has been no delaying of projects recently,' Mr Chua told AFP.

Still, analysts said the economic downturn has led to sharp price falls in Hong Kong's luxury market. Local media reported last week that developers are engaged in a price war, slashing values by as much as 40 per cent.

The Standard newspaper quoted Richard Lee Chin-shing of Hong Kong Property Services as saying developers 'are being forced to face reality and must sell properties at prices the market can bear'.

Regionally, government stimulus measures introduced to fight the economic crisis could entice potential property buyers, Keppel Land said in its January earnings report. For the moment, though, there is nothing to lure anyone through the battered and rusted gates of the South Beach site.


S'PORE DEVELOPERS HARDEST HIT
Singapore has been among the hardest hit.

Two years ago global real estate firm Jones Lang LaSalle described the city-state's market as the world's hottest. Property prices surged 31 per cent overall in 2007.

Now the island nation is dealing with an over-supplied market, said Nick Brooke, of Hong Kong-based Professional Property Services Ltd.

'Singapore is in free-fall,' said Mr Brooke, chairman of the regional real estate consultancy.

Since the fourth quarter of 2007, the number of Singapore private residential units 'in the pipeline' has decreased every quarter and more completion dates have been pushed back to 2012 and beyond, DTZ Research said in a February report.

Real estate firms 'are already delaying construction and launches' of projects, the property consultancy said.

Singapore-based developers, key players in the regional property sector, said they are reviewing or have deferred projects.

'With the current tight credit crunch and economic slowdown, the majority of developers will naturally defer the development of their projects and delay launches,' City Developments (CDL) said in November when it released third-quarter earnings and announced it would defer construction of South Beach, citing 'economic turmoil' and high construction costs.

South Beach is perhaps the highest-profile Singapore project to be delayed.

'As the Singapore economy grows from strength to strength, South Beach will be a beacon signalling exciting times ahead,' the CDL-led consortium said when it announced the development little more than a year ago, with a targeted 2012 completion date.

There were, it turned out, miserable times ahead.

Only 107 new private homes were sold in Singapore in January, the lowest level since June 2007, according to an analysis of government data by Jones Lang LaSalle.

Singapore-based CapitaLand, one of Asia's largest property firms, recently reported a sharp drop in fourth-quarter net profit.'We expect to delay some projects,' said the firm.

Another Singapore developer with a regional presence is Keppel Land, whose spokeswoman told AFP that deferrals are being considered, 'and we are reviewing the projects'.

More positive in Hong Kong
But the situation in Hong Kong is more positive, analysts said. 'In Hong Kong, the future supply is tight due to shortage of land supply. Hence there has been no delaying of projects recently,' Mr Chua told AFP.

Still, analysts said the economic downturn has led to sharp price falls in Hong Kong's luxury market.

Local media reported last week that developers are engaged in a price war, slashing values by as much as 40 per cent.

The Standard newspaper quoted Richard Lee Chin-shing of Hong Kong Property Services as saying developers 'are being forced to face reality and must sell properties at prices the market can bear'.

 

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March 2, 2009
Mapletree rejects appeal for rent cuts
Former JTC tenants vexed by refusal despite new landlord's offer to help them in other ways
By Francis Chan
TENANTS of former JTC Corp factories are vexed at the refusal of the new landlord, Mapletree Investments, to lower rents in these difficult times.
A group of 123 bosses - about 90 per cent of the tenants at the Toa Payoh North Industrial Estate - petitioned Mapletree last December to cut rents by 25 per cent to 30 per cent.

'They wrote recently and told me they will not accede to our request for the rent reduction,' said Mrs Lee Yoke Keng, director of UST Technology, a tenant there since 1974.

Like Mrs Lee, most tenants run small and medium-sized enterprises (SMEs) that have operated out of the former JTC property since as far back as the 1970s.

And like most export-driven manufacturing firms, a majority have reported a fall of 50 per cent to 80 per cent in sales, and are looking for ways to cut costs.

In response, Mapletree spokesman Shae Hung Yee told The Straits Times that it had considered the tenants' request but was unable to accede to the rental reduction. 'We cannot support such an across-the-board rental cut. We are running a business just like they are.'

Nonetheless, Mapletree - a wholly owned unit of Temasek Holdings - is trying various other means to help the tenants. These efforts, however, are cold comfort to SME bosses trying to manage declining order books and rising business cost amid increasing uncertainty.

The root of their frustrations: Had the property not been sold by JTC and taken over by Mapletree last July, they would have enjoyed 15 per cent rental rebates announced during this year's Budget.

As part of the Resilience Package, tenants of JTC, the Housing Board, the National Environment Agency and the Singapore Land Authority are entitled to a rental rebate of 15 per cent.

'I've been left out in the cold through no fault of my own,' said Mrs Lee. 'In the past, JTC's original objective was to provide a stabilising force in the rental market for industry but now we're under Mapletree, that becomes meaningless.'

JTC sold $1.7 billion worth of its flatted factories, stack-up buildings and ready-built assets to Mapletree last July.

'I've cut staff wages and my salary, so surely rental is something my landlord can work with me on,' said Mrs Lee.

A director of Small Tools Technologies, Mr Dick Lee, who leases five units at the property, echoed the sentiments. 'We need to let go of some units because business is not good - I'm down to just 20 per cent to 30 per cent in sales...but I've got to finish the lease.'

Mr Lee, who employs 130 staff, added: 'I don't want to cut any jobs, but if there are no orders, what can I do?'

Mr Sim Wee Chuan, managing director of Norton Precision Engineering, said: 'My orders are down 50 per cent but my rental will be up 10 per cent in March.'

While Mapletree does not intend to cut rent across the board, it will be passing on a 40 per cent property tax rebate - announced in the Budget - in full to tenants. Other measures offered to tenants include lease restructuring, instalment programmes and finding replacement tenants for all or part of their spaces.

'We feel this focused approach will better channel our limited financial resources to cases where help is most needed, rather than an across-the-board rental rebate,' Ms Shae said.

Tenants The Straits Times spoke to last week said recent lease renewals had seen rent increases of between 10 per cent and 15 per cent. Mr Alan Hoong, managing director of Apex Technologies International, says he has not seen any value-added or improvements to the property since Mapletree took over, despite the rent hike.

'All you need to do is go to the toilets. There are doors hanging on one hinge instead of two, flushing systems that are not working...They have not maintained the amenities.' he said.

Ms Shae says Mapletree is working on building improvements and asset enhancements. 'We will announce the initiatives to tenants as and when we are ready to do so,' she added.

A second petition to Mapletree was started last Friday. The tenants hope Mapletree will give a 15 per cent rent cut.


POOR MAINTENANCE

'All you need to do is go to the toilets...They have not maintained the amenities.'
Mr Alan Hoong, managing director of Apex Technologies International, who says facilities have not improved despite higher rents

LEFT ADRIFT

'In the past, JTC's original objective was to provide a stabilising force in the rental market for industry but now that we're under Mapletree, that becomes meaningless.'
Mrs Lee Yoke Keng, director of UST Technology

BAD BUSINESS

'We need to let go of some units because business is not good - I'm down to just 20 per cent to 30 per cent in sales...but I've got to finish the lease.'
Mr Dick Lee, a director of Small Tools Technologies

 

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March 1, 2009
'Flippers' back at condo launches
By Shuli Sudderuddin
Speculators were among buyers at the recent sell-out sale of all 293 units at Alexis @ Alexandra, a newly launched condominium.
Another project, Caspian, in Jurong, sold around 515 of its 712 units at about the same time.

'For sale' ads followed both launches last month - but sub-sale buyers are not rushing in.

Yesterday, there was no huge crowd, but a steady stream of more than 300 people turned up at the launch of developer Hiap Hoe's The Beverly in Toh Tuck Road.

Its spokesman did not say how sales went for the 31 apartments that were released in the 118-unit development at an average of $750 per sq ft.

Property agents reported signs of attempted 'flipping' - quick profit sales from having bought at the developer's price - but they also said few sub-sale buyers were biting.

They noted that in the case of Alexis and Caspian, shortly after they were launched, ads for subsales began to appear.

An agent who declined to be named said about 10 per cent of Alexis' 293 units were being flipped.

Property agents cited the relatively low pricing as reasons for buyers wanting to do a flip. Prices for Caspian apartments started at $580 psf, while those at Alexis @ Alexandra were priced on average at $850 to $1,100 psf.

In addition, property agent K.L. Goh, who is marketing two sub-sale units at Alexis, said: 'Although the market is bad, Alexis is located near Queenstown MRT station and is highly sought after.'

The owners of a two-bedroom apartment are asking for $880,000, up from the $760,000 they paid for it.

Property agent Leslie Yap, who is helping a buyer market a two-bedroom apartment at Caspian for about $580,000, said: 'She bought it at $527,400 and even if she can make a little profit, I think it's quite good in such a short time.'

Meanwhile, agents said the response from sub-sale buyers was still rather cautious. Mr Yap said last Friday that he had received only one call that day for the Caspian unit.

'Even though this is a very popular project, the response is still very bad and it may be difficult for buyers to make a profit right now,' he said.

Mr John Murray, 41, who works in IT company EMC, was at the launch of The Beverly.

He said: 'I've noticed that the prices are down from when I went house-hunting five or six months ago. This is actually a great time to buy.'

But he did not buy a unit yesterday.



March 1, 2009
property
Property market starting to stir
Success of two new launches encourages a few developers to release their projects
By Joyce Teo
Thanks to the mini-buzz created by two new successful launches - Caspian in Jurong and Alexis @ Alexandra - a few developers have decided to release their projects for sale.

It is an improvement, even if it is just a slight one, from the very sombre mood a month ago, when market watchers were expecting the lull in the market to continue.

Over the weekend, TG Development launched 30 units of the freehold, 102-unit St Patrick's Residences in St Patrick's Road in the East.

On average, prices start at around $675 per sq ft (psf) for a two-bedroom unit and rise to about $900 psf for a four-bedroom penthouse.

Unit sizes range from 1,152 sq ft for the two-bedroom units to 3,423sqft for the four-bedroom penthouses. Some three-bedroom units can cost just under $1 million.

The interest absorption scheme, which allows buyers - if they take a loan from the start - to defer making any payments beyond the initial down payment until the project is completed, is offered at a 3 per cent premium.

Marketing agent Savills said the condominium offers quality furnishings and fittings usually associated with prime projects, and that a few units have been sold since the preview a week ago.

Near Upper Bukit Timah, Hiap Hoe has launched The Beverly, its 118-unit condo in Toh Tuck Road.

Each unit is served by a private lift. Prices start at $648 psf; the average price is $750 psf. This means that the total price per unit should start from just below $1 million.

Unit sizes range from 1,120 sq ft for the two-bedders to 4,187 sq ft for the four-bedders. There are also double-storey penthouses from 2,099 sq ft to 3,757 sq ft. Hiap Hoe is not offering the interest absorption scheme.

Other projects expected this month include Double Bay Residences in Simei, The Arte in Thomson, Domus in Irrawaddy Road and an 18-storey project in River Valley.

These are in the mass- to mid-market categories that, unlike the high-end segment, are still attracting buyers.

New home sales in January had plunged to a new low as developers and buyers kept to the sidelines.

The two new projects that sold very well about two to three weeks ago - Caspian and Alexis - helped revive the market mood to a certain extent.

The Caspian showflat was packed during the preview, when 300 out of 712 units were sold at average prices starting from $580 psf. So far, more than 500 units have been sold.

The 293 Alexis units were all sold at $950 psf to $1,250 psf, but the absolute prices were reasonable, given that most units are small.

At a results briefing last Thursday, City Developments' Kwek Leng Joo cited the good take-up at the two projects as proof that there is still demand.

'The good response to recent launches is true,' he said.

Still, the stock market and buying sentiment remain weak.

Ms Phylicia Ang, director of Savills Residential, said: 'The affordability threshold is key at this point. In the current market, it is important to price projects at an attractive level to attract buyers.'

The UOL group should start selling the 646-unit Double Bay Residences near the Simei MRT station soon. It declined to give pricing details of the 99-year leasehold condo until the launch, but there is talk that prices will be around $650 psf to $680 psf.

The one-bedders start at 538 sq ft, the two-bedroom units from 915sq ft, while the big units can go up to 3,703 sq ft.

Along Thomson Road, The Arte is expected to be released for preview sale by the middle of the month.

Property agents have advertised the preview of the 336-unit, freehold condo at prices starting at more than $950 psf.

About half of the project, or 164 units, are three-bedroom units from 1,399 sq ft to 1,625 sq ft. Another 100 units are 1,873 sq ft four-bedders.

There are also advertisements for the preview of the 18-storey, 67-unit project in River Valley, which offers the interest absorption scheme. It has mostly small units - 32 are 635 sq ft apartments and 30 are 1,044 sq ft units.

A Chinese developer, Lakeview Developments, may also push out its 104-unit Domus this month.

High-end launches will likely be few and far between this year, as current demand is coming only from owner-occupiers or very small investors, according to a developer.

There should be more mass- to mid-market projects coming up in the next few months. These could include projects like the 99-year leasehold Ascentia Sky next to the Redhill MRT station. It offers two- to four-bedroom units from approximately 1,000 sq ft to 1,800 sq ft.

 

[jq75]

March 1, 2009
YOUR LETTERS
Time to license all estate agents
I refer to the article, 'License all agents, say experts' (Feb 8).
I have been a licensed property agent since 1992, and am a member of the Institute of Estate Agents (IEA) and operate my own agency. I fully support the move to license all estate agents.

Licensed property agents and IEA members have to adhere to proper conduct and abide by a code of ethics, failing which we will be penalised or even have our licences revoked.

Unlicensed property agents, on the other hand, can easily get away with unethical practices; they can simply quit their agencies and join other agencies.

The time is right for this issue to be looked into - for the good of the industry and the public.

Conee Wuan (Ms)

 

[jq75]

March 2, 2009
Police report over property owner using legal aid
Judge queries use of legal scheme meant for needy when he has properties in Malaysia
By K. C. Vijayan
A MAN who used a legal aid service meant for the needy despite being the co-owner of properties in Malaysia has been referred to the police.
Mr Ng Soy Pee, 60, had asked for help from the Law Ministry's Legal Aid Bureau to take up his case in the Family Court. He was seeking to have the monthly maintenance he was supposed to pay to his ex-wife slashed to just $50 from $800.

After the judge dismissed his request, she questioned, in a written judgment released in January, how Mr Ng was able to obtain a lawyer for the hearing through the state-funded legal aid scheme.

The Legal Aid Bureau told The Straits Times that it has since lodged a police report regarding this case. Its spokesman said it will follow up 'with the appropriate action' after the police probe.

When a person applies for legal aid, he has to disclose all his income and assets in a statutory declaration.

Under the Legal Aid and Advice Act, anyone who lies about his income and assets can face a fine not exceeding $5,000 or jail for up to six months, or both.

Those who make a false statutory declaration can be jailed up to six months or fined up to $1,000.

On top of that, anyone who obtains legal aid through fraud or misrepresentation can be ordered to pay the legal costs of the director (Legal Aid) or of the assigned lawyer. This may include the full legal costs of the case.

In Mr Ng's case before District Judge May Loh, it emerged that he co-owned two properties in Malaysia.

The judge also queried his stated income as he seemed to be able to depend on a woman, with whom he had a 'suspiciously close relationship', for money.

She noted that Mr Ng did not seem as destitute as he had claimed.

Given his circumstances, she questioned his use of a lawyer assigned by the Legal Aid Bureau, which only represents those with an annual disposable income of $10,000 and less, or in exceptional cases where hardship justifies aid as assessed by the bureau's director.

Judge Loh said she had considered ordering him to pay costs to the bureau director or to the other party. But the maintenance case before her was not about the question of fraud or misrepresentation.

Also, she was not privy to the documents Mr Ng hag given the bureau in his application for aid to find out if there was fraud or misrepresentation.

The Family Court, Judge Loh said, was not the right forum to debate if the 'means and merits test was properly applied'. She added: 'The provision of legal aid in this case may benefit from study from a policy standpoint in terms of the real legal costs incurred and the final cost order made.'

The bureau said that, on average, it cancels aid for about 12 cases every year because the applicant had abused its services.

It provides legal aid to about 480 needy cases each month.

Legal aid recipients have to pay a contribution, but the amount depends on the complexity of the case, the work done and the ability of the applicant to pay, said the bureau spokesman.

KhattarWong's deputy managing partner K. Anparasan said there was a need to send a strong deterrent signal to those who abuse the scheme.

'Those who do so are being grossly unfair as the same services could have been diverted to those who really need the aid, given the limited resources.'

vijayan@sph.com.sg

About the case

IN 2005, Mr Ng Soy Pee left the family home in Pontian, Johor, and moved to Singapore to live with a woman. In November 2006, he was ordered to pay $800 in monthly maintenance to his wife, Madam Huang Ai Hee. He has consistently failed to do so. They have two grown-up children who are engineers.
Madam Huang went to the court to seek the arrears, which came up to about $18,500. Mr Ng countered that the monthly amount should be slashed to $50 as he now earned only $750 a month, unlike the $3,000 before. He claimed an eye ailment and knee problems limited his ability to work.

But District Judge May Loh was sceptical his salary had really fallen so steeply. She also noted that Mr Ng co-owned two properties in Malaysia.

She dismissed his request to reduce the monthly maintenance.

 

[jq75]

March 6, 2009
Maybank makes fixed-rate mortgages cheaper
By Fiona Chan
MAYBANK aims to counter the rising popularity of floating-rate home loans by making its fixed-rate loans cheaper.
It has cut rates on its three-year fixed-rate package, it said yesterday.

Home owners will now pay 1.6 per cent for the first year, 2.2 per cent for the second, 2.9 per cent for the third and 3.75 per cent thereafter.

The final rate is the bank's board rate and subject to change, but Maybank said it has not been adjusted since it was implemented in February 2007.

Previously, the package charged 3.58 per cent in each of the first three years and 3.75 per cent thereafter.

Although the promotion is being advertised as a refinancing package, Maybank said the special rates are also open to new home buyers, and apply to both HDB flats and private properties.

But there are some conditions: The loans cannot be for more than 70 per cent of the property's purchase price, and the rates apply only to completed homes that are owner-occupied.

Maybank's move comes as more people turn to floating-rate loans pegged to transparent indicators such as the Singapore Interbank Offered Rate (Sibor) and the Swap Offer Rate (SOR).

These rates have plunged recently, making floating-rate loans more attractive. Sibor touched 0.68 per cent last month. With a mark-up of 1.25 percentage points - as in one package offered by HSBC Bank - a Sibor-pegged mortgage rate would come up to 1.93 per cent.

An HSBC spokesman said yesterday that most of its home loan clients opt for Sibor-pegged packages as 'they like the transparency these loans offer'.

Maybank does not offer Sibor-pegged loans, though it has floating-rate loans.

Its consumer banking head Helen Neo said Sibor is already close to 10-year lows and there is no guarantee it will continue the downward trend. She noted that rates can fluctuate by as much as 3per cent over three-year periods.

She said: 'We are confident people will welcome the peace of mind that fixed-rate packages can offer, particularly in times of such volatility.'

 

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March 8, 2009
Private estate to be elderly friendly
MacPherson Gardens is first to get ramps and slip-resistant footpaths in govt-funded upgrading scheme
By Mavis Toh
A wish list for senior citizens living in any housing estate would surely include slopes instead of kerbs, and covered drains to enhance wheelchair access.
Also in demand would be tactile road markings in bright colours to highlight changes in levels and directions, gentle slopes and ramps to mitigate changes in levels, and slip-resistant service roads and footpaths facing shops.

Barrier-free and elderly friendly features like these will be coming soon - to MacPherson Gardens.

It will be the first private estate to have these features under a government-funded Estate Upgrading Programme for private residential estates.

At a ground-breaking ceremony yesterday, guest of honour Fatimah Lateef said the mature estate, in need of upgrading and with a large number of senior citizens, was an ideal pilot project.

'Many of the senior citizens here are in need of barrier-free access and it's very timely to implement at a point when we need to cater to this group of people,' Dr Fatimah, an MP for Marine Parade GRC, said.

About 22 per cent of the 1,581 residents in 397 units in MacPherson Gardens are above 60 years old.

Project architect Huang Jia-yeu said: 'We aim towards a zero-barrier situation, whether for a person in a wheelchair or a parent pushing a stroller, to have no hassle in getting about.'

The upgrading work, expected to be finished in 15 months, will cost about $6.7 million.

In her speech, Dr Fatimah assured residents that, despite the ongoing global economic and financial crisis, the Government has planned for and set aside funds for its projects.

'For issues like education, upgrading and health care, we cannot compromise. These are basic needs so work has to carry on and life has to go on,' said Dr Fatimah.

Account assistant Regina Lim, 36, a resident, is sure the new features will enable her 74-year-old wheelchair-bound mother to move around with ease.

'Now, the kerbs are hard to manage but the barrier-free features will make it easier for me to take my mum to various amenities here,' she said.

Opera Estate, East View and Mount Sinai will be the next private estates in line for such upgrading.

 

[jq75]

March 11, 2009

Regent Court ruling explained

By K. C. Vijayan



THE difference between breaking even and making a profit was at the heart of a High Court decision to overrule the Strata Titles Board (STB) and let the Regent Court en bloc sale application proceed.

Justice Judith Prakash handed down her decision last October and released the grounds for it last week.

The legal row began when the STB rejected the estate's collective sale application in December 2007 after two objectors said they would suffer losses in the deal.

The objectors said their share of the sale proceeds would amount to $932,000; they had bought their flat for $993,000.

But Senior Counsel Hri Kumar and lawyers Gary Low and Benedict Teo from Drew & Napier argued in last October's appeal that the buyer, Regent Development, had undertaken to settle the gross difference of $93,935.75 once the sale went through.

The STB did not consider this payment and took account of only the objectors' purchase price and the en bloc sale price.

This meant the objectors would end up out of pocket, enough to abort the application, the STB ruled.

The lawyers argued that the board's approach would be 'highly prejudicial to the public interest in that it would unreasonably hinder en bloc sales'.

They said that as property prices fluctuated, it was possible to have at least one owner who bought a flat at a price below the en bloc price.

This would mean that even if 99 per cent of owners voted for the sale, it could not go through, they added.

Justice Prakash agreed and added that the Land Titles (Strata) Act empowered the STB to ensure the buyer agreed to make good any loss suffered by the objecting owner.

The STB still has to consider all the relevant evidence, including the concerns of eight other objectors besides the two referred to in the judgment, before making a decision on the en bloc application. Its hearing on the $34 million collective sale for the 49 units at the Serangoon Road site is expected later this month.

 

[jq75]

March 11, 2009

Regent Court ruling explained

By K. C. Vijayan



THE difference between breaking even and making a profit was at the heart of a High Court decision to overrule the Strata Titles Board (STB) and let the Regent Court en bloc sale application proceed.

Justice Judith Prakash handed down her decision last October and released the grounds for it last week.

The legal row began when the STB rejected the estate's collective sale application in December 2007 after two objectors said they would suffer losses in the deal.

The objectors said their share of the sale proceeds would amount to $932,000; they had bought their flat for $993,000.

But Senior Counsel Hri Kumar and lawyers Gary Low and Benedict Teo from Drew & Napier argued in last October's appeal that the buyer, Regent Development, had undertaken to settle the gross difference of $93,935.75 once the sale went through.

The STB did not consider this payment and took account of only the objectors' purchase price and the en bloc sale price.

This meant the objectors would end up out of pocket, enough to abort the application, the STB ruled.

The lawyers argued that the board's approach would be 'highly prejudicial to the public interest in that it would unreasonably hinder en bloc sales'.

They said that as property prices fluctuated, it was possible to have at least one owner who bought a flat at a price below the en bloc price.

This would mean that even if 99 per cent of owners voted for the sale, it could not go through, they added.

Justice Prakash agreed and added that the Land Titles (Strata) Act empowered the STB to ensure the buyer agreed to make good any loss suffered by the objecting owner.

The STB still has to consider all the relevant evidence, including the concerns of eight other objectors besides the two referred to in the judgment, before making a decision on the en bloc application. Its hearing on the $34 million collective sale for the 49 units at the Serangoon Road site is expected later this month.

 

[jq75]

March 16, 2009
Private home sales surge
By Joyce Teo
SALES of new private homes surged to 1,323 units in February, exceeding the 1,069 units launched, according to monthly figures released by the Urban Redevelopment Authority on Monday.
In January, developers launched just 204 units and sold a mere 108 units as buyers stayed away amid the gloom and Lunar New Year holidays. Sales of new private homes for the whole of last year reached only 4,264 units.

The strong February sales were boosted primarily by three projects, two of which were new launches that did exceptionally well given the current economic climate.

All 293 units at Alexis in Alexandra Road were sold at a median price of $1,083 per square foot, while Caspian in Jurong registered sales of 517 units at a median price of $603 psf.

A project launched sometime back, The Quartz in Buangkok Drive, also saw strong sales in February, with 168 units sold at a median price of $591 psf.

Jones Lang LaSalle's local director and head of research, South-east Asia, Dr Chua Yang Liang, said this is the first time total transactions have crossed the 1,000 mark in more than a year. 'This unusual demand blip is some 23 per cent from the historical peak attained in August 2007,' he said.

The surge in market interest was supported by affordable pricing and pent-up demand from almost five months of very limited transactions, he added.

Developers were only selling an average of about 350 housing units per month in 2008. This is comparatively lower than the 1,230 units sold monthly by developers in 2007, noted Knight Frank.

The non-landed housing market continues to dominate overall market activity. New landed housing supply remained low - at only 10 units from MontClair @ Whitley by East Coast Properties.

'While no sales were reported in this project, overall demand showed positive growth albeit marginal, with some 35 units landed properties absorbed islandwide,' said Dr Chua.

 

[jq75]

March 17, 2009
Home sales surge on new launches
Analysts ask if February spike from new heartland condos can be repeated

By Joyce Teo
SALES of new private homes surged dramatically last month to the sort of levels seen in the property boom.
However, some property analysts cautioned that the spike in sales to 1,323 units in February may have been a blip - attributable largely to two popular launches of mid-priced heartland condos.

Still, the new Urban Redevelopment Authority (URA) figures showed that last month's bumper sales were equal to more than a quarter of all the sales of new private homes last year - 4,264 units.

The February figure is also a huge jump from the dismal 108 unit sales in January as buyers stayed away amid deepening economic gloom and Chinese New Year festivities.

'It has been more than one year since we last saw total transactions surpassing the 1,000 mark,' said Jones Lang LaSalle's local director and head of research, South-east Asia, Dr Chua Yang Liang.

The launch of new units was also up sharply last month, to 1,069 units from just 204 units in January.

Analysts say two newly-launched heartland condos, Alexis and Caspian, proved especially popular with upgraders who had been biding their time amid the sharp run-up in prices during the boom.

All 293 units at Alexis in Alexandra Road were sold at a median price of $1,083 per sq ft (psf) while Caspian in Jurong sold 517 units at a median price of $603 psf. Prices started from $450,000 at Alexis and $340,000 at Caspian.

A third project, originally launched in 2006, The Quartz in Buangkok Drive, sold 168 units last month at a median price of $591 psf after it was relaunched at a lower price. The 99-year leasehold condo was first released at $490 psf on average, which rose to $650 psf in 2007.

Apart from these three, no other project had notable sales. Livia in Pasir Ris launched another 80 units last month, selling just 16 at a median price of $620 psf. A new launch, The Beverly in Toh Tuck Road, offered 31 units last month but sold none. It sold a few this month.

For a second straight month, no units were sold at the decidedly upmarket price range of $2,500 psf to $3,999 psf, said Knight Frank's director of research and consultancy, Mr Nicholas Mak.

CBRE Research executive director Li Hiaw Ho said the top three sellers were projects in the heartland, where a majority of the buyers are HDB upgraders.

They have been waiting on the sidelines during the run-up of home prices in 2006-2007, when there was a lack of mass-market projects for sale, he said.

Apart from pent-up demand, consultants said sales at Caspian and Alexis were driven by the availability of small, affordable units - mainly under $800,000.

Private home sales for the January to March quarter could be about 1,800 to 2,000 units, according to Mr Li, going by the 'brisk sales' at Double Bay Residences, Suites @ Kembangan and others so far this month. The 646-unit Double Bay in Simei has, for instance, already posted sales of at least 210 units at $600 psf to $650 psf since its March 6 preview.

 

[jq75]

March 18, 2009
Government to tighten rules for housing agents


THE National Development Ministry is reviewing the framework that property agents work under given the recent spate of unethical practices that have surfaced.
Minister Mah Bow Tan told The Straits Times: 'The status quo, in my view, is not tenable. I think we need to do something.'

The MND is looking to see if it could get property agencies to keep a closer watch on their agents, among other things.

'Surely the agencies, who I believe share in the commissions of the agents, have a responsibility too. Whoever is offering a service for a fee must have a responsibility, a duty to maintain certain standards,' he said.

It may even take even tougher measures if agencies do not rein in their agents, said Mr Mah.

'We have to see how agents do not mislead, and if they do mislead, they engage in unlawful practices, what action we can take against them.'

This is the first time that the Government has hinted at the possibility of mandatory regulations for the real estate industry. For years, it has maintained that the industry should regulate itself despite the fact that various such attempts have been found lacking.

Although housing agencies are licensed by the Inland Revenue Authority of Singapore, the over 20,000 housing agents here are not regulated. They do not need to meet minimum standards and can continue in the trade even if they are found to have done wrong.

In a highly publicised case last month, a couple took ERA Realty Network to court after they sold their downtown apartment for $688,000 in 2007 and learned subsequently that their home was bought and resold by the wife of their agent's boss for $945,000. The couple won the case and have since received the difference of $257,000 back from ERA.

ERA had argued during the case that the agency was not liable for the actions of its agents because they are considered independent contractors.

Years of infighting have left housing agencies unable to agree on common standards for self-regulation.

The Institute of Estate Agents has only a small fraction of agents as its members and there is confusion over what it takes to be an accredited agency under the four-year-old Singapore Accredited Estate Agencies (SAEA) scheme.

The board behind the programme initially required accredited agencies to have all their agents pass the Common Exam for House Agents (Ceha) by this year, but introduced a scaled-down test called the Common Examination for Salespersons (CES) just before that deadline.

Mr Mah said: 'I don't think it worked well, based on all accounts...It's not satisfactory. The whole current system is not satisfactory.'

His comments buoyed industry players like Mr Jeff Foo, the president of the Institute of Estate Agents, who said: 'It's about time for a change. We have to do things in the interests of the consumer.'

But the chairman of the SAEA, Mr Peter Koh, maintained that voluntary accreditation was making 'satisfactory progress'. About 300 agencies with more than 6,000 agents under them have been accredited so far.

'With government support, we can do better. We are doing our level best given that it's so fragmented.'

TAN HUI YEE

 

[jq75]

March 21, 2009
Orchard prime rents may fall 20%
Challenging retail sector is forcing landlords to look at making cuts
By Joyce Teo
IN ORDINARY times, the move to transform Singapore's premier shopping strip with three glitzy new malls would mean higher rents.
But the latest property industry report suggests that Orchard Road prime rents could fall further - by 15 to 20 per cent - by the end of the year.

A weakening economy, a shift away from luxury goods, and shrinking tourist arrivals spell gloom for hard-pressed retailers with space in the area.

Consultancy ** Richard Ellis (CBRE) says rents will fall as landlords pass on property tax rebates, extend rent-free periods, set lower rent levels for new space, or cut existing rents.

So far this quarter, prime rents have eased 3.3per cent from late last year to an average of $34.90 per sq ft (psf) a month, according to its latest data. The fourth quarter last year saw the first rent fall in the shopping belt in five years.

The retail sector is becoming increasingly challenging as leasing demand is subdued by new mall completions about to offer more retail space in the area.

Already, many retailers are crying out for rent cuts from landlords as they see the economic crisis further undermining already-weak sales.

Suburban malls, which experts have said should be more resilient than prime Orchard Road malls, are also feeling the impact of the gloomy climate.

Prime suburban rents slid by a smaller 2.4per cent from the fourth quarter to $28.30 psf per month, said CBRE.

For the whole of this year, they could decline by 10 to 15per cent, it said.

The somewhat smaller expected drop in suburban mall rents reflects their greater resilience to the recession.

They benefit from shoppers living nearby and from steady demand for basic goods. They also face less competition from new malls, said CBRE's director of retail services, Ms Letty Lee.

'As tenant retention becomes increasingly critical to shopping malls, more landlords are likely to initiate rental incentives or repackage rental structures.'

Just this week, the Singapore Retailers Association (SRA) intensified its call for rent cuts by getting three other associations on board. They say they are banding together as calls for rental rebates have gone unheeded, and they warn that many retailers will go under if nothing is done soon to bring rent levels in line with the much weaker sales environment.

'The issue which is most pressing now and which retailers are still very concerned about is existing tenancies with high rental rates which were locked in during the good times, and which are eroding their businesses now, when sales revenues have dropped significantly,' said the association's executive director, Ms Lau Chuen Wei yesterday.

'These are the ones in danger of closure if nothing is done to stem the losses. And closure means job losses.'

SRA had originally hoped landlords would reduce rents to 2005 levels 'which in many cases would be about 50per cent of current rates', said Ms Lau.

But she said that tenants are realistic and recognise that 'this is probably not possible'. With this in mind, SRA has moderated its position to seek an average 20 to 30per cent cut in rents, particularly for existing leases.

Ms Lau added that the industry is not expecting rental rates to be reduced on a long term basis, but rather for, say, six months, as the market is very volatile.

New signings are less of a concern to SRA as these retailers will be more ready to refuse a store location if the rental is not financially viable, said Ms Lau.

Indeed, new malls opening this year have witnessed some tenant pull-outs due to the weak market. This happened at City Square Residences in Kitchener Link, though developer City Developments said the vacant prime space was quickly filled up.

joyceteo@sph.com.sg

 

[jq75]

March 21, 2009
KepLand to defer luxury project
Madison joins others in weakening market that have been put on hold
By Jessica Cheam
PROPERTY developer Keppel Land (KepLand) yesterday announced that it will defer the construction of its 56-unit development, Madison Residences, because of weak market conditions.
The project has not been launched.

Luxury condos such as the Madison have fallen out of favour in recent times as buyers turn to smaller, more affordable apartments.

Some earlier reports said 'some units' had been sold at the preview of the Bukit Timah condo for a median price of $1,801 per sq ft (psf).

However, KepLand said yesterday only one sale had been made, and that had been cancelled 'by mutual agreement'. It declined to give details.

Analysts that The Straits Times spoke to said it was not uncommon for developers to offer to buy back units sold at the preview of a project if there were changes to its development.

A search on the Urban Redevelopment Authority's website showed a single caveat lodged for a 1,776 sq ft unit at $3.1 million - or $1,745 psf - in September last year.

'Given current market conditions, there is no urgency to proceed with the construction of Madison Residences. The launch or when the construction will resume for the project will depend on market conditions,' KepLand told The Straits Times.

Construction was meant to start last June and take 21/2 years. Construction and property group KSH Holdings had won a $53 million contract from Keppel Land Realty to build Madison, it was reported.

The project consists of luxury three- and four-bedroom apartments that range in size from 1,460 sq ft to 4,000 sq ft.

Madison is the latest in a string of projects in the local property market that have been deferred in the wake of the global economic crisis.

Luxury units seem to have been hit harder, noted analysts, as buyers now prefer mass-market, lower-priced condos.

KepLand said in January that it would consider delaying the construction of some of its projects to save costs.

Some measures unveiled in January by the Government in the Budget also gave developers greater flexibility in terms of selling their residential units.

The measures include a one-year extension of the completion period for private residential projects. Also extended was the period in which developers with qualifying certificates need to dispose of all residential units, from two years to four. They can rent out unsold units during this time.

** Richard Ellis executive director Joseph Tan said there had been examples in the past of developers offering to buy back units if there were changes to the development plans. He noted that it was also not unusual for a project to be deferred even after the preview.

In its statement to the Singapore Exchange, KepLand said the deferment is not expected to have any significant impact on the company's earnings per share for the current financial year.

jcheam@sph.com.sg

 

[jq75]

March 18, 2009
Government to tighten rules for housing agents


THE National Development Ministry is reviewing the framework that property agents work under given the recent spate of unethical practices that have surfaced.
Minister Mah Bow Tan told The Straits Times: 'The status quo, in my view, is not tenable. I think we need to do something.'

The MND is looking to see if it could get property agencies to keep a closer watch on their agents, among other things.

'Surely the agencies, who I believe share in the commissions of the agents, have a responsibility too. Whoever is offering a service for a fee must have a responsibility, a duty to maintain certain standards,' he said.

It may even take even tougher measures if agencies do not rein in their agents, said Mr Mah.

'We have to see how agents do not mislead, and if they do mislead, they engage in unlawful practices, what action we can take against them.'

This is the first time that the Government has hinted at the possibility of mandatory regulations for the real estate industry. For years, it has maintained that the industry should regulate itself despite the fact that various such attempts have been found lacking.

Although housing agencies are licensed by the Inland Revenue Authority of Singapore, the over 20,000 housing agents here are not regulated. They do not need to meet minimum standards and can continue in the trade even if they are found to have done wrong.

In a highly publicised case last month, a couple took ERA Realty Network to court after they sold their downtown apartment for $688,000 in 2007 and learned subsequently that their home was bought and resold by the wife of their agent's boss for $945,000. The couple won the case and have since received the difference of $257,000 back from ERA.

ERA had argued during the case that the agency was not liable for the actions of its agents because they are considered independent contractors.

Years of infighting have left housing agencies unable to agree on common standards for self-regulation.

The Institute of Estate Agents has only a small fraction of agents as its members and there is confusion over what it takes to be an accredited agency under the four-year-old Singapore Accredited Estate Agencies (SAEA) scheme.

The board behind the programme initially required accredited agencies to have all their agents pass the Common Exam for House Agents (Ceha) by this year, but introduced a scaled-down test called the Common Examination for Salespersons (CES) just before that deadline.

Mr Mah said: 'I don't think it worked well, based on all accounts...It's not satisfactory. The whole current system is not satisfactory.'

His comments buoyed industry players like Mr Jeff Foo, the president of the Institute of Estate Agents, who said: 'It's about time for a change. We have to do things in the interests of the consumer.'

But the chairman of the SAEA, Mr Peter Koh, maintained that voluntary accreditation was making 'satisfactory progress'. About 300 agencies with more than 6,000 agents under them have been accredited so far.

'With government support, we can do better. We are doing our level best given that it's so fragmented.'

TAN HUI YEE

March 20, 2009
Punish rogue property agents
I REFER to Wednesday's report, "Government to tighten rules for housing agents".
I agree with National Development Minister Mah Bow Tan that certain standards must be set and tougher measures must be taken against agencies that fail to rein in their agents.

Punitive action - and not the passing of examinations - is the best way to deal with unethical agents.*

Examinations will not prevent a similar incident from happening in the future as this is an issue that involves moral values, not academic knowledge, of the agent.

For example, an agent may pass the Common Examination for House Agents and represent an accredited agency, but continue to make "secret" profits from other sales transactions if he joins another real estate company.

(It is my understanding that some companies still accept agents who have been convicted in court.)

I suggest the following:

1. Housing agencies should do a cross-check on agents who have resigned or had their services terminated by another agency. If they are found to have any previous criminal convictions, they must be barred permanently from returning to the industry.

2. Impose a heavy fine on agents who make "secret" profits at the expense of their clients.

Raymond Lim