Property News!

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May 3, 2010
Realty firms halt lending activities
Move comes in wake of MND plans to curb milking of flat sellers
By Mavis Toh
PROPERTY firms with moneylending arms that do a roaring business are now putting the brakes on their ventures.

Their activities came under the spotlight last Tuesday when Minister of National Development Mah Bow Tan said in Parliament that his ministry is drafting measures to stop moneylenders from exploiting cash-strapped flat sellers.

Property agency owners and moneylenders told The Straits Times there are about 10 realty firms that hold moneylending licences and operate credit arms along with their property businesses.

Moneylenders' Association of Singapore president David Poh estimates that there are at least another 30 individual property agents who are also licensed moneylenders.

There are currently 260 licensed moneylenders in Singapore, up from 173 in 2008 and 169 in 2007.

The draw? Licensed moneylenders are currently free to set interest rates for loans above $3,000.

Mr Poh said: 'Some of these black sheep charge interest up to 40 per cent and have hidden costs so the sellers don't get back much in their sales proceeds.'

Typically, flat sellers in urgent need of cash could apply for loans ranging from $5,000 to $100,000. The lenders in turn charge interest ranging from 1 to 10 per cent, depending on the loan amount, repayment period and their income.

A legal loophole allows moneylenders to lodge a caveat on the property to ensure they get the first bite of the profits when the flat is sold. This practice is not illegal, and neither is that of agents referring flat sellers to moneylenders for a fee.

However, industry players told The Straits Times that there is a conflict of interest. A property agent who is giving a loan to the home seller may no longer be objective. He may delay closing the property transaction to make the seller pay more in loan interest, or close it at a lower price so that the seller takes larger loans to raise the money needed.

PropNex chief executive Mohamed Ismail said business has proven so profitable that moneylenders are texting agents urging them to bring in flat sellers.

Mr James Lee, chief of James Lee Realty, which also has a credit service, said he sees at least 20 HDB flat sellers asking for loans each month.

Most borrow between $5,000 and $20,000: 'If we don't lend them the money, they will go to illegal moneylenders. While there are some unscrupulous lenders, you can't lump us all together.'

However, with the Ministry of National Development (MND) announcing a review of measures to curb such practices, the realty firms are now taking a step back and adopting a wait-and-see attitude.

Mr Lee has stopped giving loans to sellers: 'The rules are messy now, so we just want to wait till things are clearer.'

The chief executive of MindLink Realty, Mr Merson Chow, who also has stakes in two moneylending firms, has stopped lodging caveats.

'This means we don't extend large loans between $50,000 and $100,000 because it's risky without a caveat,' he said, adding that 20 per cent of borrowers default on payments.

His loan business started five years ago when he realised that two in every 20 sellers would ask his agents to recommend a moneylender they could trust.

Mr Mohamed Ismail wants it made illegal for agents to hold moneylending licences. He fired one such agent last month. 'I've made it a policy that any agent with a moneylending licence can't be a Propnex agent. We need tougher rules to weed them out from the industry,' he said.

When contacted, MND said it is working with the relevant authorities on legislative amendments to prevent flats from being used as a security for debt.

Advising owners against selling their flats to raise money, a spokesman said: 'While they may realise some cash from the sale, they will face a more serious problem of finding another roof over their heads.'

May 6, 2010
Estate agents shouldn't work with moneylenders
I REFER to Monday's report, 'Realty firms halt lending activities'.

As reported, there are currently some real estate agencies and agents who are licensed moneylenders. Although the moneylending business is typically constituted as a separate legal entity, the individuals behind it are essentially the same as those of the real estate group.

At present, there is no prohibition against a real estate agent holding a moneylender's licence and vice versa. However, when either scenario occurs, the likelihood of collusion between the credit companies and estate agents becomes real.

Already, the report mentioned 'black sheep' moneylenders cum estate agents who have abused the trust of cash-strapped HDB sellers and exploited them. The sellers who had hoped for a breather were smacked with exorbitant interest rates and possibly robbed of the lion's share of their sales proceeds in other 'hidden costs'.

Singapore Accredited Estate Agencies (SAEA) urges estate agencies and agents who are licensed moneylenders to exercise caution and ethical conduct in their professional relationships with their clients who are HDB sellers. Although legal, it is not advisable for the two businesses to mix.

We do not support the practice of estate agents working with moneylenders and referring their clients to them for introducer's fees or to take advantage of their clients' financial plight.

Estate agents should not introduce HDB sellers to moneylenders for a fee as this is not within the ambit of their job and the real estate brokerage service rendered. In fact, estate agents who do so stand in potential breach of fundamental ethical obligations to their clients and may be perceived as lining their own pockets rather than acting in the interests of their clients.

SAEA will not hesitate to act against such agents should they be accredited.

Instead, according to the HDB resale checklist for sellers, estate agents should, among other duties, help HDB sellers work out their estimated sales proceeds before selling, and upon resale, sellers must discharge their outstanding mortgage loan and refund the Central Provident Fund (CPF) monies used to buy the flat with interest to their CPF accounts. Estate agents should also advise sellers to plan for their next home before they sell their flat, and should the sellers wish to buy another HDB flat, they will need to know if they are eligible for an HDB or bank loan.

If HDB sellers are in dire financial need, there are other avenues of help to which estate agents can refer their clients so they do not lose the roof over their heads.

Dr Tan Tee Khoon
Chief Executive Officer
Singapore Accredited Estate Agencies

 

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May 7, 2010
Govt steps in to curb errant property agents
New statutory board to regulate industry after rise in complaints
By Joyce Teo
Key elements of new framework
Property agents need to be registered with a new statutory board called the Council for Estate Agencies. The board will also be licensing estate agencies.
Agents must pass a mandatory industry examination, undertake mandatory continuing professional development of six hours a year, and have a minimum of four GCE O-level passes or the equivalent.
Agents will not be allowed to represent both the seller and buyer in the same transaction.
Estate agencies and agents must not be a licensed moneylender or an employee of a licensed moneylender.
New legislative powers and mechanisms will be introduced to discipline agencies and agents. Such actions include warnings, fines, suspension and debarment of agencies and agents.
A public registry of estate agencies and agents will allow consumers to check on the particular agency or agent they are engaging.

The real estate sector has faced complaints such as agents failing to give proper advice, using misleading sales tactics and not honouring deals. -- BH FILE PHOTO

NEW rules to nail errant property agents and protect Singapore's home buyers and sellers will be introduced by the Government.

It is planning a new statutory board - the Council for Estate Agencies - to regulate the industry and require all property agents to sit examinations, register and stick to a binding code of ethics and conduct.

Agents and agencies that flout the council's rules will be subjected to a range of disciplinary measures, including debarment.

A key impetus for the Government's get-tough initiative is the rising number of complaints made against property agents in recent years.

The Consumers Association of Singapore (Case) received 358 real estate cases, including complaints, in the first four months of this year, against 1,079 cases last year and 1,100 in 2008.

And there has been a range of gripes from consumers about agents failing to give proper advice, using misleading sales tactics and not honouring agreements.

Players in the largely fragmented and self-regulating industry had called for a mandatory licensing scheme for individual agents to help crack down on errant operators switching firms after being fired.

The existing voluntary accreditation programme had allowed some agents to rejoin the industry after serving prison sentences for fraud.

The changes - set to be introduced in the second half of the year - are destined to give regulation more focus, given that the Ministry of National Development has opted for a central body to license agencies and register agents.

Under the new regime, all estate agents will have to register through their agencies with the Council for Estate Agencies, which will also take over the Inland Revenue Authority of Singapore's role in licensing estate agencies.

To practise, property agents will need to pass a mandatory industry examination and undertake compulsory continuing professional development.

Those who have already passed an industry exam will not need to sit the new test.

New agents must have a minimum of four GCE O-level passes or the equivalent.

Licensed moneylenders, or employees of a licensed moneylender, are to be prohibited from becoming an estate agent or agency, and vice versa.

There have been reports of moneylenders trading as estate agents and exploiting cash-strapped HDB flat sellers. And National Development Minister Mah Bow Tan had announced in Parliament that new measures were being drafted to tackle the issue.

Additionally, the new regulations will set out standard prescribed estate agency agreements for sale and leasing deals.

Measures aimed at avoiding conflicts of interest are planned and will mean, for example, that agents will not be allowed to represent both the seller and buyer in the same transaction.

To keep errant players in check, the framework will have the backing of legislation and disciplinary mechanisms. This will give the Council for Estate Agencies the power to hit agencies and agents with warnings, fines, suspension and debarment.

ERA Asia-Pacific associate director Eugene Lim welcomed the introduction of the new controls.

'Errant agents can now hide behind the companies. With the change, they can be struck off the register and won't be able to practise any more,' he said.

In the area of consumer dispute resolution, agencies and agents will need to participate in mediation and adjudication.

This process will tap existing facilities, such as consumer watchdog Case and the Singapore Mediation Centre, instead of a special tribunal as earlier suggested.

The changes being implemented are going to mean that the Singapore Accredited Estate Agencies (SAEA) will no longer be accrediting agents.

SAEA chief executive Tan Tee Khoon said that the SAEA can help small firms with mediation services for dispute resolution and training, given that agencies will have to set up dispute resolution and training systems for their agents.

Mr Jeff Foo, president of the Institute of Estate Agents (IEA), said that the changes would mean the IEA becoming more relevant, given that as the platform and voice of the real estate sector, it can provide feedback to the new statutory board.

joyceteo@sph.com.sg

What it should have been
published on 8th May, 2010

AN ACCOMPANYING information box with yesterday's report, 'Govt steps in to curb errant property agents', said wrongly that real estate agents must spend six hours a day on training for continuing professional development.

It should be six hours a year.

We are sorry for the error.

 

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May 7, 2010
16 bids for Hougang housing site
By Esther Teo
RESIDENTIAL development sites continue to be snapped up aggressively with the tender of a site zoned for landed or apartment housing on Tampines Road receiving a total of 16 bids.

Fragrance Properties topped the tender, which closed yesterday, with a bid of $16.25 million - or $405 per sq ft per plot ratio (psf ppr)- just beating Whye Wah Group, with $15.5 million.

Fragrance's bid was also more than double the lowest bid of $7.5 million - or $187 psf ppr - by Kim Hoe Corporation.

The 99-year leasehold site near Hougang Avenue 3 has a land area of 28,656 sq ft and a maximum gross floor area of 40,118 sq ft, the HDB said. It was triggered for sale when a developer lodged an acceptable offer of $6.5 million.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak said this high participation rate indicated that both large and small developers were still very hungry for development sites and bullish on the property market next year.

'There is a shortage of small residential development sites in the present Government Land Sale (GLS) programme that cost less than $30 million, which smaller developers could easily acquire,' he said.

The Government should thus consider including a few more of these small sites in the next GLS programme, he said.

Mr Mak noted that the highest bid could translate into a break-even price of $720 psf to $750 psf, with the developer likely to develop small apartments on this site to maximise the psf selling price.

 

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May 8, 2010
Towards better property agents
New regulations include higher entry level and mandatory examination
By Joyce Teo, Property Correspondent

TOUGH new rules for property agents are likely to make it harder for people to quickly switch careers and jump into the real estate market when it turns red-hot.

The upcoming regulations will raise the entry barrier far higher and so deter agencies signing up new sales staff - full or part-time - at a moment's notice.

The rules announced on Thursday will require Singapore's 25,000 or so agents to register through their firms at a new statutory board called the Council for Estate Agencies.

They will also have to pass a mandatory industry exam and undertake continuing professional development of six hours a year. Agents will also need to have four GCE 'O' levels.

This is a sea change. There are now no educational requirements and no mandatory exam, so anyone - from housewives to executives - is able to easily try his luck as an agent.

'Those who may want to make a mid-life career switch into property won't be able to do so if they do not have the four Os,' said ERA Asia-Pacific associate director Eugene Lim.

The buying and selling of property is probably a person's biggest investment and all deals involve paperwork, so this new rule will protect consumers, he added.

Existing agents will be exempted from this educational qualification criterion and those who have passed an industry exam will not need to take the new test.

The new rules - they will kick in once legislation is introduced in Parliament in the second half of the year - will outlaw an agent representing both buyer and seller in a transaction.

Some agents dealing in HDB flats may see a drop in their income if they are not willing to co-broke, said C&H Realty managing director Albert Lu.

Agents representing the buyer and the seller in the same transaction is a widespread practice in the HDB resale market, even though there is a conflict of interest.

Such agents collect commissions from both the seller (usually 2 per cent) and the buyer (often 1 per cent) if the buyer does not have an agent, said Mr Lu.

Agents handling rental deals who are not willing to co-broke may see a drop in income of up to 50 per cent, he added.

These agents usually charge the landlord a commission of one month's rent for a two-year lease and the same commission for the tenant if he does not have an agent.

The new regime is in response to rising complaints against errant agents in what some have termed a 'cowboy' industry.

Dodgy agents have been known to rejoin the industry right after getting out of jail for fraud but this will be impossible under the new rules.

Agents will also not be able to represent more than one agency and will have to wear a standard agent identification card when on the job.

And a public registry of real estate agencies and agents will be set up so that consumers can check on a particular agency or agent. The registry will list any disciplinary action taken over the past three years but it still may not be enough.

ECG Property Group's chief executive Eric Cheng said: 'All the agency bosses will have to work together to police the industry.

'A lot of cowboys are still in the industry. The new rules will help improve the industry but it will not clean it up. There must be constant improvement.'

The impact of the new rules may be felt more when they are clearly defined and in effect, said ERA's Mr Lim.

Industry experts say the ranks of agents will not shrink considerably, though there will be dropouts.

About 10 to 20 per cent of agents may retire within two years if they are not up to the mark as the new rules will require them to take an exam, said PropNex chief executive Mohamed Ismail, who is also president of the Institute of Estate Agents.

Agents who have not passed any existing industry exam will have one year after the start of the new exam to pass it.

'The whole idea behind the new rules is to remove those who don't fit the bill or who don't behave,' said Mr Lim.

About 1,700 agencies with 20,000 to 25,000 agents deal in HDB and private homes.

Knight Frank's managing director of residential services, Mr Peter Ow, said: 'The framework is a good start. The impact won't be felt immediately but perhaps over a four-to-five-year period. The standard of the industry will improve.'

 

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May 8, 2010
'Mickey mouse flats' still selling well
Record number of flats of 500 sq ft or less sold last year; demand still strong so far this year
By Esther Teo
THE BUYERS
'When these units are eventually completed, the most likely occupier profile would consist of expatriate tenants or Singaporean single professionals.'

** Richard Ellis residential executive director Joseph Tan

SALES OF RESIDENTIAL UNITS OF 800 SQ FT OR LESS
SALES of small apartments - the so-called mickey mouse flats - skyrocketed last year and are still going strong this year.

There were 696 flats of 500 sq ft or less in size sold last year, based on caveats lodged with the Urban Redevelopment Authority's Realis system.

That is the highest level since such records began in 1995.

And sales of units between 500 and 800 sq ft hit 1,285 last year, according to a report from property firm ** Richard Ellis (CBRE).

Buyer interest is still strong with 533 units of 800 sq ft or less sold in the first four months of this year. The total number of flats of 800 sq ft or less in the primary residential market comprises about 23 per cent of the 2,300 caveats lodged since yesterday, CBRE said.

CBRE residential executive director Joseph Tan said: 'What started as a notable trend in 2009 appears to have caught on in the early part of 2010.

'Small-format units form a significant proportion of the overall burgeoning sales volume that we have seen in the first four months of this year.

'Developers continue to provide these small- format units and home buyers seem to be biting.'

These units are commonly included as one-bedroom flats in project launches. The Altez, for example, has a substantial number of units ranging from 527 to 816 sq ft while the 134 one-bedroom units at 76 Shenton range from 592 to 624 sq ft.

Buyers like the relatively smaller price quantum for such units, making them more affordable compared to family-size flats.

Developers can also maximise their returns by selling these units at a higher price per sq ft (psf), CBRE said.

Mr Tan added: 'When these units are eventually completed, the most likely occupier profile would consist of expatriate tenants or Singaporean single professionals.'

As lifestyle choices in Singapore continue to evolve in a cosmopolitan environment and the demand for these smaller units remains strong, developers will continue to provide small-format units in the residential market, he said.

DMG & Partners Securities property analyst Brandon Lee said small units were the main draw during his visit to small to medium-sized projects last weekend.

Small units, which comprise 70 per cent of Oxley Ventures' Parc Somme near Farrer Park, had a swift take-up, he said.

One-bedders of between 300 sq ft and 450 sq ft fetched $1,350 psf while two-bedders from 550 to 670 sq ft were selling for $920 psf.

Mr Steven Tan, executive director of OrangeTee's residential division, said the trend for shoe-box- size units took off only a couple of years ago.

'The most important thing is to notice the layout of the unit. It's better to have just two bedrooms in an 800 sq ft apartment than squeezing three bedrooms in and making the place unattractive due to its tight space,' he added.

Although expatriates have been returning to Singapore, Mr Tan cautioned that if the economic recovery falters, owners of small units might struggle to find tenants.

 

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May 9, 2010
SPECIAL REPORT: MONEYLENDING OUTFITS
A peek into the business of quick cash
Spike in number of moneylenders in the last two years; the criteria are straightforward but the job has its risks
By Irene Tham , Shuli Sudderuddin and Sumita Sreedharan

Most moneylenders are one-man shows operating out of a broad range of locations throughout the island. -- ST PHOTO: ALPHONSUS CHERN

Mr G. Chua became a moneylender last year because he felt it 'complemented' his job as a real estate agent.

But he will end his lending business soon because of new rules that prohibit licensed moneylenders from working as property agents and vice versa.

The rules, announced last week and to be introduced in the second half of this year, aim to curb errant estate agents and protect home buyers and sellers.

'I have to give one up,' said Mr Chua, 43, last Friday.

'My focus now is to collect the money owed to me, then I'll 'close shop',' he said, adding that he has stopped accepting new clients.

He said he started the business 'as a value-added service' to home sellers as many needed money urgently.

He entered the industry with about $100,000 capital which he borrowed from a bank, friends and from his own savings.

He operates his moneylending business from a desk in a pleasantly decorated office in a HDB rental office in Toa Payoh Central.

He declined to name the property agency he is affiliated to.

He shares the 35 sq m space with four others. Like him, they are one-man moneylending 'companies' which basically comprise the lender working from a table with a computer and a phone.

One of them is also a property agent cum moneylender. Mr E. Chua, 42, said he resigned from his property agent job last Friday to focus on moneylending.

Moneylenders like them have been under the spotlight following reports of how cash-strapped HDB flat sellers may be exploited.

For instance, an agent who is giving a loan to a home seller may delay closing the property transaction to make the seller pay more in loan interests. The agent may also close the transaction at a lower price so that the seller takes larger loans to raise the money he needs.

To rein in such rogue behaviour, National Development Minister Mah Bow Tan announced in Parliament that new rules were being drafted.

They include a new statutory board - the Council for Estate Agencies - to regulate the industry and impose disciplinary measures like fines and debarment of errant agents.

Industry players say that the number of moneylenders who double as estate agents is small.

Mr Steven Tan, executive director of OrangeTee's residential division, said: 'I do not know anyone who does double duty. Real estate firms do not encourage this. Moneylenders do not usually take up an estate agent job once we make our stand clear.'

What is clear, though, is that the number of licensed moneylenders has shot up in the last two years, with many specialising in 'housing loans'.

There are currently 260 licensed moneylenders, up from 173 in 2008 and 169 in 2007.

In 2008, the Moneylending Act was amended to remove the cap on maximum interest rates that lenders can charge.

Previously, licensed moneylenders could only impose a maximum interest rate of 18 per cent for unsecured loans, and 12 per cent for secured loans.

Restrictions on advertising, methods of loan disbursements and collection of payments were also eased.

Moneylenders have been taking up advertisements in the media. Their ads promise quick cash for personal loans and for those selling their flats. A typical ad reads: 'Collect cash now!!! 100% approval'.

The Sunday Times visited 30 moneylenders last week and found that 20 were one-man outfits.

Some lenders were tough-looking men in their 40s decked in gold chains and gold bracelets.

Others are like Mr Chua, who look like fashionable office workers in their patterned long-sleeved shirts and tailored pants.

Some run their operations out of bare offices equipped with only tables, chairs, telephones and laptops, like those in the shabby Jalan Besar Plaza and old HDB retail shops in French Road near Lavender MRT.

Others are in central locations like Peninsula Plaza, Hill Street Centre and Toa Payoh Central, equipped with fax machines and manned by receptionists.

More often than not, several moneylenders share one office space.

In a unit in French Road, for example, four men wore similar black polo shirts and pants and sat behind desks answering phones. But they were all from different companies.

Some lenders specialise in personal loans while others provide housing loans. Some provide both.

Those targeting the housing market say their clients are HDB flat sellers who need cash ahead of their unit being sold.

Typically, flat sellers apply for loans ranging from $5,000 to $100,000. The loan amount is usually less than the amount they will get for their property.

Lenders charge interest rates ranging from 4 per cent to 20 per cent, depending on the loan amount, repayment period and the borrower's income.

They check to ensure that the borrower's house is indeed on the market and ask questions like: 'Do you have a housing agent?' or 'Have you made your first appointment with the HDB?'

If the answer is no, the lender will ask the borrower to get his house marketed first before trying to get a loan.

The borrower can get the money as quickly as 30 minutes in the form of cash or a cash cheque.

Typically, moneylenders file a caveat on the flat, which ensures they get a first bite of the sale proceeds.

The criteria for becoming a moneylender are fairly straightforward.

For example, the applicant and his employees must be above the age of 21, reside in Singapore and be 'of good character and fit and proper persons to carry on the moneylending business'.

He must be familiar with the provisions of the Moneylenders Act and operate from a place that is 'suitable for the conduct of the moneylending business'.

He must also place a security deposit of $20,000 with the Accountant-General.

Moneylenders said the job carries risks and they have been cheated many times by customers who default on payment.

Sometimes, borrowers pretend to be interested in selling their home but the sale never goes through, they said.

Mr G. Chua said that despite being careful, he has chalked up about $100,000 in unpaid loans and there is nothing he can do about it.

'Our hard-earned money is just lost like that, and apart from turning to the police, there is nothing we can do,' he said.

'After all, we're legal lenders, so we can't go around splashing paint on their doors.'

 

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May 9, 2010
Loan amount and interest rates
Besides licensed moneylenders, borrowers turn to banks, trade unions and illegal loan sharks. Here is how much they generally charge.

BANKS

Effective interest rates for personal loan: 12 per cent to 25 per cent per annum depending on income and loan tenure
Interest rates for housing loan: from 1.6 per cent per annum depending on loan tenure and type of loan
Minimum income: $20,000 per annum
Maximum amount that can be borrowed: up to four times the borrower's monthly income
UNIONS

Interest rates for personal loans: 4.25 per cent to 6 per cent per annum
Minimum income: no minimum income but must be member of union

Maximum amount that can be borrowed: two to eight times borrower's monthly salary or up to the value of the pledged collateral
LEGAL MONEYLENDERS

Interest rates for personal loans: 3.33 per cent per week to 20 per cent per month
Interest rate for housing loans: 4 per cent to 20 per cent per month, depending on the loan amount, repayment period and borrower's income
Minimum income: $1,000 a month
Maximum amount that can be borrowed: up to four times the borrower's monthly income
ILLEGAL MONEYLENDERS or LOAN SHARKS

Interest rates: Usually a flat 20 per cent per month, regardless of the type of loan
Minimum income: None. You need a guarantor who will pay up if you default.
Maximum amount that can be borrowed: Depends on how much you are trusted. Amounts start as small as $500 and can go up to thousands of dollars.




May 9, 2010
Looking like your average S'porean
Ms Karen Lim was dressed in a flowery top and denim mini-skirt and carried a Louis Vuitton bag.

She hardly looked like someone who would need to borrow money, but there she was visiting a moneylender in Peninsula Plaza last Friday to borrow $800.

She needed the cash to pay off her mobile phone bill, she said.

'I will return my loan over two weeks in six payments. Like that the interest rates are not so high, so it should be okay,' she said.

She was waiting for her loan to be approved and expected to be charged an interest rate of about 10per cent a month.

Ms Lim, 24, who works in the hospitality industry and earns $1,800 a month, said she just needed a short-term loan. As she already had bank debts, she could not turn to a bank for a personal loan.

Most borrowers The Sunday Times met last week looked like the average Singaporean you would see walking down Orchard Road.

Technician Jeremy Chua, 25, was clean-cut and wearing bermudas and a T-shirt.

He was borrowing $750 for the first time and said the higher interest rates did not deter him. Cash on the spot was the draw.

'I have to pay the bills and I'm not really able to wait, so I came here to get the money quickly,' he said outside a moneylender at Peninsula Plaza.

 

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May 9, 2010
PROPERTY
Private home rents picking up again
Demand rising in tandem with arrival of more expats
By Joyce Teo, Property Correspondent
Private home rents are finally on the way up, official data shows.

But there is some anecdotal evidence that the rental market has since slowed in some areas.

Data from the Urban Redevelopment Authority (URA) a fortnight ago shows private home rents rose by 4.7 per cent in the first quarter. This is a clear improvement on the 0.6 per cent rise in the previous quarter which followed five quarters of rental decline.

Leasing activities have picked up as more expatriates arrive, and this year could turn out to be as busy as 2007, said Mr Patrick Lai, director of corporate residential leasing at Savills Singapore.

Most of them are still from the biomedical, pharmaceutical and petrochemical industries, he said.

But Mr Lai added: 'We are seeing a lot of returnees from the financial services - and bankers are the ones with deep pockets.'

Agreeing, CBRE executive director, residential, Mr Joseph Tan said: 'The recovering Singapore economy has resulted in positive business sentiment and expansion plans, especially in finance and banking.

'Some top-level executives were known to have relocated from Britain to Singapore to enjoy some tax savings.'

Experts said rentals for good class bungalows and detached houses are up as their supply is limited.

Area-wise, the city centre is likely to do better than the city fringes or suburbs, said Mr Tan. URA data shows the median rents of some residential buildings in districts 9 and 10 such as The Claymore have grown by 1 to 27 per cent in the last six months.

The prime districts, and increasingly downtown Marina Bay and Sentosa Cove as well, are favourite locations for expatriates because of their amenities, network of foreigners, and accessibility to international schools, Mr Tan said.

As for the other areas, things are not as bright, though some parts are doing better. Rentals for both non-landed and landed homes in the Serangoon Gardens and Lorong Chuan areas, for instance, are heading up because of the presence of the Australian and French international schools there, said Mr Tan.

URA data shows that rents of non-landed homes in the city fringe areas and suburban spots rose by 4 per cent and 4.8 per cent respectively in the first quarter.

Rents of non-landed homes in the core city centre, or what URA calls the core central region, rose the most, at 5.3 per cent.

URA's second-quarter data will not be out until end-July but already, some agents are seeing more supply in certain parts of the market.

'The rental volume is there but lessees have more choices now. Quite a few projects were completed in the past few months and they will have created more competition in the market,' said ECG Property Group chief executive Eric Cheng.

The market did recover quite a bit earlier this year but things have slowed since then, with rentals staying mostly flat, said a seasoned agent who declined to be named.

In particular, the mid-tier rental segment - homes asking for about $3,500 to $8,000 a month - is expected to see even more supply than demand as more projects such as Sky @ Eleven and Southbank are completed, experts said.

An executive about to sign a lease for a three-bedroom apartment of some 1,500 sq ft in Upper Bukit Timah for $3,000 a month said the landlord had lowered the rent from $3,500 a month. 'Rents are very negotiable now,' she said.

Mr Tan said business prospects could remain favourable for the rest of the year, based on the Government's projection of gross domestic product growth of 7 per cent to 9 per cent this year.

'But the Greek financial crisis may put a dampener on the global markets,' he cautioned.

'Although companies may continue their expansion plans, they might not review their housing budget for expatriate staff. This is likely to check the rise in residential rents for the rest of the year.'

 

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May 9, 2010
YOUR LETTERS
Regulate parking in condos and private estates

The article, 'The condo carpark crunch' (April18), highlighted a dispute between a family who own four cars and their condominium management over new rules limiting the number of cars residents can park on-site.

Such parking problems seem to have come about because in recent years, car prices have become more affordable, so more families now own multiple vehicles. At the same time, developers have been allowed to build condos with fewer carpark spaces than before, especially those closer to MRT stations.

In many online forums, people have suggested that those with four cars should either buy more units or live in a landed property. However, I would like to highlight parking woes of private property owners as well.

In my private estate, most properties have car porches that can accommodate one car. However, many families now own two or more cars. Some of these owners would park their cars outside their houses or in front of their neighbours' units, sometimes blocking the entrances.

Also, some families do not use their porches for their cars but for storage - for their bicycles or dog cages. These families would park their cars in public space, thus making the two-lane road barely passable for traffic.

Once, a frustrated resident even called in the Traffic Police to deal with the situation, but the traffic warden just advised the errant car owners to move their cars and, within the hour, the cars were back where they had been.

Such obstruction of traffic and inconsiderate behaviour just show that most people cannot be relied on to act in a civic-minded way.

I hope that the Land Transport Authority or Urban Redevelopment Authority will act to regulate the situation in private estates and condominiums, just as the Housing Board regulates the carpark situation in HDB carparks. It is clear that without proper enforcement, the parking problem will not go away.

Leong Chee Liang

 

[jq75]

May 10, 2010
Do more to prevent property bubble
I REFER to last Friday's article, 'Most flats sold with low cash upfront: HDB'. I believe this trend is not healthy as it indicates that valuation figures for HDB flats have finally caught up with the recent years' soaring HDB resale flat prices.

From these soaring prices, no one would have believed that we went through and are still recovering from an economic downturn. A three-room HDB flat in Tanjong Pagar Plaza was going for $280,000 in 2008, but in just two years, it is now going for more than $400,000.

The younger generation of Singaporeans and even their parents are feeling that an HDB resale flat is no longer within their means.

Generally, new job entrants who are thinking of starting a family would rather buy a resale flat in mature estates than a new flat in the outskirts. This is to cut down on the time taken for their daily commute to work, particularly if they have young children that they need to take to grandparents' homes or childcare centres each day.

I notice that the Ministry of National Development and the Monetary Authority of Singapore have been taking sporadic measures to curb the sharp increases in property prices, but the impact is not really visible. I understand that the Government has to balance the needs of different groups - investors who wish for property prices to rise, and home buyers who are averse to soaring prices.

The Government should take more comprehensive preventive measures to curb a property bubble, rather than resort to remedial actions when a bubble forms or bursts.

Recent strong measures taken by the Chinese government to curb undue property speculation have sent a strong signal to potential speculators that the Chinese government means business. These measures have also done much to reassure the public. I wonder if our Government has taken sufficient measures to do the same.

Ong Boot Lian (Ms)

 

[jq75]

May 11, 2010
Dragon Mansion en bloc sale approved
By Dickson Li
THE Strata Titles Board (STB) approved the $100.8 million collective sale of Dragon Mansion yesterday.

It is the only collective sale site to have achieved a sale price above $100 million since the global economic crisis unfolded, says the deal's broker, CKS Property Consultants.

The tender for the collective sale of Dragon Mansion was launched in July last year, marking the first such sale offering of the year.

Owners of the 72-unit condominium initially wanted $120 million, or $1,020 per sq ft (psf) per plot ratio. This was significantly above collective sale prices racked up in the 2007 boom.

Their sale tender closed on Aug 11 last year with no firm bids. A deal was eventually struck with RL Developments, a subsidiary of boutique developer Roxy-Pacific, for $100.8 million last December.

Owners of the 1,399 sq ft units in the Spottiswoode Park estate near Outram Park will pick up about $1.4 million each.

Roxy's offer came in at the end of October and it entered into a conditional agreement to acquire the site. Its offer of $100.8 million worked out to $863 per sq ft and included a development charge.

Dragon Mansion has a land area of 41,874 sq ft. A new development on the site could potentially yield a maximum gross floor area of about 117,000 sq ft - or about 120 apartments of 1,000 sq ft each.

 

[jq75]

May 12, 2010
99-yr Simei plot draws 18 bids
Analysts expect average selling price of $1,000 psf
By Joyce Teo, Property Correspondent

ANOTHER suburban land tender has generated massive interest, with a staggering 18 developers plunging in and offering top dollar for the site.

The 99-year leasehold 1.18ha site, which can accommodate an estimated 250 flats, is in Simei St 3, right across the road from Eastpoint Mall and Simei MRT station.

Chip Eng Seng's CEL Development has emerged the top bidder with a much higher-than-expected bid of $152.69 million or $523 per sq ft per plot ratio (psf ppr).

This price will translate to a break-even level of $860 to $900 psf, and an average selling price of around $1,000 psf if the project is launched in the first half of next year, said CBRE Research.

Mr Steven Tan, executive director, residential, at OrangeTee.com, expects a slightly higher break-even and a possible final selling price of $1,100 to $1,150 psf.

CBRE Research's executive director, Mr Li Hiaw Ho, said the 18 bids garnered represent 'an all- time high level of interest' not seen in government land sales tenders in the last five years for a site of this size and with a value of more than $100 million.

'This demonstrates the strength of a location that is close to an MRT station as well as developers' confidence in the residential market going forward,' he said.

Other bidders included Far East Organization, MCL Land, Keppel Land, Hoi Hup Realty, UOL and Ho Bee Investment. Their bids were also impressive.

CEL's bid was just 3 per cent above Frasers Centrepoint's bid of $148 million or $507 psf ppr. Sim Lian Land put in the third highest bid of $142.5 million or $488 psf ppr.

In fact, apart from the bottom three, all other bids came in above expectations.

Allgreen Properties came in last, with a bid of $113.8 million or $389.78 psf ppr.

Property experts had earlier tipped bids of just $320 to $410 psf ppr, which would translate to likely selling prices for flats of $750 to $850 psf.

According to CBRE Research, between January and April this year, typical new units - the three- to four-bedroom units - in Double Bay Residences in Simei St 4 were sold for between $660 psf and $750 psf.

In the resale market, units of such sizes in Modena and Tropical Spring in the vicinity were sold for $615 psf to $780 psf over the same period, it noted.

'The tender results show that developers are still very hungry for land. Those who have not bought any recently will have to be very aggressive,' said Mr Tan.

A recent tender for a land parcel in Tampines drew 16 bids while another tender for a plot next to Lakeside MRT station drew 14 bids and a top bid of $499 psf ppr.

At that price, the Lakeside plot may sell for close to or above $1,000 psf, industry sources had said.

Mr Tan said such prices for suburban projects are no longer very surprising, after The Vision in the West Coast set a new benchmark.

The Vision had sold well, despite it being priced at above $1,000 psf.

The winning tender for the Simei site will be announced later by the Urban Redevelopment Authority.

 

[jq75]

May 12, 2010
Shouldn't town councils govern private estates too?
I DISCOVERED recently that town councils govern only public housing, and not private housing. Hence, the bulky item disposal service available to HDB residents is not offered to residents of private estates.

Is this because residents in private housing do not pay the monthly town council fees? And fees aside, what is the rationale for this policy? Are not the residents of private estates also the responsibility of the MP in that area?

Jason Chiam

 

[jq75]

May 13, 2010
Demand for high-end homes may lose steam
Investors turning wary as doubts are cast over global economic upturn
By Esther Teo

An artist's impression of the luxury 228-unit The Residences at W Singapore Sentosa Cove. --PHOTO: THE RESIDENCES AT W SINGAPORE, PHOTO ILLUSTRATION: BON

CELEBRATIONS for the much-anticipated full comeback of the luxury end of the property market this year might just have to be put on hold.

The sector's nascent recovery is looking a little shaky as investors grapple with lingering fears over the Greek debt crisis and general uncertainty still plaguing the global economy.

Analysts say that despite increasing demand and rising prices for upmarket residences since last year, investors might be starting to get wary again as the shaky European economy raises doubts as to whether the global recovery can be sustained.

'It is a fairly uncertain situation. We don't know if the crisis is really over or if other countries like Spain and Portugal could require more money,' Ngee Ann Polytechnic real estate lecturer Nicholas Mak said. '(The Greek debt crisis) puts a damper on sentiment, and if it continues affecting the global financial market, it could impact investors' available funds.'

The recovery so far has been impressive.

The high-end sector with homes in the core central region (CCR) was the star performer this year with first-quarter sales numbering 1,927 - or 44 per cent of total new homes sold - and a 4.4 per cent increase in prices.

The CCR includes prime districts, the financial district and Sentosa.

But analysts are more cautious, and expect the high-end segment to track rather than outperform the wider market.

For example, sales of condos at Sentosa Cove have been slow.

In releasing its first-quarter results yesterday, City Developments (CDL) said the 228-unit The Residences at W Singapore Sentosa Cove had sold about half of the 56 units launched in March.

The project has also been marketed in Hong Kong, Jakarta and Shanghai. The group says it still has confidence in Sentosa's medium to long-term potential.

'When the W Singapore Sentosa Cove hotel is operational, the property value will be enhanced, and there will be a premium attached to the branded residences,' CDL said in its results statement.

Marina Bay Suites - a 221-unit project with a 99-year lease - has seen a 100 per cent take-up of the 128 units it has released so far at two previews.

But while it released 90 units at its first preview last November, the figure was cut to 36 at its second preview late last month.

Raffles Quay Asset Management - the manager of the project - said that 'units launched were due to requests from guests who attended the preview'.

Mr Mak said the smaller second preview reflected weaker demand, as a project would be viewed poorly if its released units did not sell well.

However, he also noted an increase in psf prices the second time around.

SC Global's 41-unit Seven Palms has sold nine of the 10 units it has released to date. It was first launched last October, but no units have been launched this year. The developer has no current plans for further launches this year.

'As a general trend, however, we have seen an increasing number of high net worth individuals seek out tangible assets such as prime properties which are more stable and less prone to the volatility of the stock market,' a spokesman said.

Mr Colin Tan, research and consultancy director of Chesterton Suntec International, said developers often time project launches according to market conditions.

'Investors are taking a wait-and-see approach, especially with the sudden drop in the Dow Jones and the Greek crisis causing nervousness among some...

Sales might dip a bit for the moment, but will pick up again once the markets sort themselves out,' he said.

Showflats had gone quiet the past weekend in a 'drastic change of sentiment', as investors usually held back when markets were volatile, he said.

The lower than expected sales simply reflected weaker demand since the cash of the wealthy, and even their bonuses, are often tied to the health of the global economy, Mr Mak said.

However, DTZ's head of South-east Asia research Chua Chor Hoon believes that demand for luxury residences will be sustained as most of these home buyers are foreigners from Asian countries such as Indonesia, China and India, which are experiencing strong growth.

'There is caution and there is uncertainty, but the effect on the world economy remains to be seen...The recent European rescue package might be able to soothe fears in the market,' she said.

Most analysts, however, still expect prices for posh residences to trend upwards. Mr Mak and Ms Chua expect a 10 to 15 per cent rise in prices this year, while Chesterton's Mr Tan is less bullish with a prediction of 10 per cent or less.

'Even without the Greek crisis, it has been a struggle to reach previous price highs. The Greek crisis has now made it even harder to advance on the price front... (and) brought investors' attention to the fact that economic fundamentals are still a long way off from catching up with the price increases,' Mr Tan said.

 

[yukita]

nice effort... thanks alot

 

[Citiguy]

Ya, many thanks to jq75.

 

[jq75]

May 28, 2010
Not many rogue agents, replies real estate body
I COMMEND Ms Tan Hui Yee ('Getting smart against rogue housing agents'; Wednesday) for highlighting how savvy consumers can protect themselves from falling prey to rogue agents.

But rogue agents are not aplenty. Most consumers have had satisfactory experiences with the agents in their transactions. The Public Perception and Expectations of Real Estate Agents survey carried out by Ngee Ann Polytechnic last year indicated that 64.6 per cent of the respondents were satisfied with their estate agents and 67.3 per cent rated them in the range of 'satisfactory' to 'excellent' for fiduciary dealings, which is meant to reflect the ethical relationship between parties.

The case of the Yuens involving gross misconduct of agents last year was a rarity.

Contrary to Ms Tan's suggestion that consumers were sceptical or unfamiliar with real estate bodies such as the Singapore Accredited Estate Agencies (SAEA), we had 329 inquiries, feedback and complaints last year, of which 40 per cent were complaints requiring our intervention, and these included disputes over commission.

The number of complaints alone was thrice more than what our agency handled in 2008. The bulk of the complaints was expeditiously resolved. SAEA also successfully helped settle all cases which required mediation. So, we do not believe we are ineffectual.

Finally, Ms Tan stated that 'not every agent who misleads a client into an unsavoury deal will be disciplined; some could merely be made to forgo part of their commission in a mediated settlement'.

There is another perspective to this, that is, if indeed the estate agent is clearly proven to have misled his client resulting in financial loss or even hardship, it is likely that he will face disciplinary inquiry in addition to the possibility of civil suit. The estate agency to which he is registered with may also face censure.

Dr Tan Tee Khoon
Chief Executive Officer
Singapore Accredited Estate Agencies

 

[jq75]

May 30, 2010
New launches aplenty amid uncertainty
Analysts believe demand likely to be healthy despite market volatility
By Jessica Cheam

Units at the sprawling Flamingo Valley in Siglap have been going at an average of $1,200 psf during preview sales. -- PHOTO: FRASERS CENTREPOINT HOMES

New residential projects have been launched for the long weekend as Singapore celebrates Vesak Day. But with the recent uncertainty in the financial market, will property investors bite?

Property experts whom The Sunday Times spoke to said the jury is still out on whether April's bumper sales of 2,207 new units - the second-highest monthly sales achieved - can be sustained this month.

This figure was up from 1,761 in March and 1,202 in February.

But recent turmoil stemming from the sovereign debt crisis in Greece and other European countries, coupled with stock market volatility, may have a cooling effect on the market in the short term, experts said.

Last week, the Government also released the largest amount of state land for private homes in response to surging demand.

It put 18 residential or residential/commercial sites on the programme for confirmed sale in the second half of the year, and 13 sites for residential use on the reserve list.

Together, the plots could yield 13,905 new homes - a figure that has experts speculating about a possible supply glut in the future.

The big question on the minds of property hunters on the prowl this weekend: Is this the right time to buy?

Ngee Ann Polytechnic real estate lecturer Nicholas Mak said that investors will now have to consider that there may be cheaper projects on the horizon.

'With the bumper crop of land sales, bids will be less aggressive and this could translate to lower launch prices,' he said.

Chesterton Suntec International research and consultancy director Colin Tan said the uncertainty of the global economic outlook could also be a reason for investors to stay away.

Mr Tan did not think, however, that the Government's recent land release would have a big impact on demand as there are still genuine buyers in the market.

But both experts agreed there is a healthy level of demand that will still move sales this weekend.

Major projects launched this weekend include Kheng Leong group's The Minton in Lorong Ah Soo/Hougang Street 11, which officially opened to the public yesterday.

The 99-year leasehold development offers a range of one- to four-bedroom apartments and is due for completion around 2014. Units were sold during the soft launch at an average price of $880 psf.

Another project launched last Friday was Frasers Centrepoint's Flamingo Valley in Siglap.

About 40 of 120 units released during the previews have been sold at an average price of $1,200 psf, said Frasers.

The freehold development offers a range of units from studios to four-bedders and penthouses.

Another recent launch: the freehold Cascadia condo in Bukit Timah Road.

More than 50 of 90 released units have been sold, said its developer Allgreen Properties. Units sold at between $1,300psf and $1,600psf, with average transacted prices close to $1,400 psf, it said.

For buyers on the lookout for completed properties, Melodies Limited's freehold 72-unit Cassia View in Guillemard Road offers three-bedroom units and penthouses. Prices range from $900 psf to $1,100 psf.

Ngee Ann Polytechnic's Mr Mak said that despite market uncertainty, some projects - especially those attractively priced - will still do well.

Chesterton's Mr Tan said that the recent bidding by developers for land at bullish prices reflects developers' positive outlook on demand for homes.

 

[jq75]

May 31, 2010
More Singaporeans buying pricey homes
Locals overtake PRs and foreigners as buyers of units costing above $5m
By Lee Zhi Xin


THINK most buyers of homes priced above $5million are foreigners? Not any more, according to a report by Savills Research and Consultancy.

It has reported a stunning reversal of a trend that has prevailed for at least three years, when foreigners had dominated the top end of the market here.

The proportion of Singaporeans buying these pricey homes shot up 12.8 percentage points to 42.3 per cent for homes sold in the four months ended April 30, compared with the figure in the fourth quarter of last year.

Locals have easily overtaken the 39.7per cent combined figure for permanent residents and foreigners. Their share is 21.4percentage points lower compared to that in the three months ended last December.

Companies made up the other buyers.

'This decrease could be partly due to more cautiousness as a result of the financial woes and uncertainties facing the European countries,' senior manager of Savills Research and Consultancy Christine Sun said. 'Another reason could be... that the Singapore currency is generally stronger against other currencies, making these houses more expensive for foreigners.

'On the other hand, Singaporean buyers are more upbeat, especially after seeing the boost in our gross domestic product (GDP) and the influx of tourists and investors.'

Indeed, this strong optimism was reflected in the surge in sales of non-landed, high-end private homes. An impressive 214 homes costing $5million or more were sold in the first four months of this year, surpassing the 208 for 2008.

This year's sales also amount to 70 per cent of the 307 homes sold in the whole of last year, bolstering Ms Sun's confidence that this year's sales total will better last year's as well.

Optimism in the high-end market started picking up in the third quarter of last year, when 147 homes worth at least $5million were sold - a 283per cent jump from the figure in the previous quarter. In the first quarter this year, 137 of these pricey units were sold.

But Ms Sun noted that these figures are still a far cry from 2007 figures, when 1,249 units priced at $5 million or above were sold as a result of the property boom.

In the primary market, Urban Suites sold the largest number of these high-end homes - 24 units - for the period from the third quarter of last year to this April.

Goodwood Residence and Nassim Park Residences were not far behind, with 18 and 16 units sold respectively.

In the resale market, Ardmore Park took the lead with 19 units sold, followed by Grange Residences with 15 units. The subsale market saw Tate Residences swiping first place with 17 units, while Ardmore II bit at its heels with 16 units sold.

As a result, the total transaction value of these non-landed private homes priced at $5 million and above has shot up 30 per cent in the first quarter to $953 million from the figure in the previous quarter.

This upswing looks set to continue with last month's figure of $507 million already more than half of last quarter's.

Leading the pack in price so far this year is a 6,889 sq ft unit at Nassim Park Residences, sold for an eye-popping $20million. This, however, is still some distance away from the record $33.4million for an 8,051 sq ft unit at Boulevard Vue sold in November last year.

These rising figures have translated into a larger share of the non-landed market for these homes, from 0.3 per cent in the first quarter of last year to 3.4 per cent last month.

As a result, the share of private homes priced at less than $2.5 million has dropped from 95 per cent to 87.4 per cent.

'All these findings may indicate that more buyers are increasing their risk appetite for pricier homes as the economy recovers,' said Ms Sun, who was quick to note that this may also be a result of private home prices rising in recent months.

Add another reason to the mix: Buyers are going for larger units as well.

Sales of non-landed private units above 2,000 sq ft saw a year-on-year leap of 426.7 per cent for the first quarter of this year to 553 units. These homes now make up 7.6 per cent of the non-landed private market, a 4 percentage point rise in the same period.

But Cushman & Wakefield managing director Donald Han thinks that demand for luxury homes will not continue rising at this rapid rate. 'Our rapid GDP rise is clouded by the European crisis, and the stock market does not look buoyant at the moment... I expect the property market to take a breather,' he said.

 

[jq75]

Jun 1, 2010
Pender Court sold for $95m, 2 other sites for sale
PENDER Court, a 48-unit condominium off West Coast Highway, has been sold en bloc for $95 million.

This land price works out to $1,007 per sq ft (psf) on the potential gross floor area. The price is shy of the owners' asking price of $100million to $108 million but is way above the $80 million price negotiated in an ultimately abortive sale in the boom days of July 2007.

Bravo Building Construction called off the sale in early 2008. It had also pulled out of two other collective sale deals.

Owners of the 48 units will get close to $2 million each.

Credo Real Estate, which marketed the site, confirmed only the price and declined to comment further as the sale committee is not yet ready to make a formal announcement.

Meanwhile, Waldorf Mansions off Balestier Road and Foh Pin Mansion in Charlton Road have been put up for collective sale.

Both freehold estates have an indicative price of about $22.5 million each. At the 16-unit Waldorf Mansions, this equates to $709 psf per plot ratio, inclusive of a development charge of $104,000.

Credo Real Estate said the buyer can expect to break even at about $1,100 psf.

Built in the 1990s, the site has an allowed gross floor area of 31,875 sq ft. The buyer can redevelop the site into a project with 50 apartments of 600 sq ft on average, said Credo.

As for the 30-year-old, 21-unit Foh Pin Mansion, it can be redeveloped only into a three-storey mixed landed housing development as the land has been rezoned, said marketing agent Savills Singapore.

The buyer may undertake a cluster housing development, said Savills director of investment sales Suzie Mok.

A price of $21 million or $22 million will translate to a land price of about $610 psf to $650 psf, she said.

The tender for Waldorf Mansions closes on June 29 while the tender for Foh Pin closes a day earlier on June 28.