Property News!

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Resale home prices post slower growth

0.2% price rise in non-landed segment shows market finding balance, say analysts


Published on Aug 30, 2011

SHOEBOX UNITS: A 388 sq ft apartment at Soho 188 in Race Course Road. A dip in demand has been observed for small homes, but prices are still rising, They increased at a more subdued pace of 1.4 per cent last month, compared with 2.4 per cent in June


By Cheryl Lim



OVERALL prices of resale non-landed homes crept up marginally last month, largely fuelled by a stronger rise in prices of so-called shoebox units.
But even prices of these tiny homes, typically about 500 sq ft or less, rose at a more subdued pace of 1.4per cent, compared with 2.4 per cent in June.
Flash estimates for the Singapore Residential Price Index (SRPI), which monitors transactions of non-landed completed projects, indicated overall price growth of just 0.2 per cent, lower than the 0.7 per cent recorded in June.


Ms Petra Blazkova, head of Singapore and South East Asia research at ** Richard Ellis, said she has observed a dip in demand for small homes.
But she added that this fall in interest might be a blip caused by uncertainties brought on by the economic crises in the United States and Europe.
'In the long term, we will continue to see more interest, possibly until 2012. The supply of such homes remains steady and smaller units are seen
as a more affordable class of property for those
who are interested in putting their money in property,' said Ms Blazkova.
Knight Frank's research head, Mr Png Poh Soon, agreed. He said property buyers may also be banking on the long-term potential of such homes, especially if they are in good locations, such as the upcoming commercial hub in Paya Lebar.
Prices of suburban homes were fairly stable, moving up 1.2 per cent, unchanged from the previous month, while prices of homes in central districts declined by 1.3 per cent.
While the figures indicate that buyers are still keen on resale suburban properties, analysts anticipate that revisions to the income limits set for public housing will dampen that demand.
The higher income ceiling will allow more home hunters to buy HDB flats.
Many industry experts say the true effects of this policy change will probably be felt when newer public housing projects are rolled out.
They said that in the next few months, prices of resale homes could reflect a shift to public housing from buyers who would have otherwise chosen to purchase private property.
Market watchers say the latest 0.2 per cent rise in resale prices is a good sign, and indicates that the market is finding some balance despite the uncertainties clouding buyer sentiment.
Some buyers are more cautious about what their next move will be.
However, Mr Png said he has observed another group of home purchasers who are taking advantage of what they deem to be a good investment opportunity.
'(This) group is made up of people who still believe that with interest rates remaining low, property is a less volatile investment than putting money into the stock market.
'Even if prices drop, these people will hold on and rent their apartments out.'
Dr Chua Yang Liang, head of research at Jones Lang LaSalle South-East Asia, expects slower growth of prices in line with doubts over global economic conditions.
Although he expects the resale market to face some fluctuations, he said it is likely prices for this segment will stabilise throughout the rest of the year.
Dr Chua said prices for both new and resale property might appreciate between 1.5 and 2 per cent in the remaining quarters, growing 7 per cent for the whole of 2011.

 

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Keen interest in Tampines exec condo

Hundreds visit showroom of first project launched after income ceiling rise


Published on Sep 1, 2011

An artist's impression of the Arc at Tampines. The exec condo project, developed by a consortium, has 574 units across nine 16-storey blocks. -- PHOTO: HOI HUP SUNWAY

By Cheryl Lim




KINDERGARTEN principal Agnes Lee was quick off the mark yesterday to put her name down for an executive condominium that would have been an impossible dream just a few weeks ago.
She was one of the early birds at the Arc at Tampines showroom, the first exec condo project launched since income rules were changed last month.
She had been house-hunting in the private market but the new regulations have opened up new possibilities.


'Previously, my family and I didn't qualify because we earned more than $10,000,' said the 57-year-old.
'But we had our eye on this project for a while and we have been waiting for the changes to the income ceiling to take effect so we could get a three-bedroom multi-generation unit at this project.'
The Straits Times was told that more than 300 interested parties visited the showroom yesterday. Buyers have until next Monday to apply for a unit. Balloting and booking will begin on Sept 8.
Exec condos have condo-like facilities and are an upmarket hybrid of public and private housing. They are popular but the income ceiling restricted the pool of buyers. That rule was revised to cater to the high demand. Households with a total income of up to $12,000 can now buy a unit, up from $10,000 previously.
Under government rules, developers have to set aside at least 95 per cent of exec condo units for first-time home buyers in the initial month of a launch. Only up to 5 per cent can be sold to second-timers.
The Arc, developed by a consortium including Hoi Hup Realty, has 574 two, three and four-bedroom units and penthouses across nine 16-storey blocks.
It is understood that the average price is slightly above $700 per sq ft (psf), putting it at the higher end of the spectrum of exec condo projects.
Recently launched projects, like Blossom Residences and Belysa, range between $650 and $750 psf, said analysts.
These prices are lower than those of nearby mass market condos like Waterfront Gold, where homes were launched at prices just shy of $1,000 psf earlier this year. Homes at nearby condo Waterview were offered at an average price of $838 psf at last November's launch.
In comparison, a 1,216 sq ft five-room build-to-order (BTO) flat in Tampines - the most expensive type of BTO flat - was priced from about $300 psf in May.
Indicative prices at the Arc show that a 775 sq ft two-bedder costs $598,000, while a 958 sq ft three-bedder costs $678,300. A 2,282 sq ft four-bedder penthouse will set buyers back $1.3 million.
Dennis Wee Group director Chris Koh pointed out that Century Square and Tampines Mall are nearby, and while the Arc is some distance from the heart of Tampines Town, it is near educational institutions like Temasek Polytechnic. The upcoming Tampines West and Bedok Reservoir MRT stations are nearby as well.
Analysts predict that more developers will target exec condo sites in the cooling market as more buyers opt for such units over mass market homes.

 

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Development charges shoot up

Industrial sector leads the charge with a hefty rise of 31% on average


Published on Sep 1, 2011

Development charges shoot up -- GRAPHICS: QUEK HONG SHIN

By Esther Teo, Property Reporter
HIGHER property prices have prompted the Government to raise development charges, with some areas and sectors hit particularly hard.
The new charges, which take effect today, were far higher than the market had expected but reflect the surging values across residential and commercial real estate sectors over the past six months.
Development charges are applied when the value of a site is increased because of re-zoning, or when a taller building can be erected following a change in the plot ratio.
Charges on commercial land have been hiked by 22 per cent on average, and 12 per cent for residential non-landed.
The biggest rise came in the industrial and warehousing sector, where rates have been lifted by an average of 31 per cent - the largest increase for the segment since September 2007.
Development charges for industrial land in Tuas, Jurong, Woodlands and Sembawang have gone up even more, with an average increase of 55 per cent.
Colliers International's director of research and advisory, Ms Chia Siew Chuin, said the hikes were probably partly the result of the 4 to 20 per cent increases in JTC Corporation's land rents for most areas since July.
Robust sales at industrial strata projects such as North Spring Bizhub and Oxley Bizhub have also drawn aggressive tender bids by developers, she added.
Some experts say the big rise in fees could add to development costs for some industrial projects, which could also lead to higher rents.
Mr Alan Cheong, Savills associate director of research and consultancy, said the 31 per cent rise in development charges could drive rents for industrial space up by more than 10 per cent in the medium term. He had expected the charges to be raised by about 20 per cent.
'This is worrying as some of these firms are already facing higher costs and challenges such as the strong Singdollar,' he noted.
While commercial land charges increased by an average of 22 per cent, Paya Lebar Central was hit with a 32 per cent hike. This is in line with the Government's push to decentralise the business district into the Jurong and Paya Lebar areas. Recent land sales in both areas have attracted increased interest from developers, say experts.
The average fee for landed homes rose 17 per cent, while that for non-landed residences gained 12 per cent - slightly higher than the 10.6 per cent jump during the last review in March. This is despite some recent land tenders showing signs of cooling demand. The increased charges may deter collective sales as developers will now have to fork out more to redevelop some of these sites.
Dr Chua Yang Liang, head of research at Jones Lang LaSalle South-east Asia, said the increases were higher than expected and 'although there is sufficient empirical evidence to support the increase, the inflationary pressure that is building up in certain sectors of the property market could be another reason'.
He added: 'The outflow of funds from the United States into Asia and localised policy shifts that drove investors into other non-residential sectors are probably enough reasons to warrant' higher charges.
Development charges are adjusted every six months and can run into the millions of dollars for individual projects.
They are set by the Chief Valuer based on recent land and property values. They apply at varying levels across 118 geographical sectors covering sectors such as hospitals and hotels, commercial, industrial and residential.

 

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EC sales perk up with revised income ceiling
Backdating opens up units in 5 more projects

Published on Sep 20, 2011

BACKGROUND STORY


BLOSSOM RESIDENCES

Sold 20 units over the past week.
Half of buyers are from $10,000 to $12,000 income segment.
BACKGROUND STORY


AUSTVILLE RESIDENCES

Large number of previously disqualified buyers return to make a purchase.
Number of visitors at the showflat double over the weekend.
BACKGROUND STORY


THE CANOPY

Larger-than-usual crowd at showflat.
Had about 30 units left last week. About five units were sold over the weekend.

Footwear outside the Arc at Tampines showflat on Aug 31. The project was the first to be launched after the raising of income ceiling. -- ST PHOTO: DESMOND FOO
By Esther Teo, Property Reporter


SALES of executive condos (ECs) have picked up strongly just days after the higher income ceiling for eligible buyers was backdated to include all unsold units.

Developers have reported quicker sales since last Wednesday's announcement that the revised household income cap of $12,000 - up from $10,000 - would now apply to five other EC projects with unsold units.

The higher ceiling had initially applied only to EC projects launched after Aug 15, when the announcement was made.

ECs are a hybrid of public and private housing, reintroduced to the market last year after a five-year hiatus.

Qingjian Realty said that more than 50 units had been snapped up at EC project RiverParc Residence in Punggol since Wednesday, with the 'majority' of buyers falling into the newly eligible $10,000 to $12,000 income bracket.

This brings total sales to 468 units - or 93 per cent - of the 504-unit project.

City Developments' (CDL) 602-unit Blossom Residences in Segar Road also found buyers for 20 units over the past week, bringing total sales to 400 units.

Mr Chia Ngiang Hong, CDL group general manager, said that about half of these additional buyers are from the $10,000 to $12,000 income segment.

'We expect to see continued healthy sales based on the positive feedback from this group of potential buyers that the latest government announcement is beneficial as it offers them more choices for their selection,' he added.

Similarly, buyers also more than doubled in number compared to a normal weekend before the revised ceiling at United Engineers' 540-unit Austville Residences in Sengkang, a spokesman said.

About 350 units or 65 per cent of the 540-unit project launched in January have been sold, with visitors at the showflat also doubling over the weekend.

'In particular, we saw quite a large number of interested buyers, who were previously disqualified due to their combined household income exceeding $10,000, coming back to our showflat to make a purchase,' he added.

The spokesman added that the firm is positive about the outlook of ECs in the future. Moreover, new EC launches in the past year are better designed and promise a higher building quality, he said.

'With increased incomes and widespread aspirations of living in a condominium among Singaporeans, young couples and HDB upgraders will always consider ECs as a housing option, especially when EC prices continue to be below those of private condominiums.'

The 406-unit EC project The Canopy in Yishun, which had only about 30 units left last week, also experienced a larger-than-usual crowd at its showflat.

MCC Land managing director Tan Zhiyong said, however, that the new ruling would have little impact on the project's sales as fewer than 30 units were left unsold. About five units were sold over the weekend, he added.

The new ruling meant that about 600 more unsold units from five earlier EC projects - as well as units from the most recent EC project launched on Aug 31, Arc at Tampines - are available to buyers who meet the new income requirements.

They can now tap an estimated 68,700 additional households that qualify for ECs when the cap was lifted to $12,000, UOB Kay Hian property analyst Vikrant Pandey estimates.

Since the EC scheme returned last year, eight sites have been sold to developers. In all, 4,194 units have been released into the market for sale and over 3,000 more units are expected to be launched in the next 12 months, a Kim Eng research note said last week.

 

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PROPERTY PRICES
Keep rolling out cooling measures

Published on Sep 19, 2011

I FULLY agree with Mr Khong Kiong Seng ('Vital to keep cooling rules'; last Wednesday). It is premature to consider lifting the property cooling measures, the last of which had been in effect for only eight months.

It remains to be seen if the measures will work, as property prices and sales volumes are still going up, albeit at a slower rate.

Developers may want to see prices go higher and higher but the fact is that property prices have raced ahead of economic fundamentals and income levels.

A private property located in a non-central location easily costs upwards of $800 per sq ft today, a pricing level that was seen only in prime districts like District 11 five to six years ago.

Property developers have also been making record profits at the expense of home buyers, who have to undertake ever bigger bank mortgages to finance home purchases.

It is no surprise that in recent years, several companies in totally unrelated businesses have jumped on the property bandwagon with an eye on lucrative profits.

The Government must continue to roll out cooling measures to tame the stubbornly high property prices.

Andrew Hong



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Population growth shouldn't outpace housing stock

Published on Sep 19, 2011



THE assessment of the housing situation, by Jones Lang LaSalle's head of research for real estate services Chua Yang Liang, worries a first-time buyer like me. ('Housing glut 'won't cause dip in prices''; last Wednesday).

He calculated that demand is likely to stay high, given the way population growth has outpaced the increase in housing stock over the past 10 years, at the average rate of 2.8 per cent population growth and 2.1 per cent increase in completed homes per year. This resulted in a housing stock shortfall of about 87,000 homes last year.

These statistics worry me especially when developers are urging the Government to lift property cooling measures which have been introduced only recently.

What it means for a first-time home buyer looking for a basic roof over my head to start a family is that prices will continue to climb.

For most young families, a home is the costliest purchase they are likely to make, and servicing heavy loans can affect their financial stability in the long-term.

The Government must ensure that population growth does not outpace housing stock as it has - and yes, please introduce more cooling measures.

Nicholas Loh

 

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PROPERTY DEVELOPERS CRITICISED
Vital to keep cooling rules

Published on Sep 14, 2011



I CANNOT believe developers want the Government to review cooling measures which were introduced only in January because they fear that global economic woes could undermine the property market ('Developers: Review cooling measures'; last Saturday).

The measures have only just begun to take effect, and minimally. I do not recall developers expressing concern during 2009, when the world and Singapore were suffering from the financial crisis, on signs that the local property market was running ahead of fundamentals and prices were rising steadily and swiftly.

If the Government had not stepped in then to slow it down with the first set of measures and more subsequently, I am sure a bubble would have formed and burst.

Nor did any developer express concern in the past on any of the property market upswings.

If there is to be a review of the cooling measures, it should be about whether more should be planned as a standby in case economic woes deepen in the West in the third quarter, funnelling hot money into Asia and especially Singapore, which foreign investors regard as a safe haven.

What is stopping any foreign investor from breaking the current $6,400 psf record set last month by a foreign buyer?

Is this what developers want for Singapore - a buoyant market fuelled by foreign purchases earning them a hoard of cash while the rest of the country is mired in recession?

Khong Kiong Seng

 

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Property agents' reprieve on exam
Those with provisional licences given six more months to pass industry test

Published on Sep 22, 2011
By Cheryl Ong


PROPERTY agents who have yet to pass a manda-tory industry exam by the year's end will have six more months to do so.

The Council for Estate Agencies' (CEA) new deadline of June 30 next year will spell respite for 2,753 provisionally licensed agents who, as of Aug 31, make up 8 per cent of some 33,000 registered property agents here.

Earlier this year, the CEA said agents who brokered at least three transactions over the last two years have up to Dec 31 to pass the Real Estate Salesperson Examination. They were given provisional licences in the meantime.

CEA's director of licensing and investigation, Ms Purnima Shantilal, said the extension stems from the council's acknowledgement that agents need more time.

'The extension will thus help them to better prepare for the exam. The CEA will work with the estate agents closely to ensure that their salesmen take the exam by the deadline,' she said.

The new deadline also applies to those sitting the Real Estate Agency Examination, which is for partners, directors and key executive officers of property agencies.

The CEA, a statutory board under the Ministry of National Development, made it mandatory for all agents and those running agencies to take proficiency exams to raise the professionalism of the industry, which was largely unregulated before the council was set up in October last year.

But property agencies said they received feedback from some agents who had problems passing the exams set in English mainly because they were not proficient in the language. The CEA said it has arranged with the Institute of Estate Agents to come up with Mandarin courses to teach agents how to pass the Real Estate Salesperson exam.

The exam is a mix of multiple-choice and short-answer questions testing issues such as an agent's knowledge of property law and regulations.

PropNex chief executive Mohamed Ismail said agents need to take the exam more seriously, now the CEA has given them more time to do so, as well as try to overcome the language barrier.

This is because the CEA expects agents to understand English, which is used in documents in property transactions.

'They should not expect the CEA to keep extending the deadline. The reason the CEA has announced this extension is really because it recognises that this job is a 'rice bowl' for many people, so agents now have to play their part,' he said.

The news comes as a relief to Mr Colin Zhang, 30, a property agent with real estate firm Cushman & Wakefield.

'I've not really had the time to sit down and study for the exam, which deals a lot with property law,' he said.

'If not for the extension, I would have had a real headache by the year's end. Now I have more time to study, the exam shouldn't be a problem.'

The CEA will also conduct its first licensing and registration renewal exercise - for those who have passed the mandatory exam and whose registration expires on Dec 31 - from Oct 1 to Nov 15 and update the list of property agents registered for next year.

They are also urged to undergo six hours of continuing professional development (CPD) before March 31 next year.

CPD is a scheme to update agents and property companies on the latest government policies and real estate procedures.

The courses, which are recognised by the CEA, are conducted by vendors from the public and private sectors.

 

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New rules on showflats delayed to 'refine details'
Implementation date postponed to consider industry proposals: URA
By Esther Teo, Property Reporter



TOUGH new rules to ensure homebuyers finish up with a flat just like the showflat, among other goals, are on the way - only a little later than planned.

The slew of rules, to make developers more transparent and give buyers greater confidence, were expected to have been in place by the end of this month.

However, the Urban Redevelopment Authority (URA) told The Straits Times that it needs more time to refine the details for some of the proposals in consultation with the industry.

Some require legislative changes which take time, a URA spokesman added. The new implementation date will be announced at a later date.

The URA said that it is refining proposals such as the detailed requirements to ensure accurate showflats.

They include requiring developers to build showflats with the same floor area and floor-to-ceiling height as the actual units and with signs to mark positions of removed walls, partitions or doors.

URA is also finetuning changes to do with the standard template of information that developers must provide to buyers of the home they are purchasing.

These include outlining accurately the floor area of rooms in a new unit - from balconies, to bedrooms and the dining area - and also the space for areas such as planter boxes and bay windows.

Some developers say they are ready for the new rules and are not overly concerned about the implementation date being pushed back. Soilbuild managing director Lim Chap Huat said his firm is confident of meeting the new rules; it would require more administrative work on some fronts but it was 'no problem'.

However, others say they have provided feedback to URA on concerns they have over certain regulations.

A developer, who declined to be named, said while the industry is generally supportive of more transparency and reducing misrepresentations, there is a concern that unreasonable buyers might take advantage of certain rules, especially in a market downturn.

'We don't want the industry to be more contentious instead as a result of these new rules. There might be unhappiness, for example, over how the size of a room is calculated, whether from the edge of or from the centre of a wall.

'And with the size of individual rooms given, instead of just the overall size of the home, there might be more room for disputes.'

He added that developers would also prefer to have the option of adjusting prices as close to a project's launch date as possible in the light of market volatility and fast-changing sentiment.

The current proposed changes require the price list of units to be released at least two days before launch.

Mr Steven Tan, OrangeTee's executive director of residential, agreed that URA might want more time to look into the details of the changes to ensure that it is not only beneficial to buyers but also fair to developers.

'For example, in the template which indicates estimated measurements, will developers be allowed a reasonable margin of error due to slight changes during the construction stage or will developers be held liable for them?' he asked.

'I think URA might want to take everything into consideration and from different perspectives before proceeding with the final changes.'

On developers' feedback that URA has been visiting showflats in the lead up to the new rules, URA said it conducts regular showflat visits to help it gain a better understanding of the setting up of showflats by developers.

'They are not meant to enforce the new rules, which have not been effected yet,' the spokesman added.

When the raft of proposals were unveiled in March, the URA said that final changes to the Housing Developers (Control & Licensing) Act and Housing Developers Rules were expected to take effect by the third quarter of this year.

The proposed changes tackle a range of issues, from the accuracy of showflats to the problems of pressure selling and misleading advertisements.

They aim to protect buyers by making information about units more accessible while removing the distraction of misleading marketing gimmicks.

Just last month, URA also announced three new proposals in response to feedback from an online consultation exercise held in March and April.

It will now name developers that have violated the new regulations and post the list on its website. Another key change will see the revised rules applied to all housing developers, even small operators building four units or fewer.

 

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The Seaview defects: Condo residents sue for $14m
Home owners at The Seaview blame developer for problems that surfaced after moving in

Independent chartered building surveyors found 32 defects in the pool, lift lobbies, residential units and basement carpark. Rotting wooden plank in the pool deck area (above), and water seepage in the basement carpark. -- ST PHOTOS: LIM WUI LIANG

By Amanda Tan



BACKGROUND STORY

Residents in the condo, billed originally as the 'Ardmore Park of the east', claim that problems surfaced from mid-2008, shortly after they moved in. Complaints include shoddy workmanship and bad smells in their units.



Home owners of The Seaview, an upmarket condo in the east, are seeking $14 million for defects that have allegedly plagued the estate since 2008.

In what is believed to be one of the largest amounts that a developer here is being sued for, the residents of the 546-unit project in Amber Road are suing Mer Vue Developments, a subsidiary of listed Wheelock Properties.

Also named in the suit - filed by the condo's management corporation (MC) - are main contractor Tiong Aik Construction, RSP Architects Planners & Engineers and engineering firm Squire Mech.

Residents in the condo, billed originally as the 'Ardmore Park of the east', claim that problems surfaced from mid-2008, shortly after they moved in.

Complaints include shoddy workmanship and bad smells in their units.

In another incident, the estate's water bill for common areas spiked to about $20,000 a month, from $4,000.

Maintenance staff from the condo and experts hired by the MC found a leak in a pipe supplying water to the swimming pool.

The estate has temporarily installed valves to curb the leak and now uses a hose to top up the pool.

The MC claimed that the developer had asked its contractors to rectify some of the problems but they kept recurring.

In late 2009, the MC engaged independent chartered building surveyors who found at least 32 cases of defects in areas such as lift lobbies, swimming pool, residential units and basement carpark.

Among other things, the MC claimed that waterproofing was not carried out properly in areas such as the basement carpark, causing damage and safety risks.

Residents said it was the same problem on the rooftops which meant that higher-floor residents had to deal with water seepage and stained ceilings and walls.

Inside the units, residents claimed that they had to regularly deal with foul smells and flies.

According to experts hired by the MC, this was because floor traps and pipes in the kitchen were not installed properly, leading to food waste being stuck in the pipes.

Last week, residents were given more details of the case via the condo's newsletter. In it, it was reported that joint inspections of the defects by the developer and MC in 2009 did not help to resolve the issues.

The MC said it decided to file the suit after Wheelock's lawyer wrote to it last year, stating that the firm would no longer listen to complaints of defects.

In its claims, the MC said it was 'reasonable to believe and expect' that Wheelock would construct the development in a 'good workmanlike manner' and that the residents can seek recourse against defects.

Defence statements show that all four parties have denied any responsibility for the defects and claimed that the MC had failed to maintain the property.

Mer Vue Development said it had not carried out the construction and had engaged a reputable contractor.

Wheelock is also behind other luxury projects such as Ardmore Park and The Cosmopolitan.

Tiong Aik Construction argued that the defects arose from wear and tear and were due to the management's own failure to maintain the property.

It said it had hired reasonably competent sub-contractors to carry out the works.

A High Court pre-trial conference is due to be held next month.

 

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Private resale home prices remain flat
Buyers cautious amid economic uncertainty, say property analysts

Published on Sep 29, 2011

BACKGROUND STORY

THE BOTTOM LINE

'At the end of the day it's about affordability... it's the total quantum, total lump sum that buyers are looking at. Shoeboxes tend to fare better.'

Dr Chua Yang Liang, head of research at Jones Lang LaSalle South-east Asia


By Melissa Tan
PRICES of private resale homes stayed flat last month following a similar result in July, according to an index that tracks transactions in completed projects.

Experts say the flatlining prices indicate that buyers are taking a cautious approach to property amid a period of economic uncertainty.

Flash estimates of the Singapore Residential Price Index (SRPI) indicated zero overall price growth last month while the revised numbers for July also showed zero growth in overall residential prices. Prices rose 0.7 per cent overall in June.

The previously released flash estimates for July had indicated a 0.2 per cent overall price rise.

The previous time the index was flat month-on-month was July last year, according to Ms Chua Chor Hoon, head of DTZ South-east Asia research.

Associate Professor Lum Sau Kim of the National University of Singapore's Institute of Real Estate Studies and Department of Real Estate, who leads the group that compiles the index, said the situation is not directly comparable to that in July last year.

This is because the index methodology was changed in July this year to 'account specifically for the influence of small or shoebox units', she said.

'What we can say is that our August flash estimate shows that overall housing prices in the non-landed private market have remained relatively unchanged between July and August based on data captured by Sept 21.'

August's flat price index was a result of rising values of so-called shoebox flats being offset by modest movements in central and suburban areas.

Prices of shoebox units - they are typically around 500 sq ft or under - seem to have defied gravity last month, rising 3.1 per cent and rebounding from a 0.5 per cent price dip in July.

Property analysts told The Straits Times that the flash August values reflected buyer caution, with affordability as the top priority.

Dr Chua Yang Liang, head of research at Jones Lang LaSalle South-east Asia, said shoebox apartment prices could have risen last month with more buyers seeking cheaper apartments.

'At the end of the day it's about affordability... it's the total quantum, total lump sum that buyers are looking at. Shoeboxes tend to fare better.'

DTZ's Ms Chua also noted that the outlook was more cautious now, although she added that the monthly index tended to be volatile so revised values could be quite different.

As a case in point, flash estimates for shoebox unit prices in July showed 1.4 per cent growth but the revised number was a fall of 0.5 per cent.

Prices of regular-sized flats in the central and suburban areas showed little movement last month.

Central area values slipped 0.7 per cent after a 1.3 per cent decrease in July, while suburban apartment prices rose 0.5 per cent, from July's 1 per cent increase.

Dr Chua said: 'The market is in a bit of a wait-and-see (mood), given the economic uncertainty.'

 

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60% of MBFC Tower 3 leased out

Published on Sep 29, 2011

(From left) Keppel Land group chief executive Kevin Wong, Cheung Kong (Holdings) executive director Justin Chiu, DPM Teo and Hongkong Land chief executive Y.K. Pang at the topping-out ceremony for MBFC Tower 3 yesterday. -- PHOTO: MYPAPER
By Robin Chan


THE upcoming Marina Bay Financial Centre (MBFC) Tower 3 has been 60 per cent leased with talks ongoing that could see the rest of the space taken before next year's opening.

Raffles Quay Asset Management, which manages and markets the property, has a few prospective tenants that could fill the tower, said chief executive Wilson Kwong yesterday.

'We do have strong interest in our space, on the remaining 40 per cent of the building. We are in active discussions,' he said on the sidelines of a ceremony to mark the topping out of the 46-storey MBFC Tower 3.

He noted that while there may be market volatility in the short term and signs of caution from some of the companies, discussions are still ongoing.

Mr Kwong declined to name the firms at this time.

'We do see a healthy pipeline of interest, so we are cautiously optimistic,' he said.

There are signs of a softer market. A recent Colliers International report said overall Central Business District Grade A office rents from the second quarter to the third grew at the slowest quarter-on-quarter pace since the second quarter last year.

The confirmed tenants of MBFC's Tower 3 are DBS Group Holdings, McGraw-Hill, and law firms Ashurst, Clifford Chance and WongPartnership.

A recent news report claimed that mining giant Rio Tinto would lease 70,000 sq ft, or more than three floors in Tower 3, but Mr Kwong declined to comment.

DBS Bank will occupy more than 600,000 sq ft, or 18 floors, and move its entire global headquarters, flagship branch and 4,800 staff to the premises after the building is completed in the first quarter of next year.

The move is part of a $1.5 billion project over 10 years to revamp the bank's premises around the region.

Chief executive Piyush Gupta said: 'Our move to our own headquarters in MBFC will be our crowning jewel of our strategy occupancy plan.'

The plan was put into motion four years ago. DBS has since moved into new buildings in Hong Kong, Taiwan, Shanghai and New Delhi.

Mr Gupta said similar moves will take place in Indonesia and Mumbai over the next couple of years.

Deputy Prime Minister Teo Chee Hean said at yesterday's ceremony: 'Marina Bay's growth and, in particular, the Marina Bay Financial Centre, will support Singapore's development as a leading business and financial centre.

'We must ensure that Singapore remains a well-planned urban city, and maintains our consistently high standing in global rankings on quality of life and our global competitiveness.'

 

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Gift from husband is matrimonial asset
But ex-wife can keep house as part of her 50% share of assets

Published on Sep 29, 2011
By K. C. Vijayan, Law Correspondent


A GIFT from a spouse during marriage is part of a couple's matrimonial assets to be tallied and divided by the court when they divorce.

The High Court made this ruling on a claim by Madam Tan Hwee Lee that a house in Seletar Hills was given to her as a gift and should not be counted among the matrimonial assets.

Justice Choo Han Teck held that an inter-spousal gift acquired by the donor, other than as a gift or inheritance from a third party, remains part of the matri-monial pool.

But he made it clear that although it was expected that a gift once issued cannot be revoked, this idea of gift applied at the third stage, that is, after the assets had been compiled and a decision made on how much each party should get.

At the third stage, it would be decided who should get what, and the asset as a gift would be factored here.

The judgment released yesterday differs from a ruling by Justice Kan Ting Chiu in January which held that such gifts between spouses should not be counted as part of the joint matrimonial assets.

Lawyers had then described Justice Kan's judgment on a dispute between Madam Wan Lai Cheng and her former spouse Quek Seow Kee as ground-breaking.

It was based on the amended Women's Charter of 1996.

A year earlier, the Court of Appeal had held in another case that a gift was part of a couple's matrimonial assets.

In the current case, Mr Tan Cheng Guan, 55, split with his wife Tan Hwee Lee, 52, after 28 years of marriage.

Mr Tan, an executive vice-president at Sembcorp Industries, was the sole breadwinner while Madam Tan was a housewife.

They have two children aged 23 and 21.

Madam Tan claimed that when the marriage deteriorated, he gave her one of the three houses they owned to persuade her not to end the marriage.

She divorced him in May last year on grounds of his unreasonable behaviour. Her lawyers relied on the earlier decision in Madam Wan's case to exclude the house.

Mr Tan countered that even if it was a gift, it was still part of the matrimonial-asset pool.

Justice Choo said the court should not exclude the gift at the first stage as, in this case, it was bought with Mr Tan's salary.

The total assets in the case, comprising three houses, club memberships and bank accounts, were valued at $6.795 million. The judge noted that the husband was the breadwinner and the wife attended to the household and children. He ruled that a 50:50 division of the assets would be 'just and equitable'.

He held that it would be 'inequitable' for the house previously given to the wife to be taken back from her. The judge awarded her the house and other lesser assets to add up to her due of 50 per cent of the $6.795 million.

Separately, she was given a lump sum of $288,000 for maintenance and Mr Tan was ordered to maintain his 21-year-old undergraduate daughter.

Justice Choo made it clear that although his reasoning was different from the earlier decision, 'the practical outcome in most cases will likely be the same'.

The earlier decision in the High Court has been the subject of an appeal. A judgment by the Court of Appeal, when released, is expected to clarify the law in this area.

Mr Tan was represented by lawyers Bernice Loo and Magdalene Sim, while Mr Irving Choh and Ms Stephanie Looi represented Madam Tan.

 

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Slower growth for Singapore private property home prices

Published on Oct 3, 2011


Private home prices have shown a slower pace of growth for the third quarter of this year, according to the latest flash estimates released by the Urban Redevelopment Authority.

Prices of private residential property rose 1.3 per cent in the third quarter, lower than the 2 per cent increase seen in the previous three months.

This is the eighth consecutive quarter that private home prices have shown slower growth.

Private home prices in the suburban neighbourhoods led the growth, up by 2.1 per cent.

Meanwhile homes along the city fringe rose 1.1 per cent, while those in the city centre moved up 0.8 per cent.

The flash estimates are based on caveats lodged during the first 10 weeks of the quarter.

 

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Private-home price rise slows amid global uncertainties

Published on Oct 4, 2011

By Esther Teo, Property Reporter
PRIVATE-home prices inched up an estimated 1.3 per cent in the third quarter as buyer resistance and jitters over the global economic outlook took hold.

The modest rise follows 2 per cent growth in the second quarter and underlines a trend of moderating price rises that has been going on for eight quarters.

Values are expected to continue moderating, with experts estimating gains of between 1 per cent and 2 per cent in the fourth quarter.

But while yesterday's flash estimates from the Urban Redevelopment Authority point to a softening market, private home prices are still 15.9 per cent above the 2008 peak and 13.4 per cent ahead of the heady days of 1996.

The trend ahead looks to be flatlining or down, say experts, who cite stock market falls and a global economic slowdown coming on top of four rounds of cooling measures.

Buyers are more cautious and price-sensitive, with market activity focused mainly on the more affordable mass-market segment.

Mr Png Poh Soon, Knight Frank's head of research and consultancy, said concerns over the frail United States economy and the deteriorating euro zone debt crisis have weighed down prices.

'Sentiment is somewhat affected, leading to a lingering air of caution among home buyers,' he added.

'Property investors are also keeping a keen watch over economic developments that will unfold in the coming months. In the worst-case scenario, some are bracing themselves for a recession and a plausible interest rate increase should the capital market freeze up.'

** Richard Ellis Research executive director Li Hiaw Ho noted that home prices are 'stabilising'.

Prices rose 5.6 per cent in the first nine months of this year, well under the 14.4 per cent growth in the same period last year, said Mr Li.

Yesterday's flash estimates highlighted how different market segments are performing.

City centre non-landed home prices increased 0.8 per cent in the three months to Sept 30, down from a 1.6 per cent rise in the previous three months. This was the smallest rise since the third quarter of 2009 when the market first rebounded.

City fringe home prices held steady at 1.1 per cent, while suburban home prices shot up 2.1 per cent from a 1.7 per cent rise in the three months before.

Colliers International's director of research and advisory, Ms Chia Siew Chuin, said 'the edging up of (suburban home) prices is supported by sustained, strong underlying demand in the mass-market segment despite global economic uncertainties'.

Mr Ong Teck Hui, Credo Real Estate's head of research and consultancy, agreed that this was 'not surprising' as the mass-market segment has been relatively buoyant, supported mainly by demand from owner-occupiers.

But price gains in the future are likely to be linked to particular projects, as home buyers in this segment are also getting cautious in the light of the economic uncertainties, said Cushman & Wakefield's Asia-Pacific research senior manager, Mr Ong Kah Seng.

 

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Firm fails in appeal over $37m bungalow
It would be unjust to grant ECI's bid to buy house for $20m: Court

Published on Oct 8, 2011

The Ridout Road home, bought by Mr Agus Anwar in 2006, sits on a 40,600 sq ft plot, with a tennis court and swimming pool, in the Holland Road good-class bungalow area. -- ST FILE PHOTO
By K. C. Vijayan, Law Correspondent


A LONG-RUNNING dispute over who has the right to buy a $37 million bungalow in the Holland Road area has finally been settled in the Court of Appeal.

After years of legal battles, the court has ruled that the owner, businessman Agus Anwar, is entitled to sell it to former Goldman Sachs banker Thomas Chan.

The two-storey Ridout Road home sits on a 40,600 sq ft plot, complete with a tennis court and swimming pool, in the Holland Road good-class bungalow area.

Indonesian-born Mr Agus bought the house through his firm Ridout Residence for $28 million in 2006. He had paid

$11 million in cash and taken $17 million from a $30 million facility extended to him by Hong Leong Finance.

But when the 2008 global financial crisis rocked his financial position, Hong Leong recalled the loan, so Mr Agus was in need of cash.

In June 2009, Mr Agus granted an option to buy the home for $20 million to EC Investment Holding (ECI), owned by Mr Tan Koo Chuan of Yi Kai Group and Mr Melvin Poh of Fission Group.

ECI paid Mr Agus $1.5 million for the right to hold this option but Mr Agus had to option to cancel the deal within 60 days if he paid a cancellation fee. By September 2009, both had agreed that ECI would not exercise its option to buy if Mr Agus paid $3.5 million which involved a higher cancellation fee.

The next month, Mr Agus granted Mr Chan the option to buy the home for a much heftier price tag of $37 million.

ECI, on learning this, warned Mr Agus that it would apply to court to enforce its option to buy, and both settled that he would pay ECI $5 million to cancel its purchase. This included the $1.5 million option fee. But he failed to meet the settlement's November deadline.

ECI then went to the High Court to try to enforce its contract but lost its case, and again on appeal.

In its written judgment released yesterday, the Court of Appeal held that although there was a genuine agreement between ECI and Mr Agus' Ridout Residence, which owned the property, it was inappropriate to enforce the agreement.

The court, comprising Judges of Appeal Chao Hick Tin, Andrew Phang and V. K. Rajah, ordered Ridout to pay damages suffered by ECI as a result of its failure to honour the agreement. The damages payable to ECI will be assessed at a separate hearing by a court registrar.

Explaining why it refused to order the property to be acquired by ECI instead of Mr Chan, the court noted that ECI had earlier been 'quite content to forgo its right to acquire the property if the compensation was right'.

As the property market improved in 2009, the compensation that ECI sought escalated from $180,000 to $3.5 million under a September 2009 settlement, and to $5 million two months later.

ECI had also 'implicitly permitted' Mr Agus to look for other buyers as it knew he had no other means to pay the compensation except by selling to another party.

At one stage, Ridout had asked for a two-day extension to pay the $5 million compensation to ECI but ECI refused because it opted for a bigger payout by wanting to claim the property for itself, as prices were rising, said the court.

The court said granting ECI's request to buy the home would cause 'tremendous hardship' to a third party, Orion Oil, which had lent $10 million to Mr Agus.

There would be very little left from the sale proceeds to repay Orion if the house was sold to ECI for $20 million, compared to Mr Chan for $37 million. As it stood then, Hong Leong Finance, the mortgagee to the property, was also entitled to a chunk of the sale proceeds.

The court, in a 35-page judgment, ruled it would be unjust and inequitable to grant ECI's appeal to enforce its contract with Mr Agus.

ECI, in a statement through its lawyers from Rajah & Tann yesterday, said 'although the Court of Appeal did not grant us specific performance, we are pleased that the court reversed parts of the High Court judge's earlier findings. In particular, the Court of Appeal agreed with ECI that the transaction was a genuine agreement for the sale of the property by Ridout to ECI and that ECI had approached the court with 'clean hands''.

Mr Agus was once a significant shareholder in two Indonesian banks, Bank Kredit Asia and Bank Pelita, but there was a run on these banks during the 1997 Asian financial meltdown and they were taken over by the Indonesian Bank Restructuring Agency.

He came to Singapore in 2000 and became a citizen in 2004.

 

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Pearl Bank back for sale - at lower price
Owners are now asking for $725m, down from $750m in March

Published on Oct 11, 2011

The horseshoe-shaped Pearl Bank Apartments has been hailed as one of Singapore's architectural landmarks. It has about 65 years left on its 99-year lease. -- ST FILE PHOTO
By Esther Teo, Property Reporter



PEARL Bank Apartments near Chinatown is back on the market again - this time at a lower price.

The owners have followed the lead of some other collective sale projects by trimming their expectations.

They are now hoping for $725 million.

The 280-unit project had an estimated price of $750 million when it was launched for sale in March this year.

A number of projects mounting collective sales have cut their asking prices in a bid to close their deals in the light of global market uncertainties.

The new price works out to $1,314 per sq ft per plot ratio, including a lease top-up of about $162 million and a 10 per cent balcony allocation, marketing agent Knight Frank said.

The development has about 65 years left on its 99-year lease.

It has a gross floor area of about 675,000 sq ft, and can yield more than 500 apartments of 1,200 sq ft each.

The building has been hailed as one of Singapore's architectural landmarks. The Urban Redevelopment Authority said in March that the public had asked for the horseshoe-shaped tower to be conserved.

Experts say the gloomy economic outlook has made it even more difficult for mega collective sale sites of over $500 million to find buyers - so owners are starting to moderate their expectations.

Developers prefer to deal with projects with price tags of under $100 million as such sales involve less risk, they add.

Mr Nicholas Wong, Knight Frank's head of investment, noted that there have been eight or nine of such mega collective sale sites. These include Laguna Park, Hawaii Tower and Pine Grove.

Interest in such sites has been muted, partly due to the worsening economic climate and the Government's ample release of state land, which has siphoned capital away from collective sale sites.

Mr Wong said that while there were expressions of interest from developers when Pearl Bank was first launched for sale in March, the shaky global recovery even back then had spooked developers.

'But larger sites like these are attractive to some developers, as they are in more mature areas, while the government land sale sites are mostly in new towns.'

Owners of freehold condo Tulip Garden in District 10 relaunched their collective sale bid at $600 million in June, down from their $650 million price tag in January. There has been no news on whether the site has been sold.

But other collective sales have found success after owners brought down their prices.

Whitley Heights off Whitley Road, for example, reduced its asking price from between $185 million and $210 million, to $165 million. It was eventually sold at just under the price target, at $159 million last month.

Separately, Colliers International said yesterday that two of its collective sale sites, St Patrick's Garden and Crystal Tower, will be relaunched.

No indicative price was given this time, but St Patrick's Garden, off East Coast Road, had a $188 million indicative price in June. The indicative price for Crystal Tower, at Ewe Boon Road, was $155 million in July.

Ms Tang Wei Leng, Colliers' executive director for investment services, said: 'While owners wish to sell for as high a price as possible, they are now prepared to consider what the market will pay.'

 

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Pearl Bank back for sale - at lower price
Owners are now asking for $725m, down from $750m in March

Published on Oct 11, 2011

The horseshoe-shaped Pearl Bank Apartments has been hailed as one of Singapore's architectural landmarks. It has about 65 years left on its 99-year lease. -- ST FILE PHOTO
By Esther Teo, Property Reporter



PEARL Bank Apartments near Chinatown is back on the market again - this time at a lower price.

The owners have followed the lead of some other collective sale projects by trimming their expectations.

They are now hoping for $725 million.

The 280-unit project had an estimated price of $750 million when it was launched for sale in March this year.

A number of projects mounting collective sales have cut their asking prices in a bid to close their deals in the light of global market uncertainties.

The new price works out to $1,314 per sq ft per plot ratio, including a lease top-up of about $162 million and a 10 per cent balcony allocation, marketing agent Knight Frank said.

The development has about 65 years left on its 99-year lease.

It has a gross floor area of about 675,000 sq ft, and can yield more than 500 apartments of 1,200 sq ft each.

The building has been hailed as one of Singapore's architectural landmarks. The Urban Redevelopment Authority said in March that the public had asked for the horseshoe-shaped tower to be conserved.

Experts say the gloomy economic outlook has made it even more difficult for mega collective sale sites of over $500 million to find buyers - so owners are starting to moderate their expectations.

Developers prefer to deal with projects with price tags of under $100 million as such sales involve less risk, they add.

Mr Nicholas Wong, Knight Frank's head of investment, noted that there have been eight or nine of such mega collective sale sites. These include Laguna Park, Hawaii Tower and Pine Grove.

Interest in such sites has been muted, partly due to the worsening economic climate and the Government's ample release of state land, which has siphoned capital away from collective sale sites.

Mr Wong said that while there were expressions of interest from developers when Pearl Bank was first launched for sale in March, the shaky global recovery even back then had spooked developers.

'But larger sites like these are attractive to some developers, as they are in more mature areas, while the government land sale sites are mostly in new towns.'

Owners of freehold condo Tulip Garden in District 10 relaunched their collective sale bid at $600 million in June, down from their $650 million price tag in January. There has been no news on whether the site has been sold.

But other collective sales have found success after owners brought down their prices.

Whitley Heights off Whitley Road, for example, reduced its asking price from between $185 million and $210 million, to $165 million. It was eventually sold at just under the price target, at $159 million last month.

Separately, Colliers International said yesterday that two of its collective sale sites, St Patrick's Garden and Crystal Tower, will be relaunched.

No indicative price was given this time, but St Patrick's Garden, off East Coast Road, had a $188 million indicative price in June. The indicative price for Crystal Tower, at Ewe Boon Road, was $155 million in July.

Ms Tang Wei Leng, Colliers' executive director for investment services, said: 'While owners wish to sell for as high a price as possible, they are now prepared to consider what the market will pay.'

 

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Regulator will help raise standards, say property agents

Published on Oct 11, 2011



REAL estate professionals praised the role played by the regulator at an industry conference yesterday.

They said that tighter rules brought in by the Council for Estate Agencies will drive up standards in the sector.

Since it was formed a year ago, the statutory board has introduced tough measures such as a code of conduct that bars agents from acting as moneylenders.

Mr Peter Koh, who chairs the organising committee for this year's National Real Estate Congress, said it is crucial for the industry to achieve 'consistency in service quality standards'.

The new measures will 'raise professional standards' in the long run, he told 300 conference delegates at the Grand Copthorne Waterfront Hotel.

Singapore has nearly 33,000 real estate agents, but the industry was not regulated until the statutory board was set up in October last year.

Dr Teo Ho Pin, Mayor of North West District, said the move has brought 'order and certainty to the practice standards to be met' and contributed to Singapore's quest to be a 'world-class city with excellent systems in place'.

'As consumers ourselves, we all look forward to the day when unethical practices are a thing of the past,' said Dr Teo, who was the guest of honour at the event.

Industry experts gave advice on ethics and protecting consumers at the annual congress, the fourth held so far.

Mr Danny Yeo, group managing director of property consultancy Knight Frank, said the topics covered were relevant and useful.

'The speakers used case studies to present their points and many of them are what salespeople can relate to,' he said.

Mr Tay Kah Poh, chairman of industry organisation the Singapore Accredited Estate Agencies, said the event gives agents from different firms the chance to get together and learn from one another.

He added: 'There is a lot of emphasis on ethical practices - which is what we want, to raise the bar of professional practice for the industry.'

LIN WENJIAN

 

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URA launches public tender for site next to Bukit Panjang station

Published on Oct 11, 2011



The Urban Redevelopment Authority (URA) launched the commercial and residential site at Jelebu Road/Petir Road for sale by public tender on Tuesday.

The 1.89ha land parcel is located next to the existing Bukit Panjang LRT station and the upcoming Bukit Panjang MRT Station, and is 'well positioned to be an attractive mixed-use development, with retail, F&B and residential uses', the URA said in a statement.

The URA said future development of the site will also be integrated with a bus interchange, which aims to provide residents and shoppers with 'seamless access to public transportation'. The URA also added that at least 35 per cent of the maximum permissible gross floor area is to be for commercial uses to 'provide more commercial facilities within Bukit Panjang Town'.

A tender period of about seven weeks will be allowed for the land parcel. The tender will close at 12 noon on Nov 30, 2011. Selection of the successful tenderer will be based on the tendered land price only, the URA said.

 

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HDB upgraders setting pace in private property market

Published on Oct 18, 2011

RiverParc Residence in Punggol sold another 90 units in addition to the 393 already sold. -- PHOTO: QING JIAN


New private home sales surged 21 per cent with 1,631 homes finding buyers in September. This is more than the 1,351 units sold in August. Industry watchers attribute the higher sale volume to Housing & Development Board (HDB) upgraders.

Including executive condominium (EC) units, the number swelled to 2,064 units. Mr Li Hiaw Ho, executive director of CBRE Research, said the high September volume was mainly supported by mass-market and upgrader-type projects, with a total of 433 executive condominium (EC) units sold in September, compared to 290 in August.

'It is likely that the latest Government move to raise the household income ceiling for EC buyers from $10,000 to $12,000 per month has given a boost to the sales momentum,' he added.

EC owners who have occupied their apartments and met the five-year minimum occupation period (MOP) can sell their EC in the open market. Resale ECs are treated as equivalent to 'private housing', according to information listed on the HDB website.

Arc At Tampines, the first EC project launched after the announcement, registered 233 units sold at a median price of $734 per sq ft (psf). RiverParc Residence in Punggol sold another 90 units ($685 psf) in addition to the 393 already sold, while Blossom Residences in Bukit Panjang sold 52 units at $706 psf on top of the 361 units sold earlier.

Mr Mohamed Ismail, chief executive officer of PropNex Realty, agreed, highlighting that units in private property projects such as A Treasure Trove in Punggol were sold mainly to HDB upgraders.

He said: 'Savvy home buyers are now taking the mid- to long-term perspective to investing in a home in Singapore. Overall, we predict that mass-market homes will be the driving force for this private property segment in the next three months.'

However, he qualified that 'this forecast is not withstanding any unforeseen disaster or economic downturn'.

Mr Li said that developers are monitoring the impact of the euro zone crisis on the Singapore economy to time their project launches.

He added: 'We expect the total new home sales volume in 2011 to exceed the 14,688 units sold in 2009, but it remains to be seen whether it can outdo the record 16,292 units sold in 2010.'