Source : The Straits Times, Jan 19, 2009
HOUSING Board flat owners who face difficulty in selling their units to buyers from the ethnic groups are advised to be realistic in their asking price.
National Development Minister said given a large number of resale flats available in the market, and with about 30,000 transactions annually, they should be able to find buyers.
While acknowledging that there could be a small number of households that may need more time to find a suitable buyer for their flat because of the Ethnic Integration Policy (EIP), Mr Mah said: "This is a small inconvenience that Singaporeans must live with to ensure racial harmony in our society."
He said this in a written reply on Monday to a question from Marine Parade GRC MP Lim Biow Chuan, who had asked if the EIP could be reviewed on a case-by-case basis for residents who could not sell their flats to buyers of other races.
The EIP was introduced in 1989 to ensure a balanced mix of the various ethnic groups within HDB estates.
"By providing HDB residents of different races with more opportunities to interact, the EIP fosters ethnic tolerance and understanding, and strengthens our social cohesion and national unity," said Mr Mah.
"The EIP is applied consistently to all races. Exceptions made to EIP can undermine the objective of maintaining a balanced racial mix and result in the creation of ethnic enclaves.
"However, HDB does exercise some flexibility under very exceptional circumstances. For example, it has allowed households of mixed marriages or parentage to be re-classified to meet the ethnic criteria."
Tuesday, January 20, 2009
S'pore In Sharp Recession
Source : The Straits Times, Jan 19, 2009
Recovery not expected until second half of year
SINGAPORE'S economy won't recover from the current 'sharp' recession until the second half of 2009, Trade and Industry Minister Lim Hng Kiang said in Parliament on Monday.
Minister Lim Hng Kiang highlighted that Singapore is facing unprecedented factors in this recession and little can be done to mitigate the downturn. -- ST
The Republic is facing unprecedented factors in this recession and little can be done to mitigate the downturn, he said.
Its key non-oil exports fell 7.9 per cent in 2008 from a year earlier, hurt by a sharp decline in external demand amid a global economic downturn.
'There is very little we can do to try and mitigate the impact of such a major decline in external demand,' said Mr Lim, during question time.
'The economic downturn has spread to all sectors of our economy.'
Mr Lim also warned that job losses will increase and consumer sentiment will weaken as the manufacturing and financial industries slow, but he declined to give a forecast.
Singapore's loans may decline in the coming months as banks turn more cautious in lending amid a deepening economic slump, he added.
Still, Singapore's banks are not facing a liquidity crunch and the financial system remains 'fundamentally sound,' he said.
Finance Minister Tharman Shanmugaratnam is due to present the budget for the 2009/10 fiscal year to parliament on Thursday, expected to be expansionary to help combat the slowdown.
Recovery not expected until second half of year
SINGAPORE'S economy won't recover from the current 'sharp' recession until the second half of 2009, Trade and Industry Minister Lim Hng Kiang said in Parliament on Monday.
Minister Lim Hng Kiang highlighted that Singapore is facing unprecedented factors in this recession and little can be done to mitigate the downturn. -- STThe Republic is facing unprecedented factors in this recession and little can be done to mitigate the downturn, he said.
Its key non-oil exports fell 7.9 per cent in 2008 from a year earlier, hurt by a sharp decline in external demand amid a global economic downturn.
'There is very little we can do to try and mitigate the impact of such a major decline in external demand,' said Mr Lim, during question time.
'The economic downturn has spread to all sectors of our economy.'
Mr Lim also warned that job losses will increase and consumer sentiment will weaken as the manufacturing and financial industries slow, but he declined to give a forecast.
Singapore's loans may decline in the coming months as banks turn more cautious in lending amid a deepening economic slump, he added.
Still, Singapore's banks are not facing a liquidity crunch and the financial system remains 'fundamentally sound,' he said.
Finance Minister Tharman Shanmugaratnam is due to present the budget for the 2009/10 fiscal year to parliament on Thursday, expected to be expansionary to help combat the slowdown.
Home Prices Still Falling, Study Shows
Source : The Straits Times, Jan 20, 2009
HOME prices here largely continued to be eroded at the end of last year, according to early indications.
A Knight Frank study of a sampling of property options signed mostly last month showed that the prices of many condominiums fell in a quiet month.
In developments which had registered more than one recent sale, prices fell by 4.6 per cent to 10.9 per cent, it said. However, prices of a few developments remained steady or even rose.
Knight Frank compared individual options of a development with median prices of caveats lodged in the previous three quarters. There may be a time lag for caveats lodged, as lodging a caveat is voluntary, it said.
The consultancy was unable to identify a general trend by locality or wider region as the number of options was limited. Also, the characteristics of a particular unit, such as which floor it is on, can influence prices.
At the 910-unit City Square Residences near Farrer Park MRT station, for instance, prices of recent options signed ranged from lower to largely flat from the third quarter at $789 to $964 per sq ft. While its prices have gradually come down from the second quarter, they were way above the April 2005 soft launch price of $560 psf on average.
Overall, home prices are expected to weaken further in the next three to six months, with a bigger plunge in prices of high-end projects than mass market ones, said Knight Frank director of research and consultancy Nicholas Mak. 'There is a fair bit of latent demand, but these buyers are all waiting to come in at the bottom.'
Individual sellers in the resale market are likely to drop their prices at a faster rate than developers in the primary market, he said.
Home prices will likely continue to fall gradually for a few months, but there is a difference between the previous downturns and this one, said Chesterton Suntec International head of research and consultancy Colin Tan. 'Usually, when prices go down, sales will go up. But now, prices have started to come down, but sales have not improved.'
One possible reason for the low volume is that some investors cannot afford to sell now, said Mr Tan.
If they were to sell low now, they would have to top up their loan in cash, he said, and cash is a scarce commodity in a credit crunch.
The slower the prices come down, the longer the property market recovery will take, said Mr Tan.
HOME prices here largely continued to be eroded at the end of last year, according to early indications.
A Knight Frank study of a sampling of property options signed mostly last month showed that the prices of many condominiums fell in a quiet month.
In developments which had registered more than one recent sale, prices fell by 4.6 per cent to 10.9 per cent, it said. However, prices of a few developments remained steady or even rose.
Knight Frank compared individual options of a development with median prices of caveats lodged in the previous three quarters. There may be a time lag for caveats lodged, as lodging a caveat is voluntary, it said.
The consultancy was unable to identify a general trend by locality or wider region as the number of options was limited. Also, the characteristics of a particular unit, such as which floor it is on, can influence prices.
At the 910-unit City Square Residences near Farrer Park MRT station, for instance, prices of recent options signed ranged from lower to largely flat from the third quarter at $789 to $964 per sq ft. While its prices have gradually come down from the second quarter, they were way above the April 2005 soft launch price of $560 psf on average.
Overall, home prices are expected to weaken further in the next three to six months, with a bigger plunge in prices of high-end projects than mass market ones, said Knight Frank director of research and consultancy Nicholas Mak. 'There is a fair bit of latent demand, but these buyers are all waiting to come in at the bottom.'
Individual sellers in the resale market are likely to drop their prices at a faster rate than developers in the primary market, he said.
Home prices will likely continue to fall gradually for a few months, but there is a difference between the previous downturns and this one, said Chesterton Suntec International head of research and consultancy Colin Tan. 'Usually, when prices go down, sales will go up. But now, prices have started to come down, but sales have not improved.'
One possible reason for the low volume is that some investors cannot afford to sell now, said Mr Tan.
If they were to sell low now, they would have to top up their loan in cash, he said, and cash is a scarce commodity in a credit crunch.
The slower the prices come down, the longer the property market recovery will take, said Mr Tan.
Dip In Asking Prices Of England, Wales Homes
Source : The Business Times, January 20, 2009
(LONDON) Asking prices for houses in England and Wales fell 7.3 per cent in January from a year ago, property website Rightmove said yesterday, the sharpest drop since its house price series began in August 2002.
Home truths: Rightmove's survey shows that asking prices have fallen less steeply than actual selling prices
The survey, which is not adjusted to take seasonal factors into account, showed that average asking prices fell 1.9 per cent between December and January to £213,570 (S$466,000), down nearly 12 per cent from their peak last May and the lowest level since June 2006.
The figures support widespread evidence that the housing market slump is far from over and could even be gaining momentum as Britain enters its first recession since the early 1990s.
Rightmove said that dramatic cuts in interest rates by the Bank of England since October had boosted new buyer enquiries.
But the figures also show that new sale listings were less than half the level they were at last year and asking prices have dropped by more than 7 per cent since November, the fastest three-month decline since the survey began.
'The speed with which prices have declined has been worrying, but it does mean we are potentially reaching the bottom sooner,' said Miles Shipside, commercial director at Rightmove.
Britain's housing market has taken a battering over the past year as the global credit crunch has made it difficult to borrow. A survey from Britain's biggest mortgage lender, the Halifax, showed house prices fell an unprecedented 18.9 per cent in 2008.
Rightmove's survey shows that asking prices have fallen less steeply than actual selling prices, suggesting that buyers are negotiating deals well below the marketed price. -- Reuters
(LONDON) Asking prices for houses in England and Wales fell 7.3 per cent in January from a year ago, property website Rightmove said yesterday, the sharpest drop since its house price series began in August 2002.
Home truths: Rightmove's survey shows that asking prices have fallen less steeply than actual selling pricesThe survey, which is not adjusted to take seasonal factors into account, showed that average asking prices fell 1.9 per cent between December and January to £213,570 (S$466,000), down nearly 12 per cent from their peak last May and the lowest level since June 2006.
The figures support widespread evidence that the housing market slump is far from over and could even be gaining momentum as Britain enters its first recession since the early 1990s.
Rightmove said that dramatic cuts in interest rates by the Bank of England since October had boosted new buyer enquiries.
But the figures also show that new sale listings were less than half the level they were at last year and asking prices have dropped by more than 7 per cent since November, the fastest three-month decline since the survey began.
'The speed with which prices have declined has been worrying, but it does mean we are potentially reaching the bottom sooner,' said Miles Shipside, commercial director at Rightmove.
Britain's housing market has taken a battering over the past year as the global credit crunch has made it difficult to borrow. A survey from Britain's biggest mortgage lender, the Halifax, showed house prices fell an unprecedented 18.9 per cent in 2008.
Rightmove's survey shows that asking prices have fallen less steeply than actual selling prices, suggesting that buyers are negotiating deals well below the marketed price. -- Reuters
Shanghai Office Rents Headed For Second Year Of Falls
Source : The Business Times, January 20, 2009
10m sq ft of new property coming onstream this year
(SHANGHAI) Shanghai office rents, which fell in 2008 for the first time in eight years, are expected to decline further this year as almost 10 million square feet of new property comes onto the market.
Buyers' market: China's richest city added 930,707 sq m of office space last year and will introduce another 870,000 sq m this year, says CB Richard Ellis
The city's market for office space 'is expected to see a continued rise of market vacancy from 10.5 per cent at the end of 2008 and the rents to trend further southward', according to a report by property consultants CB Richard Ellis Inc distributed yesterday.
Average office rents in Shanghai fell 0.4 per cent last year to 241.8 yuan (S$52.84) per square metre per month, the report said.
China's richest city added 930,707 square metres of office space last year and will introduce another 870,000 square metres this year, creating a glut of supply just as the worst financial crisis since the Great Depression erodes spending by companies, said CB Richard Ellis. Shanghai's government expects economic growth of 9 per cent in 2009, compared with a pace of 13.3 per cent in 2007.
This year will likely 'remain a buyers' market' in Shanghai, CB Richard Ellis said.
Total investment in Shanghai property fell 25.8 per cent last year to 14.6 billion yuan, according to the report. That annual decline was the result of a 67 per cent decline in investment during the second half of 2008, after first half spending rose 25 per cent from a year earlier, CB Richard Ellis said.
Rents for industrial and shipping facilities fell 3.1 per cent in the fourth quarter from the third to an average of 36 yuan per month per square metre, the report said.
They rose 4.9 per cent for the whole of 2008, it said. Factory rents, including in the industrial and shipping category of properties, fell in both the third and fourth quarters, CB Richard Ellis said without giving figures.
Retail space rents in Shanghai rose at a slower pace last year than in 2007, gaining 7.6 per cent compared with a pace of 9.1 per cent a year earlier, according to the report.
Rents in the luxury residential market also fell, with prices for serviced apartments declining 5.7 per cent, apartments down 3.2 per cent and villas sliding 4.3 per cent. The number of luxury apartments and villas sold last year fell 59 per cent from a year earlier, CB Richard Ellis said.
Fewer transactions didn't stop the price of luxury homes from rising. The average price of luxury apartments increased 6.1 per cent last year, while villa prices rose 6.8 per cent, CB Richard Ellis said. -- Bloomberg
10m sq ft of new property coming onstream this year
(SHANGHAI) Shanghai office rents, which fell in 2008 for the first time in eight years, are expected to decline further this year as almost 10 million square feet of new property comes onto the market.
Buyers' market: China's richest city added 930,707 sq m of office space last year and will introduce another 870,000 sq m this year, says CB Richard EllisThe city's market for office space 'is expected to see a continued rise of market vacancy from 10.5 per cent at the end of 2008 and the rents to trend further southward', according to a report by property consultants CB Richard Ellis Inc distributed yesterday.
Average office rents in Shanghai fell 0.4 per cent last year to 241.8 yuan (S$52.84) per square metre per month, the report said.
China's richest city added 930,707 square metres of office space last year and will introduce another 870,000 square metres this year, creating a glut of supply just as the worst financial crisis since the Great Depression erodes spending by companies, said CB Richard Ellis. Shanghai's government expects economic growth of 9 per cent in 2009, compared with a pace of 13.3 per cent in 2007.
This year will likely 'remain a buyers' market' in Shanghai, CB Richard Ellis said.
Total investment in Shanghai property fell 25.8 per cent last year to 14.6 billion yuan, according to the report. That annual decline was the result of a 67 per cent decline in investment during the second half of 2008, after first half spending rose 25 per cent from a year earlier, CB Richard Ellis said.
Rents for industrial and shipping facilities fell 3.1 per cent in the fourth quarter from the third to an average of 36 yuan per month per square metre, the report said.
They rose 4.9 per cent for the whole of 2008, it said. Factory rents, including in the industrial and shipping category of properties, fell in both the third and fourth quarters, CB Richard Ellis said without giving figures.
Retail space rents in Shanghai rose at a slower pace last year than in 2007, gaining 7.6 per cent compared with a pace of 9.1 per cent a year earlier, according to the report.
Rents in the luxury residential market also fell, with prices for serviced apartments declining 5.7 per cent, apartments down 3.2 per cent and villas sliding 4.3 per cent. The number of luxury apartments and villas sold last year fell 59 per cent from a year earlier, CB Richard Ellis said.
Fewer transactions didn't stop the price of luxury homes from rising. The average price of luxury apartments increased 6.1 per cent last year, while villa prices rose 6.8 per cent, CB Richard Ellis said. -- Bloomberg
Developers Want Measures In Budget To Boost Market
Source : The Business Times, January 20, 2009
ASME hopes for rebates, rent cut on commercial properties of JTC and HDB
Property players have suggested many measures to support the market as Budget 2009 has drawn closer. But it's anyone's guess as to what the government will announce come Thursday.
'The government has so far remained silent on specific measures,' says Leonard Ong, executive director at KPMG Tax Services.
Wishlist: Developers want a property tax rebate on all residential, commercial and industrial projects, including those under construction. They are also asking for deferral of stamp duty payment for projects under construction until TOP is obtained
Developers want a property tax rebate on all residential, commercial and industrial projects, including those under construction. They are also asking for deferral of stamp duty payment for projects under construction until temporary occupation permit (TOP) is obtained.
Tenants have their own requests. The Association of Small and Medium Enterprises (ASME) hopes for rebates and rent reductions on commercial properties owned by JTC Corp and HDB. The Singapore Retailers Association is also looking for cheaper rents.
Some of these wishes may be granted, analysts say. A property tax rebate is seen as one of the more likely measures as it would have an immediate effect by reducing property companies' cash costs, says Mr Ong.
The government could also take this a step further and introduce tax exemption for projects under development to ease the cash burden on developers, many of whom may want to defer construction, he says. But this is seen as less likely.
Analysts also say that if measures are introduced to ease developers' cash flows, the savings should be passed on to tenants in the form of rent rebates to benefit more businesses.
Some type of concession allowing the deferral of stamp duty payment for projects under construction - similar to one introduced in 1998 and removed in 2006 - is a possibility, consultants reckon.
And analysts believe JTC and HDB rent cuts are likely. 'On the part of these government agencies, we expect tiered cuts in rents for factories and warehouses, as well as reductions in utility, property taxes,' said OCBC economist Selena Ling.
But market observers point out that with the government having privatised much of its property in the past few years, rent cuts for state-owned property are not likely to have much of an impact. In 1998 when the Asian financial crisis broke, the government froze rents for land and factories owned by JTC and HDB and gave a 15 per cent tax rebate on commercial and industrial properties. But as one industry player said: 'Tenants need more this time round.' He suggested that any property tax rebates given to landlords come with the condition that these landlords cut rents for tenants.
Taking a longer-term view, some analysts say the government should take a measured approach to aid stakeholders in the property industry.
'It is best not to interfere too much with the market as policy measures to alleviate or cool it could have the inadvertent effect of exacerbating swings when the cycle changes and cause a different set of problems later,' said DTZ's senior director for research Chua Chor Hoon.
'If policy measures are implemented, they should be given a definite expiry date and extended only if necessary. There has to be a balance between tactical measures to bring us through this unprecedented period and strategic long-term goals.'
ASME hopes for rebates, rent cut on commercial properties of JTC and HDB
Property players have suggested many measures to support the market as Budget 2009 has drawn closer. But it's anyone's guess as to what the government will announce come Thursday.
'The government has so far remained silent on specific measures,' says Leonard Ong, executive director at KPMG Tax Services.
Wishlist: Developers want a property tax rebate on all residential, commercial and industrial projects, including those under construction. They are also asking for deferral of stamp duty payment for projects under construction until TOP is obtainedDevelopers want a property tax rebate on all residential, commercial and industrial projects, including those under construction. They are also asking for deferral of stamp duty payment for projects under construction until temporary occupation permit (TOP) is obtained.
Tenants have their own requests. The Association of Small and Medium Enterprises (ASME) hopes for rebates and rent reductions on commercial properties owned by JTC Corp and HDB. The Singapore Retailers Association is also looking for cheaper rents.
Some of these wishes may be granted, analysts say. A property tax rebate is seen as one of the more likely measures as it would have an immediate effect by reducing property companies' cash costs, says Mr Ong.
The government could also take this a step further and introduce tax exemption for projects under development to ease the cash burden on developers, many of whom may want to defer construction, he says. But this is seen as less likely.
Analysts also say that if measures are introduced to ease developers' cash flows, the savings should be passed on to tenants in the form of rent rebates to benefit more businesses.
Some type of concession allowing the deferral of stamp duty payment for projects under construction - similar to one introduced in 1998 and removed in 2006 - is a possibility, consultants reckon.
And analysts believe JTC and HDB rent cuts are likely. 'On the part of these government agencies, we expect tiered cuts in rents for factories and warehouses, as well as reductions in utility, property taxes,' said OCBC economist Selena Ling.
But market observers point out that with the government having privatised much of its property in the past few years, rent cuts for state-owned property are not likely to have much of an impact. In 1998 when the Asian financial crisis broke, the government froze rents for land and factories owned by JTC and HDB and gave a 15 per cent tax rebate on commercial and industrial properties. But as one industry player said: 'Tenants need more this time round.' He suggested that any property tax rebates given to landlords come with the condition that these landlords cut rents for tenants.
Taking a longer-term view, some analysts say the government should take a measured approach to aid stakeholders in the property industry.
'It is best not to interfere too much with the market as policy measures to alleviate or cool it could have the inadvertent effect of exacerbating swings when the cycle changes and cause a different set of problems later,' said DTZ's senior director for research Chua Chor Hoon.
'If policy measures are implemented, they should be given a definite expiry date and extended only if necessary. There has to be a balance between tactical measures to bring us through this unprecedented period and strategic long-term goals.'