Friday, June 12, 2009
High-End Properties Feel The Buzz Too
Source : The Business Times, June 12, 2009
Prices breach $3,000 psf, speculators on the prowl; analysts advise restraint
The high-end property market is starting to soak up the sunshine again.
Developers of some luxury residential projects have reported a slight pick-up in sales since May. The Orchard Residences, The Hamilton Scotts and Boulevard Vue have seen units sold at above $2,500 psf; in the case of The Orchard Residences, there have been a few units transacted at more than $3,000 psf.
The Orchard Residences: The luxury project has seen a few units transacted at over $3,000 psf since May
In the secondary market, a unit at Ardmore Park is said to have changed hands for around $2,500 psf recently.
Prices have also breached the $2,000 psf mark again for The Sail @ Marina Bay, where transacted prices are said to have appreciated by $100 psf a week in the past three weeks.
The speculators are back, too. 'We hear of people trading options again in some secondary market projects like The Sail and Rivergate. That is, someone buys a unit and before the two-week option exercise period is over, sells it to another person,' a market watcher said.
In the primary market, five units have been sold at The Orchard Residences in the past few weeks. A spokeswoman for Orchard Turn Developments, which is building the 99-year leasehold condo, confirmed this when contacted by BT. 'We've recently sold units at prices ranging from $2,700 psf for a 10th floor unit to $3,300 psf for an apartment on level 33. We've seen interest from both locals and foreigners at prices similar to what we sold when we first began to sell around March/April 2007,' she said.
A stone's throw away at Cuscaden Walk, Far East Organization sold an apartment last month at Boulevard Vue for $2,600 psf or nearly $12 million. The eighth-floor unit was acquired by a Singapore permanent resident on normal progress payment scheme. Far East's chief operating officer of property sales Chia Boon Kuah told BT the unit would have been priced around $3,800 psf in first-half last year when the group first started selling the posh 33-storey freehold project.
Added Mr Chia: 'We're seeing more inquiries across the full range of our products, including landed homes, over the past few weeks. In terms of volume of transactions, we're now seeing 3-5 times the level in the December/January period. So in a typical week - without new launches - we're now selling about 40 units compared with 10 in December/January,' he added.
This weekend, Far East is launching its ad campaign for Miro, comprising freehold loft units at Lincoln Road. Prices range from $1,400 to $1,600 psf. The group has also been selling Dalla Vale, a freehold cluster semi-detached and bungalow project at Springleaf Avenue priced from $650 psf.
At Scotts Road, Hayden Properties this week sold a 2,756 sq ft apartment at Hamilton Scotts for $2,600 psf or about $7 million to a Singaporean buyer on normal progress payment terms. The price is about 20 per cent lower than the $3,200 psf the unit would have cost in August last year, when Hayden sold the initial five units in the project, says the company's director Leny Suparman.
'We started getting more inquiries from April and therefore we were more inclined to revise our prices. Buyers have become more confident about the market lately because of the stockmarket rally and positive news from all fronts. People don't want to miss out on good opportunities,' she added.
In the secondary market too, a couple of two-bedroom units at The Sail @ Marina Bay were transacted recently at above $2,000 psf. A bay-facing unit above the 50th level fetched $2,400 psf while another unit slightly above the 15th level sold for $2,200 psf. Also, a one-bedder on the 20th floor changed hands at $1,700 psf.
Knight Frank director Nicholas Mak pointed out that the last time the market saw transactions above $3,000 psf was late last year. 'Across Asia, the stockmarket rally has improved investors' confidence and this has spilled over to the property market. However, there are factors that could potentially cut away the legs of this rally. Falling rents is one of them.'
DTZ executive director Ong Choon Fah noted that the latest price gains come after substantial declines. By Q1 this year, luxury home prices had fallen about 30-40 per cent from the 2007 peak levels.
'Many perceive the worst is over and the downside risk is manageable. There's also been a subtle change in attitude towards real estate. People now realise that property is more lasting. At least you can live in it, hold it out for the long term and pass it to your children; it won't vanish, unlike some financial products,' Mrs Ong said.
'However, we would rather the market exercise some restraint. At the end of the day, any sustainable recovery will have to be supported by fundamentals. The leasing market is still going through a challenging period. Given the recession, can we support such a sharp V-shaped recovery in property prices?' she asked.
Prices breach $3,000 psf, speculators on the prowl; analysts advise restraint
The high-end property market is starting to soak up the sunshine again.
Developers of some luxury residential projects have reported a slight pick-up in sales since May. The Orchard Residences, The Hamilton Scotts and Boulevard Vue have seen units sold at above $2,500 psf; in the case of The Orchard Residences, there have been a few units transacted at more than $3,000 psf.
The Orchard Residences: The luxury project has seen a few units transacted at over $3,000 psf since MayIn the secondary market, a unit at Ardmore Park is said to have changed hands for around $2,500 psf recently.
Prices have also breached the $2,000 psf mark again for The Sail @ Marina Bay, where transacted prices are said to have appreciated by $100 psf a week in the past three weeks.
The speculators are back, too. 'We hear of people trading options again in some secondary market projects like The Sail and Rivergate. That is, someone buys a unit and before the two-week option exercise period is over, sells it to another person,' a market watcher said.
In the primary market, five units have been sold at The Orchard Residences in the past few weeks. A spokeswoman for Orchard Turn Developments, which is building the 99-year leasehold condo, confirmed this when contacted by BT. 'We've recently sold units at prices ranging from $2,700 psf for a 10th floor unit to $3,300 psf for an apartment on level 33. We've seen interest from both locals and foreigners at prices similar to what we sold when we first began to sell around March/April 2007,' she said.
A stone's throw away at Cuscaden Walk, Far East Organization sold an apartment last month at Boulevard Vue for $2,600 psf or nearly $12 million. The eighth-floor unit was acquired by a Singapore permanent resident on normal progress payment scheme. Far East's chief operating officer of property sales Chia Boon Kuah told BT the unit would have been priced around $3,800 psf in first-half last year when the group first started selling the posh 33-storey freehold project.
Added Mr Chia: 'We're seeing more inquiries across the full range of our products, including landed homes, over the past few weeks. In terms of volume of transactions, we're now seeing 3-5 times the level in the December/January period. So in a typical week - without new launches - we're now selling about 40 units compared with 10 in December/January,' he added.
This weekend, Far East is launching its ad campaign for Miro, comprising freehold loft units at Lincoln Road. Prices range from $1,400 to $1,600 psf. The group has also been selling Dalla Vale, a freehold cluster semi-detached and bungalow project at Springleaf Avenue priced from $650 psf.
At Scotts Road, Hayden Properties this week sold a 2,756 sq ft apartment at Hamilton Scotts for $2,600 psf or about $7 million to a Singaporean buyer on normal progress payment terms. The price is about 20 per cent lower than the $3,200 psf the unit would have cost in August last year, when Hayden sold the initial five units in the project, says the company's director Leny Suparman.
'We started getting more inquiries from April and therefore we were more inclined to revise our prices. Buyers have become more confident about the market lately because of the stockmarket rally and positive news from all fronts. People don't want to miss out on good opportunities,' she added.
In the secondary market too, a couple of two-bedroom units at The Sail @ Marina Bay were transacted recently at above $2,000 psf. A bay-facing unit above the 50th level fetched $2,400 psf while another unit slightly above the 15th level sold for $2,200 psf. Also, a one-bedder on the 20th floor changed hands at $1,700 psf.
Knight Frank director Nicholas Mak pointed out that the last time the market saw transactions above $3,000 psf was late last year. 'Across Asia, the stockmarket rally has improved investors' confidence and this has spilled over to the property market. However, there are factors that could potentially cut away the legs of this rally. Falling rents is one of them.'
DTZ executive director Ong Choon Fah noted that the latest price gains come after substantial declines. By Q1 this year, luxury home prices had fallen about 30-40 per cent from the 2007 peak levels.
'Many perceive the worst is over and the downside risk is manageable. There's also been a subtle change in attitude towards real estate. People now realise that property is more lasting. At least you can live in it, hold it out for the long term and pass it to your children; it won't vanish, unlike some financial products,' Mrs Ong said.
'However, we would rather the market exercise some restraint. At the end of the day, any sustainable recovery will have to be supported by fundamentals. The leasing market is still going through a challenging period. Given the recession, can we support such a sharp V-shaped recovery in property prices?' she asked.
S'pore Becoming More Expensive For Expatriates
Source : The Business Times, June 11, 2009
SINGAPORE is now the 10th most expensive city in Asia for expatriates, despite its weakened currency, a survey shows.
Having moved up three notches from its previous ranking of 13th place in ECA International's survey on cost of living a year ago, Singapore is however still ranked below Japanese and Chinese cities, which dominate the top ten.
'Price rises have not slowed down as much in Singapore as in other parts of Asia,' said ECA's regional director for Asia, Lee Quane.
Prices of goods and services in China and Malaysia have increased at half of last year's pace, while in Singapore, they have increased by three-quarters, Mr Quane added.
Also, currencies of locations previously more expensive than Singapore (such as London, Stockholm and Istanbul) have depreciated at an even faster rate than the Sing dollar.
Meanwhile, the survey showed that due to the strong yen, Tokyo maintained its position as the most expensive city for expats. Its lead was followed by three other Japanese cities: Nagoya, Yokohama and Kobe.
Chinese cities and territories - Beijing, Shanghai, Hong Kong, Shenzhen and Guangzhou - stayed ahead of Singapore, due to the strengthening yuan.
'The yuan has continued to strengthen while the yen has appreciated by almost 8 per cent against the US dollar,' Mr Quane said.
'Many Western currencies, including sterling, the euro and the Swiss franc, have weakened. As a result, people coming from these economies into Asia will notice a considerable difference in costs compared with 12 months ago.'
Globally, Singapore jumped to the 72nd most expensive city worldwide from 114th year-on-year.
However, not all Asian cities remained expensive for expats. Due to the weakened won, Seoul has fallen to the 17th most expensive city in Asia, from its top position as the most expensive Asian city two years ago.
Similarly, the depreciating currencies of Malaysia, Thailand, Indonesia and Taiwan have lowered expatriate living costs in those countries.
Among the top 10 cheapest places for expats are Indian cities, as the weakened rupee coupled with lower inflation has made the cost of living for those locations fall.
The biannual survey by ECA compares a basket of 125 consumer goods and services commonly purchased by international assignees in over 370 locations worldwide.
SINGAPORE is now the 10th most expensive city in Asia for expatriates, despite its weakened currency, a survey shows.
Having moved up three notches from its previous ranking of 13th place in ECA International's survey on cost of living a year ago, Singapore is however still ranked below Japanese and Chinese cities, which dominate the top ten.'Price rises have not slowed down as much in Singapore as in other parts of Asia,' said ECA's regional director for Asia, Lee Quane.
Prices of goods and services in China and Malaysia have increased at half of last year's pace, while in Singapore, they have increased by three-quarters, Mr Quane added.
Also, currencies of locations previously more expensive than Singapore (such as London, Stockholm and Istanbul) have depreciated at an even faster rate than the Sing dollar.
Meanwhile, the survey showed that due to the strong yen, Tokyo maintained its position as the most expensive city for expats. Its lead was followed by three other Japanese cities: Nagoya, Yokohama and Kobe.
Chinese cities and territories - Beijing, Shanghai, Hong Kong, Shenzhen and Guangzhou - stayed ahead of Singapore, due to the strengthening yuan.
'The yuan has continued to strengthen while the yen has appreciated by almost 8 per cent against the US dollar,' Mr Quane said.
'Many Western currencies, including sterling, the euro and the Swiss franc, have weakened. As a result, people coming from these economies into Asia will notice a considerable difference in costs compared with 12 months ago.'
Globally, Singapore jumped to the 72nd most expensive city worldwide from 114th year-on-year.
However, not all Asian cities remained expensive for expats. Due to the weakened won, Seoul has fallen to the 17th most expensive city in Asia, from its top position as the most expensive Asian city two years ago.
Similarly, the depreciating currencies of Malaysia, Thailand, Indonesia and Taiwan have lowered expatriate living costs in those countries.
Among the top 10 cheapest places for expats are Indian cities, as the weakened rupee coupled with lower inflation has made the cost of living for those locations fall.
The biannual survey by ECA compares a basket of 125 consumer goods and services commonly purchased by international assignees in over 370 locations worldwide.
Local And Foreign Developers Still Offering Properties
Source : The Business Times, June 11, 2009
LOCAL and foreign developers continue to offer properties in Singapore as market sentiment stays up and the June school holidays come around.
BT understands that projects such as Residences @ Killiney and One Devonshire may enter the market soon. And marketing events for beachside housing in Vietnam and Australia are coming to town this week.
One Devonshire: It has 152 units, consisting of two to four-bedders, sky suites and penthouses
Agents are now checking out interest in the 68-unit Residences @ Killiney by Hoi Hup Realty. The freehold project, near Somerset MRT station, comprises two to four-bedders and penthouses, and prices may start from $1,700 psf.
Preparations to launch another freehold project in the vicinity also appear to be under way. The 36-storey One Devonshire by Allgreen Properties has 152 units, consisting of two to four-bedders, sky suites and penthouses.
Research houses are divided on the outlook for the residential property market here. Considering that demand has been selective and more supply will be coming up, Nomura Singapore remains bearish on the sector.
'While a pick-up in pre-sale activity has buoyed the optimists, we believe such demand has been prompted by price discounting and IAS (interest absorption schemes),' its analysts said in a report yesterday.
In contrast, DMG & Partners Securities upgraded its call on the property sector to 'overweight' yesterday. Physical property prices may have bottomed in the first quarter of this year and more foreign buyers may enter the market in the next six to nine months, according to its report.
In the meantime, some foreign developers are counting on buyers from Singapore taking up their properties. In town today, Indochina Land is marketing apartments at the Hyatt Regency Danang Resort and Spa in Vietnam. Prices range from US$207 psf to US$326 psf, and a three-bedroom penthouse can cost up to US$895,000.
Sales representatives for Hilton Surfers Paradise Hotel and Residences on Australia's Gold Coast will be in Singapore this weekend to launch units which are priced from A$720,000 (S$833,800). Construction of the property was halted as the financial crisis hit the original developer last year, but it has resumed with the help of ANZ and Brookfield Multiplex.
LOCAL and foreign developers continue to offer properties in Singapore as market sentiment stays up and the June school holidays come around.
BT understands that projects such as Residences @ Killiney and One Devonshire may enter the market soon. And marketing events for beachside housing in Vietnam and Australia are coming to town this week.
One Devonshire: It has 152 units, consisting of two to four-bedders, sky suites and penthousesAgents are now checking out interest in the 68-unit Residences @ Killiney by Hoi Hup Realty. The freehold project, near Somerset MRT station, comprises two to four-bedders and penthouses, and prices may start from $1,700 psf.
Preparations to launch another freehold project in the vicinity also appear to be under way. The 36-storey One Devonshire by Allgreen Properties has 152 units, consisting of two to four-bedders, sky suites and penthouses.
Research houses are divided on the outlook for the residential property market here. Considering that demand has been selective and more supply will be coming up, Nomura Singapore remains bearish on the sector.
'While a pick-up in pre-sale activity has buoyed the optimists, we believe such demand has been prompted by price discounting and IAS (interest absorption schemes),' its analysts said in a report yesterday.
In contrast, DMG & Partners Securities upgraded its call on the property sector to 'overweight' yesterday. Physical property prices may have bottomed in the first quarter of this year and more foreign buyers may enter the market in the next six to nine months, according to its report.
In the meantime, some foreign developers are counting on buyers from Singapore taking up their properties. In town today, Indochina Land is marketing apartments at the Hyatt Regency Danang Resort and Spa in Vietnam. Prices range from US$207 psf to US$326 psf, and a three-bedroom penthouse can cost up to US$895,000.
Sales representatives for Hilton Surfers Paradise Hotel and Residences on Australia's Gold Coast will be in Singapore this weekend to launch units which are priced from A$720,000 (S$833,800). Construction of the property was halted as the financial crisis hit the original developer last year, but it has resumed with the help of ANZ and Brookfield Multiplex.
Bids Galore For Hotel Site On Short St
Source : The Business Times, June 11, 2009
A government tender for a small hotel site on Short Street closed yesterday with a whopping 14 valid bids received - which analysts said reflects market interest in development sites with good attributes.
The highest bid came from Fragrance Group. It offered $15.5 million - or $353 per square foot per plot ratio (psf ppr) - some 76 per cent higher than the trigger price of $8.8 million, or $201 psf ppr.
The top bid was also 74 per cent higher than the lowest valid bid of $8.9 million, or $203 psf ppr, submitted by SCM (Overseas).
Various other companies also bid for the 99-year leasehold site - including property groups such as Sim Lian Land, Orchard Parade Holdings, Heeton Holdings, Wah Khiaw Developments and Regal Land, the company behind the Hotel 81 chain, as well as the Harry's chain of pubs.
Analysts said the small size of the site is one of its main selling points. The number of bids - 15 in all, including one bid judged invalid because it was below the minimum bid price - is one of the highest received for a Government Land Sales (GLS) tender.
'As the site area is relatively small and construction costs are expected to decline this year, the overall investment should not be very costly, making this an attractive opportunity for developers and hoteliers,' said Leonard Tay, director of CBRE Research.
The strong response to the tender also signals that hoteliers still believe in the fundamentals of Singapore as a tourist destination and its long-term ability to attract visitors, he added.
The site has a maximum gross floor area of 43,885 sq ft. Given its location near the upcoming Rochor MRT station and the Bugis area, a boutique hotel would be most likely, analysts said.
The site was launched for public tender on April 15. It was originally on the Reserve List of the GLS programme.
Last week, the Ministry of National Development said it would continue its suspension of the Confirmed List for the July-December period. It also made little increase to the reserve list.
A government tender for a small hotel site on Short Street closed yesterday with a whopping 14 valid bids received - which analysts said reflects market interest in development sites with good attributes.
The highest bid came from Fragrance Group. It offered $15.5 million - or $353 per square foot per plot ratio (psf ppr) - some 76 per cent higher than the trigger price of $8.8 million, or $201 psf ppr.
The top bid was also 74 per cent higher than the lowest valid bid of $8.9 million, or $203 psf ppr, submitted by SCM (Overseas).
Various other companies also bid for the 99-year leasehold site - including property groups such as Sim Lian Land, Orchard Parade Holdings, Heeton Holdings, Wah Khiaw Developments and Regal Land, the company behind the Hotel 81 chain, as well as the Harry's chain of pubs.
Analysts said the small size of the site is one of its main selling points. The number of bids - 15 in all, including one bid judged invalid because it was below the minimum bid price - is one of the highest received for a Government Land Sales (GLS) tender.
'As the site area is relatively small and construction costs are expected to decline this year, the overall investment should not be very costly, making this an attractive opportunity for developers and hoteliers,' said Leonard Tay, director of CBRE Research.
The strong response to the tender also signals that hoteliers still believe in the fundamentals of Singapore as a tourist destination and its long-term ability to attract visitors, he added.
The site has a maximum gross floor area of 43,885 sq ft. Given its location near the upcoming Rochor MRT station and the Bugis area, a boutique hotel would be most likely, analysts said.
The site was launched for public tender on April 15. It was originally on the Reserve List of the GLS programme.
Last week, the Ministry of National Development said it would continue its suspension of the Confirmed List for the July-December period. It also made little increase to the reserve list.
S'pore Economy Expected To Shrink 6.5% This Year
Source : The Business Times, June 11, 2009
But contraction could slow in coming quarters, economists predict
Economists and analysts now predict a sharper dip in Singapore's GDP for the full-year than they forecast in March, but continue to expect the rate of contraction to slow in the coming quarters, according to a quarterly survey by the Monetary Authority of Singapore, released yesterday.
The survey showed that 19 professional forecasters polled in late May now expect Singapore's economy to shrink 6.5 per cent this year, worse than the 4.9 per cent contraction forecast in March. This comes in at the higher end of the official forecast of a 6 to 9 per cent contraction.
For the second quarter, the median forecast from respondents was a 7.7 contraction in GDP from a year earlier, a larger decline than the 6.9 per cent fall predicted in March.
But this predicted contraction would still be more moderate than the 10.1 per cent contraction in Q1, when the economy shrank more than the economists' median forecast of an 8.5 per cent decline.
Forecasts for Q3 and Q4 were also revised downwards from March's predictions, to minus 6.6 per cent and minus 1.2 per cent respectively.
Several economists revised their 2009 forecasts downwards after the government released worse than expected preliminary Q1 GDP figures and lowered the official forecast in April. Since then, 'green shoots' seen in indicators such as industrial production and better actual Q1 figures, have prompted upward revisions.
In the latest poll, the minus 6.5 per cent median was derived from full year forecasts ranging from minus 4.8 to minus 10 per cent.
The downgrade came on the back of sharp cuts in projections for the manufacturing, wholesale and retail trade, and hotels and restaurant sectors.
However, a smaller contraction is now predicted for financial services. Construction, the only sector expected to grow this year, is also expected to post stronger growth of 15.9 per cent.
Further easing of the CPI inflation rate is expected for the full year too, with the forecast falling into negative territory at minus 0.5 per cent, from the 0.2 per cent rate reported in March.
The analysts' view of the labour market showed some optimism too, as the median projected unemployment rate was 4.2 per cent, slightly lower than the 4.4 per cent rate reported in March.
For 2010, the median forecast rose to a 4.2 per cent expansion, from the March forecast of 3.3 per cent growth.
But contraction could slow in coming quarters, economists predict
Economists and analysts now predict a sharper dip in Singapore's GDP for the full-year than they forecast in March, but continue to expect the rate of contraction to slow in the coming quarters, according to a quarterly survey by the Monetary Authority of Singapore, released yesterday.
The survey showed that 19 professional forecasters polled in late May now expect Singapore's economy to shrink 6.5 per cent this year, worse than the 4.9 per cent contraction forecast in March. This comes in at the higher end of the official forecast of a 6 to 9 per cent contraction.
For the second quarter, the median forecast from respondents was a 7.7 contraction in GDP from a year earlier, a larger decline than the 6.9 per cent fall predicted in March.
But this predicted contraction would still be more moderate than the 10.1 per cent contraction in Q1, when the economy shrank more than the economists' median forecast of an 8.5 per cent decline.
Forecasts for Q3 and Q4 were also revised downwards from March's predictions, to minus 6.6 per cent and minus 1.2 per cent respectively.
Several economists revised their 2009 forecasts downwards after the government released worse than expected preliminary Q1 GDP figures and lowered the official forecast in April. Since then, 'green shoots' seen in indicators such as industrial production and better actual Q1 figures, have prompted upward revisions.
In the latest poll, the minus 6.5 per cent median was derived from full year forecasts ranging from minus 4.8 to minus 10 per cent.
The downgrade came on the back of sharp cuts in projections for the manufacturing, wholesale and retail trade, and hotels and restaurant sectors.
However, a smaller contraction is now predicted for financial services. Construction, the only sector expected to grow this year, is also expected to post stronger growth of 15.9 per cent.
Further easing of the CPI inflation rate is expected for the full year too, with the forecast falling into negative territory at minus 0.5 per cent, from the 0.2 per cent rate reported in March.
The analysts' view of the labour market showed some optimism too, as the median projected unemployment rate was 4.2 per cent, slightly lower than the 4.4 per cent rate reported in March.
For 2010, the median forecast rose to a 4.2 per cent expansion, from the March forecast of 3.3 per cent growth.
Property Auctions Rise As Hammer Falls
Source : The Business Times, June 11, 2009
May deals outstrip all of Q1; some banks allowing owners to hock their own properties
Property auctions are in vogue again, with deals touching $18.5 million in May alone. This is higher than the $17.9 million for the whole of Q1 this year, show Colliers International figures.
Banks are playing their part by occasionally stepping aside and letting owners hock their own properties. This is because prices tend to slide when financial institutions repossess a property and offer it as mortgagee sale.
After a slow start to the year, a total of $47.7 million worth of properties have been sold at auction in the first five months. Colliers deputy managing director and auctioneer Grace Ng is now predicting that the year would see about $150 million of auction deals - compared to $83.7 million for 2008, which was an 11-year low.
The May figure is the highest since August last year, when auction sales touched about $22.7 million. But last August's number was bumped up by state auctions that raised $13.81 million, while no such special factor was at play in May.
Owner sales accounted for 44 of the 59 properties that went under the hammer last month. Fifteen properties actually got sold, of which just over half - eight - were mortgagee sales. They fetched a combined $8.7 million.
Said Ms Ng: 'We're not seeing a surge in the number of repossessed properties in the market yet as financial institutions are making an effort to manage the situation by helping owners to ride through this difficult period and giving them the opportunity to sell the properties in the open market instead of repossessing the property immediately.'
Knight Frank executive director and auctioneer Mary Sai added: 'Banks know that once they take over a property and it is offered as a mortgagee sale at an auction, some buyers will offer lower prices thinking it's a fire sale or cheap sale. So it's to the bank's advantage to talk things over with the borrower, restructure the mortgage if necessary or at least give him a chance to try selling the property himself first.'
The stockmarket rally and strong homes sales by developers improved the overall sentiment and contributed to the strong auction sales in May.
Attendance at property auctions perked up last month, said Ms Sai. 'Success rates also rose. For instance, in Q1, one or two properties, or even none in some cases, were sold at auctions. However, in May, most of the big auction houses achieved sales of at least two properties per auction.'
Jones Lang LaSalle head of auctions Mok Sze Sze noted that the price gap between buyers and sellers narrowed in May, resulting in more deals being sealed at auctions. Even though 96 properties were offered for auction in April and only 59 in May, last month saw more sealed deals.
Looking ahead, Ms Mok expects total auction sales for this year to surpass last year's tally.
Colliers' Ms Ng expects buoyant sales to continue in the next few months but whether the trend can be sustained depends on the economic recovery, the stockmarket performance and the selling price.
Agreeing, Knight Frank's Ms Sai said: 'There are buyers at auctions if prices are right. But if the reserve price is too high, they will not participate.'
Several landed homes were auctioned off in May, which accounted for its strong showing. They included a semi-detached house at 69 Namly Garden which was sold for $3.7 million or $716 per square foot of land area; the $4.1 million ($442 psf) sale of a bungalow at 20 Bright Hill Crescent off Upper Thomson Road; and 2 Pasir Ris Way (a semi-D) that fetched $2.3 million ($459 psf). The Pasir Ris and Namly Garden properties were mortgagee sales.
Colliers' Ms Ng does not foresee an immediate rise in the number of mortgagee sale properties hitting the auction block.
'A pick-up is likely to happen only in Q3 or Q4 this year. Currently, there's an average of 18 distressed properties being put up for auction per month and the number could go up to about 22 properties per month in Q3 or Q4 this year.'
Knight Frank's Ms Sai expects owner sales to continue buoying auctions in coming months, given the advantage this mode has over private treaty. 'Once the sale is done, the seller collects 10 per cent payment immediately at the auction - instead of having a two-week option period. Prices and terms are pre-determined, avoiding protracted negotiation.
'The advantage to the buyer is that the seller has to sell once the reserve price is reached at the auction, unlike private treaty where the seller can change his mind even if you meet his price before he grants an option.'
May deals outstrip all of Q1; some banks allowing owners to hock their own properties
Property auctions are in vogue again, with deals touching $18.5 million in May alone. This is higher than the $17.9 million for the whole of Q1 this year, show Colliers International figures.
Banks are playing their part by occasionally stepping aside and letting owners hock their own properties. This is because prices tend to slide when financial institutions repossess a property and offer it as mortgagee sale.After a slow start to the year, a total of $47.7 million worth of properties have been sold at auction in the first five months. Colliers deputy managing director and auctioneer Grace Ng is now predicting that the year would see about $150 million of auction deals - compared to $83.7 million for 2008, which was an 11-year low.
The May figure is the highest since August last year, when auction sales touched about $22.7 million. But last August's number was bumped up by state auctions that raised $13.81 million, while no such special factor was at play in May.
Owner sales accounted for 44 of the 59 properties that went under the hammer last month. Fifteen properties actually got sold, of which just over half - eight - were mortgagee sales. They fetched a combined $8.7 million.
Said Ms Ng: 'We're not seeing a surge in the number of repossessed properties in the market yet as financial institutions are making an effort to manage the situation by helping owners to ride through this difficult period and giving them the opportunity to sell the properties in the open market instead of repossessing the property immediately.'
Knight Frank executive director and auctioneer Mary Sai added: 'Banks know that once they take over a property and it is offered as a mortgagee sale at an auction, some buyers will offer lower prices thinking it's a fire sale or cheap sale. So it's to the bank's advantage to talk things over with the borrower, restructure the mortgage if necessary or at least give him a chance to try selling the property himself first.'
The stockmarket rally and strong homes sales by developers improved the overall sentiment and contributed to the strong auction sales in May.
Attendance at property auctions perked up last month, said Ms Sai. 'Success rates also rose. For instance, in Q1, one or two properties, or even none in some cases, were sold at auctions. However, in May, most of the big auction houses achieved sales of at least two properties per auction.'
Jones Lang LaSalle head of auctions Mok Sze Sze noted that the price gap between buyers and sellers narrowed in May, resulting in more deals being sealed at auctions. Even though 96 properties were offered for auction in April and only 59 in May, last month saw more sealed deals.
Looking ahead, Ms Mok expects total auction sales for this year to surpass last year's tally.
Colliers' Ms Ng expects buoyant sales to continue in the next few months but whether the trend can be sustained depends on the economic recovery, the stockmarket performance and the selling price.
Agreeing, Knight Frank's Ms Sai said: 'There are buyers at auctions if prices are right. But if the reserve price is too high, they will not participate.'
Several landed homes were auctioned off in May, which accounted for its strong showing. They included a semi-detached house at 69 Namly Garden which was sold for $3.7 million or $716 per square foot of land area; the $4.1 million ($442 psf) sale of a bungalow at 20 Bright Hill Crescent off Upper Thomson Road; and 2 Pasir Ris Way (a semi-D) that fetched $2.3 million ($459 psf). The Pasir Ris and Namly Garden properties were mortgagee sales.
Colliers' Ms Ng does not foresee an immediate rise in the number of mortgagee sale properties hitting the auction block.
'A pick-up is likely to happen only in Q3 or Q4 this year. Currently, there's an average of 18 distressed properties being put up for auction per month and the number could go up to about 22 properties per month in Q3 or Q4 this year.'
Knight Frank's Ms Sai expects owner sales to continue buoying auctions in coming months, given the advantage this mode has over private treaty. 'Once the sale is done, the seller collects 10 per cent payment immediately at the auction - instead of having a two-week option period. Prices and terms are pre-determined, avoiding protracted negotiation.
'The advantage to the buyer is that the seller has to sell once the reserve price is reached at the auction, unlike private treaty where the seller can change his mind even if you meet his price before he grants an option.'
VTB Building Said To Have Changed Hands For $71 Million
Source : The Business Times, June 9, 2009
Buyer is understood to be a JV between Yi Kai Group and Fission Group
VTB Building, an ageing freehold office block on Robinson Road, is said to have been sold for $71 million or about $1,061 per square foot (psf) based on existing net lettable area (NLA).
VTB Building: Is more than 30 years old and has a 9,052 sq ft land area and a gross floor area of just over 91,000 sq ft; Yi Kai and Fission are said to have bought the 16-storey building with an eye on tearing it down and redeveloping it into a residential project, subject to approval
The price is about 18 per cent higher than the offers of around $60 million that the property had drawn earlier, as reported by BT last month.
The buyer is understood to be a joint venture between Yi Kai Group and Fission Group. The two are jointly developing the Alexis condo near Queenstown MRT station which sold like hot cakes earlier this year.
The sale of VTB Building entails a relatively long completion period of six months, which is when seller VTB Capital, part of VTB group (formerly known as Moscow Narodny Bank), will deliver vacant possession on the property to the buyers. Yi Kai and Fission are said to have bought the 16-storey building with an eye on tearing it down and redeveloping it into a residential project, subject to approval from the authorities to rezone the site, which is currently designated for commercial use.
The long completion period for the transaction gives more options to the buyers. 'They could, among other things, potentially be looking at flipping the property,' a market watcher suggested.
Another possibility would be to retrofit the existing office block and optimising its NLA. That was an option that some of the contenders for the property, which are said to have included overseas players, looked at.
VTB Building is more than 30 years old and has a 9,052 sq ft land area and a gross floor area of just over 91,000 sq ft, which reflects a plot ratio of 10.05. Under Master Plan 2008, the site is zoned for commercial use with an 11.2 + plot ratio and 35-storey maximum height.
The property is close to the Cross Street MRT station, which is scheduled to open around 2012 under Downtown Line 1.
Assuming that Fission and Yi Kai redevelop VTB Building for residential use, their $71 million acquisition price translates to a land cost of about $700 psf per plot ratio (based on an 11.2 plot ratio and assuming no development charge is payable). The breakeven cost for a new residential project could be about $1,100-$1,200 psf.
VTB's existing NLA is said to be 66,888 sq ft and roughly half of this space is currently empty. The remaining occupants, including VTB, will move out by year end. The bank is said to be considering a few locations in the CBD to lease premises, tapping current low office rents.
DTZ is understood to have brokered the VTB Building deal.
This is the third office block to have changed hands over the past month, after Parakou Building and Anson House. Parakou Building, a fairly new freehold property at the Robinson Road/McCallum Street corner, was purchased for $81.38 million or $1,280 psf of NLA by a unit of Cathay Organisation. Anson House changed hands for around $85 million or slightly over $1,100 psf of NLA. It was completed 11 years ago and is on a site with a remaining lease of around 87 years.
Buyer is understood to be a JV between Yi Kai Group and Fission Group
VTB Building, an ageing freehold office block on Robinson Road, is said to have been sold for $71 million or about $1,061 per square foot (psf) based on existing net lettable area (NLA).
VTB Building: Is more than 30 years old and has a 9,052 sq ft land area and a gross floor area of just over 91,000 sq ft; Yi Kai and Fission are said to have bought the 16-storey building with an eye on tearing it down and redeveloping it into a residential project, subject to approvalThe price is about 18 per cent higher than the offers of around $60 million that the property had drawn earlier, as reported by BT last month.
The buyer is understood to be a joint venture between Yi Kai Group and Fission Group. The two are jointly developing the Alexis condo near Queenstown MRT station which sold like hot cakes earlier this year.
The sale of VTB Building entails a relatively long completion period of six months, which is when seller VTB Capital, part of VTB group (formerly known as Moscow Narodny Bank), will deliver vacant possession on the property to the buyers. Yi Kai and Fission are said to have bought the 16-storey building with an eye on tearing it down and redeveloping it into a residential project, subject to approval from the authorities to rezone the site, which is currently designated for commercial use.
The long completion period for the transaction gives more options to the buyers. 'They could, among other things, potentially be looking at flipping the property,' a market watcher suggested.
Another possibility would be to retrofit the existing office block and optimising its NLA. That was an option that some of the contenders for the property, which are said to have included overseas players, looked at.
VTB Building is more than 30 years old and has a 9,052 sq ft land area and a gross floor area of just over 91,000 sq ft, which reflects a plot ratio of 10.05. Under Master Plan 2008, the site is zoned for commercial use with an 11.2 + plot ratio and 35-storey maximum height.
The property is close to the Cross Street MRT station, which is scheduled to open around 2012 under Downtown Line 1.
Assuming that Fission and Yi Kai redevelop VTB Building for residential use, their $71 million acquisition price translates to a land cost of about $700 psf per plot ratio (based on an 11.2 plot ratio and assuming no development charge is payable). The breakeven cost for a new residential project could be about $1,100-$1,200 psf.
VTB's existing NLA is said to be 66,888 sq ft and roughly half of this space is currently empty. The remaining occupants, including VTB, will move out by year end. The bank is said to be considering a few locations in the CBD to lease premises, tapping current low office rents.
DTZ is understood to have brokered the VTB Building deal.
This is the third office block to have changed hands over the past month, after Parakou Building and Anson House. Parakou Building, a fairly new freehold property at the Robinson Road/McCallum Street corner, was purchased for $81.38 million or $1,280 psf of NLA by a unit of Cathay Organisation. Anson House changed hands for around $85 million or slightly over $1,100 psf of NLA. It was completed 11 years ago and is on a site with a remaining lease of around 87 years.
To Let: 400,000 Sq Ft Shadow Office Space
Source : The Business Times, June 11, 2009
Financial institutions in search of tenants for space that they pre-committed to
CLOSE to 400,000 square feet of shadow office space is now available as financial institutions scramble to find replacement tenants for the space that they pre-committed to in the boom years.
A white paper on the subject by Colliers International says that the amount of shadow office space in Singapore rose by a steep 48 per cent over the last two months to hit 370,000 sq ft in May 2009 - up from 250,000 sq ft in March.
This is equivalent to 0.5 per cent of the islandwide office stock, or about the size of MAS Building at Shenton Way.
Likewise, Jones Lang LaSalle (JLL) estimates that some 400,000 sq ft of shadow office space is now available. The bulk of this came onstream from February to May this year, said JLL's regional director and head of markets, Chris Archibold.
Shadow space is loosely defined as excess office space that companies have leased but are looking to sublet to a third party for reasons such as reduction in headcount.
Colliers' white paper, which was released yesterday, identified the financial industry as the largest contributor of shadow space. It accounts for 46 per cent of all shadow space currently being marketed.
'This is hardly surprising,' said Colliers. After all, the financial services sector experienced explosive growth of 11.7 per cent in 2006 and 15.7 per cent in 2007. During this period, many financial institutions - including Citigroup, Credit Suisse, Deutsche Bank, Merrill Lynch, Prudential Assurance and UBS - embarked on aggressive expansion plans.
'With the current economic downturn being fuelled by the collapse of the global financial markets, the reverse is now true,' Colliers observed.
The white paper also gave a breakdown of where the available shadow space is located.
Of the 370,000 sq ft of shadow space available as at May 2009, some 42 per cent is located in the Raffles Place/New Downtown micro-market.
A further 24 per cent is located in the Marina/City Hall area, while the Shenton Way/Tanjong Pagar micro-market accounted for some 14 per cent.
Even more shadow space is likely to become available over the rest of the year and in 2010, analysts said.
Colliers projects that some 400,000 to 600,000 sq ft of additional shadow space could become available by 2010 from just financial institutions.
The problem will be worsened when construction of new major office buildings, in which financial companies have pre-committed to large amount of spaces, is expected to be completed.
'This will add to the downward pressure on rents exerted by the potential supply of 9.6 million sq ft from Q1 2009 to Q4 2012, and could keep rents depressed for a prolonged period of time and delay market recovery until after 2010,' said Colliers.
It projects that Grade A office rents will decline by up to 60 per cent in 2009 and 20 per cent in 2010.
JLL's Mr Archibold, who similarly estimates that another 400,000 sq ft of shadow office space could be added up to 2010, also expects rents to take a hit from the increase in shadow space.
Colliers' data shows that as at March 2009, grade A office rents in the Raffles Place area have plummeted by some 41 per cent since peaking in Q3 2008.
The intense race for tenants has even resulted in landlords offering incentives such as rent holidays in addition to closing rents that are sometimes 25-30 per cent below asking rents in order to retain or secure new tenants, the firm observed.
Financial institutions in search of tenants for space that they pre-committed to
CLOSE to 400,000 square feet of shadow office space is now available as financial institutions scramble to find replacement tenants for the space that they pre-committed to in the boom years.
A white paper on the subject by Colliers International says that the amount of shadow office space in Singapore rose by a steep 48 per cent over the last two months to hit 370,000 sq ft in May 2009 - up from 250,000 sq ft in March.This is equivalent to 0.5 per cent of the islandwide office stock, or about the size of MAS Building at Shenton Way.
Likewise, Jones Lang LaSalle (JLL) estimates that some 400,000 sq ft of shadow office space is now available. The bulk of this came onstream from February to May this year, said JLL's regional director and head of markets, Chris Archibold.
Shadow space is loosely defined as excess office space that companies have leased but are looking to sublet to a third party for reasons such as reduction in headcount.
Colliers' white paper, which was released yesterday, identified the financial industry as the largest contributor of shadow space. It accounts for 46 per cent of all shadow space currently being marketed.
'This is hardly surprising,' said Colliers. After all, the financial services sector experienced explosive growth of 11.7 per cent in 2006 and 15.7 per cent in 2007. During this period, many financial institutions - including Citigroup, Credit Suisse, Deutsche Bank, Merrill Lynch, Prudential Assurance and UBS - embarked on aggressive expansion plans.
'With the current economic downturn being fuelled by the collapse of the global financial markets, the reverse is now true,' Colliers observed.
The white paper also gave a breakdown of where the available shadow space is located.
Of the 370,000 sq ft of shadow space available as at May 2009, some 42 per cent is located in the Raffles Place/New Downtown micro-market.
A further 24 per cent is located in the Marina/City Hall area, while the Shenton Way/Tanjong Pagar micro-market accounted for some 14 per cent.
Even more shadow space is likely to become available over the rest of the year and in 2010, analysts said.
Colliers projects that some 400,000 to 600,000 sq ft of additional shadow space could become available by 2010 from just financial institutions.
The problem will be worsened when construction of new major office buildings, in which financial companies have pre-committed to large amount of spaces, is expected to be completed.
'This will add to the downward pressure on rents exerted by the potential supply of 9.6 million sq ft from Q1 2009 to Q4 2012, and could keep rents depressed for a prolonged period of time and delay market recovery until after 2010,' said Colliers.
It projects that Grade A office rents will decline by up to 60 per cent in 2009 and 20 per cent in 2010.
JLL's Mr Archibold, who similarly estimates that another 400,000 sq ft of shadow office space could be added up to 2010, also expects rents to take a hit from the increase in shadow space.
Colliers' data shows that as at March 2009, grade A office rents in the Raffles Place area have plummeted by some 41 per cent since peaking in Q3 2008.
The intense race for tenants has even resulted in landlords offering incentives such as rent holidays in addition to closing rents that are sometimes 25-30 per cent below asking rents in order to retain or secure new tenants, the firm observed.
Idle Office Space Casts Shadow On Rents
Source : The Straits Times, June 11, 2009
Tenants who cut losses by subletting are affecting rates
SOMEWHERE in the Central Business District lies a skyscraper with floors of idle office space on offer, and it is not even officially on the rental market.
This is called 'shadow space' - office space that technically has been leased out to a tenant, except that that tenant now wants to sublet it to someone else because he has too much of it.
More and more companies, particularly financial institutions, are looking to sublet 'shadow space', according to a new Colliers International study.
Many have shelved expansion plans or scaled down operations in light of the current economic crisis, and do not want to keep paying rent for space that they no longer need.
Colliers estimated that 'shadow space' rose another 48 per cent from an estimated 250,000 sq ft in March to 370,000 sq ft last month. That is equivalent to the size of the 30-storey MAS Building in Shenton Way.
While it may represent only 0.5 per cent of Singapore's islandwide office stock, it is about 15 per cent of the 2.5 million sq ft of new office space expected to come onstream this year.
And the number is still growing.
This unexpected overhang of excess space could delay an anticipated recovery in office rents, said Colliers.
Some 42 per cent of the space is in the Raffles Place and Marina Bay area, with 24 per cent in the Marina and City Hall area and the remainder in the Shenton Way and Tanjong Pagar areas.
Nearly half of all the 'shadow space' currently being marketed is offered by financial institutions, which went through an explosive growth period earlier but were among the first to downsize their operations in the downturn. Citibank is among those with idle space - at buildings such as Millenia Tower, Centennial Tower and Capital Square.
The information technology and marine/offshore industries are the next two largest contributors of 'shadow space'. So far, the fast-growing 'shadow space' in the market has added to the competition for tenants and exacerbated downward pressure on rents.
'Corporates are looking at offloading such space as soon as possible so they need to be more attractive rental-wise,' said Cushman and Wakefield managing director Donald Han. Rents for 'shadow space' can be as much as 20 per cent lower than the committed rental deals for usual office space, he noted.
That is because there are typically more restrictions associated with 'shadow space', even though the pros include a fitted-out space. For example, the remaining lease of such space may be two years, shorter than the typical three-year lease.
'The tenant's agenda is to mitigate their loss by subletting the idle space,' said Knight Frank director of business space (office) Agnes Tay. 'Depending on how much they are willing to cut their losses and when they signed the lease, the discounts can be as low as 10 per cent or as high as 50 per cent,' she added.
As a result, traditional landlords are offering incentives such as rent holidays on top of very competitive closing rents, sometimes 25 per cent to 30 per cent below what they asked for, said Colliers.
Going forward, financial institutions who had pre-committed to large amounts of space in yet-to-be completed offices or business park buildings in the past two years may no longer need so much room.
As the bulk of these buildings - including Marina Bay Financial Centre Phase 1 - will be completed next year, the amount of 'shadow space' could peak then, said Colliers.
And should the global business environment remained challenged, these financial institutions alone will make available an estimated 400,000 to 600,000 sq ft of additional 'shadow space', it said.
The office rental market is already trying to digest a potential supply of 9.6 million sq ft of office space available from this year till 2012.
Grade A office rents are projected to decline by up to 60 per cent this year and 20 per cent next year.
By the end of next year, the average monthly gross rents of Grade A office space in the Raffles Place micro-market could return to the mid-2005 level of just $5 per sq ft (psf) per month, from $10 psf in the first quarter, said Ms Tay Huey Ying, Colliers' director of research and advisory. This, though, would still be above the $3.95 psf seen at the bottom of the market in 2004.
Tenants who cut losses by subletting are affecting rates
SOMEWHERE in the Central Business District lies a skyscraper with floors of idle office space on offer, and it is not even officially on the rental market.
This is called 'shadow space' - office space that technically has been leased out to a tenant, except that that tenant now wants to sublet it to someone else because he has too much of it.
More and more companies, particularly financial institutions, are looking to sublet 'shadow space', according to a new Colliers International study. Many have shelved expansion plans or scaled down operations in light of the current economic crisis, and do not want to keep paying rent for space that they no longer need.
Colliers estimated that 'shadow space' rose another 48 per cent from an estimated 250,000 sq ft in March to 370,000 sq ft last month. That is equivalent to the size of the 30-storey MAS Building in Shenton Way.
While it may represent only 0.5 per cent of Singapore's islandwide office stock, it is about 15 per cent of the 2.5 million sq ft of new office space expected to come onstream this year.
And the number is still growing.
This unexpected overhang of excess space could delay an anticipated recovery in office rents, said Colliers.
Some 42 per cent of the space is in the Raffles Place and Marina Bay area, with 24 per cent in the Marina and City Hall area and the remainder in the Shenton Way and Tanjong Pagar areas.
Nearly half of all the 'shadow space' currently being marketed is offered by financial institutions, which went through an explosive growth period earlier but were among the first to downsize their operations in the downturn. Citibank is among those with idle space - at buildings such as Millenia Tower, Centennial Tower and Capital Square.
The information technology and marine/offshore industries are the next two largest contributors of 'shadow space'. So far, the fast-growing 'shadow space' in the market has added to the competition for tenants and exacerbated downward pressure on rents.
'Corporates are looking at offloading such space as soon as possible so they need to be more attractive rental-wise,' said Cushman and Wakefield managing director Donald Han. Rents for 'shadow space' can be as much as 20 per cent lower than the committed rental deals for usual office space, he noted.
That is because there are typically more restrictions associated with 'shadow space', even though the pros include a fitted-out space. For example, the remaining lease of such space may be two years, shorter than the typical three-year lease.
'The tenant's agenda is to mitigate their loss by subletting the idle space,' said Knight Frank director of business space (office) Agnes Tay. 'Depending on how much they are willing to cut their losses and when they signed the lease, the discounts can be as low as 10 per cent or as high as 50 per cent,' she added.
As a result, traditional landlords are offering incentives such as rent holidays on top of very competitive closing rents, sometimes 25 per cent to 30 per cent below what they asked for, said Colliers.
Going forward, financial institutions who had pre-committed to large amounts of space in yet-to-be completed offices or business park buildings in the past two years may no longer need so much room.
As the bulk of these buildings - including Marina Bay Financial Centre Phase 1 - will be completed next year, the amount of 'shadow space' could peak then, said Colliers.
And should the global business environment remained challenged, these financial institutions alone will make available an estimated 400,000 to 600,000 sq ft of additional 'shadow space', it said.
The office rental market is already trying to digest a potential supply of 9.6 million sq ft of office space available from this year till 2012.
Grade A office rents are projected to decline by up to 60 per cent this year and 20 per cent next year.
By the end of next year, the average monthly gross rents of Grade A office space in the Raffles Place micro-market could return to the mid-2005 level of just $5 per sq ft (psf) per month, from $10 psf in the first quarter, said Ms Tay Huey Ying, Colliers' director of research and advisory. This, though, would still be above the $3.95 psf seen at the bottom of the market in 2004.
US Foreclosures Fall 6% In May
Source : The Straits Times, June 11, 2009
WASHINGTON - THE number of US households on the verge of losing their homes dipped in May from April, and the annual increase was the smallest in three years.
But as layoffs, rather than risky mortgages, become the main reason that borrowers default on their home loans, foreclosures likely will remain elevated this year and into 2010.
More than 321,000 households received at least one foreclosure-related notice last month. --PHOTO: AFP
Many economists expect unemployment, now at 9.4 per cent nationwide, to rise as high as 10 percent, and some project it will exceed the post-World War II record of 10.8 per cent.
Foreclosure filings fell 6 per cent in May from April, according to RealtyTrac Inc. More than 321,000 households received at least one foreclosure-related notice last month - 18 per cent more than a year earlier - but the smallest annual gain since June 2006.
Despite the drop from April, it was the third-highest monthly rate since Irvine, Calif.-based RealtyTrac began its report in January 2005, and the third straight month with more than 300,000 households receiving a foreclosure filing. One in every 398 US homes received a foreclosure filing last month, according to the foreclosure listing firm's report.
The mortgage industry has resumed cracking down on delinquent borrowers after foreclosures were temporarily halted by mortgage finance companies Fannie Mae and Freddie Mac and other lenders.
'It would not be a huge surprise to see the numbers level off a little bit at this point,' said Rick Sharga, RealtyTrac's senior vice president for marketing.
Banks repossessed about 65,000 homes in May, up from 64,000 in April, due to big increases in several states including Michigan, Arizona and Nevada.
The Obama administration announced a plan in March to provide US$50 billion (S$72.7 billion) from the financial industry rescue fund as an incentive for the mortgage industry to modify loans at lower monthly payments. But the effectiveness of the relief plan remains unclear, with questions lingering about how much the lending industry will cooperate. Many housing counselors say it hasn't made much of a difference so far.
After banks take over foreclosed homes, they usually put them up for sale at deep discounts, pulling down prices for other sellers. Nationwide, sales of foreclosures and other distressed properties made up about 45 per cent of the market in April, according to the National Association of Realtors. -- AP
WASHINGTON - THE number of US households on the verge of losing their homes dipped in May from April, and the annual increase was the smallest in three years.
But as layoffs, rather than risky mortgages, become the main reason that borrowers default on their home loans, foreclosures likely will remain elevated this year and into 2010.
More than 321,000 households received at least one foreclosure-related notice last month. --PHOTO: AFPMany economists expect unemployment, now at 9.4 per cent nationwide, to rise as high as 10 percent, and some project it will exceed the post-World War II record of 10.8 per cent.
Foreclosure filings fell 6 per cent in May from April, according to RealtyTrac Inc. More than 321,000 households received at least one foreclosure-related notice last month - 18 per cent more than a year earlier - but the smallest annual gain since June 2006.
Despite the drop from April, it was the third-highest monthly rate since Irvine, Calif.-based RealtyTrac began its report in January 2005, and the third straight month with more than 300,000 households receiving a foreclosure filing. One in every 398 US homes received a foreclosure filing last month, according to the foreclosure listing firm's report.
The mortgage industry has resumed cracking down on delinquent borrowers after foreclosures were temporarily halted by mortgage finance companies Fannie Mae and Freddie Mac and other lenders.
'It would not be a huge surprise to see the numbers level off a little bit at this point,' said Rick Sharga, RealtyTrac's senior vice president for marketing.
Banks repossessed about 65,000 homes in May, up from 64,000 in April, due to big increases in several states including Michigan, Arizona and Nevada.
The Obama administration announced a plan in March to provide US$50 billion (S$72.7 billion) from the financial industry rescue fund as an incentive for the mortgage industry to modify loans at lower monthly payments. But the effectiveness of the relief plan remains unclear, with questions lingering about how much the lending industry will cooperate. Many housing counselors say it hasn't made much of a difference so far.
After banks take over foreclosed homes, they usually put them up for sale at deep discounts, pulling down prices for other sellers. Nationwide, sales of foreclosures and other distressed properties made up about 45 per cent of the market in April, according to the National Association of Realtors. -- AP
Property Auctions Rise As Hammer Falls
Source : The Business Times, June 11 2009
May deals outstrip all of Q1; some banks allowing owners to hock their own properties.
Property auctions are in vogue again, with deals touching $18.5 million in May alone. This is higher than the $17.9 million for the whole of Q1 this year, show Colliers International figures.
Banks are playing their part by occasionally stepping aside and letting owners hock their own properties. This is because prices tend to slide when financial institutions repossess a property and offer it as mortgagee sale.
After a slow start to the year, a total of $47.7 million worth of properties have been sold at auction in the first five months. Colliers deputy managing director and auctioneer Grace Ng is now predicting that the year would see about $150 million of auction deals - compared to $83.7 million for 2008, which was an 11-year low.
The May figure is the highest since August last year, when auction sales touched about $22.7 million. But last August's number was bumped up by state auctions that raised $13.81 million, while no such special factor was at play in May.
Owner sales accounted for 44 of the 59 properties that went under the hammer last month. Fifteen properties actually got sold, of which just over half - eight - were mortgagee sales. They fetched a combined $8.7 million.
Said Ms Ng: 'We're not seeing a surge in the number of repossessed properties in the market yet as financial institutions are making an effort to manage the situation by helping owners to ride through this difficult period and giving them the opportunity to sell the properties in the open market instead of repossessing the property immediately.'
Knight Frank executive director and auctioneer Mary Sai added: 'Banks know that once they take over a property and it is offered as a mortgagee sale at an auction, some buyers will offer lower prices thinking it's a fire sale or cheap sale. So it's to the bank's advantage to talk things over with the borrower, restructure the mortgage if necessary or at least give him a chance to try selling the property himself first.'
The stockmarket rally and strong homes sales by developers improved the overall sentiment and contributed to the strong auction sales in May.
Attendance at property auctions perked up last month, said Ms Sai. 'Success rates also rose. For instance, in Q1, one or two properties, or even none in some cases, were sold at auctions. However, in May, most of the big auction houses achieved sales of at least two properties per auction.'
Jones Lang LaSalle head of auctions Mok Sze Sze noted that the price gap between buyers and sellers narrowed in May, resulting in more deals being sealed at auctions. Even though 96 properties were offered for auction in April and only 59 in May, last month saw more sealed deals.
Looking ahead, Ms Mok expects total auction sales for this year to surpass last year's tally.
Colliers' Ms Ng expects buoyant sales to continue in the next few months but whether the trend can be sustained depends on the economic recovery, the stockmarket performance and the selling price.
Agreeing, Knight Frank's Ms Sai said: 'There are buyers at auctions if prices are right. But if the reserve price is too high, they will not participate.'
Several landed homes were auctioned off in May, which accounted for its strong showing. They included a semi-detached house at 69 Namly Garden which was sold for $3.7 million or $716 per square foot of land area; the $4.1 million ($442 psf) sale of a bungalow at 20 Bright Hill Crescent off Upper Thomson Road; and 2 Pasir Ris Way (a semi-D) that fetched $2.3 million ($459 psf). The Pasir Ris and Namly Garden properties were mortgagee sales.
Colliers' Ms Ng does not foresee an immediate rise in the number of mortgagee sale properties hitting the auction block.
'A pick-up is likely to happen only in Q3 or Q4 this year. Currently, there's an average of 18 distressed properties being put up for auction per month and the number could go up to about 22 properties per month in Q3 or Q4 this year.'
Knight Frank's Ms Sai expects owner sales to continue buoying auctions in coming months, given the advantage this mode has over private treaty. 'Once the sale is done, the seller collects 10 per cent payment immediately at the auction - instead of having a two-week option period. Prices and terms are pre-determined, avoiding protracted negotiation.
'The advantage to the buyer is that the seller has to sell once the reserve price is reached at the auction, unlike private treaty where the seller can change his mind even if you meet his price before he grants an option.'
May deals outstrip all of Q1; some banks allowing owners to hock their own properties.
Property auctions are in vogue again, with deals touching $18.5 million in May alone. This is higher than the $17.9 million for the whole of Q1 this year, show Colliers International figures.
Banks are playing their part by occasionally stepping aside and letting owners hock their own properties. This is because prices tend to slide when financial institutions repossess a property and offer it as mortgagee sale.After a slow start to the year, a total of $47.7 million worth of properties have been sold at auction in the first five months. Colliers deputy managing director and auctioneer Grace Ng is now predicting that the year would see about $150 million of auction deals - compared to $83.7 million for 2008, which was an 11-year low.
The May figure is the highest since August last year, when auction sales touched about $22.7 million. But last August's number was bumped up by state auctions that raised $13.81 million, while no such special factor was at play in May.
Owner sales accounted for 44 of the 59 properties that went under the hammer last month. Fifteen properties actually got sold, of which just over half - eight - were mortgagee sales. They fetched a combined $8.7 million.
Said Ms Ng: 'We're not seeing a surge in the number of repossessed properties in the market yet as financial institutions are making an effort to manage the situation by helping owners to ride through this difficult period and giving them the opportunity to sell the properties in the open market instead of repossessing the property immediately.'
Knight Frank executive director and auctioneer Mary Sai added: 'Banks know that once they take over a property and it is offered as a mortgagee sale at an auction, some buyers will offer lower prices thinking it's a fire sale or cheap sale. So it's to the bank's advantage to talk things over with the borrower, restructure the mortgage if necessary or at least give him a chance to try selling the property himself first.'
The stockmarket rally and strong homes sales by developers improved the overall sentiment and contributed to the strong auction sales in May.
Attendance at property auctions perked up last month, said Ms Sai. 'Success rates also rose. For instance, in Q1, one or two properties, or even none in some cases, were sold at auctions. However, in May, most of the big auction houses achieved sales of at least two properties per auction.'
Jones Lang LaSalle head of auctions Mok Sze Sze noted that the price gap between buyers and sellers narrowed in May, resulting in more deals being sealed at auctions. Even though 96 properties were offered for auction in April and only 59 in May, last month saw more sealed deals.
Looking ahead, Ms Mok expects total auction sales for this year to surpass last year's tally.
Colliers' Ms Ng expects buoyant sales to continue in the next few months but whether the trend can be sustained depends on the economic recovery, the stockmarket performance and the selling price.
Agreeing, Knight Frank's Ms Sai said: 'There are buyers at auctions if prices are right. But if the reserve price is too high, they will not participate.'
Several landed homes were auctioned off in May, which accounted for its strong showing. They included a semi-detached house at 69 Namly Garden which was sold for $3.7 million or $716 per square foot of land area; the $4.1 million ($442 psf) sale of a bungalow at 20 Bright Hill Crescent off Upper Thomson Road; and 2 Pasir Ris Way (a semi-D) that fetched $2.3 million ($459 psf). The Pasir Ris and Namly Garden properties were mortgagee sales.
Colliers' Ms Ng does not foresee an immediate rise in the number of mortgagee sale properties hitting the auction block.
'A pick-up is likely to happen only in Q3 or Q4 this year. Currently, there's an average of 18 distressed properties being put up for auction per month and the number could go up to about 22 properties per month in Q3 or Q4 this year.'
Knight Frank's Ms Sai expects owner sales to continue buoying auctions in coming months, given the advantage this mode has over private treaty. 'Once the sale is done, the seller collects 10 per cent payment immediately at the auction - instead of having a two-week option period. Prices and terms are pre-determined, avoiding protracted negotiation.
'The advantage to the buyer is that the seller has to sell once the reserve price is reached at the auction, unlike private treaty where the seller can change his mind even if you meet his price before he grants an option.'
经济回暖及利好政策下 中国房价加速回升
Source : 《联合早报》June 11, 2009
（北京综合电）在经济逐步回暖及利好政策支持下，中国主要城市房价加速回升。
据中国国家发展和改革委员会与国家统计局的调查，5月份全国70个大中城市房屋销售价格同比下降0.6%，降幅比4月缩小0.5个百分点。环比则上涨0.6％，涨幅比上月扩大0.2个百分点。
今年4月份，中国70个城市的房价环比上涨0.4％；3月份的环比涨幅为0.2％。
中国国家统计局昨日公布的数据也显示，1-5月全国商品房销售额人民币1万1389亿元，同比增长45.3%。其中，商品住宅销售额增长49%。
同期，完成房地产开发投资同比增长6.8%，增幅比1-4月提高1.9个百分点，比去年同期回落25.1个百分点。
开春的一波“小阳春”行情，提振了中国开发商的信心。近月来，北京、上海、杭州等诸多城市房价均出现不同程度的上涨。
调查结果显示，5月份，新建住房销售价格同比下降1.3％，降幅比上月缩小0.4个百分点；环比上涨了0.7％，涨幅比上月扩大0.4个百分点。其中，普通商品住房销售价格环比上涨了0.8％；高档商品住房销售价格环比上涨0.6％。
在70个城市中，新建住房销售价格5月份环比价格上涨的有60个，厦门、深圳、长春等城市涨幅居前；环比价格下降的城市仅有六个。
当月，二手房房价同比、环比均为上涨。同比上涨0.9％，涨幅比上月扩大0.9个百分点；环比上涨0.7％。
中国房地产尚未全面复苏
虽然今年以来，北京、上海、广州等地楼市走出低迷，房价也出现不同幅度上涨，但房地产服务机构世邦魏理仕昨日发布的研究报告指出，目前中国房地产市场仍处于低迷期向调整期过渡的阶段，市场调整不会在短期内完成，何时结束有待进一步观察。
供应并不会出现断档
世邦魏理仕大中华区资深董事吴家仪认为，国内房价走势很大程度受中央及各地政府近期出台的利好政策影响。
对于北京住宅市场，吴家仪认为，尽管今年以来成交量出现大幅增加，未来市场供应并不会出现断档。
面对住宅市场新增供应集中和高存量的双重压力，预期北京房价在今年仍有下调可能。
摩根大通首席经济学家龚方雄昨日也称，发展商库存快速减少，因此短期内将需买地和增加开支。考虑到房地产投资占中国国内生产总值10％的份额，而且这一领域的发展也将带动其他领域的增长，因此房地产将是推动中国经济复苏的强劲力量。
此前，他也曾预测，二季度中国楼市将继续保持回暖势头，今年中国房价上涨幅度将达5%－10%，而明年涨幅也将达到10%，并鼓励大家最近积极行动起来，投资买地建房。
（北京综合电）在经济逐步回暖及利好政策支持下，中国主要城市房价加速回升。
据中国国家发展和改革委员会与国家统计局的调查，5月份全国70个大中城市房屋销售价格同比下降0.6%，降幅比4月缩小0.5个百分点。环比则上涨0.6％，涨幅比上月扩大0.2个百分点。
今年4月份，中国70个城市的房价环比上涨0.4％；3月份的环比涨幅为0.2％。
中国国家统计局昨日公布的数据也显示，1-5月全国商品房销售额人民币1万1389亿元，同比增长45.3%。其中，商品住宅销售额增长49%。
同期，完成房地产开发投资同比增长6.8%，增幅比1-4月提高1.9个百分点，比去年同期回落25.1个百分点。
开春的一波“小阳春”行情，提振了中国开发商的信心。近月来，北京、上海、杭州等诸多城市房价均出现不同程度的上涨。
调查结果显示，5月份，新建住房销售价格同比下降1.3％，降幅比上月缩小0.4个百分点；环比上涨了0.7％，涨幅比上月扩大0.4个百分点。其中，普通商品住房销售价格环比上涨了0.8％；高档商品住房销售价格环比上涨0.6％。
在70个城市中，新建住房销售价格5月份环比价格上涨的有60个，厦门、深圳、长春等城市涨幅居前；环比价格下降的城市仅有六个。
当月，二手房房价同比、环比均为上涨。同比上涨0.9％，涨幅比上月扩大0.9个百分点；环比上涨0.7％。
中国房地产尚未全面复苏
虽然今年以来，北京、上海、广州等地楼市走出低迷，房价也出现不同幅度上涨，但房地产服务机构世邦魏理仕昨日发布的研究报告指出，目前中国房地产市场仍处于低迷期向调整期过渡的阶段，市场调整不会在短期内完成，何时结束有待进一步观察。
供应并不会出现断档
世邦魏理仕大中华区资深董事吴家仪认为，国内房价走势很大程度受中央及各地政府近期出台的利好政策影响。
对于北京住宅市场，吴家仪认为，尽管今年以来成交量出现大幅增加，未来市场供应并不会出现断档。
面对住宅市场新增供应集中和高存量的双重压力，预期北京房价在今年仍有下调可能。
摩根大通首席经济学家龚方雄昨日也称，发展商库存快速减少，因此短期内将需买地和增加开支。考虑到房地产投资占中国国内生产总值10％的份额，而且这一领域的发展也将带动其他领域的增长，因此房地产将是推动中国经济复苏的强劲力量。
此前，他也曾预测，二季度中国楼市将继续保持回暖势头，今年中国房价上涨幅度将达5%－10%，而明年涨幅也将达到10%，并鼓励大家最近积极行动起来，投资买地建房。
野村证券： 本地楼价可能明年见底
Source : 《联合早报》June 11, 2009
私宅销售量过去几个月频频报捷，房地产关联股夹带这股锐气往上冲，但野村证券(Nomura)分析师提醒投资者当心，本地房地产市场可能采取“W”型复苏形态，楼价也许要到明年才会见底。
野村证券最新发表的新加坡房地产研究报告中指出，目前所见的买气不会长久延续下去，本地楼市的复苏形态较可能是“W”型，而不是预期中的“U”型。
撰写报告的分析师达尔威(Tony Darwell)和蔡明兆指出，虽然目前的低利息环境亲买家，但经济前景未出现明显复苏迹、失业率依然在攀升、私宅租金因供过于求而直线下滑，加上过去延迟付款计划(deferred payment scheme)来买房子的人可能因无法负担而需脱售房子，都将给楼市施压。
他们预测，大众化私宅价格可能从目前到2010年间继续下滑25.9％，而豪华高档房地产价格则在2007年第四季和2010年之间下跌43％。
根据市区重建局的数据，反映大众化私宅价格的郊区楼价退低了14.2％，而高档房地产价格则锐减了31.9％。
分析师指出，投资者也许是看到每平方英尺的楼价从高峰回跌了许多，而认为值得买入，但需求几个月下来保持兴旺，主要是因为获发展商清货行动所推动，削价和给予利息吸纳计划(Interest Absorption Scheme)两个甜头成功虏获买家的心。
在利息吸纳计划下，在项目领取临时入伙准证(TOP)之前，发展商将承担买家的利息。这将减少买家的现金支出，在项目完成之前只需付定金，认为自己的投资风险较低。
面对上述“诱惑”，分析师提醒投资者，市场上其实还有许多已准备就绪但未推出的项目，2009年至2011年的新私宅供应预计每年平均达9898个单位，其中86.2％，或8536个单位已在建设中。
此外，分析师指出，如同定时炸弹的延迟付款计划很可能开始引爆，有超过1万个在计划下购买的单位即将在2013年以前竣工，而其中一些项目的价格显著下跌。
媒体报道，利用延迟付款计划买下单位但在项目完工后无法付款的例子，在今年1月至5月期间有76个。
另外，分析师也指出，被发展商延后发展的集体出售项目将形成“影子存货”(hidden inventory)，打压租金价格加速下滑，影响投资者的租金回报。目前估计有1400个这类单位在市场上出租。
野村证券的报告要比近期的一些报告悲观。
德意志摩根建富证券(DMG & Partners Securities)最新报告指出，楼价可能在今年第一季就已见底，而在接下来的六至九个月，会带动中、高档私宅项目的买气。除了本地买家，海外买家相信也会“回流”。
美银美林的报告则看好新私宅的销售情况会维持强劲，同时也会带动转售市场的交易量上升，预测本地楼价将在2009年第三或第四季见底，在2010年复苏，并强力回弹20％。
私宅销售量过去几个月频频报捷，房地产关联股夹带这股锐气往上冲，但野村证券(Nomura)分析师提醒投资者当心，本地房地产市场可能采取“W”型复苏形态，楼价也许要到明年才会见底。
野村证券最新发表的新加坡房地产研究报告中指出，目前所见的买气不会长久延续下去，本地楼市的复苏形态较可能是“W”型，而不是预期中的“U”型。
撰写报告的分析师达尔威(Tony Darwell)和蔡明兆指出，虽然目前的低利息环境亲买家，但经济前景未出现明显复苏迹、失业率依然在攀升、私宅租金因供过于求而直线下滑，加上过去延迟付款计划(deferred payment scheme)来买房子的人可能因无法负担而需脱售房子，都将给楼市施压。
他们预测，大众化私宅价格可能从目前到2010年间继续下滑25.9％，而豪华高档房地产价格则在2007年第四季和2010年之间下跌43％。
根据市区重建局的数据，反映大众化私宅价格的郊区楼价退低了14.2％，而高档房地产价格则锐减了31.9％。
分析师指出，投资者也许是看到每平方英尺的楼价从高峰回跌了许多，而认为值得买入，但需求几个月下来保持兴旺，主要是因为获发展商清货行动所推动，削价和给予利息吸纳计划(Interest Absorption Scheme)两个甜头成功虏获买家的心。
在利息吸纳计划下，在项目领取临时入伙准证(TOP)之前，发展商将承担买家的利息。这将减少买家的现金支出，在项目完成之前只需付定金，认为自己的投资风险较低。
面对上述“诱惑”，分析师提醒投资者，市场上其实还有许多已准备就绪但未推出的项目，2009年至2011年的新私宅供应预计每年平均达9898个单位，其中86.2％，或8536个单位已在建设中。
此外，分析师指出，如同定时炸弹的延迟付款计划很可能开始引爆，有超过1万个在计划下购买的单位即将在2013年以前竣工，而其中一些项目的价格显著下跌。
媒体报道，利用延迟付款计划买下单位但在项目完工后无法付款的例子，在今年1月至5月期间有76个。
另外，分析师也指出，被发展商延后发展的集体出售项目将形成“影子存货”(hidden inventory)，打压租金价格加速下滑，影响投资者的租金回报。目前估计有1400个这类单位在市场上出租。
野村证券的报告要比近期的一些报告悲观。
德意志摩根建富证券(DMG & Partners Securities)最新报告指出，楼价可能在今年第一季就已见底，而在接下来的六至九个月，会带动中、高档私宅项目的买气。除了本地买家，海外买家相信也会“回流”。
美银美林的报告则看好新私宅的销售情况会维持强劲，同时也会带动转售市场的交易量上升，预测本地楼价将在2009年第三或第四季见底，在2010年复苏，并强力回弹20％。
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