Property Auctions Of $83.7m At 11-Year Low

Source : The Business Times, December 19, 2008

WITH the last two property auctions for the year concluded this week, the final tally of the value of properties sold at auctions in 2008 is $83.7 million - the lowest in 11 years, according to Colliers International.















This year's figure is 79 per cent below last year's number of $407.4 million and 38 per cent less than the $135.7 million plumbed in 1998 during the Asian financial crisis.

Colliers pointed out that the 2008 auction sales value of $83.7 million was worse than two trough points reached in 2001 and 2004, when auction sale values dropped to $160.5 million and $155.4 million, respectively.

All property sectors experienced a decline in their total sales value at auctions in 2008, with the residential sector registering the biggest drop of 88 per cent to $25.2 million from $202.4 million in 2007.

This decline was marked by a plunge in activity in the high-end residential segment in 2008. The year saw just three prime district properties worth a total $4.62 million changing hands at auctions - against 24 properties that sold for $106.1 million at auctions in 2007. In contrast, mass market and mid-tier properties dominated the list of of residential properties sold under the hammer this year.

Colliers' deputy managing director and auctioneer Grace Ng attributed the drop in auctions sales this year to cautious buying sentiment amid the worsening economic outlook. 'Additionally, sellers are also holding on to their asking price. This resulted in a stalemate between buyers and sellers, contributing to the decline in sales value,' she added.

She predicts an increase in mortgagee sale properties at auctions next year against the backdrop of worsening economic outlook and expected rise in unemployment.

This could lead to a potential rise in loan default rates and raise the number of forced sales.

Rival property consultancy Knight Frank projects an increase in the number of properties offered for auction next year as there could be some investors who bought their properties with the deferred payment scheme and would need to sell their properties quickly as the completion dates draw nearer.

New Yishun HDB Flats Up For Grabs At Below-Market Resale Prices

Source : The Business Times, December 19, 2008

THE Housing and Development Board (HDB) has launched Dew Spring @ Yishun where a good number of units are smaller two and three-room flats.

Prices range from $76,000 to $90,000 for each of the 144 two-bedroom flats.

There are 216 three- room flats and these have been priced at $120,000 to $146,000. HDB says that prices of nearby resale flats (which are about 20 years old) are about $175,000 to $180,000 (on a pro-rated basis with units of the same 65 square metre size).

As such, HDB has priced the three-room flats at about 20 to 30 per cent less than comparable resale prices.

There are 504 four- room flats and these have been priced between $197,000 and $238,000.

HDB says that resale prices are between $225,000 and $257,000 (on a pro-rated basis with units of the same 90 sq m size) for the four-room flats nearby. As such, Dew Spring four-room flats are about 7-12 per cent cheaper.

HDB did not have comparable resale prices for two-room flats.

The board said that in pricing new flats, it considers several factors such as location, individual attributes of the flats, design of the project and the prevailing market conditions.

'To ensure public housing is affordable for first- time home buyers, new HDB flats are priced below their equivalent market prices,' it added.

Including Dew Spring, HDB has launched a total of 883 units of two-room and three-room flats this year and plans to launch another 100 smaller flats soon. It also plans to offer about 4,000 smaller units over the next two years.

The launch of Dew Spring follows National Development Minister Mah Bow Tan's announcement in Parliament on Nov 18 that lower-income families and those who need to downgrade to smaller flats can look forward to a steady supply of smaller flats.

PropNex chief executive officer Mohamed Ismail believes that HDB's launch of the smaller units is timely, considering the 'current economic uncertainty'.

He added: 'These flats are priced very attractively. The smaller units are actually going at below $200 psf, which is very much below the median resale prices for that area in the last quarter.'

As the units are situated not far from a golf course and a reservoir, Mr Ismail expects an oversubscription for these units of about four times.

HDB has so far launched 6,600 units under its Build- to-Order system in 2008. It plans to launch another 1,180 units by the end of the year.

Global Economy To Contract 0.4% In 2009: IIF

Source : The Business Times, December 19, 2008

WASHINGTON - The global economy likely will contract next year for the first time in decades as the credit crunch bites, leaving the financial sector on life support, an international banking group said on Thursday.

Charles Dallara, the managing director of the IIF said that the weakening of economic activity and intense financial market strains are feeding on each other and are reinforced by the global synchronization of the slowdown

The Institute of International Finance (IIF), a Washington-based association representing more than 375 of the world's major banks and financial institutions, projected the world economy would shrink 0.4 per cent in 2009, after a 2.0 per cent gain this year.

'It should be emphasized that an overall contraction in the global economy is a truly weak outcome, and the first time this has happened in the post-1960 period,' the IIF said in its monthly Global Economic Monitor report.

Charles Dallara, the managing director of the IIF, called it 'the most severe, globally synchronized recession in modern economic history.' He said the economy was mired in a negative feedback loop.

'The weakening of economic activity and intense financial market strains are feeding on each other and are reinforced by the global synchronization of the slowdown,' the IIF head said.

Philip Suttle, the IIF macroeconomic analysis director, said that data as far back as the early 1950s do not show a contraction in the world economy.

The IIF said that the mature economies already gripped in recession - the United States, the 15-nation eurozone and Japan - would contract a hefty 1.4 per cent amid the worst financial crisis since the Great Depression.

Those advanced economies were seen growing a mere 0.9 per cent this year as the global credit crunch that erupted in August 2007 flared in mid-September with the collapse of Wall Street investment bank Lehman Brothers.

The US economy, the world's largest and the epicentre of the financial tsunami, would shrink 1.3 per cent in 2009 after growth of 1.2 per cent this year, according to the IIF projections.

The eurozone would contract more sharply, by 1.5 per cent from 0.9 per cent growth, and Japan would shrink 1.2 per cent after zero growth.

The sharpest markdown was for the emerging economies, including powerhouses China, India, Brazil and Russia.

Those engines of global growth had resisted the impact of the credit crunch gripping the advanced economies until the mid-September financial firestorm, the IIF said.

The IIF forecasted economic growth in emerging markets would brake to 3.1 per cent in 2009 after a 5.9 per cent gain this year.

'Emerging Asian growth has slowed sharply, but should hold up better than in other regions,' it said.

China's growth would drop to 6.5 per cent in 2009 from 9.3 per cent this year and 11.9 per cent in 2007, while India's deceleration would be less steep, to 5.0 per cent from 6.2 per cent.

The IIF said 'particularly weak growth' was forecast for central, eastern and southern Europe, with economic output of just 0.3 per cent likely for 2009 after 4.5 per cent in 2008.

Since the start of 2007, the reported losses at financial institutions has topped US$1 trillion, the IIF said. Institutions have raised about US$930 billion since mid-2007, with more than one third coming from the public sector.

Hung Tran, head of the IIF's capital markets and emerging market policy department, warned that those losses would increase amid the economic slowdown.

'The weakening economy will increase credit losses, continuing to put pressure on bank capital. This underscores the point that capital injection alone will not be sufficient to strengthen the banking system until the economy and financial markets stabilise,' Mr Tran said.

Mr Dallara recommended measures including the purchase of troubled assets and relief of credit bottlenecks, and said an increasing number of financial institutions were making progress in reforming operations to address the exposed problems.

But he said actions by central banks to cut rates aggressively and take other steps to get credit flowing will help foster a recovery.

'We trust that coherent fiscal and monetary policies throughout Europe and in Japan will play their full parts in restoring conditions conducive to the resumption of sustained global growth,' he said. -- AFP

URA Releases Data Of Private Homes Sold Under DPS

Source : The Business Times, December 19, 2008

Urban Redevelopment Authority (URA) on Friday released information of private homes sold under the Deferred Payment Scheme (DPS).

A total 10,450 units in uncompleted projects were still under the DPS as at Nov 30, 2008.

'This number may change over time as the developers may not extend the scheme to sub-purchasers when the original purchasers sub-sell the units. It also depends on whether the buyers of the remaining units that are not launched or sold yet are offered the DPS or choose to take up the scheme private homes sold in uncompleted projects,' URA said in its release.

URA also gave a breakdown of the 10,450 units still under DPS by three geographical locations and expected year of completion. Some 413 units are expected to be completed by the end of this month. The bulk of the stock, or 4,560 units, is slated for completion in 2009, followed by 2,540 units in 2010.

Ascendas-Frasers Centrepoint JV Clinches Site In Changi Business Pk

Source : The Business Times, December 19, 2008

A joint venture between Frasers Centrepoint and Ascendas has clinched a 60-year leasehold site next to Expo MRT Station on which they will build a retail, hotel and business park project.

The 4.7-hectare site is located within Changi Business Park (CBP). The tender for the plot was launched in June this year. It was the first time developers were invited to submit proposals to design, build and operate a mixed use development in CBP.

The tender was conducted by JTC Corporation.

Groundbreaking for the project is expected by June 2009.

Ascendas president and CEO Chong Siak Ching said: 'This project will set a new benchmark for business parks in Singapore. When completed, we fully expect the development to inject a fresh vibrancy to the area and offer a unique alternative to companies seeking high quality business space outside the Central Business District.'