Tuesday, December 18, 2007

In Quiet Nov, Sales Of New Private Homes Rise

Source : TTODAY, Tuesday, December 18, 2007

The number of new private homes sold in Singapore rose unexpectedly last month in a traditionally-quiet period, amid volatile market conditions.

The Urban Redevelopment Authority (URA) said yesterday that 611 new units were sold last month, up from 590 in October.

Developers launched 598 units last month - which is slightly lower than the 629 in October.

“The market thought that November would be quieter than October, but it turned out to be a little bit better. So, that was unexpected,” said Savills Singapore director of marketing and business development Ku Swee Yong.

“The buyers who were in for short-term gains have disappeared and the serious investors or owner-occupiers were the ones buying homes.”

The United States sub-prime problems are escalating global financial market volatility, resulting in fewer new property launches and more cautious buyers, said Mr Li Hiaw Ho, executive director of CBRE Research.

Still, two bulk purchases were made by investors last month, said Mr Li. These are the 20 units at 8 Napier - at about $3,550 per square feet (psf) - and 44 units at Cliveden at Grange - at nearly $3,700psf.

Mr Li said that the main performers last month were Amber Residences, which sold 85 units, and Casa Fortuna (picture), which sold 103 units.

“It is likely that the total number of new units sold in the fourth quarter will be around 1,700 to 1,800 units. Overall, prices are firming,” said Mr Li. “Sales volume and prices in December should remain at the same levels as October and November.”

Savills’ Mr Ku added: “We didn’t see many deals struck where sellers were willing to give a discount.”

Mr Ku expects this month to be quiet in terms of new sales, but the property market should pick up momentum early next year.

Exclusive St. Regis Hotel To Open On Saturday

Source : Channel NewsAsia, 18 December 2007

Competition in Singapore's luxury hotel industry looks set to heat up with the entry of a new player – the exclusive St. Regis.

The 13th St. Regis hotel in the world – the third in Asia, after Beijing and Shanghai – will be opening for business this Saturday.

As the first internationally-branded luxury hotel to open in Singapore in 11 years, it has planned an official launch in early 2008.

With some 500 staff overseeing 300 suites, the hotel aims to be the front-runner in the luxury hotel business, with services such as butlers on every floor.

It also has three chauffeur-driven Bentleys in the unique St. Regis bronze colour.

Yngvar Stray, general manager of St. Regis Singapore, said: "We have a tremendous respect for all the hotels that are operating in Singapore, but we have the opportunity and the obligation to constantly bring innovation into our industry, and that is what we have been fortunate enough to do, with the product we're putting together." - CNA/so

Asian Economies Set To Lose Some Steam In 2008: Analysts

Source : Channel NewsAsia, 18 December 2007

Asia's economies are set to lose some steam in 2008 as the US economic locomotive slows, but continued breakneck growth in China should ensure the region escapes a severe downturn, analysts predicted.

Japan looks particularly vulnerable to any cooling of the US economy as brisk exports have played a pivotal role in a recovery in Asia's largest economy after a slump stretching back over a decade, they said.

But overall the region is expected to remain relatively resilient to the ongoing fallout from a US housing slump and related credit squeeze.

"Growth will likely moderate somewhat from what has been a very strong performance this year across most of Asia," said David Cohen, director of Asian economic forecasting at Action Economics in Singapore.

The extent of the slowdown will depend on whether the US economy makes a hard or a soft landing, analysts said.

"Asia ex-Japan is well placed to weather a moderate global economic slowdown, but not a sharp downturn," Lehman Brothers economist Rob Subbaraman wrote in a research note.

As well as an expected US slowdown, high oil prices and a possible US dollar slump are seen as the main potential threats to the region.

But analysts said Asia is in better shape to cope with external shocks than a decade ago when the regional financial crisis struck because countries now have current account surpluses and huge foreign exchange reserves.

Despite its resilience so far to signs of a US slowdown, analysts say Asia's fortunes are still closely tied to the United States. "If there is a hard landing, we doubt that the region could decouple; China could even face deflation," said Subbaraman.

Asian economies still rely heavily on the United States to buy the goods churned out by their myriad factories.

"The exposure of Asian economies to the US and other major industrialised economies has increased not decreased over the last couple of years," said Jan Friederich, a senior economist at the Economist Intelligence Unit in Hong Kong.

But he said the fast-growing Chinese and Indian economies might benefit from a moderation in growth amid concerns about overheating.

"China is probably growing a bit fast at the moment. India is probably also still somewhat on the verge of overheating," he said. Slowing demand for their exports would help to rein in growth to more sustainable levels, said Friederich.

According to the Asian Development Bank, Chinese economic growth will ease to 10.5 percent in 2008 from 11.4 percent in 2007 "if government measures to cool the economy begin to take hold."

China's economy continues to power ahead despite government efforts to rein in growth, with a recent emphasis on directly ordering banks to curb lending.

Growth in the Southeast Asian economies is expected to cool to 6.1 percent in 2008 from 6.3 percent in 2007, according to the ADB.

Japan looks set to be one of the weakest performers again in Asia next year, particularly if exports to the US slow, analysts said.

Morgan Stanley economist Takehiro Sato warned Japan was even likely to suffer a "mild recession" in 2008. "Coming on top of high energy prices, the fallout from the sub-prime crisis and errant policies will likely cause economic activity to stagnate," he wrote in a research note.

Inflation has also taken longer than expected to return in Japan after years of deflation, with consumers reluctant to splurge as companies continue to award only meagre pay rises despite bumper profits. A shrinking population also poses a major challenge.

"The Japanese are swimming against the current. The demographics are just not favourable for their domestic growth," said Cohen at Action Economics, who sees Japan's economic growth holding steady at 1.8 percent next year. - AFP/ch

En Bloc Sales: Find Fairer Way To Compensate All

Source : The Straits Times, Dec 17, 2007

THE Singapore Institute of Surveyors and Valuers (SISV) recommends the following methods of apportionment for collective sale: the share value method; 50per cent strata floor area and 50per cent share value method; general valuation method; or the combination of general valuation and share value method.

The share value method favours small units, while the strata floor area method favours units with large areas.

The 50per cent strata floor area and 50 per cent share value method has been quite equitable for the past couple of years as, generally, the bigger units are transacted at a lower rate per sq ft (psf) than the smaller units.

But during the last two years, there has been a growing number of bigger units where the asking on a psf basis is equal or more than that of the smaller units.

One of the reasons could be the reduction in unit size as developers try to maximise the buildings, and hence the scarcity of larger units.

I would like to suggest further variations to the above methods to minimise the objections by the minority owners who own bigger units.

For example, 85per cent strata floor area and 15 per cent share value; or 90per cent strata floor area and 10 per cent share value; or a combination of the percentage of the strata floor area and share value be used, instead of the fixed 50 per cent strata floor area and 50 per cent share value method.

The method chosen will have to be discussed at an extraordinary general meeting.

It will be a win-win situation this way, as a smaller unit is compensated for its share by getting a better psf than a larger unit. At the same time, the larger unit will not be losing out too much. The rationale is to find a fairer way for all owners to be compensated.

During the debate on the Land Titles (Strata) Amendment Bill on Sept20, Nominated MP Siew Kum Hong brought up the matter of apportionment, and the response from Deputy Prime Minister and Law Minister S. Jayakumar was that 'Mr Siew Kum Hong expressed his unhappiness with the guidelines...on how proceeds should be apportioned or distributed. I would look into this. But let me say that we understand that the SISV is working on refining valuation guidelines...Of course, we are not able to specify in the law a standard apportionment method because there are a multitude of factors to consider in deciding on a single method of distributing the sale proceeds...But I take his point about the guidelines, and we will have discussions with the SISV'.

It would be good if we could know the outcome of these discussions.

Alex Cheong Boo Yam

No Takers For Many Collective Sale Sites As Market Cools

Source : The Straits Times, Dec 18, 2007

Quiet end to record year where $12.5b worth of estates were sold en bloc.

MOST collective sale sites put up for tender in recent weeks have closed without any bids.

About 40 estates have been launched for sale since October, but just eight deals were sealed between October and last month, said property firm CB Richard Ellis (CBRE).

‘The end of the year has come early,’ said CBRE executive director Jeremy Lake.

This market cooling comes after a record of about $12.5 billion of collective sales was notched up this year.

That was more than 50 per cent up on last year’s $8.2 billion, CBRE said yesterday.

But developers have become more cautious about buying new sites, amid slowing home sales in Singapore and worries over the United States sub-prime mortgage crisis, property analysts say.

While there is no shortage of home owners keen to go en bloc for the sort of record prices seen for most of this year, the number of sites that have successfully been sold has dropped off significantly in recent weeks - coinciding with slower private home sales.

Figures released yesterday by the Urban Redevelopment Authority showed that 611 new units were sold last month, just a tad more than the 590 new units in October.

That compares with a much higher 1,731 units sold in August, for instance.

Said CBRE Research executive director Li Hiaw Ho: ‘Clearly, buyers have become more cautious in view of the volatility in global stock markets resulting from the sub-prime problems in the US, the smaller number of new launches…and tightened en bloc sales rules.’

A new set of collective sale rules kicked in on Oct 4.

In the weeks before that, a wave of potential sellers rushed to go en bloc to avoid the more time-consuming rules. But even some who managed to launch sales under the old rules have not succeeded in closing deals.

Big sites such as Spanish Village in Farrer Road, Villa delle Rose off Holland Road and Elizabeth Towers in Mount Elizabeth all had no takers at the close of their tenders recently. Their indicative prices were $878 million, $700 million and $673 million respectively.

The tender for former Housing and Urban Development Company estate Chancery Court on Dunearn Road also closed earlier this month without any bids. It had an indicative price of $468 million.

The freehold Royalville off Sixth Avenue - with a guidance price of up to $350 million - also failed to attract bidders. Others with unsuccessful tenders include Dunearn Gardens, Cavenagh Gardens, The Village, Amber Glades, Grange Heights and Thomson View Condominium.

‘There are developers who still want to buy but the problem is that some owners are expecting obscene, sky- high prices,’ said an industry observer.

‘The lull may continue for a while into the first quarter,’ said Credo Real Estate managing director Karamjit Singh.

He said developers have already acquired quite a lot of sites. ‘They don’t need to take extra risks by buying at today’s level unless they believe that there is further upside at current levels.’

Knight Frank’s managing director Tan Tiong Cheng said: ‘Singapore definitely looks very positive… But this external sub-prime problem will affect local and foreign buying so everyone will exercise caution.’

‘Long-term fundamentals still look good… Buying interest should return from mid-January when people return from their holidays,’ said Mr Ku Swee Yong of Savills Singapore.

Others, such as Mr Tan and Mr Lake, believe activity will pick up after Chinese New Year in February.

URA Awards Boon Lay Site To Frasers Centrepoint

Source : The Business Times, December 18, 2007

THE Urban Redevelopment Authority (URA) yesterday awarded a residential site at Boon Lay to Frasers Centrepoint, which put in the higher bid of $205.6 million - or $248 per sq ft per plot ratio (psf ppr) - after the tender closed last week with just two bids.

The weak response to the 99-year leasehold site caught industry watchers by surprise as mass market homes are expected to see good demand next year. Property analysts say that prices of mass market private homes could climb by about 15 per cent next year.

The site, which is bounded by Boon Lay Way and Lakeside Drive, had attracted only two bids - Frasers Centrepoint’s $205.6 million ($248 psf ppr) and GuocoLand’s $191 million ($230 psf ppr).

Both bids are below earlier market expectations of about $300 to $375 psf ppr, which were indicated in October when the tender for the site was first launched.

Despite this, market watchers predicted that URA will award the site as the government is committed to its aim of increasing housing supply.

The site, which has a gross floor area of 828,600 sq ft, is just five minutes from Lakeside MRT station.

Frasers Centrepoint plans to build an 18-storey development comprising three blocks, with a total of 600-plus apartments based on an average size of 1,300 sq ft each.

When the tender closed last week, a spokeswoman for Frasers Centrepoint described the group’s bid price as ‘conservative’. She said that the price reflects a breakeven cost of about $550 psf. ‘We would be looking at an average selling price of at least $700 psf,’ she added.

Private Home Sales Inch Up; Prices Remain Firm

Source : The Business Times, December 18, 2007

URA data shows 4,000 units in 70 developments with pre-requisites for sale as at end-Nov

The number of private homes sold by developers inched up 4.7 per cent to 593 units in November, up from 566 units in October.

The Urban Redevelopment Authority (URA) also revealed monthly property market data of transacted benchmark prices as well as median prices. During the month, a significant number of transactions were seen at Amber Residences, which sold 85 units at the median price of $1,392 psf, and Casa Fortuna which sold 103 units at $1,009 psf.

CBRE Research executive director Li Hiaw Ho also noted that 20 units at 8 Napier were sold at a median price of $3,557 psf and pointed out that these were likely to have been made by a single buyer.

On the performance in November, Mr Li said: 'Overall, prices are firming. Sales volume and prices in December should remain at the same levels as October and November.'

Indeed, developers told BT that launch prices are being maintained even though buyers are now a bit more'cautious'.

UIC Ltd's 192-unit Park Natura, across from Bukit Batok Nature Park, saw 56 units sold in the month at a median price of $945 psf. The price was slightly lower than the October median price of $1,022 but UIC group general manager Vito Koh explained that this was because units sold in November included those with private enclosed spaces like roof terraces.

Mr Koh said that the withdrawal of the Deferred Payment Scheme (DPS) have made buyers more cautious but added that he believes developers are not lowering prices to move units. 'Prices are not coming down, but they are not going up either,' he said.

A comparison of the median price of Amber Residence ($1,392 psf) and the reported average selling price ($1,650 psf) does appear to show that prices may have softened a little.

According to the URA data, 68 units were sold in the $1,000-$1,500 psf bracket with 16 units sold in the $1,500-$2,000 psf bracket. One unit was sold at between $2,000-$2,500 psf.

Jones Lang LaSalle head of research and consultancy Chua Yang Liang noted that launches declined significantly in the Core Central Region (CCR) by 43 per cent from the 166 in October to only 95 in November. 'The take-up or demand further reflects this softer market with 130 units absorbed - a marginal drop of 4 per cent month-on-month (MoM),' he said.

Similarly, demand in the Outside Central Region (OCR) also weakened with a 33 per cent MoM decline or only 173 units absorbed compared to 259 in October. Dr Chua pointed out that this was on the back of a larger supply of 221 units or a 28 per cent increase in the number of units launched.

'The decline in demand in OCR is a likely result of the removal of the DPS,' he explained.

In contrast, the demand in Rest of Central Region (RCR) remained strong. In November, the take-up increased by 57 per cent MoM.

Most of the transactions in the RCR were in District 15. 'Take-up in this segment is largely driven by foreign occupiers that has spilled over from the CCR,' Dr Chua added.

According to the URA data, there are over 4,000 units in 70 developments with pre-requisites for sale as at end-November. This includes mass-market offerings at Bedok Resevoir as well as high-end developments at Cairnhill.

While developers are not 'panicking' at the possibility of a slowdown in the economy, Cushman & Wakefield managing director Donald Han believes more will be 'repositioning' their launches and going directly to foreign buyers in the Middle East and North Asia.

Mr Han, who expects the total volume of transactions in Q4 2007 to be below 2,000 units, added: 'Some developers were already marketing their high-end products at the recent Mipim exhibition in Hong Kong to reach an international market.'

It is a strategy that appears to be working.

Savills Singapore director of marketing and business development Ku Swee Yong said he was pleasantly surprised at some of the benchmark prices reached in the high-end sector, with the highest price for the 40-unit Sui Generis at Balmoral Crescent increasing from $2,578 in October to $2,713 psf in November. Six units were transacted in November and the median price rose from $2,406 to $2,474 psf.

Saying that he believes that this end of the market would continue to be driven by international high net worth individuals, he revealed: 'We had a client who insisted on being first in queue for The Ritz Carlton Residence.' The client later set a new benchmark price of $4,515 psf for the Cairnhill area.

LC, Lum Chang Team Up With Chinese Developer For Housing Project

Source : Channel NewsAsia, 17 December 2007

LC Development and Lum Chang Holdings are teaming up with a Chinese developer, Guangzhou Weicheng Real Estate Development.

Guangzhou Weicheng is developing a largely residential project in Guangzhou, China, called The Lakefront Residence.

It comprises 199 substantially completed residential apartments for sale as well as 188 residential units that have been sold.

The project also includes commercial retail space for rental and another 240 residential units to be built and sold.

Under the agreement, LC Development and Lum Chang will act as a project consultant in the development, marketing and management of the project.

They will also help Weicheng to obtain loans of up to 200 million yuan to complete the development of the project. - CNA/vm

Less Than 2,000 Units Of New Private Homes To Be Sold In Q4

Source : Channel NewsAsia, 17 December 2007

Sales of new private residential homes in Singapore look set to plateau this quarter.

According to the Urban Redevelopment Authority (URA), 593 units were sold in November, up by about 5% from the previous month.

Market watchers said they expect overall prices to rise by 5-8% for the last quarter of this year. This will bring the full year price increase to between 27% and 30%.

Based on the latest figures, analysts said they expect the number of units sold this quarter to fall below 2,000, compared to 5,129 in the second quarter and 3,450 on the third quarter.

Analysts said the withdrawal of the deferred payment scheme took some wind out of the market, but strong economic fundamentals meant the mass market segment will see strong interest well into 2008.

"I think we'll probably be in a region of about 5-8%, in terms of the increase (in price) for the fourth quarter. That brings the overall close to about 30% and I think that's still respectable, considering that the main movement of the market came about during the first 7 months of this year," said Donald Han, Managing Director of Cushman & Wakefield.

In November, 80% of the units sold were in the mid-tier or mass market segments. This follows from October, when there was a more than 50% drop in the the number of units sold in the core central region.

However, prices held up despite another bout of bad news over the US housing mortgage crisis last month.

The Ritz-Carlton Residences, for example, sold 2 units out of 3 put up for sale at S$4,515 per square foot.

Consultants said developers are turning to untapped overseas markets like South Korea and the Middle East.

Han said: "There's been also potential focus on targeting the Russian market. There are a lot of high net worth individuals coming from Moscow looking to buy properties in Singapore.

"These are all non-traditional areas that developers are targeting on, and some have already embarked on this, other than targeting on the usual suspects of foreign investors from Indonesia or Hong Kong."

About 15,000 units are expected to be sold for the whole year, or 34% more than in 2006.

Analysts are forecasting property prices to go up by 10-15% next year. - CNA /ls

Regent Court - From $34 Million To $0

Source : The Electric New Paper, December 18, 2007

En-bloc sale shelved because of one home-owner. Now, neighbours call him their hero

THE done deal was undone - by one household.

Regent Court in Serangoon Road was sold to a developer in April for $34million after the majority of owners approved an en-bloc sale.

But retiree TK Seah said his family opposed the sale, saying they would lose money.

They took their case to the Strata Titles Board (STB) and won. It threw out the en-bloc sale application last week.

When contacted, the STB said they considered the facts and held that one of the objectors had suffered financial loss.

Financial loss means that the en-bloc sale proceeds, after deductions allowed by STB, are less than the price the owner paid for his property.

Under the Land Titles (Strata) Act, a financial loss case provides grounds for STB to dismiss an en-bloc sale.

Mr Seah said they were promised a payout of about $900,000 for their 1,980 sq ft unit.

He said they bought their three-bedroom unit for more than $1 million in 1996.

This means a gross loss of at least $100,000 for this family, not counting their bank interest repayments.

The 81-year-old said in Hokkien: 'It didn't make much sense for us to say yes to the en-bloc sale because the payout is so little. I don't think it's right that we should lose money during the sale.'

A lawyer The New Paper spoke to, who is familiar with en-bloc applications, was surprised that the application even made it to the STB in the first place.


He said such en-bloc dismissals on grounds of financial loss are rare.

The lawyer, who didn't want to be named, said: 'You can't have a successful en-bloc sale if someone has already suffered a financial loss.

'But maybe the applicants didn't know there was a financial loss case in the estate.' With a financial-loss case, the buyer of the estate will usually make good the loss suffered by the seller.

The en-bloc payouts ranged from about $560,000 for a 968sqft unit to about $1.3 million for the largest 3,121 sqft units.

With more than 80 per cent of the households (41 out of 49 units) voting for the sale, you would think Mr Seah would not be a popular figure.

But this was not the case.


This is because property prices have risen since then, and some residents believe that they could to get a better price for their estate if they put it on sale again.

When The New Paper was at the estate last week, Mr Seah was hailed a saviour by some residents who were discussing the latest en-bloc issue.

Mr Seah looked visibly embarrassed, brushed off the accolade and said: 'I was just looking out for my own interest. But I'm glad others also benefited from the STB decision.'

One resident who voted for the collective sale, a businessman who wanted to be known just as Mr Chiah, was quite relieved the sale was dismissed.

He paid about $400,000 for his two-bedroom unit over 20 years ago.

He would've received about $600,000 from the en-bloc sale.

Mr Chiah said: 'I agreed to the sale because the price was good in April. Today, I'm sure the price for this estate has gone up. So, it's actually a blessing in disguise that the en-bloc sale didn't go through this time. If we put the estate up for sale again, I'm sure we'll get a better price for it.'

Rajah & Tann, the legal counsel for Regent Development, said it is reviewing its options.

The majority homeowners' legal counsel, Legal21, also said it is doing the same at this stage.