Friday, October 31, 2008

Boon Lay MRT Extension To Open On Feb28

Source : The Business Times, October 31, 2008

THE Boon Lay Extension (BLE) of the East-West Line is expected to begin service on Feb 28, according to the Land Transport Authority (LTA).

The BLE, it said, will help reduce travel time by as much as 15 minutes by offering direct access to the MRT system instead of requiring bus transfers at Boon Lay station.

It will also reduce the current high utilisation rate of Boon Lay bus interchange and Boon Lay MRT station.

'The BLE is part and parcel of the Land Transport Masterplan to double the rail network in 12 years, from now to 2020,' said Raymond Lim, Minister for Transport and Second Minister for Foreign Affairs.

In addition, the LTA announced its revised MRT Operating Performance Standards (OPS), which came into effect yesterday.

For one, LTA has tightened the train passenger load indicator from 1,700 to 1,600 passengers per train, placing a more stringent limit on the number of passengers each train can carry.

Secondly, a new indicator - train headway - has been imposed to ensure that the intervals between trains during the peak periods do not exceed stipulated standards.

For instance, the operator will have to ensure that during lunch time on weekdays, the headways at Raffles Place (all bounds) range from three to four minutes.

Thirdly, the availability targets of key equipment such as lifts and escalators will be raised to minimise downtime.

'These standards are necessary for today's passenger ride, and SMRT has always remained well within these standards,' said Saw Phaik Hwa, president and chief executive officer of SMRT Corporation.

The 3.8km extension will benefit residents in Jurong West Town and those working in Jurong Industrial Estate. It has two stations - Pioneer Station at Jurong West St 63, and Joo Koon Station at Joo Koon Circle.

Wing Tai Q1 Gain Falls 47%; Revenue Up 34%

Source : The Business Times, October 31, 2008

Earnings dragged down by lower contributions from associated, JV firms

WING Tai Holdings yesterday said that its first-quarter profit fell 47 per cent to $32.6 million - from $61.8 million a year ago - as it saw lower profit contributions from associated and joint-venture companies.

Earnings per share fell to 4.13 cents, from 8.58 cents for the corresponding three months in 2007.

Floridian: Wing Tai's first-quarter revenue climbed 34% due mainly to the higher contributions from the development properties division

For the first quarter ended Sept 30, 2008, revenue climbed 34 per cent to $134.3 million, from $100.2 million in the previous corresponding period. This increase is mainly attributable to the higher contributions from the development properties division, Wing Tai said.

Revenue for the current period came largely from the units sold in Helios Residences and The Riverine by the Park in Singapore, and Sering Ukay in Malaysia.

Profits recognised from these projects also contributed to the increase in the group's operating profit from $15 million to $41.1 million, an increase of 174 per cent.

However, Wing Tai's share of profits of associated and joint-venture companies fell by 88 per cent to $7.8 million in Q1 due to the substantially lower profit recognition from the sale of residential units in VisionCrest and USI Holdings.

Looking ahead, Wing Tai said demand for properties is expected to slow down with the slower economic growth and weaker market sentiment. In a filing to the Singapore Exchange, it said: 'The group will continue to monitor the market closely and will exercise prudent management to ride through these difficult times.'

Wing Tai, like many other Singapore developers, has been reluctant to cut selling prices to entice buying - except when it comes to Floridian, its joint-venture project with Far East.

As at end-September, Wing Tai had only soft-launched the high-end Belle Vue, selling six units at a median price of $2,044 per square foot.

As at Sept 30, 2008, Wing Tai's net gearing ratio was 0.4 times and it has no loan maturing in Singapore for the next 12 months, the developer said.

Wing Tai shares gained 5 cents to close at 60 cents yesterday. The stock has lost 77.8 per cent so far this year. The developer has been supporting its share price through its share buyback programme since late last year.

'Since November 2007, a total of 6.96 million shares have been bought back by the company for a total of $11.34 million, or $1.63 a share on average,' Morgan Stanley analysts noted on Oct 24. Management can be expected to continue buying back shares, the analysts said.

Wing Tai has also been steadily increasing its stake in its associate company USI Holdings in the last month or so. Yesterday, Wing Tai said that it has once again increased its shareholding in USI from 34.809 per cent to 34.831 per cent.

CapitaLand Q3 Profit Falls 26% On Slower Home Sales

Source : The Business Times, October 31, 2008

Singapore's largest developer CapitaLand said on Friday that net profit for its third quarter ended September 30, 2008 fell 25.6 per cent to S$419.4 million, from S$563.9 million a year ago.

Revenue in 3Q 2008 was fell to S$597.2 million, down 33.3 per cent from S$895.8 million in 3Q2007. CapitaLand was hit by lower sales revenue from development projects in the core markets.

But the decline in turnover was mitigated by stronger rentals from investment properties and higher fee-based income from real estate investment trusts (Reits) and funds under the group's management, it said.

Earnings for 3Q 2008 were also boosted by gains from the divestment of Capital Tower Beijing in China and 1 George Street in Singapore, as well as the injection of the Raffles City properties in China into the Raffles City China Fund.

CapitaLand's assets under management stood at S$24.8 billion as at 30 September 2008, up 18 per cent compared to the previous quarter.

CapitaLand is well-positioned to ride out the global financial and economic uncertainties, said CapitaLand chairman Richard Hu. 'It has the strong balance sheet, liquidity and diversified sources of funding necessary to act on investment opportunities that will arise in the current capital-constrained environment,' he said.

Chief executive Liew Mun Leong pointed out that the company has strengthened its balance sheet by increasing its cash position to S$4.2 billion.

This strong balance sheet will be particularly useful in the current global financial crisis which has brought down not only Wall Street's blue chip financial institutions but also created in its wake a global recessionary environment,' Mr Liew said. 'With the situation deteriorating rapidly, we are strategically watching the distressed markets, very carefully seeking out opportunities to make the right acquisitions at the right price.'

CapitaLand will continue to seek out opportunities as before, focusing capital and human resources into its existing established sectors of residential, retail, commercial, hospitality, integrated developments and financial services in core markets, he added.

热门地区大型组屋 第三季转售价下滑

Source :《联合早报》October 31, 2008


















Thursday, October 30, 2008

Shui On To Delay Plan To Build Resorts In China

Source : The Business Times, October 30, 2008


(HONG KONG) The global credit squeeze has prompted Shui On Land to delay plans to build resorts in four cities in China's Yunnan province.

Mr Lo: 'Under the circumstances, it's just not realistic to expect us to obtain sufficient finances.'

'Under the circumstances, it's just not realistic to expect us to obtain sufficient finances,' said Vincent Lo, chairman of the Hong Kong-listed, Shanghai-based developer.

The billionaire was speaking in an interview in the western Chinese city of Chongqing yesterday.

The projects in Kunming, Diqing, Lijiang and Dali, costing as much as 50 billion yuan (S$10.9 billion), may be delayed until the second half of next year, Mr Lo said.

Central banks around the world are trying to thaw frozen credit markets and avert a global recession. China's economy, the world's fourth biggest, is under threat from weaker demand for exports and slumping property sales that may undermine investment.

Global credit and stock markets 'need to settle', Mr Lo said.

The 60-year-old is worth US$2.5 billion according to a Forbes magazine ranking of the world's richest people, published in March. Market declines may have trimmed that number.

He is the sixth son of Lo Ying-shek, the late founder of Hong Kong-based developer Great Eagle Holdings.

Shui On's shares fell 1.6 per cent to HK$1.26 in Hong Kong yesterday. The stock has lost 86 per cent this year, more than the 54 per cent decline in the benchmark Hang Seng Index.

China Vanke Co, the country's largest publicly traded real estate developer, this week reported a drop in third-quarter profit amid what it described as a housing market 'recession'.

Mr Lo was speaking at a ceremony to mark the start of construction of one of the office towers at its eight billion yuan Chongqing Tiandi project.

Hong Kong-based Winnington Capital may raise its stake in the project to 50 per cent from 20 per cent, according to chief investment officer Kenneth Hung. The fund is raising US$1 billion to invest in Chinese property, Mr Hung told reporters after the ceremony yesterday.

In May, Winnington bought 25 per cent of a Shanghai residential project from Shui On for US$162 million and may buy another 25 per cent, Mr Hung said. It may also invest in a Shui On project in Foshan, he said.

Shui On, known for the Xintiandi office and entertainment complex in Shanghai, has been expanding outside of eastern China. In May, the company said that it will invest in a software park in the north-eastern city of Dalian and it's also building replicas of the Xintiandi complexes in Wuhan, Hangzhou, Chongqing and Foshan. -- Bloomberg

Wing Tai Reports Q1 Earnings Fall Of 47%

Source : The Business Times, October 30, 2008

WING Tai Holdings said Thursday that its first quarter profit fell 47 per cent to S$32.6 million, from S$61.8 million a year ago as it saw lower profit contributions from associated and joint venture companies. Earnings per share fell to 4.13 Singapore cents, from 8.58 Singapore cents a year ago.

For the three months ended September 30, 2008, Wing Tai saw revenue climb 34 per cent to S$134.3 million, from S$100.2 million in the previous corresponding period. This increase is mainly attributable to the higher contributions from the development properties division, Wing Tai said.

Revenue for the current period came largely from the units sold in Helios Residences and The Riverine by the Park in Singapore, and Sering Ukay in Malaysia. Profits recognized from these projects also contributed to the increase in the group's operating profit from S$15.0 million to S$41.1 million, an increase of 174 per cent.

However, Wing Tai's share of profits of associated and joint venture companies fell by 88 per cent to S$7.8 million in Q1 due to the substantially lower profit recognition from the sale of residential units in VisionCrest and USI Holdings.

Looking ahead, demand for properties is expected to slow down with the slower economic growth and weaker market sentiment, Wing Tai said: 'The group will continue to monitor the market closely and will exercise prudent management to ride through these difficult times.'

As at September 30, 2008, Wing Tai's net gearing ratio is 0.4 times and it has no loan maturing in Singapore for the next twelve month, the developer said.

Property Transactions With Contract Dates Between Oct 13th - 18th, 2008

UK House Prices Fall 7.3% Y-O-Y In October

Source : The Business Times, October 28, 2008

(LONDON) English and Welsh house prices fell by 7.3 per cent in the year to October, with the pace of decline accelerating to take prices back to their lowest since March 2006, property consultancy Hometrack said yesterday.

Average house prices fell by 1.3 per cent to £163,200 in Hometrack's October survey, faster than the one per cent drop recorded in September.

Forecasters from London's Centre for Economics and Business Research predicted in a separate report yesterday that British house prices would fall by 25 per cent from their peak in the third quarter of 2007 to a likely trough at the end of 2009. This would take property prices to below 2004 levels.

The downturn in property prices - which have doubled since the start of the decade - is both a consequence and a cause of the economic gloom settling on Britain, where two-thirds of households own their own home.

Official data released last week showed that the British economy shrank for the first time in 16 years between July and September, contracting 0.5 per cent, and British Prime Minister Gordon Brown has warned that the country risks recession.

'The outlook for demand is set to remain weak as consumers focus their attention on the economy,' said Richard Donnell, Hometrack's director of research.

'The expectation of a forthcoming recession and rising unemployment will further undermine demand for housing and continued price falls are inevitable in the months ahead.'

Homes took an average of 11.9 weeks to sell, up from 11.5 weeks in September, and buyers paid just 89 per cent of sellers' asking prices, down from 90 per cent last month. - Reuters

Tokyo Residential Property Set For Full-Blown Decline

Source : The Business Times, October 28, 2008

Japan's slowing economy and the credit crisis has damped commercial, residential demand

(TOKYO/SHANGHAI) Tokyo residential property prices may be poised for a major decline because of excess housing supply and flagging demand, said Minoru Mori, chairman of Japan's biggest privately held developer. 'We foresee full-blown drops in residential property prices,' Mori Building Co's chairman said in an Oct 25 interview in Shanghai.

Gloomy days: The capital value of grade A office buildings in Tokyo's commercial business districts fell 2% on average as of March from three months earlier, according to an estimate by Jones Lang LaSalle

Japan's slowing economy and the credit crisis that tightened lending has damped demand for commercial and residential property in Japan. The slump in Tokyo's condominium market may last longer than the drop after Japan's asset-price bubble burst in 1990, according to an estimate by the Real Estate Economic Research Institute.

Condo supply in Tokyo fell 24 per cent for the first six months of the year from the same period a year earlier. The number of new condos put up for sale in Tokyo, which stayed above 80,000 units since 1999, fell to 69,194 units in 2007 because sales declined and inventories rose. Commercial real estate is holding up better than residential property, said Mr Mori.

'Tokyo's commercial property market remains relatively healthy. The current price decline probably won't be more than 10 per cent,' Mr Mori said.

Tokyo-based Mori has scrambled to manage the impact of the global financial market turmoil. Lehman Brothers Holdings Inc, which last month filed for the largest bankruptcy in history, was a tenant of the developer's Roppongi Hills complex, occupying 275,000 square feet of office space.

Nomura Holdings Inc, which agreed to buy Lehman's European and Asian assets, has expressed an interest in taking over Lehman's lease at Roppongi Hills, Mr Mori said in the interview. Japan's biggest brokerage also 'hinted' at possibly increasing the floor space it leases at the complex, he said.

Other tenants at the complex such as Goldman Sachs Group Inc are under long- term agreements that incorporate increases in the rents they pay, Mr Mori said. 'On a contractual basis, we don't foresee any problems,' he said.

The capital value of grade A office buildings in Tokyo's commercial business districts fell 2 per cent on average as of March from three months earlier, according to an estimate by Jones Lang LaSalle.

As commercial prices declined, Mr Mori said now is the time to prepare for land acquisition for large-sized projects similar to Roppongi Hills. 'We have plans to introduce second, third, fourth and fifth Roppongi Hills,' said Mr Mori. 'This is a good time to plan for large-size projects.'

Mori is in talks with local residents to redevelop Toranomon-Roppongi. The developer plans to build a 46-storey commercial tower and a six-floor residential building on a 15,350 square metre site in 2009.

Other projects under planning include Loop Road No 2 from Toranomon to Shimbashi in central Tokyo and a waterfront development project in Yokohama, according to the company's website.

These projects will require infrastructure such as roads and large blocks of available land, both of which may take some time, he said.

Mori Building's Shanghai World Financial Center, China's tallest building, was opened to the public on Aug 30. Space in the building was leased 'faster than expected' to near 50 per cent of capacity currently from 40 per cent in August, Mr Mori said.

Japanese financial institutions such as Mizuho Financial Group Inc and Sumitomo Mitsui Financial Group Inc have taken space, he said. Demand for space may slow with the opening of new office developments in Shanghai, such as Sun Hung Kai Properties Ltd's Shanghai IFC complex, located next to Mori's building.

'As new developments come on line, it might be difficult to enjoy the same occupancy rates as before, and net demand might decline somewhat,' Mr Mori said. -- Bloomberg

Foreclosure Crisis Vexes US Govt

Source : The Business Times, October 28, 2008

Over 4m homeowners with a mortgage are at least one month behind on their payments as at end-June

(WASHINGTON) Each day from July through September, more than 2,700 Americans lost their homes in foreclosure. That number, up from 1,200 a day a year ago, is a sign that the mortgage industry and government programmes have done little to help troubled homeowners.

Sign of the times: The No1 reason people fall behind on their mortgage is loss of a job, or some source of income, perhaps from a divorce or death of a spouse. If a borrower is unemployed, lenders do not have many options but foreclosure

The mortgage market's troubles have proved to be far more serious and intractable than most in government or the private sector had predicted a year ago.

'We are behind the curve. We are falling behind,' Sheila Bair, head of the Federal Deposit Insurance Corp (FDIC), told a Senate hearing last week. 'There has been some progress, but it's not been enough, and we need to act. And we need to act quickly, and we need to act dramatically to have more wide-scale, systematic (loan) modifications. . .'

More than four million homeowners with a mortgage were at least one month behind on their payments at the end of June, according to the latest data from the Mortgage Bankers Association, and a record 500,000 had entered the foreclosure process.

So why is the foreclosure crisis so hard to fix? There are five main reasons: 1) Crashing home prices: A massive speculative bubble in housing prices caused millions of Americans to think of their homes as an investment, rather than a place to live.

Now prices are plummeting, especially in once-sizzling markets like California, Florida and Nevada. And the bleeding might not stop until the end of next year.

The median home price in the US dropped 9 per cent in September from a year ago to US$191,600, and is down 17 per cent from the peak in July 2006, the National Association of Realtors said last week. Already, 23 per cent of homeowners with a mortgage owe more on their loans than their homes are worth, and that figure is expected to rise to 28 per cent by this time next year, according to Moody's

2) Investor speculation: Plunging prices have had even more impact on investors than on homeowners because investors have less emotional attachment to a house. They are even more likely to walk away, especially if they have put little money into a property. Investors purchased one of every five homes last year, and almost one of every three when the market peaked in 2005, according to the Realtors trade group.

Now, more than 30 per cent of properties in the foreclosure process are owned by someone with a different address, indicating the home is likely owned by an investor, according to foreclosure listing service RealtyTrac Inc. Government programmes to help homeowners are specifically designed not to help such investors, though in reality it may be hard to weed them out.

3) Complex investments: Traditionally, lenders evaluated borrowers carefully because they held onto the mortgages for the life of the loan. That process started to change in the late 1980s, as Wall Street found new ways to package the loans into securities to sell to investors.

Investors were attracted to these new mortgage-backed securities because they paid better returns than government bonds.

At the beginning of this decade, the Federal Reserve started cutting interest rates to historic lows. So investors poured money into the US mortgage market, particularly into securities made up of high-interest mortgages made to borrowers with poor credit records.

The high-interest, risky mortgages, called 'sub-prime', boomed, from US$160 billion in new loans in 2001 to more than US$600 billion in both 2005 and 2006, according to Inside Mortgage Finance, a trade publication.

Lenders stopped worrying about the creditworthiness of borrowers and offered them ever-riskier mortgages. Most of those loans were made by commission-driven mortgage brokers, who had nothing to lose if the mortgage went bad because it had been resold. 'By the time it defaults, it's somebody else's headache,' said Barry Ritholtz, CEO of research firm FusionIQ.

4) Job losses: The No 1 reason people fall behind on their mortgage is loss of a job, or some source of income, perhaps from a divorce or death of a spouse. If a borrower is unemployed, lenders do not have many options but foreclosure.

Two years ago, about 36 per cent of mortgage delinquencies were caused by loss of income or unemployment, according to research by mortgage finance company Freddie Mac. But that number has risen to 45 per cent this year as the unemployment rate has ticked up to a five-year high of 6.1 per cent.

Jon Falen, 33, put his four-bedroom house in Olathe, Kansas on the market more than two years ago, after health problems forced him to leave his job as an air traffic controller. Mr Falen and his wife, now delinquent on their two home loans, are finally scheduled to sell their house next month. But there is a big catch: The buyer has agreed to pay only US$490,000, which is US$70,000 less than what the couple paid for it in 2002.

Making matters worse, Mr Falen and his wife owe US$675,000 to two lenders because they used their home equity to pay off student loans and remodelling expenses. Though Mr Falen and his family seem to have avoided becoming another foreclosure statistic by cashing out on retirement plans and dipping deeply into savings, he is chastened by the drawn-out experience.

5) Falling behind again: It's hard to fix something that keeps breaking. Roughly one-third of all sub-prime loans modified in the third quarter of last year were delinquent again within 10 months, according to a Credit Suisse report released this month.

Maria Martinez, 57, an administrative worker at the county jail in Stockton, California, is typical of homeowners who have gotten help, but not enough. She is three months behind on her mortgage, even after receiving a loan modification earlier this year.

Though Ms Martinez bought the house more than a decade ago for only US$76,000, she now owes about US$230,000 because she refinanced her home loan several times.

- So what has and should be done? The scale of the mortgage crisis became clear in July 2007 when Countrywide Financial, then the largest US mortgage lender, reported an unexpected surge in defaults in high-quality mortgages.

Three months later, the Bush administration announced a new mortgage industry coalition - dubbed the Hope Now alliance. The coalition had an 'aggressive plan to reach more homeowners and help them find a way to stay in their homes', Treasury Secretary Henry Paulson said at the time.

Faith Schwartz, the coalition's executive director, said the effort was never meant to be the only solution to the foreclosure crisis. She says there 'has been a tremendous effort' on the industry's part, noting that 1.9 million households have received letters urging them to call a housing counsellor.

Industry and government responses have also drawn fire from consumer advocates for being too slow and too narrow. The Federal Housing Administration (FHA), a government agency that backs loans to borrowers with weak credit, says it has helped about 400,000 borrowers refinance over the past year, though only about one per cent were behind on their loans.

This month, the FHA started the 'Hope for Homeowners' programme, included in legislation passed over the summer by Congress. It is designed to let another 400,000 troubled homeowners swap their mortgages for traditional 30-year fixed rate mortgages, but only if lenders agree to reduce the value of a loan and take a loss.

But there are still questions about how eager lenders will be to participate. Faced with public outrage that they passed a US$700 billion plan to rescue the financial industry, politicians in Washington are going to keep trying to find ways to fix the foreclosure crisis. One promising approach came this month when 11 states entered into a more than US$8 billion settlement with Countrywide Financial and its new parent Bank of America Corp.

The settlement, which goes into effect on Dec 1, is projected to help an estimated 400,000 Countrywide borrowers by allowing them to replace risky loans with ones at substantially lower interest rates.

And in Washington, the FDIC's Ms Bair has proposed a plan in which the government would provide guarantees for mortgages that have been reworked by banks, lowering payments to more affordable levels. All eyes now are on Ms Bair, Mr Paulson and other top officials to see if the government can craft a plan that gets at the heart of the global financial meltdown - the US foreclosure crisis. -- AP

51% Of US Owners Say Their Property Value Fell

Source : The Business Times, October 30, 2008

Perception of values more accurate as economy's weakness hits home: survey

(NEW YORK) A majority of US homeowners believe the value of their property fell over the past year, according to a survey of real estate market confidence by data company

On the block: Foreclosure-related sales accounted for 35%-40% of total September sales

The survey of 1,388 homeowners between Oct 7 and Oct 9 found 51 per cent said their houses had lost value, while 49 per cent believed the value had stayed the same or increased, Seattle-based Zillow found.

In an earlier survey, taken from June 30 to July 2, 38 per cent said their homes had lost value and 62 per cent said they had gained or stayed the same. Three quarters of homes have actually fallen in value over the past year, Zillow said.

'The bad news on the general economy front is getting through to people and certainly is making their perception of home values more accurate,' Zillow's vice-president of Data and Analytics Stan Humphries said in an interview.

The median price of an existing home dropped to US$191,600 in August, down from a record high of US$230,200 in July 2006, according to the Chicago-based National Association of Realtors.

The disconnect between owners' perception of value and actual market conditions makes it harder for real estate agents to price homes to sell, Mr Humphries said.

Homeowners 'have a larger sense of the personal wealth of their portfolio than is actually the case,' he said.

Zillow's Home Value Misperception Index shrank to 16 in the third quarter from 32 in the second quarter. An index value of zero indicates homeowner perceptions are in line with actual values.

Homeowners also were less optimistic about the future. About 21 per cent said they believe their home's value will rise over the next six months, compared with 32 per cent who predicted price appreciation in the previous survey.

About 57 per cent said they thought property values in their local market will fall.

'It's human nature for people to imagine that what they have is nicer than what their neighbours have and unfortunately that's not always the case,' said realtor Elizabeth Blakeslee, an agent with Coldwell Banker Residential Brokerage in Washington, DC and a regional vice-president of the National Association of Realtors.

Purchases of existing homes jumped 5.5 per cent in September to a 5.18 million annual pace, the highest level in a year, according to NAR. Part of the reason is that a flood of less expensive foreclosed property drew buyers.

Foreclosure-related sales accounted for 35 per cent to 40 per cent of total September sales, NAR said. The median price dropped 9 per cent.

Respondents to the Zillow survey who said they plan to vote for Republican presidential nominee John McCain were more optimistic about their home values than were supporters of Democrat Barack Obama.

About 50 per cent of would-be McCain voters said their home values have decreased in the last year, compared with 56 per cent of Obama voters, Zillow said. -- Bloomberg

China, Korea Face Housing Market Bust

Source : The Business Times, October 30, 2008

Analysts say both countries have to take more steps to spur demand

(HONG KONG/SEOUL) China and South Korea have moved to prop up their frazzled housing markets but probably need to do much more to avoid major price slides that could ruin developers, damage banks and threaten the region's economies.

A share price collapse this week for Chinese property developers such as Guangzhou R&F and China Overseas Land suggests that many investors believe a housing market bust is on the cards, despite a policy U-turn by Beijing.

'Investors might just be throwing in the towel,' UBS analyst Eric Wong said of the sharp drop, which saw some stocks lose as much as 35 per cent of their value over Monday and Tuesday. The Chinese government, fearing a price bubble, was in market cooling mode only a year ago, squeezing developers with a clampdown on loans and hatching moves to stamp out speculation.

New home prices then slumped by up to 40 per cent in the southern cities of Guanzhou and Shenzhen as sales dried up, and property firms began slashing prices across the country to keep cash flowing in.

The outlook grew even dimmer as the global credit crisis began to buffet Asia and batter its financial markets, stalling the region's once-roaring economies.

So last week Beijing unveiled cuts in taxes, mortgages and down payments on homes in an effort to breathe life into a property industry that accounts for about 10 per cent of gross domestic product (GDP) in the world's fourth-largest economy. But the country's biggest developer, China Vanke Co, reported on Tuesday a 13 per cent decline in net profit and a nearly 30 per cent drop in sales volume, in another reminder of how deep-seated the problems are.

If the housing market fails to perk up, analysts say policy makers will probably resort to macro-economic measures to spur demand, such as cutting taxes and interest rates.

'The usual monetary cocktail is a blunt instrument but it's longer lasting,' said UBS's Mr Wong, adding that Beijing might also raise export subsidies and hike pay at state companies.

On the property side, the government could reel back on its measures to dissuade people from buying apartments as investments and tell banks to start lending to developers again, Mr Wong said.

In South Korea, where around half the country's personal wealth is tied up in property, the government pledged five trillion won (S$5.3 billion) last week to buy unsold homes and land from developers to prevent mass bankruptcies in the industry.

An interest rate cut of 75 basis points followed on Monday as policy makers tried to keep the global financial storm at bay.

The steps are a reaction to slowing economic growth and a steep climb in the number of unsold new homes on the market, which rose 43 per cent to a record 160,595 units in July from the end of 2007, according to government data.

Just as in China, the government had a hand in slowing the market in early 2007, tightening restrictions on mortgages and buying second homes.

Analysts believe freeing up finance for homebuyers is the answer, not just taking homes off the market. Apartment prices in the most expensive districts in Seoul and in satellite towns have fallen up to 20 per cent from their peaks in 2006.

'The measures came too late and are too weak,' Daiwa Institute of Research analyst Hyo Yim said of the government's action to shore up the property market.

The government should loosen rules on mortgage lending and cut back taxes on owners of two or more homes, Mr Yim said.

Mortgage debt in South Korea is still only a quarter of GDP, compared to 61 per cent in Australia, and 105 per cent in the United States, according to CLSA. In China, home loans equal only 12 per cent of GDP.

'The government cracked down on so-called speculative buyers, but people won't buy homes if they don't expect prices to rise,' said Mr Yim, adding that the housing market would probably not recover before 2010.

Many of South Korea's 12,000 builders face a cash crunch as credit dries up and home sales slow, with 88 firms defaulting in the first nine months of 2008, up 17 per cent from a year earlier.

Even top developers are not immune to such worries, with shares in GS Construction, Hyundai Development and Samsung Engineering tumbling between 37 and 50 per cent in the last month.

But some analysts are suggesting that South Korean construction stocks may have bottomed thanks to the government's actions, with valuations at historical lows and at a 30 per cent discount in price/earnings terms to the overall stock market. BNP Paribas analyst Jae Rhee has a 12-month target stock price for Hyundai Development that is double its current price. And the potential upside for GS Construction and Samsung Engineering is about 70 per cent, he wrote in a report last week.

Chinese developers are now trading at near 70 per cent discounts to net asset value, and at 7.4 times forecast 2008 earnings, according to Citigroup analyst Oscar Choi, who believes the stocks have been sold off 'indiscriminately'.

And Beijing will do all it can to stop a property market crash, said CLSA analyst Nicole Wong, who has a buy rating on New World China Land and Agile Property.

'Policy is very supportive; basically they're underwriting a put option on market,' she said. 'For sure the government will take further steps if the downward spiral doesn't stop.' - Reuters

Marina IR Not Likely To Open Fully In End-'09

Source : The Strait Times, Oct 30, 2008

THE integrated resort (IR) at Marina Bay is unlikely to be fully open for business at the end of next year, sources have said.

An old British-built sea wall on its site, which stands on reclaimed land, is among the problems. It delayed foundation works by three to four months, and then a shortage of labour and the rising cost of building materials also created setbacks.

When the Marina Bay project was awarded to Las Vegas Sands in 2006, its top executives announced that the entire resort would be ready by end-2009 - a departure from the industry practice of opening such mega projects in stages.

But sources now confirm that it is 'several months' behind schedule and that, even if the physical structure can be ready by then, it will be 'impossible' for all its facilities to be fully operational.

The 2,600-room resort with a gross floor area bigger than 70 football fields is supposed to be the new hub for the meetings, incentives, conventions and exhibitions business with its 200 meeting rooms, exhibition hall for 2,000 booths and ballroom for 6,600 diners.

Asked about the delay, Marina Bay Sands general manager George Tanasijevich maintained: 'As previously announced, we are scheduled to launch at the end of 2009.'

But show organisers and wedding couples hoping to book the venue at the end of next year have been turned away.

Bride-to-be Rachel Law, 27, called the resort in August to ask about holding her wedding dinner there next November and was turned down despite having begged for her booking to be taken.

An event organiser, who said the earliest booking available was for an April 2010 event, asked: 'If they are opening next year, why are they turning away business until 2010?'

Construction woes aside, the free-fall in the stock value of the resort's parent company Las Vegas Sands Corp - from US$178 13 months ago to under US$5 now - has also raised questions about the fate of the US$4.5 billion (S$6.7 billion) project here.

CIMB-GK economist Song Seng Wun, predicting that the gaming sector will be hit by the global recession, said the operators' vulnerability is on everyone's mind.

The collapse of banks like Lehman Brothers Finance Asia and Merrill Lynch International Banks has also put a question mark on the $5.25 billion loan secured by Marina Bay Sands. The two American banks were among the lead arrangers for the loan, along with local banks like DBS Bank, United Overseas Bank and OCBC Bank.

Mr Tanasijevich did not reply to questions on the status of the Singapore loan, nor those on whether the IR will open in phases and when it would accept bookings for events.

Singapore Tourism Board (STB) director of integrated resorts Margaret Teo told The Straits Times the board is monitoring the situation, but did not respond to other queries on penalties or whether the resorts will open in phases.

She said, however, that the STB was working with key agencies and the resorts to resolve potential delays and to enable the resorts' completion.

Analysts note that the two resorts have up to eight years to finish construction, but delays are bound to hurt the Singapore economy because of the 60,000 new jobs and $5.4 billion in revenue that they are expected to generate.

Tourism and gaming consultant Jonathan Galaviz, reckoning the losses to run into millions of dollars every month, said: 'It brings into question the true economic value each bidder promised the Singapore Government in the formal proposal.'

The rules of the awards of the two projects given in 2006 stated that both companies must start construction within three years and complete them in eight years.

They stand to lose their deposits of $200 million each and the Government could repossess the land as a penalty.

What Is Sustainable Construction?

Source : The Strait Times, Oct 30, 2008

SUSTAINABLE construction involves building and designing eco-friendly buildings that reduce adverse impact not only on the environment but also on the health of their occupants.

The Building and Construction Authority (BCA) encourages green buildings here with its Green Mark Scheme.

It rates buildings for their environmental performance and provides financial incentives to go green.

The scheme aims to promote sustainability and raise environmental awareness among developers, designers and builders when they begin designing a building as well as during construction.

One example of sustainable construction is the use of products that are made from recycled materials.

Holcim Singapore and the BCA have developed a product called 'Holcim Green' that promotes greener building practices.

This is a form of concrete which uses recycled material such as granite from demolition debris and used copper slag as sand.

Developers who use this form of green concrete, for example, can score extra points in the assessment of their buildings under the Green Mark scheme, said Holcim Singapore chief executive Sujit Ghosh.

The BCA Green Mark is awarded based on five key criteria:

# Energy efficiency

# Water efficiency

# Site/project development and management (building management and operation for existing buildings)

# Good indoor environmental quality and environmental protection

# Innovation

Sentosa IR To Delay Parts Of Project

Source : The Strait Times, Oct 30, 2008

Only four hotels, casino and Universal Studios to open as scheduled in first quarter of 2010

FOUR hotels, Universal Studios and the casino of the Sentosa integrated resort are set to open as scheduled in the first quarter of 2010.

But sources told The Straits Times that Resorts World at Sentosa is negotiating with the Government to defer the opening of the remaining facilities in the $6 billion resort.

The setback, The Straits Times understands, has arisen out of a pressing need to find storage space for the equipment for the 14 attractions in the Universal Studios theme park.

To create space on-site, the resort has had to turn one of its venues into a store and, while the venue is used this way, construction has to be put on the backburner.

Asked about this, Resorts World at Sentosa head of communications Krist Boo would only say the project is 'on track' for a 'soft opening' in 2010.

She added: 'Due to the tight labour market and the need for many varied specialist skills - both front-line and in operations - in the resort and in Universal Studios Singapore, we will be progressively opening our many hotels, food and beverage outlets, casino, entertainment and attractions from the first quarter of 2010.'

Like Las Vegas Sands Corp, Resorts World at Sentosa's parent company Genting has been hit by the financial crisis. Its stock price fell by half from RM8.50 a year ago to its current value of about RM4.

The Singapore Tourism Board declined to respond to queries on the ongoing negotiation.

US Economy Shrinks 0.3%

Source : The Straits Times, Oct 30, 2008

WASHINGTON - THE US economy jolted into reverse during the third quarter as consumers cut back on their spending by the biggest amount in 28 years, the strongest signal yet the country has hurtled into recession.

Consumers ratcheted back their spending at a 3.1 per cent pace in the third quarter, the most since the second quarter of 1980, when the country was in the grip of recession. -- PHOTO: AP

The broadest barometer of US economic health, gross domestic product, shrank at a 0.3 per cent annual rate in the July-September quarter, the Commerce Department reported on Thursday.

It marked the worst showing since the economy contracted at a 1.4 per cent pace in the third quarter of 2001, when the nation was suffering through its last recession.

The latest GDP reading marked a rapid loss of traction for the economy, which logged growth of 2.8 per cent in the second quarter, and is sure to buttress the belief of many economists that the nation is in the throes of a painful downturn.

The deterioration reflected a sharp retrenchment by consumers, whose spending accounts for the largest chunk of national economic activity.

Consumers ratcheted back their spending at a 3.1 per cent pace in the third quarter, the most since the second quarter of 1980, when the country was in the grip of recession.

GDP measures the value of all goods and services produced within the United States and is the broadest barometer of the country's economic health.

While the third-quarter's contraction wasn't as deep as the 0.5 per cent annualized decline analysts expected, the poor showing underscored the terrible toll of the housing, credit and financial crises.

The grim report comes just days before Americans pick their next president on Nov 4.

Whether Democrat Barack Obama or Republican John McCain wins the White House, the incoming president will inherit a deeply troubled economy and a record-high budget deficit that could cramp his domestic agenda.

Jobless claims remain elevated due to weak economy

WASHINGTON - NEW claims for US unemployment benefits were unchanged last week, remaining at the same elevated level due to the struggling economy, the government said on Thursday.

The Labor Department said new claims for jobless benefits for the week ending Oct. 25 stood at a seasonally adjusted 479,000, the same as the previous week and above analysts' estimates of 475,000.

The four-week average, which smooths out fluctuations, was 475,500, down 5,000 from the previous week's total.

The number of people continuing to claim unemployment benefits also improved, falling 12,000 to 3.72 million.

The figures still reflect a weak economy struggling from a financial meltdown, rapid drops in housing prices and cutbacks in consumer spending.

Jobless claims above 400,000 are considered a sign of a recessionary economy. A year ago, claims stood at 332,000, the department said.

Four weeks ago, the impact of the economic slowdown as well as Hurricanes Ike and Gustav sent jobless claims to a seven-year high of 499,000. This week, the impact of Hurricane Ike added about 7,500 claims in Texas, the department said.

Companies cut 760,000 jobs in the first nine months of this year, sending the unemployment rate to 6.1 per cent in September. Many economists expect the rate to increase to 8 per cent or higher by next year.

Several companies have announced mass layoffs recently, including Whirlpool Corp., financial services company National City Corp. and Xerox Corp. -- AP

广州市一手住房价 跌破每方米9000元

Source :《联合早报》October 30, 2008










Property Auctions See Few Takers

Source : The Business Times, October 29, 2008

Buyers waiting for prices to fall further, despite recent drop, say auctioneers

PROPERTIES for auction are being left on the shelf even after vendors cut prices - as buyers hold out for further drops.

198 properties were put on the block by the five main auction houses from July to September this year, according to figures from one of them, Knight Frank. But just 14 of these properties were sold during their first time on the podium.

And in October, there have been no takers at the two auctions held so far - one by Knight Frank and the other by Jones Lang LaSalle. DTZ, Colliers and CKS have yet to hold auctions this month.

The abysmal results are a far cry from 2006 and 2007, when many properties were snapped up the first time they were auctioned.

'The current market is essentially a buyer's market as sentiment is very sluggish in view of the global financial turmoil,' said Knight Frank's executive director for auctions Mary Sai.

The slowdown started early this year, auctioneers say. 'The auction market has been generally quiet since the beginning of 2008, and as such, buyers are adopting a wait-and-see attitude,' said Shaun Poh, DTZ's senior director for investment advisory services and auction.

Buyers are not biting because they are waiting for prices to fall, even though asking prices have already come down as much as 20 per cent in some cases, auctioneers say.

'Vendors generally are more realistic in their pricing now as property values have declined in the past few months in the wake of bad news on the economy, inflation and sub-prime woes,' said Ms Sai.

Mr Poh said that properties from various sectors are being put up for auction, and vendors are mostly hoping to make just a slight profit or break even.

But despite this, transaction volumes are low, although property firms are still getting enquiries.

Demand from investors is weak, but there is still some interest in value buys and properties that are well located and priced right, as investors are very price-sensitive, said Grace Ng, Colliers' deputy managing director for agency and business services.

Demand from owner-occupiers is slightly better. Colliers says that it is seeing good interest in mass-market private homes from upgraders and for landed properties such as terraced houses.

As yet, there are no fire sales, auctioneers report. But looking ahead, fire sales from owners who need to unload properties and cut losses before banks step in to foreclose are likely, said Knight Frank's Ms Sai.

There will also be more mortgagee sales as borrowers default on loan payments - if they lose their job or find themselves unable to hold multiple properties they acquired earlier at much higher prices and are now unable to rent out, she added.

Demand will come from owner occupiers, said Colliers' Ms Ng. 'As for the investors, they are likely to take advantage of the current market situation and offer prices that are below market valuation,' she said.

Natura Loft To Be Launched On Friday

Source : The Straits Times, Oct 29, 2008

QingJian upbeat about condo-style HDB project despite market blues

UNDETERRED by gloomy sentiment in the local financial and private property market, Chinese firm QingJian Realty is launching Singapore's fourth condo-style public housing project on Friday.

Invited guests previewing the model of HDB's Design, Build and Sell Scheme project - Natura Loft in Bishan - developed by QingJian Realty. The three 40-storey blocks of 160 four-room and 320 five-room units will be launched on Friday. -- PHOTO: LIANHE ZAOBAO

Natura Loft at Bishan, a project under the Housing Board's Design, Build and Sell Scheme (DBSS), will feature three 40-storey blocks of 160 four-room units and 320 five-roomers.

The four-room units of about 95 sq m each are priced from $465,000 to $586,000 while the five-roomers of 120 sq m will go from $600,000 to $739,000.

That works out to around $450 to $570 per sq ft (psf).

QingJian Realty's move reflects the relative strength of the HDB market amid a general downturn in the property market here. Managing director Zuo Hai Bin said demand is still strong and resale flat prices are holding.

'We're very confident that there'll be a strong demand for our flats, which are new and attractively priced compared to resale flats in Bishan,' he added.

Natura Loft is QingJian Realty's first foray into property development here. The firm is a unit of QingJian Group, formerly known as Qingdao Construction Group Corporation. The China-based builder won the tender in February with a bid of $135.9 million or $237 psf per plot ratio for the Bishan Street 24 site.

QingJian Realty has 15 property and construction units worldwide with real estate developments in Qingdao, Jinan and Beijing. It began operations here nine years ago, starting as a sub-contractor on HDB projects. It then moved to taking on the main contractor role for HDB homes in Sengkang and Punggol and now to being a DBSS developer, said Mr Zuo.

'We've moved step by step in the Singapore market and we see it as an important expansion location in our firm's overall strategy,' he added.

The firm is on the look-out for more DBSS sites to develop but considers the private market 'too risky' to venture into at the moment, said Mr Zuo.

Flat prices at Natura Loft are a notch higher than HDB's third DBSS project, Park Central at Ang Mo Kio. This was priced between $400,000 and $500,000 each for four-roomers, and $600,000 and $670,000 for five-roomers.

Mr Zuo said his firm has already revised the Bishan prices down due to the prevailing cautious sentiment. Its prices are competitive, considering Sim Lian's Clover By The Park condo in Bishan sold for about $750 psf, he added.

Natura Loft is also an eco-friendly project, with bamboo flooring for its bedrooms - a first for public housing - bay windows and energy-saving inverter air-conditioning systems, said architect Tang Too Voon of ADDP Architects.

The homes are also built with universal design, and have amenities such as basement carparks, playgrounds, fitness corners, jogging track and barbecue pits.

Wednesday, October 29, 2008

历来最贵新私人组屋 碧山怡然阁五房式售近74万

Source :《联合早报》October 29, 2008

由私人发展商设计、兴建和销售(DBSS)的碧山“怡然阁”(Natura Loft)组屋,后天在抽签选购制度下接受公众申请。其中一些五房式单位售价近74万元,比文庆路私人组屋高,可说是历来最贵的新组屋。








左海滨说,怡然阁地点优越,不仅靠近市区,周围也有许多学府,包括毗邻的惠厉中学(Whitley Secondary School)、公教中学、爱同学校、莱佛士书院及初院等,方便学生上下学。


怡然阁也因许多环保特色而获得建设局颁发“绿色建筑标志”(BCA Green Mark)。它是首个以竹木长条取代传统木制地板的住宅发展项目。竹子只需三年时间就能长成,比普通树木需要二三十年快了许多,因此采用竹子较环保。






业界:碧山私人组屋价 “挑战”组屋市场极限?




今年1月推出的文庆路“City View@Boon Keng”私人组屋,在当时创下组屋售价新高,每平方英尺平均售价520元,四房式售价52万3000元至59万7000元,五房式53万6000元至72万7000元。







Dennis Wee房地产经纪行董事许家荣也认为,怡然阁售价“有点高”。他说,发展商选择在现在经济不景的环境下推售组屋似乎“有点愚蠢”。



建屋局已通过设计、兴建和销售计划(Design,Build and Sell Scheme,简称DBSS)推出6个私人组屋地段。除了分别在6月和8月推出的四美和大巴窑地段,它也在本月宣布在今年第四季推出勿洛的DBSS地段。

Monday, October 27, 2008

Luxury Condo Prices Come Off Their Peaks

Source : The Business Times, October 27, 2008

But most units in high-end projects still changing hands at above their launch prices

Prices for some luxury and high-end projects launched in 2006 and 2007 have come off their peaks by up to about 26 per cent, anecdotal evidence shows.

Data compiled for The Business Times by property firm DTZ shows that at selected high-profile upmarket properties launched in 2006 and 2007, prices started dipping in the third quarter of 2007 and are now between some 4 to 26 per cent off their highs.

At City Developments' The Oceanfront @ Sentosa Cove, prices have fallen some 26.4 per cent since the third quarter of 2007.

On the other end of the scale, prices at Wheelock Properties' Scotts Square, fell 3.6 per cent between their peak in Q3 2007, and the second and third quarters of this year.

In both cases, the caveat is that the volume of transactions was relatively low. There were only about 10 transactions for each project in the second and third quarters of 2008.

DTZ's data supports what other property consultants are saying - that luxury apartments in prime districts are harder hit by the current downturn.

Knight Frank's in-house numbers show for example that prices of luxury apartments in Districts 9, 10 and 11 have fallen by 12-13 per cent since the start of the year.

And the fall is gathering pace, said Nicholas Mak, director of research and consultancy at Knight Frank.

Savills also reported that its in-house price index, which tracks luxury and 'super-luxury' projects, fell 10 per cent from January to July this year. Other analysts estimate that prices at some condos are around 20-30 per cent lower than during last year's peak.

The drop has been larger than expected. Knight Frank, for example, was expecting to see a 10 per cent fall in high-end residential prices for the whole of 2008.

Official numbers show that residential prices in the upmarket core central region started to fall in the third quarter of 2008, and has to date registered a 2.7 per cent drop. These numbers, however, take into account all property transactions.

Despite the price correction, property firms say that most units in high-end projects are still being transacted at prices higher than their launch prices. DTZ's data supports this.

The price falls from Q3 2007 are partially due to property investors and speculators selling out, said DTZ's senior director of research Chua Chor Hoon. 'For some projects launched in late 2006 and early 2007, there was a lot of speculation as the market was very bullish,' she said.

Luxury and high-end residential projects attract more investors and speculators than the broader residential market. With the current economic downturn, many of them are off- loading their properties.

Knight Frank's Mr Mak said: 'Right now, what everyone is saying is that cash is king.'

The availability of cheap and ready credit in 2006 and 2007 boosted property sales then. But now, banks have cut back on the amount of financing they are willing to offer to home buyers who are seen to be speculators and/or investors - as opposed to owner- occupiers, who are thought to be lesser credit risks.

In the past, most buyers were able to obtain 80 per cent financing for homes. In contrast, banks now offer speculators and investors only 60-70 per cent financing.

Ku Swee Yong, director of marketing and business development at Savills Singapore, believes that prices at projects that will soon receive their temporary occupation permits (TOPs) could go even lower.

Speculators who bought homes under the deferred payment scheme (DPS) could sell as TOP approaches. Under the DPS scheme offered by most high-end properties launched in 2006 and 2007, buyers could pay only a 10 per cent or 20 per cent downpayment, with the rest due upon completion. With TOP, these speculators will have to fork out a big chunk of the remaining sum owing.

'So there is the danger of price drops as TOP approaches,' Mr Ku said. 'But how much prices fall at each property depends on the profile of the buyers there.'

Most agents BT spoke to said they have yet to see fire sales though the pressure could continue to build up.

During the Asian Financial Crisis, the official Urban Redevelopment Authority price index fell 40 per cent from Q2 1997 to Q4 1998.

'In the next six to nine months, we are going to see downward pressure (on prices) across the board,' said Knight Frank's Mr Mak. 'And how severe the chill that spreads across the property market will be depends on the real economy in Singapore, especially the employment market.'

Phillip Securities Research analyst Alfred Low expects high-end property prices to fall by 15-25 per cent in the next four quarters.

Others are more bearish. Morgan Stanley analysts Melissa Bon and Brian Wee on Oct 24 took a more aggressive approach to cutting residential prices and projected that residential prices for the mid-high end segment will fall by 75 per cent for the next three years.

HDB Prices Up As Demand Rises

Source : The Business Times, October 25, 2008

Rents also rise, Q3 data shows; prices and rents of private mass-market homes fall as demand shifts to HDB flats

DEMAND is shifting to HDB flats from mass-market private homes - pushing up HDB prices and rents, but causing mass-market home prices and rents to fall.

Figures released yesterday by the Housing & Development Board (HDB) and Urban Redevelopment Authority (URA) show HDB's resale price index rose 4.2 per cent in the third quarter.

This means that in the first nine months of 2008, HDB resale prices climbed 12.4 per cent. The number of transactions also increased in Q3 to 8,110, from 7,760 in Q2.

In contrast, private mass-market properties put up a decidedly lacklustre showing in Q3. Prices of non-landed properties in the outside central region - where most mass-market private homes are located - fell 1.5 per cent.

The decline was not expected - most analysts have said mass-market home prices will hold steady this year.

'In contrast to the private property market, despite the gloomy economic outlook, demand in the resale HDB market is still very active, with buyers coming from up-graders, down-graders and Permanent Residents,' said ERA assistant vice-president Eugene Lim.

Analysts attribute this to a shift in demand towards HDB flats and away from private mass-market projects.

'Demand is moving towards the HDB market,' said Nicholas Mak, director of research and consultancy at Knight Frank. 'A greater proportion of new homeowners, such as newlyweds and new immigrants, are looking only at HDB flats.'

In the past, a greater proportion of new homeowners would have considered private mass-market apartments, he said: 'Compared to purchasing private residential properties, buying an HDB flat may allow some to set aside funds for liquidity during this uncertainty.'

More people are also eligible to buy HDB flats now. Statistics show the number of Singapore citizens and Permanent Residents (PRs) is set to hit a record this year. In the first half of 2008, there were 34,800 new PRs and 9,600 new citizens, up from 28,500 new PRs and 7,300 new citizens in H1 last year.

Another reason homebuyers are choosing HDB flats over private mass-market homes is that HDB flat prices are still rising, while prices of private homes are falling.

'People want the asset they buy to appreciate in value. In the HDB market there is still room for prices to move up,' said Ku Swee Yong, director of marketing and business development at Savills Singapore. At Sengkang, where HDB flats are going for around $250,000-$300,000, prices could climb 5-10 per cent in the next few quarters, he said.

Private mass-market rents have also been hit by the shift in demand. They fell 2.7 per cent in Q3, as demand switched to the HDB rental market. Overall median sub-let rents for HDB flats rose slightly in Q3.

But looking ahead, even growth in HDB prices is expected to slow as the economy worsens. 'As such, although there is good demand for resale HDB flats, we expect buyers to turn more cautious and exercise more prudence by offering less for flats so as not to overstretch,' said ERA's Mr Lim.

Because of this, cash-over-valuation (COV) figures will continue to decline in the coming quarters, analysts say. The median COV for resale transactions fell to $19,000 in Q3, from $20,000 in Q2 and $21,000 in Q1.

The bigger drops in median COVs were for five-room flats (down 15 per cent) and executive flats (down 22 per cent), notes Mohd Ismail, chief executive of PropNex. 'This is evidence of buyers resisting paying larger COVs for larger properties in this bleak economy,' he said.

The increasing popularity of smaller three and four-room flats was also reflected in the median resale prices. The increase for smaller flats, at almost 5 per cent, outstripped the 1.5 per cent increase for larger flats.

HDB resale prices are expected to continue to increase, but probably at a more measured pace in the coming months.

ERA's Mr Lim said: 'For 2008 we may see an overall price increase of 15-17 per cent, slightly lower than the 17.5 per cent increase for the whole of 2007. As for 2009, we are likely to see only marginal quarterly price increases, as current resale prices are a new peak.'

Likewise, PropNex's Mr Ismail expects the HDB resale price index to increase about 15 per cent for the whole of 2008.

Private Property Prices Seen Falling 5-6% In '09-10

Source : The Business Times, October 25, 2008

This will be so even under NUS economist's best-case projection for the Singapore economy

PRIVATE property prices will fall 5-6 per cent in the next two years even if the Singapore economy holds up, according to an economist's projections.

National University of Singapore economist Tilak Abeysinghe's forecasts see the domestic economy growing 3 per cent in 2009 - and one percentage point higher and lower under the best and worst-case scenarios.

In all three scenarios though, his simulations result in 5-6 per cent price falls a year in 2009 and 2010. Only in the optimistic outlook is there a projected 1.4 per cent rebound in 2011.

Already, the latest official figures show a 2.4 per cent dip in private housing prices in the third quarter from Q2 - the first decline since the property market bottomed out in 2004.

Housing prices tend to accelerate faster than expected during upswings and fall faster than expected during downswings, Dr Abeysinghe noted. He presented his findings yesterday at the Singapore Economic Policy Conference, jointly organised by the three local universities.

Since 1975, private property prices here have risen about 7 per cent a year - and with the uptrend, housing affordability has declined over the years.

Dr Abeysinghe's findings show the housing affordability index for private home owners at the lower end of the income range (up to the 25th percentile) fell to 0.5 in 2007, from near-two in the late-1970s.

An index of exactly one means the household's lifetime income is just enough to pay for the property. A measure below one implies 'perpetual debt' for the household.

The affordability index for private property owners in the medium income group averaged 1.2 over the period 1980-2007. This implies that if the household bought a property that cost $1 million, it would be left with $200,000 of income over its lifetime.

For high-income households, the index is a stronger 2.1 over the period 1980-2007. That's still well below the index for HDB households - which ranges from three for the low-income group to 9.4 for the richest.

So while rising home prices spell higher wealth for individuals, the economy as a whole may not be 'better off' if highly-geared households have less to spend, Dr Abeysinghe says, alluding to the paradox of thrift.

More predictable increases in property prices that do not erode long-term affordability are desirable and needed for the economy's health.

The conference also heard from Nanyang Technological University professor Choy Keen Meng that policy efforts to reduce inflation by one percentage point would result in about a two-point fall in GDP growth.

This 'sacrifice ratio' of two compares with around 3-4 for the US and an average 2.5 for the OECD.

URA Figures Ease Fears Of Housing Glut

Source : The Straits Times, Oct 25, 2008

Only 8,538 new private homes to be ready in 2010 - down from 11,788 in 2nd-quarter forecast

WORRIES about an oversupply of private homes are receding after the release of government figures that, for the first time, offer a detailed geographical breakdown of new homes in the pipeline.

It was the second straight quarter that the Urban Redevelopment Authority (URA) had lowered its forecast of home completions for 2010 and beyond.

The URA now expects only 8,538 homes to be ready in 2010 - down substantially from the 11,788 homes that it had forecast in the second quarter. Earlier, in the first quarter, it had forecast a whopping 17,545 homes.

In all, its forecast for the number of uncompleted homes in the pipeline dropped to 67,463 units in the third quarter, from 71,643 units in the second and 74,208 units in the first.

The lower supply figures would ease downward pressure on rentals, said Knight Frank's director of research and consultancy, Mr Nicholas Mak.

Earlier, concerns were building as the supply numbers remained high even as the market slowed considerably this year and the financial turmoil raged on.

The URA now expects to see 16,145 private homes completed in 2011, down from 19,559 in the second quarter.

And home completions in 2012 and beyond 2012 are now at 16,742 units and 13,565 units respectively, compared with 14,179 and 10,826 previously.

Savills Singapore's director of business development and marketing, Mr Ku Swee Yong, said the lower URA completion figures are a result of developers deferring projects due to the slow take-up rates of new homes and high construction costs.

The delays in completion dates were expected, given insufficient construction resources, completion delays in collective sales and delayed launches, he said.

Since the market turned quiet at the start of the year, many developers have delayed launches.

In the first nine months of this year, developers launched 5,401 private homes for sale - just 44 per cent of the total launches in the same period last year, said Knight Frank.

In the same period, they sold a total of 3,845 private homes, which is only 29 per cent of the sale figures in the corresponding period last year.

Yesterday, for the first time, URA released more detailed pipeline supply data, breaking down supply by the three main regions and expected year of completion. The Straits Times proposed such a breakdown in a commentary last month.

The URA made this information available separately on its website.

The data showed that there is a pipeline supply of 23,008 private homes in the core central region which includes districts 9, 10 and 11, down from 24,582 in the second quarter.

Supply in city-fringe areas such as Bukit Timah, Newton and Toa Payoh, rose to 19,736, from 19,053 in the second quarter.

As for the suburban areas, the pipeline supply fell slightly to 23,678 units, from 23,934 in the previous quarter.

According to the new URA data, just 733 homes in the core central region would be ready this year, down from the 2,363 expected in the second quarter.

While the drop next year is not dramatic, considerably fewer high-end homes will come to market from 2010 onwards.

Coming up

Number of private homes expected to be completed:

# In 2008: 2,440
# In 2009: 10,033
# In 2010: 8,538
# In 2011: 16,145
# In 2012: 16,742
# After 2012: 13,565
# Total 67,463


URA Data Shows More Completions Put On Hold

Source : The Business Times, October 25, 2008

URBAN Redevelopment Authority yesterday gave the public greater access to data on property supply in the pipeline, particularly for private homes, detailing the expected year of completion, location of the supply by regions, and development status.

The additional information was included in URA's press release on Q3 2008 real estate data, although the information has always been available through its Realis system.

There were 66,422 uncompleted private homes from projects in the pipeline (with either provisional or written permission) as at end-Q3 2008, of which 23,008 units were in Core Central Region, 19,736 units in Rest of Central Region and 23,678 in Outside Central Region. About 51 per cent of the 66,400-plus total units in the pipeline are under construction.

URA said that 37,051 private homes are scheduled for completion between Q4 this year and end-2011. This is 20 per cent or 9,429 units lower than the 46,480 units slated for completion between Q3 2008 and end-2011 listed in URA's end-Q2 data.

Of these, 2,195 units were completed in Q3 this year and have hence been removed from the supply pipeline. Other completions have been put on hold as some developments have been postponed. Weak market sentiment and higher construction costs have also delayed the construction of some projects.

Notwithstanding this, the 66,422-unit total supply of new private homes in the pipeline is not far off from the 67,569 units as at end-Q2 2008. More of these homes may now see completion post-2011.

URA's data also showed that about 1.03 million sq m of office space, 500,000 sq m of business park space and 685,000 sq m of retail space are expected to be completed between Q4 this year and end-2011.

Projects that received provisional permission in Q3 include MGPA's office, hotel and mall development at Marina View and a 46,010 sq m retail project at Serangoon Central by a unit of Pramerica Real Estate Investors (Asia). SingTel was also given approval for additions/alterations to its existing Pickering Operations Complex and City Exchange at George St/Pickering St. The approval is for 7,860 sq m of offices and 300 sq m of shop space.

Rents Get Squeezed By Credit Crunch

Source : TODAY, Weekend, October 25, 2008

THE leasing market has become the latest casualty of Singapore’s weakening property market, with both residential and office rents posting their first declines since 2004 in the third quarter of this year.

According to Urban Redevelopment Authority figures released yesterday, rentals of private residential properties fell 0.9 per cent in the third quarter, compared to a 2.5 per cent rise in the second quarter. Office rents declined 0.8 per cent, swinging from a 6.3 per cent rise in the previous quarter.

Most analysts attributed falling residential rents to the double whammy of increased supply and weakening demand as the financial sector deals with the severe crisis.

“Instead of increasing headcount, most multinationals are holding back and waiting, so fewer expatriates are coming in,” said ERA Asia Pacific’s assistant vice-president, Mr Eugene Lim. At the same time, developers are holding off developments of their enbloc sites due to the credit crunch and rising construction costs. They are instead renting out these units, resulting in a sudden surge in supply, added Mr Lim.

Additional supply from completed projects will accelerate rental declines in the coming quarters, said Mr Colin Tan, Chesterton Suntec International’s research head. But this may not necessarily be a bad thing for Singapore. “On a country level, Singapore will now be more competitive, since rentals had started off on the high side,” he said.

Meanwhile, HDB prices continued to show resilience amid the downturn, posting a 4.2-per-cent rise. That was a slight moderation from the 4.5-per-cent increase in the previous quarter, which PropNex chief Mohamed Ismail attributed to the overall drop in median cash-over-valuation (COV) to $19,000.

“It’s interesting to note that the bigger drops in median COV were for five-room flats and executive flats. This is evidence of buyers resisting paying out larger COV for larger properties in this bleak economy,” he said.

Still, Chesterton’s Mr Tan finds the 4.2-per-cent hike “extremely disturbing” as it bucks the trend amid deteriorating fundamentals. “It must mean that there is a real shortage of resale flats. This can happen when there are more downgraders than anticipated and secondly, few sellers are upgrading to the private market, because of its affordability.”

Prices in the private residential property market fell 2.4 per cent, worse than the earlier flash estimates of 1.8 per cent.

ERA’s Mr Lim noted that some investors hit by the recent stock market plunge have started to offload their properties in “fire sales” to raise cash, although any major price declines going forward depends on the extent of such scenarios and whether developers also start to lower prices.

Overall, Knight Frank’s research head Nicholas Mak expects private residential prices this year to contract up to 3 per cent.

Private Home Prices And Rents Down

Source : The Straits Times, Oct 25, 2008

PRIVATE home prices in Singapore fell faster than expected in the third quarter as the global financial turmoil weighed heavily on already weakened market sentiment.

The price slide is expected to continue into next year, property consultants said.

But the HDB resale flat market continued to buck the trend, with prices rising 4.2 per cent in the third quarter following a 4.5 per cent rise in the second quarter.

They have now surpassed the peak seen in the fourth quarter of 1996. But analysts expect this growth trend to slow as buyers turn cautious.

Urban Redevelopment Authority (URA) data yesterday put the private home price dip at 2.4 per cent for the period ended Sept30, the first contraction after 17 straight quarters of growth.

This compares with an initial estimate of a 1.8 per cent drop released by URA earlier this month. In the previous quarter, private home prices rose 0.2 per cent.

The outlook is grim. Since the end of the third quarter, global markets have tumbled further and Singapore officially entered a technical recession. Buyers expecting a full-blown recession are set to become even more cautious, analysts say.

Colliers International's director for research and advisory, Ms Tay Huey Ying, said the lower-than-expected third-quarter private home price figure indicates that sales recorded in the last two weeks of the quarter were done at lower prices.

The price fall was led by luxury homes, as such properties in choice areas like Orchard Road and Sentosa Cove posted a 2.7 per cent fall after slipping just 0.1 per cent in the previous quarter.

Prices of city-fringe homes dropped 2.4 per cent, compared with a 0.7 per cent rise in the the April-toJune period.

Suburban homes, which showed the strongest growth of 0.9 per cent in the second quarter, fell 1.5 per cent in the third. Landed home prices, which inched up 0.6 per cent in the second quarter, fell 1.9 per cent.

In a reversal from relentless rent increases of recent years, rentals of private homes fell by 0.9 per cent compared with a 2.5 per cent rise in the second quarter. Like home prices, the fall in rents was the first after 17 straight quarters of growth.

Mass-market homes saw a bigger fall of 2.7 per cent in rents, compared with 0.7 per cent for coveted high-end homes and 0.5 per cent for city-fringe homes.

The growing market caution was also reflected in resale and sub-sale deals. A total of 1,974 resale deals and 462 sub-sales were done in the third quarter, down from 2,291 resale deals and 518 sub-sales in the previous period.

Given the worsening global financial climate, private homes prices are expected to continue slipping. 'The momentum of home sales will likely slow down due to either the increasing difficulty in obtaining loans or buyers' anticipation of further price cuts,' said CBRE Research's executive director Li Hiaw Ho.

In the HDB market, resale transactions rose 4 per cent to 8,110 sales, amid continued buying from permanent residents and Singaporeans upgrading from a smaller flat or downgrading from a private home.

While the sector is still strong, property experts are expecting slower price growth ahead as current resale prices have hit a new peak. With slower economic growth and possible job losses, buyers are likely to turn more cautious and exercise more prudence by offering less for the flats so as not to overstretch, said ERA Asia-Pacific's associate director Eugene Lim.

On a brighter note, URA revised down its supply figures, dispelling the prospect of a private home oversupply.

Its data also showed that office rents have slipped by 0.8 per cent, compared with 6.3 per cent growth in the second quarter.

Shop rents also dipped 0.6 per cent islandwide in the third quarter, reversing a growth of 5.2 per cent in the second.

Industrial rents rose, but at a slower pace.

Private Property Prices, Rents Fall

Source : The Business Times, October 25, 2008

URA's private-home price index down 2.4% in Q3; industrial property prices, rents make gains

OFFICIAL data released yesterday confirmed that the private property market has started sliding backwards, while analysts tried to work out how much of its recent gains it would eventually give up.

Price and rental indices for private homes, offices and shops fell in Q3 over the preceding quarter - for the first time since the market bottomed in 2004. Industrial property prices and rents still managed to register quarter-on-quarter gains in Q3, albeit at a slower pace than the increases reported in Q2.

Urban Redevelopment Authority's (URA) price index for private homes declined 2.4 per cent in Q3 over the preceding quarter, more pronounced than the 1.8 per cent drop indicated in a flash estimate earlier this month.

The Q3 private-home price index is still 8.3 per cent higher than a year ago, leading some analysts such as JPMorgan's Chris Gee to say the official price indices are lagging market expectations. 'If you wanted to close a condo sale today, you'd expect the price to be around 20-30 per cent lower than last year's peak.'

Between the trough in Q1 2004 and the peak in Q2 this year, URA's price indices appreciated 68 per cent for offices, 58 per cent for private homes and 39 per cent for shop space. The question is how much of these gains will be surrendered during this downcycle and how long the slump will last.

The optimistic view is that about half the gains could be lost in a downcycle lasting until end-2009.

Some pessimists suggest the downturn will drag for around two to three years, and see prices easing back to the previous trough, that is, all the gains will be lost. 'Although the Singapore economy is much broader-based today than a few years ago, financial services was a key driver of recent economic growth and had a disproportionate impact on the high-end residential and prime office markets. So if the financial industry tanks, the impact will be greater on these two property segments,' said an analyst with a US bank.

A property industry veteran said: 'This property slump will be much worse than the one during the Asian financial crisis; this time, we have a global crisis. We still don't know what the entire suite of knock-on effects will be. Right now, it's consumers lacking confidence. Failures may come from many other sources, some of which will be unexpected. The downtrend has begun and is not expected to reverse any time soon.'

URA's data showed that developers sold 1,558 private homes in Q3, up 2.2 per cent from 1,525 units in Q2. The 3,845 private homes developers sold in the first nine months of this year are about a quarter of the 14,811 units they sold for the whole of last year.

A property analyst pointed out that an even more alarming trend was the decline in resale transactions of private homes, which have slipped from a high of 7,776 units in Q2 2007 to 1,974 units in Q3 this year.

'Resale transactions are sometimes seen as a proxy for the level of genuine demand, whereas the primary market tends to attract more investment/speculative demand and the subsale market is an even more direct proxy for the level of speculation,' the property analyst from the US bank said.

The number of private-home subsales islandwide fell 10.8 per cent quarter on quarter to 462 in Q3. Subsales accounted for 11.6 per cent of total private housing transactions in Q3, down from a 12 per cent share in Q2.

In the Core Central Region, subsales made up 24.1 per cent of total transactions in Q3, an increase from a 22 per cent share in Q3. The rising subsale share in the region was on the back of a 29 per cent drop in developer sales in Q3.

Meanwhile, URA's Q3 price indices for non-landed private homes fell 2.7 per cent quarter on quarter in Core Central Region, 2.4 per cent in Rest of Central Region and 1.5 per cent in Outside Central Region (OCR).

The official price indices for office and shop space declined 3.9 per cent and 0.3 per cent respectively in Q3. The all-industrial property price index rose 0.9 per cent.

The public housing market continued to buzz, with Housing & Development Board's resale flat price index rising 4.2 per cent quarter on quarter in Q3.

Colliers International director Tay Huey Ying said that developers' sales failing to keep pace with launches led to a surge in the stock of launched but unsold private homes in uncompleted projects to 3,570 units in Q3, almost 30 per cent higher than Q2's 2,755 units and more than double the recent low of 1,658 units in Q2 2007.

Knight Frank director Nicholas Mak expects the decline in private home prices and rentals to persist. 'With the slowdown in the private residential market, it is anticipated that developers could sell between 4,900 and 5,400 units in 2008, which would be only about one-third of the primary market sales last year,' he added.

Home Sales Record Biggest Gain Since July 2003

Source : The Business Times, October 25, 2008

(Washington) SALES of previously owned US homes rose 5.5 per cent last month, the biggest gain since July 2003, and the inventory of unsold homes fell, a hopeful sign for a housing market mired in a long slump.

The National Association of Realtors said yesterday that sales of existing homes rose to a 5.18 million unit annual rate from the 4.91 million unit pace set in August. Economists had expected sales to rise to only a 4.93 million unit rate.

It was the first time the sales pace had risen above its year-ago level in three years, a sign the market could be stabilising.

The surprisingly large jump in sales pushed the inventory of unsold homes down by 1.6 per cent to 4.27 million, or a 9.9 months' supply at the current pace.

Home prices, however, showed no signs of escaping their long, deep slide. The median national home price declined 9 per cent from a year ago to US$191,600, the lowest level since April 2004, the industry trade group said.

The increase in sales was spurred by a rise in foreclosure and other 'distress sales' in regions of the country hard-hit by the ongoing housing downturn, said the Realtors' chief economist, Lawrence Yun.

'In some regions, the lower prices are seeing buyers return to the marketplace,' he noted. 'This was a nice jump and hopefully this trend can continue because the first step to stabilising the market is an increase in home sales.'

Sales rose in three regions, with the West recording a 16.8 per cent jump. The Midwest saw an increase of 4.4 per cent and the South saw a 2.2 per cent rise. In the Northeast, sales fell 1.2 per cent.

Housing has been suffering through its worst downturn in decades following a five-year boom that ended in 2006, and builders have been responded by cutting back drastically. -- Reuters, AP

第三季指数超过1996年创新高 组屋转售价已近顶峰

Source :《联合早报》October 25, 2008









对于历史重演的可能性,Dennis Wee房地产经纪行董事许家荣受访时说:“下来一年,组屋转售价格将保持平稳,起落的幅度估计不大,因为它仍有基本需求支撑。”









建屋局至今已在设计、兴建和销售计划(Design,Build and Sell Scheme,简称DBSS)下推出6块地段。当局原本有意在今年第四季推出勿洛的DBSS地段,不过现在则表示会继续观察市场情况,才决定何时推出。