Source : The Straits Times, June 16, 2008
SINGAPORE'S economy will grow 4.7 per cent in the second quarter from a year ago, slowing from a 6.7 per cent expansion in the January-March period, a central bank survey of economists showed on Monday.
Full-year growth in 2008 was predicted at 5.5 per cent, within the government's forecast range of 4-6 per cent, the Monetary Authority of Singapore's quarterly survey of 21 private sector economists showed on its website.
The 2008 forecast compares with expectations of 5.6 per cent growth in the central bank's March survey. Last year, Singapore's economy grew 7.7 per cent.
Economists raised their forecasts for 2008 inflation to 6 per cent from 5.0 per cent in the March survey. The government expects inflation in the South-east Asian country to fall within 5-6 per cent this year.
More than half of the economists surveyed expected inflation to fall within 6-6.5 per cent.
In a reflection of mounting uncertainties in the global economy amid a credit crisis and a US economic slowdown, economists raised their 2008 jobless rate estimate and cut their growth forecasts for all sectors apart from manufacturing.
For non-oil domestic exports, worth about 70 per cent of Singapore's 2007 gross domestic product, the 2008 median forecast was revised down to 3 per cent from 5 per cent in the March survey.
However, the median growth forecast for Singapore's manufacturing sector, which makes up about a quarter the island's trade-dependent economy, was raised slightly to 5.5 per cent from 5 per cent.
The 2008 median forecast for Singapore's jobless rate was raised to 2.2 per cent after seasonal adjustments from 2.0 per cent in the March survey. -- REUTERS
Monday, June 16, 2008
CPF Minimum Sum Raised To $106,000 From July
Source : The Straits Times, June 16, 2008
Medisave minium sum and contribution also to go up.
THE Minimum Sum (MS) for Central Provident Fund members who turn 55 from July 1 will be raised to $106,000 - from the current $99,600, the CPB Board announced on Monday, along with other changes to the Medisave contributions and withdrawal rule.
This means that CPF members who turn 55 from July 1 to June 30 next year will have to set aside the $106,000 cash savings in their Retirement Account, from which they will will get a monthly payout of $910 from age 64 for about 20 years.
The current MS, which applies to members who turn 55 from July 1 2007 to 30 June, is $99,600, which gives a monthly payout of $790.
The new MS is in line with the announcements made in August 2003 that the CPF MS will be raised gradually to reach $120,000 in 2013, said a CPF board statement.
'The increase in MS, which includes an adjustment for inflation, is to ensure that Singaporeans set aside sufficient savings for their retirement,' it added.
Medisave minimum sum and contribution to go up
Also, from July 1, the new Medisave Minimum Sum (MMS) will go up to $29,500 - from $28,500.
Members will have to set aside this amount, or the actual Medisave balance, whichever is lower, in their Medisave Account, when they withdraw their CPF on reaching 55.
Additionally, the Medisave Contribution Ceiling (MCC) will be raised from $33,500 to $34,500 from July.
This is the maximum balance each member should have in his Medisave Account. Any excess in contribution will be transferred to the member's Special Account if he is below 55.
For those above 55, the Medisave contribution in excess of the prevailing MCC will be transferred to their Retirement Account if they have a Minimum Sum shortfall.
The revisions to MMS and MCC are to ensure that Singaporeans have sufficient savings to meet their hospitalisation expenses, and have been adjusted for inflation, said the CPF Board.
Phasing out 50% withdrawal rule
The board also announced on Monday that members who are unable to meet the full CPF MS at age 55 are allowed to withdraw the first $5,000 or 50 per cent of their savings in their CPF Accounts, whichever is higher.
Members who are able to meet the full MS will be allowed to withdraw the remaining monies in their CPF accounts.
As announced in 2003, the percentage for withdrawal will be cut back from the current 50 per cent to 40 per cent Jan 1 next year, and this will be further reduced every year by 10 percentage points.
This means that from Jan 1, 2013, CPF members must meet the CPF and Medisave Minimum Sums first before they can withdraw their remaining Ordinary Account and Special Account balances at age 55.
However, CPF members can continue to withdraw the first $5,000 from their Ordinary Account and Special Account balances.
The change in the withdrawal rule will enable members turning age 55 from Jan 1 next year to set aside more savings for their retirement.
Medisave minium sum and contribution also to go up.
THE Minimum Sum (MS) for Central Provident Fund members who turn 55 from July 1 will be raised to $106,000 - from the current $99,600, the CPB Board announced on Monday, along with other changes to the Medisave contributions and withdrawal rule.
This means that CPF members who turn 55 from July 1 to June 30 next year will have to set aside the $106,000 cash savings in their Retirement Account, from which they will will get a monthly payout of $910 from age 64 for about 20 years.
The current MS, which applies to members who turn 55 from July 1 2007 to 30 June, is $99,600, which gives a monthly payout of $790.
The new MS is in line with the announcements made in August 2003 that the CPF MS will be raised gradually to reach $120,000 in 2013, said a CPF board statement.
'The increase in MS, which includes an adjustment for inflation, is to ensure that Singaporeans set aside sufficient savings for their retirement,' it added.
Medisave minimum sum and contribution to go up
Also, from July 1, the new Medisave Minimum Sum (MMS) will go up to $29,500 - from $28,500.
Members will have to set aside this amount, or the actual Medisave balance, whichever is lower, in their Medisave Account, when they withdraw their CPF on reaching 55.
Additionally, the Medisave Contribution Ceiling (MCC) will be raised from $33,500 to $34,500 from July.
This is the maximum balance each member should have in his Medisave Account. Any excess in contribution will be transferred to the member's Special Account if he is below 55.
For those above 55, the Medisave contribution in excess of the prevailing MCC will be transferred to their Retirement Account if they have a Minimum Sum shortfall.
The revisions to MMS and MCC are to ensure that Singaporeans have sufficient savings to meet their hospitalisation expenses, and have been adjusted for inflation, said the CPF Board.
Phasing out 50% withdrawal rule
The board also announced on Monday that members who are unable to meet the full CPF MS at age 55 are allowed to withdraw the first $5,000 or 50 per cent of their savings in their CPF Accounts, whichever is higher.
Members who are able to meet the full MS will be allowed to withdraw the remaining monies in their CPF accounts.
As announced in 2003, the percentage for withdrawal will be cut back from the current 50 per cent to 40 per cent Jan 1 next year, and this will be further reduced every year by 10 percentage points.
This means that from Jan 1, 2013, CPF members must meet the CPF and Medisave Minimum Sums first before they can withdraw their remaining Ordinary Account and Special Account balances at age 55.
However, CPF members can continue to withdraw the first $5,000 from their Ordinary Account and Special Account balances.
The change in the withdrawal rule will enable members turning age 55 from Jan 1 next year to set aside more savings for their retirement.
Slice Of Singapore On Bintan?
Source : The Straits Times, June 14 2008
A new development of bungalows on Bintan is hoping to attract Singaporeans to set up a second home there
CHEAP and big bungalows located less than an hour by ferry from Singapore and resort-style living - this is the vision that Bintan Resort Cakrawala wants to sell to Singaporeans.
In 10 to 20 years, the master planner for the northern strip of the Indonesian island hopes to see between 50,000 and 75,000 residents, with the majority being Singaporeans, on a 200 sq km site which is 40 times the size of Sentosa.
SUN, SEA AND SAND: The existing Nirwana Resort Hotel was part of the first phase of development by Gallant Ventures on the northern coast of Bintan. -- PHOTO: GALLANT VENTURES
Mr Eugene Park, chief executive of Bintan Resort Cakrawala's parent company, the Singapore-listed Gallant Ventures, said the balmy isle could be a suburb for Singaporeans to retreat to.
It could be a beach resort such as Bali's Kuta Beach and Phuket's Patong Beach, but minus the commercial trappings and touts, he said.
After the first phase of development over the last decade, which saw the construction of 10 hotels with 1,350 rooms, four 18-hole golf courses and famous spas such as Banyan Tree Spa, the master planner is ready to launch phase two.
A ground-breaking ceremony was held for its latest project, the 1,300ha Lagoi Bay development, last month.
Where previous projects have mostly been for resorts and hotels, this time round, there are sites for homes. Land sales started in July last year and over 300,000 sq m have been sold for $45 million.
Bintan Resorts was first set up in 1990 by Gallant Ventures to develop the northern coast of the Riau island. Over $1 billion had been pumped in to build infrastructure, hotels and resorts.
Existing hotels range from the budget Bintan Lodge to the family-oriented Nirwana Resort Hotel to the five-star Banyan Tree.
Singaporeans form a third of the 350,000 visitors last year, drawn by white sandy beaches and clear waters. Other visitors hail from Europe, the United States, Japan, Korea, China and India.
The average visitor spent $642 per person last year, up from $488 in 2006.
Tourism fortunes are heavily dependent on Singapore as it is the main gateway for international arrivals. Tanah Merah Ferry Terminal is a mere 55-minute ride from Bintan.
Mr Park said the strategy all along has been to tap Singapore's strengths and tourism arrivals.
Bintan's target is to grow tourism arrivals to one million, to piggyback on Singapore's ambition to grow arrivals to 17 million by 2015.
To do that, Bintan Resorts has in the pipeline:
# a $100-million tourist airport;
# a marina;
# $150-million worth of infrastructure for the Lagoi Bay project;
# a $150-million power plant;
# a $5-million upgrade of the domestic and international ferry terminals; and
# $31 million invested in two new high-speed ferries which will shave travelling time by 10 minutes.
Investors, old and new, have also announced plans for the next five years. Indonesia hotel group Alila Resorts and Hotels bought a 20ha plot to build a five-star resort with 40 to 50 villas.
Malaysia's Landmarks is building Bintan Treasure Bay, a 343ha integrated resort seven times the size of Resorts World at Sentosa.
Even small-time investors such as Singaporean Crystal Sim are keen to cash in. Ms Sim, owner of an interior fabrication company in Singapore, bought a plot on the Lagoi waterfront to build a boutique hotel with 60 to 80 rooms.
Setting up second home
The master planner's goal is to increase hotel rooms to 5,000 in the next five years.
Private residences are also part of the plan. For now, 26 of 50 plots in the Samudra Villas cluster have been snapped up by individuals. These 800 to 1,200 sq m plots were launched at $300 per sq m.
Real estate agents interviewed love the idea of an integrated resort on Bintan, saying it will offer a more vibrant and exciting holiday option for Singaporeans.
However, they are more cautious when it comes to Singaporeans setting up a second home there. The upside is land price. At $150 to $260 per sq m of villa residential sites, and $120 to $250 for condo-type development sites, the land price is a steal.
PropNex chief executive Mohamed Ismail said the prices are 10 to 15 times cheaper than land in areas such as Choa Chu Kang and Lim Chu Kang, and 30 to 40 times cheaper than in the central areas.
But potential buyers must consider factors such as the lease period, saleability and accessibility to Singapore. Johor Baru across the Causeway seems to be a better option as properties there are mostly freehold, demand is higher for them and it is easier to commute to and from Singapore by road, he said.
'It is not practical to commute every day to work or go to school in Singapore by ferry, which is subject to stormy weather.'
Mr Jack Chua, director of ERA Realty, said Bintan is not too bad a location for people who crave a resort-feel environment as it is close to Singapore. 'But,' he qualified, 'if you are looking at investment, ultimately you must consider whether you can rent it out and sell it again. You must also consider how prudent the law system is and the country's by-laws.'
The land lease of 30 years is renewable, said Mr Park. He assured investors that this is a commitment his company managed to secure from the Bintan government. Plus, he added that they are buying into a gated community, which gives added privacy.
The province is eager to make the development project work. Bintan regent Ansar Ahmad said the provincial government has made it easier for investors by setting up a one-stop service to handle permit application and land lease issues, among others.
Having its headquarters on Batam, a 15-minute ferry ride away, has shortened project approval time from three months to 33 days, he said. Three development projects have been approved and three are under way.
Mr Ansar looks forward to having a tourism school set up on Bintan as it will provide skills as well as employment opportunities for residents.
He added: 'It is good for us. With the new development, tourist attractions and small to medium businesses in the villages in all parts of Bintan will also thrive.'
A new development of bungalows on Bintan is hoping to attract Singaporeans to set up a second home there
CHEAP and big bungalows located less than an hour by ferry from Singapore and resort-style living - this is the vision that Bintan Resort Cakrawala wants to sell to Singaporeans.
In 10 to 20 years, the master planner for the northern strip of the Indonesian island hopes to see between 50,000 and 75,000 residents, with the majority being Singaporeans, on a 200 sq km site which is 40 times the size of Sentosa.
SUN, SEA AND SAND: The existing Nirwana Resort Hotel was part of the first phase of development by Gallant Ventures on the northern coast of Bintan. -- PHOTO: GALLANT VENTURESMr Eugene Park, chief executive of Bintan Resort Cakrawala's parent company, the Singapore-listed Gallant Ventures, said the balmy isle could be a suburb for Singaporeans to retreat to.
It could be a beach resort such as Bali's Kuta Beach and Phuket's Patong Beach, but minus the commercial trappings and touts, he said.
After the first phase of development over the last decade, which saw the construction of 10 hotels with 1,350 rooms, four 18-hole golf courses and famous spas such as Banyan Tree Spa, the master planner is ready to launch phase two.
A ground-breaking ceremony was held for its latest project, the 1,300ha Lagoi Bay development, last month.
Where previous projects have mostly been for resorts and hotels, this time round, there are sites for homes. Land sales started in July last year and over 300,000 sq m have been sold for $45 million.
Bintan Resorts was first set up in 1990 by Gallant Ventures to develop the northern coast of the Riau island. Over $1 billion had been pumped in to build infrastructure, hotels and resorts.
Existing hotels range from the budget Bintan Lodge to the family-oriented Nirwana Resort Hotel to the five-star Banyan Tree.
Singaporeans form a third of the 350,000 visitors last year, drawn by white sandy beaches and clear waters. Other visitors hail from Europe, the United States, Japan, Korea, China and India.
The average visitor spent $642 per person last year, up from $488 in 2006.
Tourism fortunes are heavily dependent on Singapore as it is the main gateway for international arrivals. Tanah Merah Ferry Terminal is a mere 55-minute ride from Bintan.
Mr Park said the strategy all along has been to tap Singapore's strengths and tourism arrivals.
Bintan's target is to grow tourism arrivals to one million, to piggyback on Singapore's ambition to grow arrivals to 17 million by 2015.
To do that, Bintan Resorts has in the pipeline:
# a $100-million tourist airport;
# a marina;
# $150-million worth of infrastructure for the Lagoi Bay project;
# a $150-million power plant;
# a $5-million upgrade of the domestic and international ferry terminals; and
# $31 million invested in two new high-speed ferries which will shave travelling time by 10 minutes.
Investors, old and new, have also announced plans for the next five years. Indonesia hotel group Alila Resorts and Hotels bought a 20ha plot to build a five-star resort with 40 to 50 villas.
Malaysia's Landmarks is building Bintan Treasure Bay, a 343ha integrated resort seven times the size of Resorts World at Sentosa.
Even small-time investors such as Singaporean Crystal Sim are keen to cash in. Ms Sim, owner of an interior fabrication company in Singapore, bought a plot on the Lagoi waterfront to build a boutique hotel with 60 to 80 rooms.
Setting up second home
The master planner's goal is to increase hotel rooms to 5,000 in the next five years.
Private residences are also part of the plan. For now, 26 of 50 plots in the Samudra Villas cluster have been snapped up by individuals. These 800 to 1,200 sq m plots were launched at $300 per sq m.
Real estate agents interviewed love the idea of an integrated resort on Bintan, saying it will offer a more vibrant and exciting holiday option for Singaporeans.
However, they are more cautious when it comes to Singaporeans setting up a second home there. The upside is land price. At $150 to $260 per sq m of villa residential sites, and $120 to $250 for condo-type development sites, the land price is a steal.
PropNex chief executive Mohamed Ismail said the prices are 10 to 15 times cheaper than land in areas such as Choa Chu Kang and Lim Chu Kang, and 30 to 40 times cheaper than in the central areas.
But potential buyers must consider factors such as the lease period, saleability and accessibility to Singapore. Johor Baru across the Causeway seems to be a better option as properties there are mostly freehold, demand is higher for them and it is easier to commute to and from Singapore by road, he said.
'It is not practical to commute every day to work or go to school in Singapore by ferry, which is subject to stormy weather.'
Mr Jack Chua, director of ERA Realty, said Bintan is not too bad a location for people who crave a resort-feel environment as it is close to Singapore. 'But,' he qualified, 'if you are looking at investment, ultimately you must consider whether you can rent it out and sell it again. You must also consider how prudent the law system is and the country's by-laws.'
The land lease of 30 years is renewable, said Mr Park. He assured investors that this is a commitment his company managed to secure from the Bintan government. Plus, he added that they are buying into a gated community, which gives added privacy.
The province is eager to make the development project work. Bintan regent Ansar Ahmad said the provincial government has made it easier for investors by setting up a one-stop service to handle permit application and land lease issues, among others.
Having its headquarters on Batam, a 15-minute ferry ride away, has shortened project approval time from three months to 33 days, he said. Three development projects have been approved and three are under way.
Mr Ansar looks forward to having a tourism school set up on Bintan as it will provide skills as well as employment opportunities for residents.
He added: 'It is good for us. With the new development, tourist attractions and small to medium businesses in the villages in all parts of Bintan will also thrive.'
ADB Says Inflation In Asia To Rise, May Endanger Growth
Source : Channel NewsAsia, 15 June 2008
KUALA LUMPUR : Inflation in Asia will hit 5.1 percent in 2008 due to surging food and fuel prices and could threaten economic growth in the region, the Asian Development Bank warned Sunday.
The Asian Development Bank (ADB) headquarters in Manila
"Our projection for inflation for Asia for 2008 is 5.1 percent which is already a 10-year high," Rajat M Nag, managing director general of ADB told reporters at a two-day World Economic Forum on East Asia here.
"This was a projection we did in April. We are revising our projections. My feeling is the projections will go even higher," he added.
Rajat said Asian monetary and fiscal authorities should "recognise inflation as a very major concern" and hinted that they should raise interest rates.
Inflation "can endanger growth in Asia," he said, adding that "central banks should take all steps, including looking at rates as what India has done quite appropriately."
India's central bank on Wednesday raised a key short-term borrowing rate by a quarter percentage point to 8.0 percent to battle inflation that analysts say may be headed to double-digit levels.
Rajat said if Asian economies "do not tamper the inflationary rate which is quite high, you actually will compromise growth. So it is precisely to sustain the prosperity of Asia that we need to focus on inflation," he said.
"Asia has had a very good growth story. We need to focus on inflationary pressure, otherwise the growth story will be endangered," he warned.
Rajat also said that if inflation was not tamed, it would hurt Asia's poor.
"Inflation is the worst form of taxation on the poor. Inflation hurts the poor much more than it hurts the rich," he said.
He added that to reduce the impact of the rise in food and fuel prices on the poor, Asian economies should launch cash income support programmes for the poor, but not a general subsidy.
"A general subsidy is not fiscally sustainable and it does not help the very people that need help," he said.
Rajat urged Asian governments to re-launch the "green revolution" programmes that existed back in the 1960s to increase food output since prices would climb further.
"We need to recognise that there has been some structural changes in food and fuel.
The era of cheap food is over, so we need to adjust to higher price regime.
There has to be a lot of effort to increase food productivity," he said. - AFP/ms
KUALA LUMPUR : Inflation in Asia will hit 5.1 percent in 2008 due to surging food and fuel prices and could threaten economic growth in the region, the Asian Development Bank warned Sunday.
The Asian Development Bank (ADB) headquarters in Manila"Our projection for inflation for Asia for 2008 is 5.1 percent which is already a 10-year high," Rajat M Nag, managing director general of ADB told reporters at a two-day World Economic Forum on East Asia here.
"This was a projection we did in April. We are revising our projections. My feeling is the projections will go even higher," he added.
Rajat said Asian monetary and fiscal authorities should "recognise inflation as a very major concern" and hinted that they should raise interest rates.
Inflation "can endanger growth in Asia," he said, adding that "central banks should take all steps, including looking at rates as what India has done quite appropriately."
India's central bank on Wednesday raised a key short-term borrowing rate by a quarter percentage point to 8.0 percent to battle inflation that analysts say may be headed to double-digit levels.
Rajat said if Asian economies "do not tamper the inflationary rate which is quite high, you actually will compromise growth. So it is precisely to sustain the prosperity of Asia that we need to focus on inflation," he said.
"Asia has had a very good growth story. We need to focus on inflationary pressure, otherwise the growth story will be endangered," he warned.
Rajat also said that if inflation was not tamed, it would hurt Asia's poor.
"Inflation is the worst form of taxation on the poor. Inflation hurts the poor much more than it hurts the rich," he said.
He added that to reduce the impact of the rise in food and fuel prices on the poor, Asian economies should launch cash income support programmes for the poor, but not a general subsidy.
"A general subsidy is not fiscally sustainable and it does not help the very people that need help," he said.
Rajat urged Asian governments to re-launch the "green revolution" programmes that existed back in the 1960s to increase food output since prices would climb further.
"We need to recognise that there has been some structural changes in food and fuel.
The era of cheap food is over, so we need to adjust to higher price regime.
There has to be a lot of effort to increase food productivity," he said. - AFP/ms
Public Housing Transactions Not As High As 6 Months Ago
Source : Channel NewsAsia, 15 June 2008
There is no slowdown in the public housing market, but National Development Minister Mah Bow Tan has said the number of transactions may not be as high as six months ago, as the market is now more balanced with an adequate supply of new flats being offered by the Housing and Development Board.
He was speaking to the media at the sidelines of a constituency event on Sunday.
Mr Mah said, "The economy is still strong but because of the uncertainty, because of what's happening overseas, people are a bit more cautious, (and) supply and demand is a bit more balanced.
"I think people realise that there's adequate supply coming on stream, they don't have to panic, we're pushing out more Build-To-Order flats. Those who can afford to wait, they'll wait."
Meanwhile, Mr Mah also gave an update on the cycling warden trial in Tampines.
He said a townhall forum was held with residents last week and talks are still underway with the Traffic Police and the Land Transport Authority.
He expects the decision to be made before the end of June on whether the trials will be stopped, extended for another six months to a year or made a permanent feature. - CNA/ms
There is no slowdown in the public housing market, but National Development Minister Mah Bow Tan has said the number of transactions may not be as high as six months ago, as the market is now more balanced with an adequate supply of new flats being offered by the Housing and Development Board.
He was speaking to the media at the sidelines of a constituency event on Sunday.Mr Mah said, "The economy is still strong but because of the uncertainty, because of what's happening overseas, people are a bit more cautious, (and) supply and demand is a bit more balanced.
"I think people realise that there's adequate supply coming on stream, they don't have to panic, we're pushing out more Build-To-Order flats. Those who can afford to wait, they'll wait."
Meanwhile, Mr Mah also gave an update on the cycling warden trial in Tampines.
He said a townhall forum was held with residents last week and talks are still underway with the Traffic Police and the Land Transport Authority.
He expects the decision to be made before the end of June on whether the trials will be stopped, extended for another six months to a year or made a permanent feature. - CNA/ms
Aussie Properties Offer Lower Prices, Higher Returns
Source : The Straits Times, June 15, 2008
Values in major cities are set to double every seven to 10 years on average
More Singaporeans are going Down Under in search of viable property investments - and for good reasons.
Singaporeans are cashing in on a market where prices of equivalent properties are cheaper compared to l options here, and returns on investment are high.
Luxury projects on offer in the Gold Coast include the Circle On Cavill, a waterfront project touted as Australia's tallest twin towers. -- PHOTO: SUNLAND GROUP
The average capital growth rate in major Australian cities is about 7.7 per cent, meaning properties double in value every seven to 10 years on average. Rent yields in Australia are about 5 per cent on average.
Property values in major cities such as Sydney, Melbourne and Brisbane are also set to increase as they are currently facing net immigration, rising demand for housing and a housing supply shortage.
'Australia is not building houses fast enough and unless locals start living in tents, demand is set to continue rising,' said Mr Sean Parker, director of sales and marketing at JL Property Group.
Property agents are especially optimistic about growth in the Sydney market. Mr Parker described Sydney as a market 'primed for growth'.
Rents in Sydney rose 24 per cent last year due to a supply shortage. Rent yields in Sydney are currently at an average of 4 to 6 per cent.
Melbourne, another popular location, is seeing rapid property price escalations, with prices increasing by as much as 30 per cent over the past 18 months, driven largely by the owner-occupier market.
This is due to the location of several reputable universities in Melbourne.
Despite this, properties located a relatively short 4 km away from Melbourne's central business district are obtainable for an affordable A$500 to A$600 per sq ft, or about S$650 to S$780 per sq ft.
Investors looking for an alternative to these bustling cities might consider the more laid-back Gold Coast in Queensland, one of Australia's major tourist attractions.
While average rent yields are similar to the rest of Australia at about 5 per cent, rental prices escalate during peak tourist periods, for example during the Formula One season, said Mr Jeremy Thoo, general manager of Austpac International.
'Returns on properties in the Gold Coast are more cyclical and volatile compared to cities like Sydney and Melbourne, where renters will lease the property for longer periods. Tourists usually lease for about a week at most,' he said.
Recent high-profile luxury projects in the Gold Coast include the Circle On Cavill, a waterfront project launched last year by the Sunland Group. Touted as 'Australia's tallest twin towers', prices start from A$499 per sq ft, or about S$649 per sq ft.
Mr Thoo advises investors to consider whether they feel capital growth or returns on investment is more important before making a choice.
'Cities like Sydney are the equivalent of districts nine and 10 here,' he said. 'Properties there appreciate in value rapidly, but might have lower rent yields due to their higher cost. However, a property in a more suburban area like Darwin can have very high returns.'
Mr Thoo points out that the Australian market offers investment options such as serviced apartments, which are not available locally. As these are often rented to hotel chains, they offer higher returns than typical residential apartments.
He also notes that apartments tend to have higher rent yields of about 4 to 6 per cent, compared to houses which have yields of 2 to 4 per cent.
'Apartments are a more hassle-free investment,' he said.
One challenge Singaporeans face when investing in Australia is knowing who to trust. Mr Parker said buyers should look for property marketeers with a positive track record.
Values in major cities are set to double every seven to 10 years on average
More Singaporeans are going Down Under in search of viable property investments - and for good reasons.
Singaporeans are cashing in on a market where prices of equivalent properties are cheaper compared to l options here, and returns on investment are high.
Luxury projects on offer in the Gold Coast include the Circle On Cavill, a waterfront project touted as Australia's tallest twin towers. -- PHOTO: SUNLAND GROUPThe average capital growth rate in major Australian cities is about 7.7 per cent, meaning properties double in value every seven to 10 years on average. Rent yields in Australia are about 5 per cent on average.
Property values in major cities such as Sydney, Melbourne and Brisbane are also set to increase as they are currently facing net immigration, rising demand for housing and a housing supply shortage.
'Australia is not building houses fast enough and unless locals start living in tents, demand is set to continue rising,' said Mr Sean Parker, director of sales and marketing at JL Property Group.
Property agents are especially optimistic about growth in the Sydney market. Mr Parker described Sydney as a market 'primed for growth'.
Rents in Sydney rose 24 per cent last year due to a supply shortage. Rent yields in Sydney are currently at an average of 4 to 6 per cent.Melbourne, another popular location, is seeing rapid property price escalations, with prices increasing by as much as 30 per cent over the past 18 months, driven largely by the owner-occupier market.
This is due to the location of several reputable universities in Melbourne.
Despite this, properties located a relatively short 4 km away from Melbourne's central business district are obtainable for an affordable A$500 to A$600 per sq ft, or about S$650 to S$780 per sq ft.
Investors looking for an alternative to these bustling cities might consider the more laid-back Gold Coast in Queensland, one of Australia's major tourist attractions.
While average rent yields are similar to the rest of Australia at about 5 per cent, rental prices escalate during peak tourist periods, for example during the Formula One season, said Mr Jeremy Thoo, general manager of Austpac International.
'Returns on properties in the Gold Coast are more cyclical and volatile compared to cities like Sydney and Melbourne, where renters will lease the property for longer periods. Tourists usually lease for about a week at most,' he said.
Recent high-profile luxury projects in the Gold Coast include the Circle On Cavill, a waterfront project launched last year by the Sunland Group. Touted as 'Australia's tallest twin towers', prices start from A$499 per sq ft, or about S$649 per sq ft.
Mr Thoo advises investors to consider whether they feel capital growth or returns on investment is more important before making a choice.
'Cities like Sydney are the equivalent of districts nine and 10 here,' he said. 'Properties there appreciate in value rapidly, but might have lower rent yields due to their higher cost. However, a property in a more suburban area like Darwin can have very high returns.'
Mr Thoo points out that the Australian market offers investment options such as serviced apartments, which are not available locally. As these are often rented to hotel chains, they offer higher returns than typical residential apartments.
He also notes that apartments tend to have higher rent yields of about 4 to 6 per cent, compared to houses which have yields of 2 to 4 per cent.
'Apartments are a more hassle-free investment,' he said.
One challenge Singaporeans face when investing in Australia is knowing who to trust. Mr Parker said buyers should look for property marketeers with a positive track record.
Choose The Right Mortgage Deal To Save More
Source : The Straits Times, June 15, 2008
You are what you write - if you are a journalist.
After a while, friends start to label you by certain stories you write. Last week, one blithely introduced me to his mother as 'Grace Ng, the Transparent Mortgage Rates Reporter'.
That bizarre introduction unleashed a torrent of questions from Mrs X, who was about to refinance her fixed-rate mortgage. She was counting on the discomfited Miss TMRR (yours truly) to tell her exactly why 'everyone says a transparent-rate mortgage is the cheapest'.
The encounter made me realise that even some financially savvy Singaporeans might not be clued in on how to make the most of mortgage packages as interest rates change.
When rates head south, you can benefit by taking up a mortgage linked to publicly available rates such as the Singapore Interbank Offered Rate (Sibor). This benchmark rate is used by banks to determine mortgage rates for home loans, as it is the cost at which banks borrow funds from each other.
Banks such as United Overseas Bank, OCBC and Standard Chartered offer packages with rates linked to the Singapore Swap Offer Rate (SOR), which is made up of the Sibor plus lending costs incurred by the banks.
The three-month Sibor has been falling steadily, dropping from over 3.5 per cent last year to as low as 1.24 per cent in late April this year. This means some customers have been enjoying rates of about 2 per cent for the first few months of their loans. Not surprisingly, many customers have either taken up new Sibor-linked packages, or refinanced from a fixed-rate package to a Sibor-linked one.
But if rates are high and look set to climb higher, it is best to lock in a rate through either a fixed-rate mortgage for a few years, or at least a rate linked to the 12-month Sibor, which is fixed for a full year.
The three-month Sibor was gyrating within a tight range but is now climbing to about 1.43 per cent. The 12-month Sibor has moved up sharply to 2 per cent.
Singapore rates track the United States Federal Reserve rate, currently at 2 per cent. But the latter looks unlikely to climb sharply in coming weeks. Opinions are divided over whether the Fed will raise rates to curb inflation or lower them further to stave off a deep recession in the US.
So what do you do when rates in both the US and Singapore are relatively flat, the local property market is softening and the economic outlook is uncertain?
It depends on the type of customer you are.
New home-buyers will face higher fixed-rate mortgage prices. This is because local and foreign banks alike jacked up their rates last week to an average of about 3.7 per cent annually for three years.
This raises the cost of locking in mortgage rates for several years. It also makes packages with rates linked to the Sibor, which is still relatively low, look more attractive than fixed-rate loans.
If you are an existing customer with a loan whose value is less than $300,000 and you switch to a lower-rate loan, penalties such as cancellation fees could wipe out any savings from refinancing, notes Mr Bryan Ong of mortgage consultancy bcgroup.com.sg.
But if your loan value far exceeds $300,000, you could still save a great deal by sticking with a Sibor-linked package until the three-month Sibor exceeds 2.5 per cent to 3 per cent, he added.
Many will remember that, just a year ago, such packages were actually more costly than fixed-rate ones. In June last year, for instance, when the 12-month Sibor was 2.56 per cent, DBS' package stipulated 3.81 per cent for the first year, which factored in a mark-up of 1.25 per cent added by DBS.
Those looking to sell their investment properties in the coming months might want to keep to a three-month SOR loan until they offload their properties, as shorter-term rates are currently lower than long-term ones.
But for those taking a wait-and-see attitude, it might make more sense to take up a 12-month Sibor-linked package, so as to lock in the current low rates. That could give you some peace of mind until the middle of next year, when it will probably be clearer just how bad the economic slowdown in the US and Asia is likely to get, and where rates are headed.
Banks are now differentiating their products by varying the lock-in periods and the penalty fees for cancelling a package within the first year. Some banks offer rates as low as 1 per cent of the total loan quantum, while others charge up to 2 per cent.
Others, like Standard Chartered, have introduced interesting features such as a guarantee that the three-month SOR will not exceed the 2.98 per cent annual rate for the first two years.
Singaporeans like Mrs X will always be quick to leap after the cheapest rate in town. But rather than just eye-balling the current teaser prices, customers should also scrutinise the general rate trends, as well as cancellation penalties, to make sure they get the best package, be it a fixed or floating rate mortgage, all year round.
You are what you write - if you are a journalist.
After a while, friends start to label you by certain stories you write. Last week, one blithely introduced me to his mother as 'Grace Ng, the Transparent Mortgage Rates Reporter'.
That bizarre introduction unleashed a torrent of questions from Mrs X, who was about to refinance her fixed-rate mortgage. She was counting on the discomfited Miss TMRR (yours truly) to tell her exactly why 'everyone says a transparent-rate mortgage is the cheapest'.
The encounter made me realise that even some financially savvy Singaporeans might not be clued in on how to make the most of mortgage packages as interest rates change.
When rates head south, you can benefit by taking up a mortgage linked to publicly available rates such as the Singapore Interbank Offered Rate (Sibor). This benchmark rate is used by banks to determine mortgage rates for home loans, as it is the cost at which banks borrow funds from each other.
Banks such as United Overseas Bank, OCBC and Standard Chartered offer packages with rates linked to the Singapore Swap Offer Rate (SOR), which is made up of the Sibor plus lending costs incurred by the banks.
The three-month Sibor has been falling steadily, dropping from over 3.5 per cent last year to as low as 1.24 per cent in late April this year. This means some customers have been enjoying rates of about 2 per cent for the first few months of their loans. Not surprisingly, many customers have either taken up new Sibor-linked packages, or refinanced from a fixed-rate package to a Sibor-linked one.
But if rates are high and look set to climb higher, it is best to lock in a rate through either a fixed-rate mortgage for a few years, or at least a rate linked to the 12-month Sibor, which is fixed for a full year.
The three-month Sibor was gyrating within a tight range but is now climbing to about 1.43 per cent. The 12-month Sibor has moved up sharply to 2 per cent.
Singapore rates track the United States Federal Reserve rate, currently at 2 per cent. But the latter looks unlikely to climb sharply in coming weeks. Opinions are divided over whether the Fed will raise rates to curb inflation or lower them further to stave off a deep recession in the US.
So what do you do when rates in both the US and Singapore are relatively flat, the local property market is softening and the economic outlook is uncertain?
It depends on the type of customer you are.
New home-buyers will face higher fixed-rate mortgage prices. This is because local and foreign banks alike jacked up their rates last week to an average of about 3.7 per cent annually for three years.
This raises the cost of locking in mortgage rates for several years. It also makes packages with rates linked to the Sibor, which is still relatively low, look more attractive than fixed-rate loans.
If you are an existing customer with a loan whose value is less than $300,000 and you switch to a lower-rate loan, penalties such as cancellation fees could wipe out any savings from refinancing, notes Mr Bryan Ong of mortgage consultancy bcgroup.com.sg.
But if your loan value far exceeds $300,000, you could still save a great deal by sticking with a Sibor-linked package until the three-month Sibor exceeds 2.5 per cent to 3 per cent, he added.
Many will remember that, just a year ago, such packages were actually more costly than fixed-rate ones. In June last year, for instance, when the 12-month Sibor was 2.56 per cent, DBS' package stipulated 3.81 per cent for the first year, which factored in a mark-up of 1.25 per cent added by DBS.
Those looking to sell their investment properties in the coming months might want to keep to a three-month SOR loan until they offload their properties, as shorter-term rates are currently lower than long-term ones.
But for those taking a wait-and-see attitude, it might make more sense to take up a 12-month Sibor-linked package, so as to lock in the current low rates. That could give you some peace of mind until the middle of next year, when it will probably be clearer just how bad the economic slowdown in the US and Asia is likely to get, and where rates are headed.
Banks are now differentiating their products by varying the lock-in periods and the penalty fees for cancelling a package within the first year. Some banks offer rates as low as 1 per cent of the total loan quantum, while others charge up to 2 per cent.
Others, like Standard Chartered, have introduced interesting features such as a guarantee that the three-month SOR will not exceed the 2.98 per cent annual rate for the first two years.
Singaporeans like Mrs X will always be quick to leap after the cheapest rate in town. But rather than just eye-balling the current teaser prices, customers should also scrutinise the general rate trends, as well as cancellation penalties, to make sure they get the best package, be it a fixed or floating rate mortgage, all year round.
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