Wednesday, July 9, 2008

Fed To Curb Shady Home-Lending Practices

Source : The Straits Times, July 9, 2008

WASHINGTON - THE Federal Reserve will issue new rules next week aimed at protecting future homebuyers from dubious lending practices, the US central bank's most sweeping response to a housing crisis that has propelled foreclosures to record highs.

Fed Chairman Ben Bernanke spoke of the much-awaited rules in a broader speech on Tuesday about the challenges confronting policymakers in trying to stabilise a shaky US financial system. To that end, Mr Bernanke said the Fed may give squeezed Wall Street firms more time to tap the central bank's emergency loan program.

To prevent a repeat of the current mortgage mess, Mr Bernanke said the Fed will adopt rules cracking down on a range of shady lending practices that have burned many of the nation's riskiest 'subprime' borrowers - those with spotty credit or low incomes - who were hardest hit by the housing and credit debacles.

The plan, which will be voted on at a Fed board meeting on Monday, would apply to new loans made by thousands of lenders of all types, including banks and brokers.

Under the proposal unveiled last December, the rules would restrict lenders from penalising risky borrowers who pay loans off early, require lenders to make sure these borrowers set aside money to pay for taxes and insurance and bar lenders from making loans without proof of a borrower's income. It also would prohibit lenders from engaging in a pattern or practice of lending without considering a borrower's ability to repay a home loan from sources other than the home's value.

'These new rules ... will address some of the problems that have surfaced in recent years in mortgage lending, especially high-cost mortgage lending,' Mr Bernanke said.

Consumer groups have complained that the proposed rules aren't strong enough, while mortgage lenders worry that they are too tough and could crimp customers' choices.

The Mortgage Bankers Association urged the Fed to 'take a balanced approach in devising final regulations so that the credit crisis is not worsened.'

Meanwhile, the Center for Responsible Lending, a group that promotes homeownership and works to curb predatory lending, warned the Fed that weak regulation and oversight has led to the 'worst credit crunch in generations.' The Fed - under former chairman Alan Greenspan - came under attack for not acting early on to crack down on dubious lending.

Some critics complained that Mr Greenspan, who ran the Fed for 18 1/2 years - failed to act as a forceful regulator especially during the 2001-2005 housing boom, when easy credit spurred lots of subprime home loans and many exotic types of mortgages.

Meanwhile, signs emerged Tuesday that the housing market's slump is likely to persist through the summer, and the real estate market may not recover for at least another year.

The National Association of Realtors' pending home sales index slipped by 4.7 per cent in May to the third-lowest reading on record.

The decline 'suggests we are not out of the woods by any means,' said the group's chief economist, Lawrence Yun. -- AP

Residential Rents In S'pore Peaking

Source : The Straits Times, July 9, 2008

THE soaring rents in prime locations that drove many expats to downgrade in the past year seems to be easing, with some condominiums seeing a fall of up to 12 per cent.

The rental slides are expected to intensify over the next three to six months, reversing a trend that saw some rents double or triple during the property peak last year.

Consultant Jones Lang LaSalle said increased supply from newly built condominiums and a weakening economy are pushing rents in choice locations down although rents in other parts of Singapore should stay stable.

Expats have also been voting with their feet and abandoning pricey prime areas and moving to fringe locations - and nudging rents there up a little in the process.

Rents in the East Coast area, for example, rose 1.4 per cent in the first quarter but are now tipped to grow at a slower pace or even stay stable.

This is in contrast to prime areas, where landlords are feeling the chill of the new economic headwinds.

Read the full story in Thursday's edition of The Straits Times.

Buying A House Is Like Finding A Partner

Source : The Straits Times, July 7 2008

When it comes to finding domestic bliss, follow your head, not your heart

WITH the cooling property market, I thought it would be the perfect time to cash in on a modest, entry-level home.

After three months of searching, I have had an epiphany: Buying an apartment is a bit like shopping for a partner.

Cue: Sweet-faced real estate agents who, like pushy matchmakers, will spin such tales of domestic bliss as to leave you giddy.

'Aiyoh, this one so beautiful, high floor and north-facing,' one purred.

Yet another: 'Very hot right now, that one, better book first - yes, sure you will be satisfied for long, long time.'

I was not sure at all.

But even if I were, I could count on family and friends to help with my indecision.

I learnt to identify 'flaws' I did not know I even cared about.

Musing about one development in Balestier, my sister sagely intoned: 'Aren't you worried that it has a small pool?'

Whether it is a house or a spouse, committing to a long-term relationship can be a big undertaking.

There are bank accounts to balance, loans to compare, and goals to consider: Does owning an apartment with a 30-year mortgage factor into my life in the long run?

These are especially important for youth, who typically rely more on gut instinct than Excel spreadsheet-styled pragmatism, never mind their weak budgets.

Three months ago, I was the model young house-hunter - all youthful passion, no sense of perspective.

I wanted to buy the first apartment I saw, a dingy triangular studio along Jalan Besar, a few streets away from the lure of call girls and neon-lit karaoke lounges.

'It's a triangle!' my mother wailed. 'Bad fengshui!' (She did not seem to worry as much about the location.)

But, I reasoned to myself, it is cool and funky.

Yes, my criteria for signing away tens of thousands of dollars in savings were summed up in those six words.

Thankfully, I think differently now.

Before putting down the 10 or 20 per cent commitment dowry, there are a few questions I ask myself:

# Is it near an MRT station?
# What is its average transacted price per square foot in the last 12 months?
# How much do other units in the vicinity cost?
# Would anyone rent or buy it if I needed the money?
# Will the area be developed in the immediate future?
# And of course - is it regular-shaped?

The bottom line is this: You would not marry a person without first checking out his or her history (Any criminal record? Bout of the crazies in the last 10 years?); you would not pledge forever to someone if the person is unlikely to share your values and hope for the future.

A good fit needs time to discover, a sound plan to ensure a worthy rate of investment return.

Anyone can fall in love in a minute - building a home, however, requires a little more time and effort. I have not found my perfect apartment yet, but I know I will if I am patient.

When I finally put my name on the dotted line, one thing is for sure: Romance can take a backseat to a good rental yield.

Posh Condo On Sale Amid Weak Market

Source : The Straits Times, July 9, 2008

A LUXURY condominium that lets residents park their cars right in front of their high-rise units has been released for sale at a price analysts consider rather steep, given the quiet market.

ULTRA-LAVISH PROJECT: The Hamilton Scotts, which features lifts for cars, will likely be listed at an average price of $3,800 psf. -- PHOTO: HAYDEN PROPERTIES

The Hamilton Scotts project - it has special lifts to bring the cars to the desired floor - will likely be listed at an average of $3,800 per sq ft (psf), said developer Hayden Properties yesterday.

That will price the 52 regular units of about 2,700 sq ft at between $8 million and $12 million each. The 30-storey freehold condo in Scotts Road also has two junior penthouses of about 3,200 sq ft and two penthouses of around 7,100 sq ft.

Market insiders say the condo could be priced between just under $3,000 psf to over $4,000 psf, while one market watcher says it could have fetched between $3,500 and $4,500 psf last year.

However, the $3,800 psf average price is still relatively high given the cooling market for luxury homes.

There are several posh projects in the pipeline, but developers have been holding back launches amid the uncertain climate.

The luxury segment has taken a big hit after the dizzying highs hit last year. Prices are down about 10 per cent with falls of a further 5 to 10 per cent expected by the end of the year, said Savills Singapore.

The only other major luxury development released for sale this year was the 100-unit Nassim Park Residences. More than half the units have been sold since May, with prices averaging $3,000 psf.

'Hayden is probably keen to take advantage of this quiet period to launch, after the release of Nassim Park Residences and before the Hungry Ghost Festival,' said Savills director of marketing and business development Ku Swee Yong.

Knight Frank's director of research and consultancy, Mr Nicholas Mak, believes The Hamilton Scotts has enough appeal to defy the trend somewhat: 'There will still be takers as it is a unique product. But this is the time for mass market projects.'

The recent pickup in launches was almost all in the mass market or mid-tier segment.

Hayden managing director Ong Chih Ching said it should be able to get offers if the project is priced correctly. However, it would not sell if the price is not right.

'We are previewing it and not launching it because this is not the right climate to launch,' said Ms Ong, who added that Hayden has temporarily halted sales at its ultra- posh Ritz-Carlton Residences until the mood improves.

3 New Malls,5 Million Sq Ft

Source : TODAY, Wednesday, July 9, 2008

Will landlords face a possible over-supply?

SHOPAHOLICS can look forward to a fresh injection of 5 million sq ft of new retail space by the end of next year, according to Knight Frank’s calculations.

By then, at least three big new malls are projected to be ready to welcome shoppers: West Coast Plaza, Illuma and ION Orchard.

However, while customers rejoice over larger and more novel malls, will retailers and landlords face a possible over-supply?

Probably not, says Mr Nicholas Mak, director of research and consultancy at Knight Frank, despite up to 60 per cent of this new supply being in the centre of the city.

“Pent-up demand for retail space in the area, brought about by government initiatives to boost tourism, such as the inaugural Formula One night race, is likely to absorb most of the on-coming supply,” said Mr Mak.

It has been more than a decade since a new mall has appeared in the premier Orchard Road shopping area.CapitaLand and Sun Hung Kai Properties’ ION Orchard will provide 663,000 sq ft of prime retail space on Orchard Turn. Work is also underway on the nearby 313@Somerset. Both should help rejuvenate the area.

Compared to Hong Kong, Mr Mak believes Singapore, :based on its current population, has room to expand its retail stock further.

Tourism figures have been robust, with 10.3 million visitors and $13 billion spent last year. And despite global economic woes, 4.26 million visitors came to Singapore in the first five months of this year, up 4.3 per cent year-on-year.

“With a fast-rising population, coupled with strong visitor arrivals, growth in retail space is imperative to sustain the quality of the shopping experience,” said Mr Mak.

Nominal retail sales are anticipated to rise from $650.60 per sq ft (psf) last year to almost $700 psf in 2010, according to Knight Frank.

“Therefore, this potential new supply in the retail sector will be positive news for both retailers and consumers,” saidMr Mak. “Retailers can look forward to choice shop space and higher retail sales psf, while consumers can expect a more exciting retail scene coming their way.”

In Bugis, six-storey Illuma shopping mall is almost completed, with Jack Investments billing it as an “urban entertainment centre”.

West Coast Plaza is slated to open before the end of this year and is being billed as “An Oasis in the West” by developer Far East Organisation. This follows the revamp and renaming of the 16-year-old Ginza Plaza.

Beyond next year, the largest retail development currently planned is Marina Bay Shoppes by Marina Bay Sands. This is part of the integrated resort project and will provide 800,000 sq ft of waterside shopping space.

CB Richard Ellis estimates a total6.9 million sq ft of retail space will come on stream by 2012, albeit mostly next year.

UK Seen Heading Towards Recession

Source : The Business Times, July 9, 2008

Inflationary pressure makes it hard for BOE to cut rates

(LONDON) British businesses delivered fresh evidence yesterday that the economy risks sliding into its first recession since the early 1990s, reporting a sharply deteriorating climate across the country.

Bad times: Businesses say a fall in sales of manufactured goods in the second quarter poses serious risks that the economy will tumble into a recession

But inflationary pressure is also escalating, making it hard for the Bank of England (BOE) to justify lowering borrowing costs for some time to come unless hard evidence comes through that the economy is diving into a prolonged period of contraction.

The British Chambers of Commerce (BCC), joining many lobby groups now amplifying their regular calls for lower interest rates, said the business sector was on the verge of a recession and unemployment could rise by as much as 300,000 by the end of 2009.

Its second-quarter survey showed domestic conditions in the services sector at their weakest since the last time Britain's economy shrank for two successive quarters - a technical recession.

Manufacturing also suffered in Britain, the report showed, but export sales and orders in both sectors were still growing. That indicates the weaker pound is boosting demand for British goods and services overseas.

'The survey cast yet more gloom over the economic outlook by suggesting that the UK is within a whisker away from recession,' said Paul Dales, UK economist at Capital Economics. 'But, at the same time, further evidence of rising price pressures means that the Bank of England's Monetary Policy Committee is unlikely to respond with lower interest rates on Thursday or, indeed, until much later this year.'

The BOE is widely expected to announce rates on hold at 5 per cent when it ends its monthly policy meeting tomorrow, given inflation is running at its strongest rate since the central bank was given control over monetary policy in 1997.

The BCC survey highlighted those inflation concerns, with the manufacturing sector contending with the toughest price pressures since the series began in 1997 and a similar situation in the dominant services sector.

'The survey provides yet another striking example of the Bank of England being trapped between the rock of markedly slowing economic activity and the hard place of elevated inflation pressures,' said Howard Archer, an economist at Global Insight.

Negative news on the economy is now coming thick and fast.

One of Britain's biggest housebuilders, Persimmon, said yesterday it sold nearly a third less homes in the first half of this year compared with last year and is cutting 1,100 jobs.

And top-end estate agent Savills reported first-half sales of luxury homes in the once red-hot London market nearly halved.

The government said annual house price growth slowed to 3.7 per cent in May from 4.9 per cent in April.

That lagging official survey, which measures prices when mortgage loans are made, backed up a raft of other surveys showing a sharply declining market.

'The housing market correction is only in its early stages,' said Seema Shah, a property economist at Capital Economics. 'The credit crunch shows no signs of easing, while the economic and labour market outlook is rapidly deteriorating.'

Trouble for Bradford and Bingley bank, Britain's biggest buy-to-let mortgage lender, showed no sign of ending as its shares hit a record low. -- Reuters

Hamilton Scotts Offers A Garage In The Sky

Source : The Business Times, July 9, 2008

IF you are the sort who cannot bear to take your eyes off your beloved car when you are ensconced in your home, then make an appointment to view the apartment units at Hamilton Scotts.

Located at 37 Scotts Road, the 30-storey luxury development by developer Hayden Properties is the first in Asia to feature car parking within the apartment units, with the car parking area separated from the living space by double glazing.

Drivers stop their vehicles at a designated point in the basement, exit and undergo a biometric scan, whereupon elevators take the car up to the correct unit in an automated, driverless process.

The project is now open for preview by appointment only. It is understood the units will be priced at about $3,800 per square foot (psf).

The condominium consists of 56 units, including 52 three-bedroom units of 2,700 sq ft and two 3,200 sq ft junior penthouse units. Each of these has parking space for two cars.

The remaining two units are 7,100 sq ft triplex penthouses with interior customised to buyer specifications, serviced by an internal lift and come with a rooftop garden and swimming pool. They can accommodate four cars each.

Hamilton Scotts is slated for completion by 2011.

If living with your car is not your cup of tea, perhaps you might want to visit another luxury residential project: Signature at Lewis. It will be officially launched this Saturday by developer Hiap Hoe Group with a starting selling price of $1,670 psf.

Located at 1 Lewis Road, the 12-storey development comprises 10 studio units (635 sq ft each), 10 two-bedroom units (980 sq ft) and 10 four-bedroom units (1,841 sq ft), as well as two penthouses, with private pool and roof deck, occupying over 3,000 sq ft each.

So far, three units have been booked for an undisclosed price.

China Home Prices Seen Dropping More

Source : The Business Times, July 9, 2008

Citic Ka Wah Bank cites weak demand, govt unlikely to ease up loan restrictions

(SHANGHAI) Property prices in China will fall further because demand is weak and the government probably won't relax restrictions on home loans, according to Citic Ka Wah Bank chief economist Liao Qun.

Losing lustre: Falling home prices in Shenzhen and Beijing have raised concerns that an asset bubble burst may leave China's banks with more non-performing loans

'Policy targets with respect to the property market are still some way from being reached,' Mr Liao said at a press briefing here yesterday. 'The adjustment of the market is set to continue into 2009.'

China's government is seeking to rein in soaring property prices to help slow inflation from an 11-year high. It raised interest rates on mortgages for second homes and increased the minimum downpayment to 40 per cent of the sale price last September.

The central bank also told commercial banks to further tighten mortgage lending last December. Under new rules, loan applications for the purchase of a second apartment are counted by household instead of by individual.

Housing sales in China fell 0.4 per cent to 136.6 million square metres in the first four months of 2008 from a year earlier, according to the National Development and Reform Commission (NDRC). Home prices in 70 major cities rose 9.2 per cent in May, the smallest gain in eight months.

First-tier cities including Shenzhen, Beijing, Guangzhou and Shanghai will face more downward pressure on prices than smaller cities because of oversupply, according to Mr Liao.

The economist said he expects home prices to fall a further 10-15 per cent in Shenzhen, where average prices had already dropped 36.5 per cent between last October and May this year. Prices in Beijing and Shanghai are likely to fall 10 per cent over 12 months.

China Vanke Co, the country's largest publicly traded real estate developer, said on Monday that apartment sales fell 22.8 per cent in June from a year earlier.

Falling home prices in Shenzhen and Beijing have raised concerns that an asset bubble burst may leave China's banks with more non-performing loans. The banking regulator warned lenders in May against a potential rebound in bad loans amid tighter credit controls and rising inflation.

Property-related lending gained 30 per cent annually in the past two years in China - twice as much as overall loan growth, according to Moody's Investors Service. Some builders evaded lending controls by indirectly accessing bank financing, it said.

The central People's Bank of China and government ministries held talks on stabilising real estate prices, and may make financing easier, the Beijing-based Economic Observer reported on July 5, citing a person it didn't identify. A decline in property prices will erode demand and disrupt economic growth, the newspaper said, citing an NDRC report.

Mr Liao said yesterday that he doesn't expect the government to relax rules on real estate financing soon. 'With excess liquidity still prevailing, the government would be concerned that an early relaxation of tightening measures would result in an undesired quick rebound in the market, negating the previous tightening efforts,' he said. -- Bloomberg

Super-Prime Orchard Mall Rents Hit Record $54.40 PSF

Source : The Business Times, July 9, 2008

5.3% increase qoq is highest of all retail micro markets tracked by CBRE

CHANEL, Gucci, Louis Vuitton are big brands that scream 'high fashion' on Orchard Road.

But lately, the screams are more likely to be the painful result of rising rents.

CB Richard Ellis (CBRE) said that super prime retail space - defined as space facing Orchard Road or in atriums - hit a record $54.40 per square foot (psf) per month in the second quarter of this year.

This was an increase of 5.3 per cent quarter on quarter (qoq) - the highest of all retail micro markets tracked by CBRE.

For the whole Orchard Road area, rents rose 1.1 per cent qoq in the second quarter to average $36.80 psf per month - also a record.

The 'uncertain global business climate and imminent supply coming on stream' now has retailers making more prudent decisions on space, said CBRE. But 'there remains an appetite for expansion and retailers are still keen to bring new brands into the market'.

An estimated 6.9 million sq ft of retail space will be completed between the third quarter this year and 2012, with 48 per cent of this coming on stream in 2009.

But still, said CBRE: 'We continued to see new entrants and openings in Q2.'

It noted that Wisma Atria houses Jayson Brunsdon, Trois + Inch and Levis Lady.

Thai fashion label Greyhound and Playhound is now available at Tangs Orchard.

And Toshin will introduce eight new stores totalling 15,000 sq ft at Takashimaya.

Of course, as new shops open, others close.

Wing Tai Retail will close two Topshop and Topman outlets in the Orchard/Scotts Road area because the leases have expired.

The 12,000 sq ft Wisma Atria outlet will close this month and the 2,500 sq ft outlet at Isetan Scotts will close at the end of August.

Wing Tai will open a new store of more than 4,000 sq ft at an undisclosed Orchard Road location later this year and expects to open a 12,000 sq ft flagship store at ION Orchard when the mall is ready.

WingTai Retail executive director Helen Khoo said: 'We have been looking for a suitable location for our new Topshop and Topman flagship store in the Orchard Road area, and are preparing for opportunities arising from a new retail landscape.'

Rents were not cited as a reason for the relocation. But rents at ION Orchard have been reported to range between $20 and $60 psf per month.

Singapore Retailers Association (SRA) executive director Lau Chuen Wei believed that high rents are 'putting a dent in retailers' bottom lines'.

'Retailers have to work out their sums very carefully and make location decisions depending on affordability as well as what market segments they want to attract,' she said.

'Several new developments are coming on stream, but there is no lowering of rents in sight,' she added.

Ms Lau said that properties offering the new space have 'clear ideas' of their positioning and what kinds of retailers they want within their properties.

Likewise, there are retailers who are very clear about where they want to be. 'It's a matter of negotiation - and who wants who more,' she said.

Knight Frank also suggested that retail rents may not suffer from future over-supply.

In a research brief, it said that Singapore had 7.4 sq ft of available retail space per person (capita) at end-2007, compared with Hong Kong's 16.2 sq ft per capita.

Based on current population growth, Knight Frank reckoned that the Singapore retail sector may have the capacity to grow by four million sq ft in the next three years to get close to the 2004 level of 7.97 sq ft per capita.

It reckoned that a rise in retail sales over the next three years, from $650.60 psf in 2007, will outpace the increase in retail space to sustain growth in space productivity at close to $700 psf in 2010.

Frasers Centrepoint In $180m Allco Deal

Source : The Business Times, July 9, 2008

Allco Commercial Reit to be renamed Frasers Commercial Trust

IN what appears to be a sign of consolidation in the Singapore real estate investment trust (Reit) market, Frasers Centrepoint (FC) is buying 17.7 per cent of Allco Commercial Reit and 100 per cent of the Reit's manager, Allco Singapore, for a total consideration of $180 million.

Mr Lim: Frasers Centrepoint has plans to bolster and strengthen the financial position of Allco Reit

FC, a subsidiary of Fraser and Neave (F&N), had planned to list a commercial Reit called Frasers Commercial Trust (FCT) and recently received in-principle listing approval from Singapore Exchange. With the deal, FC will scrap the listing plan and rename Allco Reit as FCT.

Allco Finance Group, the Australian holding company of Allco Singapore, is said to be selling its stake to repay debt. For $104.3 million, Allco Finance and two of its subsidiaries will sell 125.65 million Allco Reit units to FC for 83 cents each. The unit price is a 42.4 per cent discount to the Reit's net asset value per unit and a 16.9 per cent premium to its last-traded price of 71 cents on Monday.

FC will also gain control of Allco Singapore by taking on all of its issued ordinary and preference shares for $75.7 million. The entire deal could be completed by Aug 6.

According to market watchers, Allco Finance ran a limited auction that aroused significant interest. As one observer put it: 'This would represent an immediate platform for a fund manager or property developer wanting to have a ready-made Reit.'

An FC spokesman told BT: 'Such an opportunity to acquire good quality commercial properties at an attractive valuation level is rare.' Allco Reit's property portfolio spans Singapore, Australia and Japan, and the deal will help FC gain $2 billion of commercial assets under management.

'Current Allco Reit unit holders will benefit from tapping into the professional management expertise, regional footprint and resources of one of Singapore's largest property companies,' FC chief executive Lim Ee Seng said in a statement yesterday.

Allco Reit will be able to leverage on a ready pipeline of commercial assets owned by FC. These comprise Alexandra Point, Alexandra Technopark and the office and ancillary retail components of Valley Point - properties initially set aside for the planned listing of FCT.

'Depending on prevailing market conditions and subject to the approval of shareholders, FC intends to inject its commercial assets within six to 18 months of completion of the acquisition,' an FC spokesman told BT.

Mr Lim noted: 'We have clear plans to bolster and strengthen the financial position of Allco Reit.' FC 'will be able to assist Allco Reit in negotiating the refinancing of its existing loans, which will bring clear benefits to Allco Reit's unit holders'. Details will be announced at the appropriate time, the FC spokesman said.

FC expects to use internal cash resources and existing credit facilities to fund the $180 million deal. The acquisition is not expected to have a material impact on the net asset value or pre-tax net profit of F&N or its subsidiaries for the year ending Sept 30, 2008.

Credit Suisse Singapore was FC's financial adviser on the acquisition.

News of the deal drove Allco Reit's units up 0.7 per cent or 0.5 cents to end at 71.5 cents yesterday. F&N shares, on the other hand, closed 0.9 per cent or four cents down at $4.39.

HSBC's New Home Loan Package Inverts Model

Source : The Business Times, July 9, 2008

Customers may pay lower rates in successive years in Sibor-pegged deal

HSBC is launching a radical home loan package - featuring a decreasing interest rate spread - which is making some rivals scratch their heads.

HSBC's new Sibor- pegged home loan package with loyalty discount gives a reduction in the interest rate margin charged in the first three years - a first in the market.

Ms Lim: Package responds to customers' wish to be rewarded for their loyalty.

Current loans pegged to Sibor (Singapore interbank offer rate) have either flat or increasing interest rate spreads.

This new Sibor-pegged loyalty package is unique because the interest rate spread reduces by 10 basis points at the end of every anniversary year, up to the third year of the loan, HSBC said yesterday.

Under the new loyalty package, the customer pays the 3-month Sibor rate plus 0.75 per cent in the first year; in the second year, he pays 3-month Sibor plus 0.65 per cent; and from the third year onwards, the rate is 3-month Sibor plus 0.55 per cent. The 3-month Sibor on July 1 was 1.25 per cent.

For a customer who pledges to stick with the bank for three years, DBS's interbank-pegged home loan charges a flat spread of 0.8 per cent for each of the three years and then it's 1.25 per cent thereafter.

United Overseas Bank (UOB) charges a flat spread of 0.8 per cent to two of its interbank-pegged home loan packages.

Standard Chartered Bank's Sibor-pegged mortgage also charges a flat spread of one per cent.

Observers that BT spoke to wonder what the catch is for HSBC to slice its margins, given the increasing costs of doing business and also the uncertain economic climate.

'They're mad,' said one rival banker, listing the various costs banks incur in selling a home loan including commissions to brokers and its own sales people, and legal subsidies offered to borrowers.

Said Kevin Lam, head of loans, United Overseas Bank: 'It's an interesting idea. UOB introduced a similar package in the past. We called it a step-down package.'

At the end of the day, a homebuyer has to consider the long-term and short- term gains versus costs, said Mr Lam.

HSBC said it is rewarding customers for staying with the bank. Asked how it will manage its reduced margins, it said it was a 'trade secret'.

Said Wendy Lim, head of consumer banking, HSBC: 'Our Sibor-pegged loyalty pricing is premised on feedback from a study we conducted among home loan customers. The majority of customers in the study said that they liked the concept of inverse pricing in their home loan rates as it translates to more savings for them in the long run.'

'Customers are telling us that they want to be rewarded for their loyalty. So we are addressing the need with this innovative offer,' added Ms Lim.

Koh Kar Siong, DBS managing director and head of consumer deposits and secured lending, said his bank listens to customer feedback too.

'DBS was the first bank to introduce transparent interest rates pegged to Sibor or to the CPF Ordinary Account rate. This happened at a time when there was public outcry over the lack of transparency of banks' mortgage rates,' said Mr Koh.

UOB KayHian analyst Jonathan Koh said banks in Singapore are benefiting 'from a steepened yield curve as they can utilise short-term funding, such as fixed deposits and savings deposits, for lending to businesses and consumers on a longer-term basis'.

He thinks HSBC's new package will not lead to an aggressive home loan war, given the 'overall economic climate and the fact that 'on corporate and small and medium enterprise loans, margins are more attractive'.

Still, rival bankers are unlikely to give up their turf without a fight.

One said his bank is prepared to reduce the spread to 0.7 per cent on a case- by-case basis in order 'to protect our customers'.

Gregory Chan, OCBC head of secured lending, said his bank regularly makes adjustments for its home loan packages.

'As such, we will continue to offer loan packages with promotional rates that are competitive compared to the other market players,' he said.

Developers Offer Agents Fatter Cuts To Push Projects

Source : The Business Times, July 9, 2008

In some segments, commissions have doubled compared to a year ago

Developers are paying property agents bigger commissions - in some cases almost double of what was offered a year ago - to push their new residential project launches.

Tough task: The environment for selling homes is very challenging now and agents have to work much harder to convince buyers

This is because the environment for selling homes is far more challenging now and agents have to work much harder to persuade potential buyers to part with their money.

A modest-sized developer told BT he does not mind rewarding agents with commissions of 2 per cent or more as, to him, speed of sales is paramount. He needs to achieve enough cash flow to begin construction and move on to his next project. But even the big boys are having to pay a higher commission rate to agents these days - if they want their help to move units.

An established developer launching a big project these days could pay its appointed marketing agent 0.8 per cent of sale price - compared with possibly 0.5 per cent 12 months ago. To further incentivise agents, the commission rate may go up to, say, one per cent nowadays, once a certain number of units have been sold.

Developers of smaller projects, for instance in the Telok Kurau area, are understood to be paying even higher commissions - often up to 2 per cent - compared with around one per cent or less a year ago, BT has learnt from property agents and developers. On top of that, some developers are offering a bonus payout in the form of an additional 0.5 per cent commission if the project sells out within a certain time frame and at a price exceeding the developer's target.

BT understands that high-end projects have also not been spared. Their developers are having to reward agents with 0.7 to 1.5 per cent commissions - up from 0.4 to 0.5 per cent a year ago.

Teo Hong Lim, executive chairman of property group Roxy-Pacific Holdings, says: 'Speed of sales is most important to us. We don't want to target sales of just 30-40 per cent of total units in a project. We need to sell 80-90 per cent or even 100 per cent. We can then begin construction, and move on to our next project.

'At the end of the day, agents are also very much incentivised by commissions. It's a sort of a no-lose situation for us when we achieve speed of sales and the final net sales value of a development is higher than our initial target, even after we less the additional bonus commissions we pay the agents.'

While some market watchers may think that paying agents higher commissions will eat into the developers' profit margins, Mr Teo argues: 'Commissions are only part of our total project cost. It's definitely much, much lower than land and construction costs.'

A property agent says: 'Developers are more concerned with cash flow and sales take-up. The higher commission is a small amount to pay for boosting their cash flow. If they don't have the cash flow, higher interest expense will be a much bigger cost item than the commissions.'

Agreeing, Knight Frank executive director Peter Ow explains why agents need higher motivation today. 'The main reason for increasing our fees is that we're operating in a tougher market and, frankly, agents are highly motivated by fees. If you get two projects side by side, most agents will naturally push for the one where the reward is higher.'

Industry players acknowledge that agents have to work a lot harder to convince buyers, given the more cautious economic outlook, thinner foreign buying and the fact that fewer speculators are left in the market after the deferred payment scheme was scrapped last October.

BT understands that the extra work being put in by agents these days to realise sales at showflats includes studying the project's costing. 'We tell buyers the price we're offering is below current replacement cost, either because the developer bought the land cheap or locked in construction costs early.

'Sometimes we also use pressure tactics. We tell potential buyers that the developer will raise prices once it achieves a certain percentage of sales. And it works,' an old hand in the game told BT.

17年来百余邻区获翻新 名堂虽多但更贴近居民需求

Source : 《联合早报》July 09, 2008



红山中心的组屋在翻新前面对停车位不足等问题,翻新后取名Merah Heights,增设了无障碍走道等新设施。


更换设备增大面积 最受居民欢迎























Source : 《联合早报》July 09, 2008

高档豪华房地产市场淡静,但也有发展商“跃跃欲试”,推出高档豪华私宅来为市场“探温”。海登房地产(Hayden Properties)昨天推出位于史各士路的“Hamilton Scotts”公寓,其售卖尺价的要价已从去年的豪宅市场高峰滑落,每平方英尺卖3800元。  


“Hamilton Scotts”是全世界第三个拥有室内高楼停车位的房地产,也是全世界拥有最高楼层的室内停车位(30层)的建筑。(何炳耀摄)



尽管如此,发展商还是选择以私下预售的方式,邀请有兴趣的买家进场。每平方英尺3800元的要价,虽然算不上是“天价”,比去年的“楼王”——乌节路卓锦豪庭(Orchard Residences)的一个顶层豪宅的成交价(每平方英尺5600元)也低许多,但在目前淡静的高档私市场,这样的价格还是相当高的。


位于史各士路37号的这个高档豪华私宅,属于永久地契,是前亚洲大酒店(Hotel Asia)的原址。在56个单位中,52个是三卧房式单位,2个是小型顶层豪宅,2个是顶层豪宅,估计会在2011年竣工。



公司董事陈莞君(Leny Suparman)指出,汽车电梯会比普通的乘客电梯快一倍,且会有两架。除此之外,每个单位内有两个停车位,在地底停车场每个单位也会拥有一个停车位。单位内的停车位由于不用排队等车位,因此停车速度快。若真发生故障,维修人员必需在90分钟内抵达维修。


与此同时,协和(Hiap Hoe)也将在来临的周末,推出位于第十邮区鲁易士路的永久地契高档私宅Signature At Lewis(莱佛士城市俱乐部对面),起始要价是每平方英尺1670元,预计在2011年就可取得临时入伙证(TOP)。