Tuesday, July 22, 2008

Condo Sales In S'pore Hit By Bad News From US

Source : The Straits Times, July 22, 2008

THE bad news coming out of the United States last week took its toll on property sales in Singapore over the weekend.

Two newly released projects sold fewer than 20 units each, as homebuyers' caution deepened after the collapse of US bank IndyMac and the forced rescue of mortgage giants Freddie Mac and Fannie Mae.

CapitaLand's Wharf Residence in Tong Watt Road, which started taking bookings over the weekend, sold just over 10 units, sources said.

The 173-unit condominium off River Valley Road is priced between $1,500 per sq ft (psf) and $1,900 psf. Unit sizes start at about 1,000 sq ft, so a two-bedroom unit costs $1.6 million to $1.7 million.

Meanwhile, Frasers Centrepoint sold about 19 of the 48 units it released at Woodsville 28 near Potong Pasir MRT station.

But the developer, which priced the units at an average of $880 psf, said it was 'quite encouraged by the take-up rate'.

'It was above our expectations, given the general sentiment in the market,' said a spokesman.

Woodsville 28 has two- and three-bedroom units, starting from 829 sq ft, with an average two-bedder costing about $755,000.

Sales also continued at a snail's pace at other condos that have recently been launched, despite reports of large crowds at showflats.

OLA Residences in Mountbatten Road has sold only about 10 of its 50 units since sales began three weeks ago.

'There are a lot of walk-ins but offers from buyers are coming in too low,' said a property agent. The freehold project is priced at about $1,200 psf on average.

Two smaller projects, The Scenic@Braddell in Braddell Road and Jubilee Residence in Pasir Panjang, have sold about 10 units each in the last few weekends, putting them at the halfway mark in sales. The Scenic is priced at $820 psf to $850 psf, while Jubilee is going for $900 psf.

Cheaper projects are seeing better sales. Buyers have picked up more than 60 of the 212 units at Beacon Heights in St Michael's Road for an average price of $800 psf, agents said. The 999-year leasehold condo developed by Kim Eng Securities started sales two weekends ago.

'Buyers are still waiting to see if prices go down further, and this will continue until the US situation stabilises,' said Mr Ku Swee Yong, director of marketing and business development at property firm Savills Singapore.

'There are definitely buyers with enough money to buy new properties, but they are doing their homework these days.'

Hope In Sight For Tampines Court Sale?

Source : The Straits Times, Jul 22, 2008

AN ELEVENTH-HOUR bid by the owners of Tampines Court to save their collective sale from petering out seems to be paying off.

The deal was in danger of collapsing after the sales committee delayed seeking mandatory Strata Titles Board (STB) approval for the sale.

The STB had scheduled to hear the case only next month, but the sales agreement with Far East Organization and Frasers Centrepoint expires this Friday. The two property giants do not look keen to grant an extension.

As a result, the sales committee last week applied successfully to the High Court to have the STB hear the case earlier.

At yesterday's hearing, those who objected to the sale had their say, clearing the way for lawyers for majority and minority owners to submit closing statements in writing by Thursday.

The STB had initially set yesterday's hearing for Aug 7, but that would have killed the $405 million collective sale as it would come after the July 25 deadline.

The deadline fix stemmed from the sales committee's decision to delay seeking mandatory STB approval for the deal until Jan 7, although all the necessary conditions had been met as early as July 25 last year.

It wanted to wait until the board had ruled on the Gillman Heights sale. Any ruling could have had a bearing on the fate of the Tampines Court deal as both are former Housing and Urban Development Company estates.

The squeeze on dates became potentially disastrous when the STB dismissed an appeal to bring forward the Aug 7 hearing, forcing majority owners to appeal to the High Court last week.

Lawyer N. Sreenivasan, who represents the minority owners, said yesterday the High Court did not explicitly order the STB to rule by Friday. But the board's deputy president, Mr Alfonso Ang, said it was likely to, in the 'spirit' of the court's order.

Sales committee chairman Mathew Lee, who spent the most time on the witness stand yesterday, was grilled on whether he had acted in the owners' best interests on the issue of the estate's valuation and the method of distribution of sale proceeds.

The lively session also drew a few laughs, particularly when Senior Counsel Andre Yeap, who represents the majority owners, said Mr Sreenivasan was 'highly intelligent', to which the latter interjected: 'No, I am not.'

Resident Niamh Choo, who also took the stand, told The Straits Times later that one of the minority owners' biggest concern was that some of the proceeds would be distributed unfairly.

In his closing statement, Mr Yeap said there was insufficient evidence that the sale lacked good faith.

Mr Sreenivasan will make his closing statements to the board today.

Another $1.7b Of Public Building Projects Deferred To Ease Construction Demand

Source : The Straits Times, July 22, 2008

ANOTHER $1.7 billion worth of public-sector building projects will be pushed back to ease the pressure on the construction industry's costs, which went up by 30 per cent last year.

This brings the total value of projects that the Government is postponing to 2010 and beyond to $4.7 billion.

The latest projects identified for deferrment include the main building of the proposed Jurong General Hospital, which will be pushed back to 2010, and other 'less urgent' improvement works.

National Development Minister Mah Bah Tan disclosed this in his written reply to a question from an MP in Parliament on Monday.

But he gave the assurance that projects that are essential to meet Singapore's economic and social needs, such as key infrastructural development, will proceed as planned.

Prices of new Housing Board flats will also not be affected and will continue to be sold at a discount so that buyers can enjoy the subsidy, said the minister.

A statement from the Building and Construction Authority's (BCA) on Tuesday said public housing and upgrading programmes are not affected.

'The additional deferment will allow the existing construction capacity and resources to be channeled towards the timely delivery of some big projects such as the Integrated Resorts, Marina Business Financial Centre and the Downtown MRT line', said BCA.

'Most of these projects are expected to be completed around end 2009. The construction resources freed up then would then be available for the deferred public sector projects, thereby achieving a better spread of construction resources and activities beyond 2009.

The Government has earlier pushed back $3 billion worth public sector projects to after 2009 to help moderate construction demand as the building boom is stretching resources and capacity to the limit.

These delayed projects include the National Addiction Management Centre and a section of the Changi Prison Complex, planned for next year and 2009, extensions to the Asian Civilisations and Peranakan museums, and a new complex to house the Communicable Disease Centre.

Replying to MP Cynthia Phua of Aljunied GRC, Mr Mah said the Building and Construction Authority's (BCA) Building Tender price Index, which tracks mainly manpower and equipment costs, rose by 19 per cent last year, and by 4 per cent more in the first quarter of this year.

But feedback from leading quantity surveyor firms showed that the increase in the overall construction was about 20 to 30 per cent in 2007, and about 3 to 5 per cent in the first three months of 2008.

Mr Mah said the sharp increase in construction cost was driven mainly by the high demand for construction resources and materials worldwide, and exacerbated by the surge in fuel prices.

For example, the price of steel bars has risen by 85 per cent since June last year, while concrete now costs about 18 per cent more than last year.

On its part, the Government has implemented several measures to ease the tight resource supply situation.

The Ministry of Manpower has relaxed the construction sector dependency ratio from 1:5 to 1:7 and raised the S-pass quota from 15 per cent to 25 per cent. Experienced foreign workers are also exempted from the Man-Year-Entitlement requirement.

BCA is also working closely with the industry to expand its contracting capacity, including bringing in contracting resources from overseas. For a start, it has organised two joint-industry trips to China.

HDB flat prices unaffected
On the impact of rising construction costs on HDB's building programme and prices of flats, Mr Mah said as new HDB flats prices are not based on cost, they will not be directly affected by the construction cost increases.

'New flats will continue to be priced at a discount to their equivalent market prices, so that buyers enjoy a generous subsidy', he assured, pointing out that new flat prices had risen by a slower pace, in tandem with the prevailing market trends.

But he acknowledged that the construction cost increase does pose a strain on HDB's budget for new building projects.

HDB has implemented various measures to mitigate the extent of cost increases as far as possible.

For example, HDB is stepping up overseas promotional efforts to attract more foreign contractors to participate in HDB tenders, and it is also buying cement and sand in bulk to cushion HDB contractors against price increases of these raw materials.

BCA is also advocating more efficient concrete design to reduce concrete usage, and promoting the use of recycled materials in construction.

S'pore Hotel Occupancy Eases But Room Rates For Top Hotels Are Up

Source : The Straits Times, July 22, 2008

ROOM rates for top-tier hotels in Singapore are still rising even as occupancy rates are easing off.

Figures released by hotel investment services firm Jones Lang LaSalle Hotels on Tuesday showed that the average daily rate for five-star hotels in May went up by 20 per cent to $331 over last year.

Four-star hotels have seen similar healthy increases, with the rate growing by 26 per cent to reach $234.

But occupancy rates, which enjoyed small increases last year, are starting to slide. It has gone down by 4 per cent for five-star hotels and 1.6 per cent for four-star places. They now stand at 77.4 per cent and 84 per cent respectively.

While it may stoke concerns about Singapore becoming too expensive for tourists, executive vice-president for Jones Lang Lasalle Hotels, Ms Chee Hok Yean, was quick to reassure that the tourism outlook here still remains positive.

She cited recent research by the Pacific Asia Travel Association which predicted that Singapore will hit 10.9 million visitor arrivals this year, surpassing the Singapore Tourism Board's target of 10.8 million.

Ms Chee added that the booming mid- and lower-tier hotel market will ensure that demand for cheaper rooms can be met.

Jones also revealed healthy growth figures for the regional hotel industry. It estimates that 140,000 rooms will come on-stream in major Southeast Asian cities in the next three years, a 25 per cent jump over the current supply.

Height Of Style

Source : The Straits Times, July 19 2008

It is a lofty ambition to turn a small space into a stylish one, but this loft-style apartment has done it

SMALL homes are often a hotbed of ideas in terms of creative storage and space-stretching tricks.

Indeed, it seems one can do plenty even in a 689 sq ft apartment, such as this bachelor's pad a stone's throw from Orchard Road.

Owner Lee Boon Teck, an auditor in his 30s, loves the area, and his split-level loft apartment is the perfect size and fit for him.

HIGH LIFE: A 6m-high shelf plays up the apartment's high ceiling and serves as a display space for the owner's collection of books and Coca-Cola bottles. The ladder can be swung out when he wants to climb up to reach the top shelves and tucked back neatly to one side when not in use.

However, when he bought it, he felt it had insufficient storage areas. So interior designer Allan Yong of Museum was roped in to remedy the problem and also to create a more cohesive look for the flat in a renovation that cost about $36,000.

Taking into account Mr Lee's bachelor lifestyle, Mr Yong proposed a masculine feel with dark colours and hard edges.

He built a glossy black granite platform in the living area to separate it from the open-concept kitchen provided by the developer.

A customised L-shaped sofa over the existing window ledge not only allowed him to fully maximise the limited living room space but was also a more comfortable alternative to the initial idea of lounging on floor cushions.

Being loft-style, the place boasts a dramatic 6m-high ceiling in the living room, with floor-to-ceiling glass windows. The bedroom on the split-level is accessible by a staircase to the side.

So what the apartment does not have in breadth, it makes up for in height.

'The ceiling height gives it excitement,' says Mr Yong. Since Mr Lee wanted a bookshelf, he designed a 6m-tall one with its own bespoke ladder.

'Some people might say it's not practical but it serves to accentuate the height of the ceiling,' says Mr Yong of the structure, which has been stained dark to match the flooring.

In addition, it provides the owner with an industrial-chic way to display his books, magazines, Coca-Cola bottle collection and travel souvenirs.

Three artworks - monochromatic Warhol-esque paintings of Elvis Presley boxing by local artist Andre Tan - lead the way up to the bedroom.

At the landing, a niche of dead space initially meant for a study has been turned into a storeroom that is closed off with a soft curtain.

A new work area was then carved out of the already small bedroom by adding a clear glass desk at the foot of the customised bed frame. As there was no space for a chair, the platform on which the bed frame sits now serves as a seat.

'This arrangement is definitely more pleasant,' says Mr Lee, who now has a view out of the window while he works, instead of a blank wall.

The space within the platform is also used for storage purposes. 'It's storage, seating and a bed frame, all in one,' says Mr Yong of the structure.

Corporate Tenant Demand In UK At Decade Low

Source : The Business Times, July 22, 2008

(LONDON) Tenant demand for commercial property space in the UK fell in the April-June period at the fastest quarterly rate in at least 10 years as an economic slowdown gathered pace, a key report showed yesterday.

According to a national survey of property professionals by the Royal Institution of Chartered Surveyors (RICS), lettings to new occupiers and occupier enquiries for new space both fell in the second quarter at their fastest clip in the report's 10-year history.

The balance between surveyors reporting a rise and those reporting a fall sank to minus 50 per cent or more in both cases from minus 31-36 per cent in the first quarter, having turned negative late last year as the US sub-prime crisis begot a global credit crunch.

Surveyors said demand and enquiries for shop floorspace were especially weak in the second quarter and dovetailed with a particularly sharp rise in the amount of available shop floorspace.

Commercial lease lengths also fell at the fastest pace since at least 1998, with the largest declines again taking place in the retail sector, the survey showed.

In contrast - and despite mounting job cuts in central London's pivotal financial services industry - office availability was still only half that reported after the dot-com bubble burst at the start of the decade, RICS said.

However, confidence in the outlook for office rents was the lowest since the final quarter of 2002. -- Reuters

UK Home Prices Fall For First Time Since 2002

Source : The Business Times, July 22, 2008

(LONDON) UK house prices dropped this month from a year earlier for the first time since Rightmove plc started measuring them in 2002, as the squeeze on lending pushed up the number of unsold properties to a record.

The average asking price for a home fell an annual 2 per cent to £235,219 (S$634,000), Britain's most-used property website said in a statement yesterday. On the month, prices declined 1.8 per cent, the biggest drop since December. Prices increased in London by 0.3 per cent from last month.

House prices will fall about 10 per cent this year and 6 per cent in 2009, the Ernst & Young ITEM Club, a forecasting group which uses the same model as the Treasury, said yesterday.

Britons, laden with a record £1.4 trillion of debt, are struggling to afford homes as banks curb lending and credit costs increase.

'Banks need to be careful they do not get blamed for a second crash in 20 years' by limiting loans, Miles Shipside, commercial director of Rightmove, said in the statement. 'The 'doom and gloom' attitude should be about the drastically low levels of sales, which affect the wider economy.'

House prices may fall further by as much as 30 per cent and unemployment will increase as the UK slips into a recession, Bank of England policymaker David Blanchflower said in an interview published in The Guardian yesterday. The economy may already be contracting, the newspaper cited him as saying.

The pound fell against the US dollar after Rightmove's report and Mr Blanchflower's comments.

The stock of unsold property per real estate agent rose for a sixth month to 77, the highest ever measured by Rightmove, from 74 last month. Prices for properties in the West Midlands fell the most on the month, declining 3.7 per cent. London was the only region to show an increase in prices, the report showed.

Property sales dropped to the lowest in at least 30 years, the Royal Institution of Chartered Surveyors (RICS) said last Tuesday.

The ITEM Club forecast yesterday that housing transactions would drop 35 per cent this year.

Demand for commercial property dropped in the second quarter to the lowest in at least a decade, RICS said yesterday. Fifty per cent more surveyors reported a drop in demand than those reporting an increase, the report showed.

Mortgage approvals fell to their lowest level in at least nine years in May, the Bank of England said on June 30. Banks are curbing lending following the collapse of the US sub-prime mortgage market, which so far has cost financial institutions worldwide US$423 billion in losses and writedowns.

HBOS plc, the UK's biggest mortgage lender, said last week that house prices, which tripled in the past decade, dropped last month from a year earlier by the most since 1992. Bank of England policymaker Andrew Sentance said in an interview last week that there is 'clearly a risk' that house prices will fall further.

Consumer price increases and the worst housing market slump since the last recession have eroded living standards and helped push the support for Prime Minister Gordon Brown's ruling Labour Party close to the lowest level since World War II.

The Bank of England's Monetary Policy Committee has kept the benchmark interest rate unchanged at 5 per cent for the past three months as it tries to curb consumer spending, while keeping the economy from falling into a recession. Inflation accelerated to 3.8 per cent last month, the fastest pace in 11 years.

The economy will grow 1.5 per cent this year and then one per cent in 2009, the weakest pace since 1992, the ITEM Club said in a statement yesterday. The group predicted that slowing expansion will allow the Bank of England to cut the benchmark interest rate to 4 per cent by the end of 2009. - Bloomberg

Johor's Horizon Hills Attracts Foreign Buyers

Source : The Business Times, July 22, 2008

60% of buyers are from overseas; more than half of whom are Singaporeans

WITH a golf course set within a residential township, the resort-style Horizon Hills in South Johor is attracting considerable overseas interest - more than 60 per cent of buyers in launched precincts are foreigners.

Here in town yesterday to promote the project, Malaysian developer Gamuda Land also noted that Singaporeans make up more than half of the foreign buyers. The rest come from countries as far as Sri Lanka, the United Kingdom, South Africa, the US, Japan and India.

Home is a golf retreat: Mr Chow (left) says that Horizon Hills offers a resort lifestyle and investment value which have attracted the attention of foreigners who are working in Johor Baru and Singapore

Horizon Hills is located in Nusajaya, a flagship zone within South Johor's Iskandar Malaysia, which is slated to become southern peninsular Malaysia's economic corridor. Spanning 1,200 acres, the township comprises 13 precincts with bungalows, semi-detached, cluster and terrace homes.

Two precincts - The Gateway and The Golf - were launched last year. Ninety per cent of The Gateway's more than 400 residential units were taken up.

A 200-acre 18-hole designer golf course and a club house are also integral parts of Horizon Hills. Costing RM30 million (S$12.5 million) and RM50 million respectively, the golf course and club house were completed this month.

Bungalows with golf course frontage went for RM2 million on average, while semi-detached units cost around RM900,000.

'The homes in Horizon Hills are very affordable,' said Gamuda Land's managing director Chow Chee Wah. 'The resort lifestyle and investment value which Horizon Hills offer have attracted the attention of foreigners who are working in Johor Baru and Singapore.'

Home prices in Horizon Hill have risen by about 15-20 per cent in the last one and a half years, Mr Chow pointed out. The uptrend is likely to continue as construction costs in Malaysia increase. Costs have swelled by some 35 per cent in Malaysia in the past year, he said.

Managing director of Savills Singapore Michael Ng also expected to see land prices in the area rise due to development and growing foreign investment in Iskandar Malaysia. Savills Singapore is the marketing agent for Horizon Hills in the region.