Source : The Straits Times, Dec 13, 2008
0.9% rate sees more interest but analysts warn of risks
INSTALMENTS for many home loan borrowers are set to fall after the all-important interest rate at which banks lend funds to one another nosedived to about 0.9 per cent this month.
Many home loan packages are pegged to this rate - known as the three-month Singapore Interbank Offered Rate (Sibor) - so when it goes down, so do Sibor- linked home loan instalments.
According to economists, the three-month Sibor should remain at these depressed levels into the new year.
OCBC Bank economist Selena Ling said the three-month Sibor is reacting to a couple of factors.
One is the widespread market expectation that the US Federal Reserve will cut its Fed funds target rate to 0.25 per cent from 1 per cent at its meeting on Tuesday.
The Sibor closely tracks this rate.
Another factor: continued measures by the Singapore authorities to pump liquidity into the system, against a backdrop of global and domestic recession.
In September, the three- month Sibor spiked to 2 per cent as the global credit crunch hit home here. Banks were afraid to lend to one another for fear of not getting repaid.
With the rate coming down sharply, more and more home buyers are looking at Sibor- linked loan packages.
Mr Geoffrey Ying, head of the mortgage division at financial advisory firm New Independent, estimates that six out of every 10 customers he is seeing are enquiring about Sibor-linked packages not only for high-end units, but also for HDB flats.
A year ago, when Sibor was significantly above 1 per cent, only three or four customers out of 10 would show interest.
It is easy to see why Sibor- linked packages have become the talk of the town, given the potential savings.
Suppose you want to buy an HDB flat. The best rate in the market is the 2.6 per cent annual rate for those qualifying for an HDB concessionary loan. This rate is pegged at a level 0.1 percentage point above the prevailing CPF ordinary account interest rate.
By comparison, at Standard Chartered Bank, for example, if you choose a two-year lock-in, its Sibor-linked package works out to Sibor plus a spread of - in this case - 0.95 per cent.
So if three-month Sibor stands at 0.9 per cent, you pay an annual rate of 1.85 per cent - lower than the HDB concessionary rate.
Still, financial experts say homebuyers must be careful. When Sibor falls, borrowers with a loan pegged to it gain as they will be paying a lower interest rate. But conversely, if the benchmark rate heads up, mortgage instalments also rise.
'We think though, that Sibor still has the potential to spike up, given that risks still remain out there,' a United Overseas Bank spokesman said.
Borrowers need to think carefully about choosing between two loan options, experts say.
Since January 2003, when banks were first allowed to provide loans for HDB flats, many homebuyers have opted for Sibor-linked packages as Sibor was very low, said Mr Leong Sze Hian, president of the Society of Financial Service Professionals.
In June 2003, the three-month Sibor bottomed out at 0.5625 per cent, but then surged to as high as 3.56 per cent three years later.
Mr Leong said that historically, the HDB rate of 2.6 per cent has been lower than rates for Sibor-linked packages.
More importantly, homebuyers with an HDB concessionary loan who switch to a bank loan cannot go back to the HDB if bank rates suddenly rise above the board's 2.6 per cent concessionary rate.
Experts think that banks are far more inclined than the HDB to repossess properties in the case of loan default.
'During the economic slowdown, there'll be people who'll struggle to meet monthly payments. Sure, Sibor- linked rates are low now, but if you want certainty, you'll choose HDB's,' said Mr Patrick Lim, associate director of financial advisory firm PromiseLand.
Take Mr David Lee, for instance. The 35-year-old engineer said that even though he is paying more now because he chose an HDB concessionary loan, he is not going to switch to a Sibor- linked package any time soon.
'I don't mind the slightly higher rate for peace of mind,' he said.
Mrs Ong-Ang Ai Boon, director of the Association of Banks in Singapore, is on record as saying that 'repossession would be a last resort, after all other measures have failed'.
Why Sibor is down
# There is widespread market expectation that the US Federal Reserve will cut its Fed funds target rate to 0.25 per cent from 1 per cent at its meeting next Tuesday. Sibor closely tracks this rate.
# Continued measures by the Singapore authorities to pump liquidity into the system.
Saturday, December 13, 2008
$25m Punggol Makeover
Source : The Straits Times, Dec 13, 2008
Winning design to revive its heritage by capitalising on maritime setting
THINK water and you will have a good idea of the main theme running through the winning design for an ambitious $25 million makeover for Punggol.
The blueprint revealed yesterday aims to revive the coastal town's heritage as a fishing village by capitalising on its maritime setting.
The makeover will include a 10km cycling trail along the 4.2km waterway, a 'heartwave' wall with a mini waterfall, and a pedestrian 'kelong-like' bridge. -- PHOTOS: COURTESY OF HDB
There will be a 10km cycling trail in a rustic setting along the 4.2km waterway and a pedestrian 'kelong-like' bridge to recapture the old fishing days.
The waterway will also boast a coastal promenade and a host of water activities.
At the heart of the waterway in Punggol's town park will be a 'heartwave' wall boasting a mini waterfall.
Visuals on the wall will depict the history and development of Punggol from its early days to a 21st century town.
All this and more was unveiled yesterday by National Development Minister Mah Bow Tan at the HDB Hub, where he announced the winner of the Punggol Waterway Landscape design contest launched in May.
Local firm Surbana International Consultants and its partner, Japanese firm Sen Inc, beat 10 local firms. Merit prizes were awarded to Arc Studio Architecture + Urbanism and Co-Design Architects.
Mr Johnny Wong, HDB's deputy director of building research, said the Housing Board was won over by Surbana's concept of incorporating Punggol's unique identity into the waterway's landscape.
Construction will be completed by 2010.
Mr Mah said the Punggol project is on schedule 'and has been progressing steadily even during this economic downturn'.
Since August last year, the HDB has launched more than 5,000 flats under its build-to-order (BTO) projects in Punggol. BTO developments are built only when a certain demand is met.
The HDB plans to offer about 3,000 flats for sale annually in Punggol, subject to demand. And by the end of 2011, there will be about 23,000 flats completed.
Mr Mah said that even with the slowdown, he expects 'sufficient take-up for these flats' as people are still getting married and young families are being formed.
The HDB is targeting the sale of the first site - a mixed commercial and residential development - to the private sector in mid-2010.
Mr Mah said there will be a demand for such sites by private developers in new towns if there is a critical mass of people living there.
'The main thing is to make sure the town itself is well populated...then the commercial developers will find it worthwhile,' he said.
Mr Mah also said that Punggol flats will remain affordable for all income groups.
About 500 rental units are being built, and about 550 of the 5,000 Punggol flats launched recently were two- and three- room flats, which cater to lower-income families. The rest will be four- and five-room flats.
Mr Mah also launched a separate design competition for Punggol's Waterfront public housing yesterday.
Architects can design a masterplan for a 26.6ha housing district west of Punggol's town centre. Shortlisted firms will go on to design in more detail a 4.9ha site along the Punggol Waterway.
The HDB plans to offer these waterfront homes by mid-2010.
Winning design to revive its heritage by capitalising on maritime setting
THINK water and you will have a good idea of the main theme running through the winning design for an ambitious $25 million makeover for Punggol.
The blueprint revealed yesterday aims to revive the coastal town's heritage as a fishing village by capitalising on its maritime setting.
The makeover will include a 10km cycling trail along the 4.2km waterway, a 'heartwave' wall with a mini waterfall, and a pedestrian 'kelong-like' bridge. -- PHOTOS: COURTESY OF HDB
There will be a 10km cycling trail in a rustic setting along the 4.2km waterway and a pedestrian 'kelong-like' bridge to recapture the old fishing days.The waterway will also boast a coastal promenade and a host of water activities.
At the heart of the waterway in Punggol's town park will be a 'heartwave' wall boasting a mini waterfall.Visuals on the wall will depict the history and development of Punggol from its early days to a 21st century town.
All this and more was unveiled yesterday by National Development Minister Mah Bow Tan at the HDB Hub, where he announced the winner of the Punggol Waterway Landscape design contest launched in May.
Local firm Surbana International Consultants and its partner, Japanese firm Sen Inc, beat 10 local firms. Merit prizes were awarded to Arc Studio Architecture + Urbanism and Co-Design Architects.
Mr Johnny Wong, HDB's deputy director of building research, said the Housing Board was won over by Surbana's concept of incorporating Punggol's unique identity into the waterway's landscape.
Construction will be completed by 2010.
Mr Mah said the Punggol project is on schedule 'and has been progressing steadily even during this economic downturn'.
Since August last year, the HDB has launched more than 5,000 flats under its build-to-order (BTO) projects in Punggol. BTO developments are built only when a certain demand is met.
The HDB plans to offer about 3,000 flats for sale annually in Punggol, subject to demand. And by the end of 2011, there will be about 23,000 flats completed.
Mr Mah said that even with the slowdown, he expects 'sufficient take-up for these flats' as people are still getting married and young families are being formed.
The HDB is targeting the sale of the first site - a mixed commercial and residential development - to the private sector in mid-2010.
Mr Mah said there will be a demand for such sites by private developers in new towns if there is a critical mass of people living there.
'The main thing is to make sure the town itself is well populated...then the commercial developers will find it worthwhile,' he said.
Mr Mah also said that Punggol flats will remain affordable for all income groups.
About 500 rental units are being built, and about 550 of the 5,000 Punggol flats launched recently were two- and three- room flats, which cater to lower-income families. The rest will be four- and five-room flats.
Mr Mah also launched a separate design competition for Punggol's Waterfront public housing yesterday.
Architects can design a masterplan for a 26.6ha housing district west of Punggol's town centre. Shortlisted firms will go on to design in more detail a 4.9ha site along the Punggol Waterway.
The HDB plans to offer these waterfront homes by mid-2010.
Bustling Waterfront Living For Punggol
Source : The Business Times, December 13, 2008
PUNGGOL, which started out as a sleepy fishing village, will get a new lease of life from 2010 onwards, with thousands of waterfront HDB flats and private homes planned alongside the soon-to-be bustling 4.2km Punggol Waterway.
FRESH LOOK - Surbana and Sen beat the field to win a competition to design a masterplan for the waterway's landscape
'HDB plans to offer about 3,000 flats for sale annually in Punggol, subject to demand,' said Minister for National Development Mah Bow Tan yesterday. 'By end-2011, there will be about 23,000 flats completed. Our plans to launch the first sale site at the Town Centre for a mixed commercial and private residential development are also on track. We will be launching this waterfront site by 2010/2011.'
Right now, there are about 17,000 HDB flats in Punggol. Since August last year, HDB has launched over 5,000 flats under seven Build-To-Order (BTO) projects in the town.
Some of the new flats will be located right next to the Punggol Waterway, which will be developed according to the vision of Singapore's Surbana International Consultants and its Japan-based partner Sen Inc.
The two firms beat 10 other entries to win a competition held to design a masterplan for the waterway's landscape. Mr Mah announced the winners yesterday.
Surbana and Sen's masterplan includes features such as a bio-pond that will be a repository of floral and fauna; a recreation zone with water-based play spaces for children and families; and a pedestrian 'kelong-like' bridge built to recapture the idyllic mood of old Punggol with its fishing villages. The bridge will lead to a heritage trail, which will follow the alignment of the existing Punggol Road.
Construction on the $25 million project to revamp the waterway will begin next year and be completed by 2010, HDB said.
After that, plans for special housing designs that will capitalise on the views along the waterway will be developed, Mr Mah said. The idea, he said, is to bring the waterway closer to residents. 'With the waterway landscape proposals completed, we can focus on another important milestone in our Punggol journey: shaping the housing along the Punggol Waterway.'
With this in mind, HDB yesterday launched a new design competition for Punggol's Waterfront public housing. Competing firms will have to come up with a masterplan for some 6,000 HDB flats during the first stage. Five finalists will be chosen to proceed to the second stage, where they will have to come up with a more detailed plan for a smaller plot of land, with an estimated 1,300 units, within the bigger site.
PUNGGOL, which started out as a sleepy fishing village, will get a new lease of life from 2010 onwards, with thousands of waterfront HDB flats and private homes planned alongside the soon-to-be bustling 4.2km Punggol Waterway.
FRESH LOOK - Surbana and Sen beat the field to win a competition to design a masterplan for the waterway's landscape'HDB plans to offer about 3,000 flats for sale annually in Punggol, subject to demand,' said Minister for National Development Mah Bow Tan yesterday. 'By end-2011, there will be about 23,000 flats completed. Our plans to launch the first sale site at the Town Centre for a mixed commercial and private residential development are also on track. We will be launching this waterfront site by 2010/2011.'
Right now, there are about 17,000 HDB flats in Punggol. Since August last year, HDB has launched over 5,000 flats under seven Build-To-Order (BTO) projects in the town.
Some of the new flats will be located right next to the Punggol Waterway, which will be developed according to the vision of Singapore's Surbana International Consultants and its Japan-based partner Sen Inc.
The two firms beat 10 other entries to win a competition held to design a masterplan for the waterway's landscape. Mr Mah announced the winners yesterday.
Surbana and Sen's masterplan includes features such as a bio-pond that will be a repository of floral and fauna; a recreation zone with water-based play spaces for children and families; and a pedestrian 'kelong-like' bridge built to recapture the idyllic mood of old Punggol with its fishing villages. The bridge will lead to a heritage trail, which will follow the alignment of the existing Punggol Road.
Construction on the $25 million project to revamp the waterway will begin next year and be completed by 2010, HDB said.
After that, plans for special housing designs that will capitalise on the views along the waterway will be developed, Mr Mah said. The idea, he said, is to bring the waterway closer to residents. 'With the waterway landscape proposals completed, we can focus on another important milestone in our Punggol journey: shaping the housing along the Punggol Waterway.'
With this in mind, HDB yesterday launched a new design competition for Punggol's Waterfront public housing. Competing firms will have to come up with a masterplan for some 6,000 HDB flats during the first stage. Five finalists will be chosen to proceed to the second stage, where they will have to come up with a more detailed plan for a smaller plot of land, with an estimated 1,300 units, within the bigger site.
Prospects For S'pore 'Bleak', Says ADB
Source : The Business Times, December 12, 2008
Hong Kong and Taiwan also face a rocky road ahead
EAST Asia's newly industrialised economies (NIEs), including Singapore, will be among the hardest hit by the economic storm that is sweeping across the globe, the Asian Development Bank (ADB) warned in a report published yesterday. It called prospects for Singapore and others 'bleak'.
At the same time, the ADB urged all Asian governments to batten down against the growing storm by taking individual and collective actions in the face of what could be an even harsher economic environment than the current one.
'The external economic environment for developing Asia is likely to worsen as major industrial economies contract further, global financial conditions remain constricted and world trade growth slows sharply,' the ADB said in its latest regional Economic Update for East Asia.
Predicting that growth in the developing economies of the region as a whole (excluding Japan) will fall from an estimated 6.9 per cent this year to 5.8 per cent in 2009, the ADB said that Asean's growth would slow from 4.8 per cent to 3.5 per cent over the same period while in the four NIEs - Singapore, Hong Kong, Taiwan and South Korea - growth would plunge from 3.5 per cent to just 2.4 per cent.
Singapore will be worst hit in absolute terms, with growth slowing from a projected 2.3 per cent this year to just 1.2 per cent in 2009, said the ADB, echoing a forecast also by the World Bank this week that Singapore's GDP growth would slump to 1.2 per cent next year.
Taiwan will be next hardest hit among the NIEs with growth there predicted at just 1.7 per cent next year, while Hong Kong's is seen at 2.1 per cent and South Korea at 3 per cent, the ADB said.
These four economies in particular are being hit not only by falling exports but also by slowing domestic demand and contracting domestic investment, the ADB said. 'As highly open economies, the NIEs are extremely sensitive to changes in the global economic environment.'
The outlook for Singapore, 'which is already in recession, is bleak', the ADB warned while adding that 'the plunge in stock prices (there) may further slow private consumption and investment'.
Meanwhile, 'aggregate GDP growth in Asean is estimated to weaken to 3.5 per cent in 2009 from an estimated expansion of 4.8 per cent, which was kept relatively high only by a buoyant first half'. However, 'domestic demand, helped by policy measures is likely to mitigate some of the impact of the weakening external environment' for Asean, the ADB said.
The bank projected China's GDP growth for 2009 at 8.2 per cent - higher than the World Bank's prediction this week that output would expand at 7.5 per cent next year. But the ADB's forecast of a 0.2 per cent contraction in Japan's GDP for 2009 was more severe than that of the World Bank.
A major threat for the region's more open economies, including Singapore, the ADB noted, is that 'world trade growth is slowing sharply as demand from major industrial countries slumps, reducing export production in emerging market economies.
'A synchronised downturn in advanced economies is adding to pressure on world trade (and) the World Bank estimates that trade volume will contract by 2.5 per cent in 2009 from an estimated 5.8 per cent expansion this year. Global manufacturing output has slumped.'
External capital has started flowing out of East Asia now, turning around from strong inflows in the first half of 2008, the ADB pointed out. Singapore saw its capital inflows, in the form of foreign direct investment and other flows, 'reversed' to outflows in the third quarter of this year.
The report warned that 'if international financial conditions worsen, external finance could dry up, placing several of the region's financial systems in jeopardy and causing domestic credit conditions to deteriorate'.
Authorities in East Asia should do all they can to bolster the strength of their financial systems against such an eventuality and to ensure adequate supplies of financial liquidity, the ADB says.
It calls upon regional governments to support a strengthening and multilateralisation of the network of currency swaps known as the Chiang Mai Initiative so that this can provide emergency injections of liquidity to East Asian economies that may run into balance of payments problems in the current crisis.
Hong Kong and Taiwan also face a rocky road ahead
EAST Asia's newly industrialised economies (NIEs), including Singapore, will be among the hardest hit by the economic storm that is sweeping across the globe, the Asian Development Bank (ADB) warned in a report published yesterday. It called prospects for Singapore and others 'bleak'.
At the same time, the ADB urged all Asian governments to batten down against the growing storm by taking individual and collective actions in the face of what could be an even harsher economic environment than the current one.
'The external economic environment for developing Asia is likely to worsen as major industrial economies contract further, global financial conditions remain constricted and world trade growth slows sharply,' the ADB said in its latest regional Economic Update for East Asia.
Predicting that growth in the developing economies of the region as a whole (excluding Japan) will fall from an estimated 6.9 per cent this year to 5.8 per cent in 2009, the ADB said that Asean's growth would slow from 4.8 per cent to 3.5 per cent over the same period while in the four NIEs - Singapore, Hong Kong, Taiwan and South Korea - growth would plunge from 3.5 per cent to just 2.4 per cent.
Singapore will be worst hit in absolute terms, with growth slowing from a projected 2.3 per cent this year to just 1.2 per cent in 2009, said the ADB, echoing a forecast also by the World Bank this week that Singapore's GDP growth would slump to 1.2 per cent next year.
Taiwan will be next hardest hit among the NIEs with growth there predicted at just 1.7 per cent next year, while Hong Kong's is seen at 2.1 per cent and South Korea at 3 per cent, the ADB said.
These four economies in particular are being hit not only by falling exports but also by slowing domestic demand and contracting domestic investment, the ADB said. 'As highly open economies, the NIEs are extremely sensitive to changes in the global economic environment.'
The outlook for Singapore, 'which is already in recession, is bleak', the ADB warned while adding that 'the plunge in stock prices (there) may further slow private consumption and investment'.
Meanwhile, 'aggregate GDP growth in Asean is estimated to weaken to 3.5 per cent in 2009 from an estimated expansion of 4.8 per cent, which was kept relatively high only by a buoyant first half'. However, 'domestic demand, helped by policy measures is likely to mitigate some of the impact of the weakening external environment' for Asean, the ADB said.
The bank projected China's GDP growth for 2009 at 8.2 per cent - higher than the World Bank's prediction this week that output would expand at 7.5 per cent next year. But the ADB's forecast of a 0.2 per cent contraction in Japan's GDP for 2009 was more severe than that of the World Bank.
A major threat for the region's more open economies, including Singapore, the ADB noted, is that 'world trade growth is slowing sharply as demand from major industrial countries slumps, reducing export production in emerging market economies.
'A synchronised downturn in advanced economies is adding to pressure on world trade (and) the World Bank estimates that trade volume will contract by 2.5 per cent in 2009 from an estimated 5.8 per cent expansion this year. Global manufacturing output has slumped.'
External capital has started flowing out of East Asia now, turning around from strong inflows in the first half of 2008, the ADB pointed out. Singapore saw its capital inflows, in the form of foreign direct investment and other flows, 'reversed' to outflows in the third quarter of this year.
The report warned that 'if international financial conditions worsen, external finance could dry up, placing several of the region's financial systems in jeopardy and causing domestic credit conditions to deteriorate'.
Authorities in East Asia should do all they can to bolster the strength of their financial systems against such an eventuality and to ensure adequate supplies of financial liquidity, the ADB says.
It calls upon regional governments to support a strengthening and multilateralisation of the network of currency swaps known as the Chiang Mai Initiative so that this can provide emergency injections of liquidity to East Asian economies that may run into balance of payments problems in the current crisis.
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