Thursday, December 18, 2008

URA Releases More Details On Sale Of Stamford Road/North Bridge Road Site

Source : Channel NewsAsia, 18 December 2008

Singapore's Urban Redevelopment Authority (URA) has put out more details on the sale of a 1.46-hectare site at Stamford Road/North Bridge Road.

It is available on the Reserve list of the Government Land Sales Programme for the second half of 2008.

The land parcel occupies a prime location in the heart of the city, and is strategically situated along the commercial and mixed-use corridor at North Bridge Road.

Retail, cultural and entertainment venues can also be found near the site.

The plot yields a maximum permissible gross floor area of 51,359 square metres.

URA said the developer will be required to develop a minimum of 40 per cent of the total gross floor area for hotel use. The remaining gross floor area can be use for other commercial purposes.

Under the Concept and Price Revenue Tender System, bidders are required to submit their concept proposals and tender prices in two separate envelopes.

Meanwhile, plans for the sale of site at Kallang River will be deferred.

URA said it is working with other agencies to finalise the detailed planning and development conditions of the Kallang River plot.

The site will only be released on the Reserve List in June 2009 instead of this month. - CNA /ls

Long-Term Property Investors Should Bet On S'pore: Analyst

Source : The Straits Times, Dec 18, 2008

SINGAPORE looks a pretty good bet for long-term property investors, given its strong savings rate, low corporate taxes and near-full employment, according to a key real estate player here yesterday.

And if prices fall further next year, it would be a good time to buy, said Mr Christopher Fossick, Jones Lang LaSalle's managing director for Singapore and South-east Asia at a media briefing at the firm's office. There is a consensus that the economy will go through a tough time next year, which means it will be tough for everybody, including those in property, he said.

'If prices are lower, that provides opportunities,' Mr Fossick added. He pointed out that Asia, particularly Singapore, given its status as a financial services hub, is better off economically than the United States and Europe. The level of household borrowings and corporate loans here is lower than in the US and Britain, he said.

He quoted a recent report commissioned by London Mayor Boris Johnson that said that the rising status of regional hubs such as Dubai and Singapore is threatening London's position as the world's financial capital.

He listed some of the key factors that should continue to attract investors here. Singapore's corporate tax rate of 18 per cent, he said, is a tad above Hong Kong's 17 per cent but below the 29 per cent rate in Britain and the 40 per cent levy in the US.

There is near full employment and a strong savings culture here. Singapore has a gross national savings rate of 45 per cent, compared with 11 per cent in the US, 14 per cent in Britain and 32 per cent in Hong Kong. Also, about 76.5 per cent of Singapore's population are working, compared with 67.1 per cent in the US and Britain.

Property is always a medium- to long-term proposition, he added. Most investors treat it as such and have an investment horizon of more than 24 months. Jones Lang LaSalle's regional director and head of markets, Mr Chris Archibold, said the office market will have a lower take-up rate over the next year but most of the expected new supply will not come to market until late next year anyway.

There are a lot of institutional investors on the sidelines waiting to enter the Singapore market, according to Mr Fossick.

'They are saying, come 2009 and 2010, there will be opportunities to buy properties in Singapore,' he said. 'Obviously, it's going to be at some discount from prices we saw in 2007.'

JLL Sees Property Interest Picking Up Here As Investors Exit Other Markets

Source : The Business Times, December 18, 2008

BUYING interest in Singapore's property market is beginning to pick up as the country benefits from investors who scale back in other markets, said Jones Lang LaSalle (JLL) yesterday.

Not so blue: While most investors are not expecting to see an upside to their investments in the next 6-24 months, in the longer run, the Singapore property market is still seen as a good bet

Foreign property funds and developers are looking for investment opportunities in the residential and commercial sectors here, said Chris Fossick, JLL's managing director for South-east Asia and Singapore.

Property, he said, is a long-term investment. So while most investors are not expecting to see an upside to their investments in the next 6-24 months, in the longer run, the Singapore property market is still seen as a good bet, he said.

'Our clients are telling us that they expect growth in Asia, and they want to take advantage of that growth. This is one of the few areas where they can get good returns on their investments,' said Mr Fossick.

In the light of this, buying activity, which has fallen sharply since the start of this year, is beginning to show some signs of recovery as prices fall, he said.

In particular, affordability has improved in the residential market, said JLL. Prices have come off their peaks some 5-24 per cent for luxury and mass market projects, the property firm's data shows.

'The affordability of both luxury and mass market projects are better now than they were about 6-9 months ago,' said JLL's South-east Asia research head Chua Yang Liang. 'Lower pricing will encourage fresh capital investment.'

The gap between monthly mortgage payments and monthly rentals have also narrowed compared with 1998, which also makes buying properties more attractive now than 10 years ago, Dr Chua said.

While most funds and developers are still watching the market closely and waiting for the right time to buy, some of them are already at 'entry point', said Mr Fossick. These funds and developers will buy if sellers offer the right price.

Mr Fossick, however, said that he does not expect many distressed asset sales. 'I don't see there being distress at all.'

Value Of Properties Sold Through Auctions Plumbs 10-Year Low

Source : The Business Times, December 18, 2008

The Singapore property auction market witnessed a 10-year low in the total value of properties sold in year 2008. Only S$83.67 million worth of properties were sold via auction this year, according to figures from Colliers International.

'Not only does this represent an approximate 79 per cent decline from the total sale value of S$407.43 million registered in 2007, it is also 38 per cent lower than S$135.7 million recorded during the last financial crisis in 1998,' Colliers said in a news release on Thursday.

All property sectors experienced a decline in their total sales value at auctions in 2008, with the residential sector registering the biggest drop of 88 per cent to $25.23 million from $202.36 million in 2007.

Property Transactions With Contract Dates Between Dec 1st - 6th, 2008

Beijing To Cut Taxes, Ease Home Sale Rules

Source : The Business Times, December 18, 2008

The moves aim to contain the decline in the nation's property market

(BEIJING) China yesterday announced fresh measures to support the ailing property market, including cuts in business and transaction taxes for real estate sales and policies to make it easier for developers to obtain credit.

Drumming up sales: Chinese homebuyers checking out a new housing project in Chongqing; economists said that reviving the property sector is vital to Beijing's efforts to counter the current downturn

The State Council, or Cabinet, also said that it would shorten to two years from five the lock-up period during which home owners are subject to a business tax if they resell their homes and that the tax would be levied on their capital gains, not the overall value of the sold property.

'We need to further encourage and support housing purchases, maintaining reasonable expansion in the property sector,' the State Council said in a statement on the central government's website.

The move by the Cabinet consolidates a series of steps that Beijing has taken in the past months to prop up the sector, including pledging to build more low-cost housing and an earlier cut in taxes on home purchases that focused on people buying their first home.

Economists said that reviving the property sector is vital to Beijing's efforts to counter the current downturn, which has worsened in the past month, with factory output falling to the slowest pace on record.

The floor area of residential properties sold in the first 11 months of the year fell 18.8 per cent from a year earlier, while real estate investment growth slowed to 22.7 per cent in January to November, down from 24.6 per cent in the first 10 months.

'These moves are much more significant than those announced in the past few months, and combined with our expectation of further significant reductions in interest rates by the central bank in the next few months, they are likely to help stabilise the property market,' said Peng Wensheng with Barclays Capital.

The State Council also said that it will allow people to buy second homes on the same preferential terms normally reserved for those buying their first homes, such as lower downpayment requirements, as long as the floor space per person is lower than the average for the city in which the homeowner is living.

The Cabinet said that it would also scrap the urban property tax levied on foreign firms and individuals, which was levied at a rate of 1.2 per cent a year on the original value of the property.

The State Council encouraged financial firms to provide services and funds to help developers undergo mergers and acquisitions.

It said that it would support developers' other 'reasonable' financing needs, and would increase credit help for construction especially of low-priced and small units, vowing to provide housing for 9.9 million low-income families in the next three years.

The People's Bank of China said later on its website that developers building low-rent housing could enjoy a 10 per cent discount on lending rates, effective from January.

To achieve the end of creating enough housing for poor families, Beijing will allow some local governments, on a trial basis, to use the housing provident fund to build more modest homes, the State Council said.

It also gave local governments the green light to take more steps to stimulate their own markets.

'Local governments, while implementing the central government's policies, need to take further steps in line with their local conditions to promote a healthy development of the property market,' it said. -- Reuters

California Home Sales Jump 27% In Nov

Source : The Business Times, December 18, 2008

Foreclosed homes account for 54.6% of resale deals

(SAN FRANCISCO) November home sales in Southern California jumped 26.9 per cent from a year earlier as bargain-hunters snapped up foreclosed properties, but fell by 22.3 per cent from October, according to a report by MDA DataQuick released on Tuesday.

A total of 16,720 new and resale houses and condominiums were sold last month in the six-county region, the most heavily populated area in the state of California.

Properties that had been foreclosed at some point in the last 12 months accounted for 54.6 per cent of the transactions on resold homes in November.

'Bargains and bargain-hunters have kept this market alive through some of the bleakest financial news in memory. There's this renewed sense that you can score a 'deal' - something that had been missing for many years,' said John Walsh, DataQuick's president.

Sales of foreclosed properties helped push the region's median home price last month down to US$285,000, down 5 per cent from October and a record 34.5 per cent from November 2007.

Some of Southern California's home markets are among the hardest hit by foreclosures in the nation. 'Foreclosure resales' ranged from 44.1 per cent of November existing home sales in Los Angeles County to 70.4 per cent in neighbouring Riverside County.

'Last month's Southland (Southern California) sales weren't great, given they were the second-lowest for any November in 16 years. But they could have been a lot worse,' Mr Walsh said.

Since summer many of the region's inland markets, where the foreclosures are concentrated, have seen home sales double or more from year earlier levels as their home prices have tumbled.

Markets posting those increased sales have a median resale home price under US$260,000, or at least 35 per cent below year-earlier levels.

'Many first-time homebuyers are, understandably, cheering as foreclosures dominate sales, tugging down prices and raising affordability,' Mr Walsh said.

'For home sellers and the industry, though, one concern over foreclosures representing half of all sales is that those transactions simply repay lenders. They don't trigger a move-up purchase,' he added.

Home sellers in California had booked big profits earlier this decade amid the housing boom and routinely used them to buy more expensive 'move-up' homes, often new homes.

Now California's new homes market is struggling amid weak demand for housing in general and because aspiring new-home buyers lack money to buy, are having a hard time obtaining financing because of turmoil in credit markets or are waiting for prices to fall further.

The California Building Industry Association, which represents home builders, said in a report released on Monday that new home sales in October in California fell 63 per cent from a year earlier, marking 'some of the worst monthly statistics yet seen over the course of the housing downturn.'

The Commerce Department's report on Tuesday of November housing starts underscored the difficult market for home builders.

It said housing starts nationwide dropped 18.9 per cent to a seasonally adjusted annual rate of 625,000 units from 771,000 units in October, the lowest level since the department started collecting monthly starts data in 1959, and well below the 740,000-unit pace that Wall Street analysts had expected.

Economist Patrick Newport of IHS Global Insight expects double-digit declines for starts again in December and January because builders with viable projects are having a hard time obtaining credit and demand for new first and second homes is weakening further after the stock market's collapse.

'These are just horrible, horrible numbers,' he said, referring to November's housing starts. 'They're going to be quite a bit worse for the next couple of months.' - Reuters

Loss In US Home Values To Top US$2 Trillion

Source : The Business Times, December 18, 2008

Nearly 11.7m households estimated to owe more on their mortgage than their homes are worth

(NEW YORK) Homes in the United States have lost trillions of dollars in value during 2008, with nearly 11.7 million American households now owing more on their mortgage than their homes are worth, real estate website said on Monday.

Depressing sign: A foreclosed home in Stockton, California, a region which fared the worst in the first three quarters of 2008, with home values sliding 32.3% year-over-year. The US housing market remains the largest unresolved issue for the global economy

US homes are set to lose well over US$2 trillion in value during 2008, according to an analysis of recent Zillow Real Estate Market Reports.

Home values declined 8.4 per cent year-over-year during the first three quarters of this year, compared to the same period in 2007, the reports showed.

US home values lost US$1.9 trillion from the first of the year through the end of the third quarter, and will probably fall further in the fourth quarter. One in seven of all homeowners, or 14.3 per cent, were 'underwater' by the end of the third quarter, the reports showed.

'This year marked the acceleration of the market correction, and is likely to end with the eighth consecutive quarter of declines in home values,' Stan Humphries, Zillow's vice- president of data and analytics, said in a statement.

'In general, homeowners in most areas we cover are struggling with foreclosures pouring into the market, large amounts of negative equity and dropping home values. On the positive side, in the third quarter, some markets - particularly those hit hardest in the downturn - showed smaller year-over-year declines than in the prior quarter,' he said.

'Our optimism here, though, must be tempered by the knowledge that the larger economic problems that emerged in the fourth quarter will likely further challenge the real estate market,' he said.

The US housing market is suffering the worst downturn since the Great Depression as a huge supply of unsold homes, tighter lending standards and record foreclosures push down home prices.

Thirty of the 163 metropolitan statistical areas, or MSAs, covered in the Zillow Real Estate Market Reports showed gains in the Zillow Home Value Index, or median value of all homes in the area, over the first three quarters of the year, with the Jacksonville, North Carolina region seeing year-over-year appreciation of 4.9 per cent. The change in value was calculated by averaging the year-over- year change in each of the first three quarters of the year, the reports showed.

The US housing market, with falling prices, rising foreclosures, and large numbers of 'underwater' mortgages, remains the largest unresolved issue for the global economy.

The Stockton, California region fared the worst in the first three quarters of 2008, with home values sliding 32.3 per cent year-over-year. The Merced, California area followed with home values declining 31.2 per cent year-over-year in the first three quarters of 2008, the reports showed. -- Reuters

Iranians Mired In Dubai Property Slump

Source : The Business Times, December 18, 2008

Bursting of the emirate's real estate bubble spells financial ruin for thousands

(TEHERAN) Habib Mostofi is one of thousands of Iranians who believed that buying property in Dubai would be safer than doing so in Iran, which is isolated by the West over its disputed nuclear plans.

He's still standing: Businessman Reza Dabir-Alai cannot sell several Dubai apartments that he bought, but he cannot cancel the contracts either
But that was before the emirate's property bubble burst.

'I invested all my family savings in property in Dubai. I thought it was near Iran, politically safe and business- friendly,' the 43-year-old businessman told Reuters. 'How can I tell my family I was so wrong and lost the money?'

The economy of the United Arab Emirates, the world's fifth-largest oil exporter, has surged 50 per cent in real terms since 2004, but the tide has turned as slumping oil prices and a global financial meltdown put an end to Dubai's property boom.

In recent years, Iranians - as well as others from Iraq, Pakistan, Somalia, Sudan and Lebanon - have flocked to Dubai, the Gulf trading hub where construction cranes litter the skyline.

Many Western banks and export credit agencies have quit Iran, and Iranian executives face increasing difficulty opening letters of credit, vital for trade, with an Iranian address.

Some opened Dubai offices to avoid that problem, while others just saw Dubai's property boom as a surefire earner.

At the height of the real estate bonanza, mortgages were easy and property could be sold for profit even before construction was finished - a practice known as 'flipping'.

Reza Dabir-Alai, a businessman, 39, bought several apartments that together measured 1,541 square metres in Dubai.

'Substantial profits could be earned in a matter of days, sometimes even hours immediately after buying a property,' he said, adding that after signing a deal for one apartment, he was offered 2 per cent more as he left the real estate agent.

Then, the financial crisis began lapping on the beaches of Dubai's many man-made islands. Rows of apartment blocks and exclusive villas have lost their value, as banks have reined in lending, casting a pall over corporate finance and construction.

'I cannot sell these apartments . . . and I cannot cancel the contracts,' said Mr Dabir-Alai.

Shahnaz Mirsoufi, an Iranian real estate agent based in Dubai, said that prices of villas and apartments in Dubai, on average, had doubled since early January last year but now, some premier property prices have dropped by as much as 50 per cent. 'Even in the first quarter of the year, the price of villas and flats, many not yet built, rose by 43 per cent,' she said.

Analysts, in a Reuters survey this month, said that Dubai property prices would fall 28 per cent from a peak earlier this year.

Hamid Sardari, an Iranian businessman, said that he was 'penniless' and feared for his shipping company.

'My money that I need to run my business is stuck in Dubai property,' he said. 'I will be bankrupted soon.'

Now, some developers have put projects on hold after Dubai's real estate regulator urged developers to slow down, saying that worsening financial conditions were driving up defaults.

Many foreigners were also attracted by a former promise that owning a property would secure them long-term Dubai residency rights.

But Dubai's property regulator this year scrapped such a guarantee.

That spelt financial ruin for computer engineer Mohammad Reza Nouri: no visa, no job in Dubai and not enough salary from his Teheran work to pay off his UAE loan.

'My aim was to get a residence permit in Dubai. Now, I cannot get the permit and I cannot pay the apartment's monthly instalments,' he said after investing US$50,000 of his savings.

Concern about the speculation even prompted a public warning from Iran's ambassador to the United Arab Emirates last month. 'I call on Iranians to avoid buying properties in Dubai. For those who want to make profit or get a residence permit, none of those is possible,' Hamid Reza Asefi told state radio.

Selling is not always an option. Mina Vakili, a divorcee, said that she could not sell an 80 sq m apartment that she bought. 'I wanted to profit from my Dubai apartment to buy one in Teheran. But now, it is not clear when the project will even be finished.' - Reuters

Stamford Road/North Bridge Road Land Parcel Released For Sale

Source : AsiaOne News, Thu, Dec 18, 2008

A 1.46 ha land parcel is now available for sale on the Reserve List of the second half 2008 Government Land Sale (GLS) Programme.

The land parcel, which is prominently located fronting the key road junction at Stamford Road and North Bridge Road, occupies a prime location in the heart of the city. It is strategically located along the commercial and mixed use corridor at North Bridge Road that extends through the Civic District.

According to a press release by the Urban Redevelopment Authority (URA), it also contains a cluster of three historically and architecturally significant buildings - Capitol Theatre, Capitol Building and Stamford House - that are to be retained and restored for adaptive reuse.

The Capitol Theatre, which was a purpose-built performance facility, is required to be restored into an arts or entertainment-related performance venue. The integration of a performance venue within the development will enhance the vibrancy and attractiveness of the project and strengthen the arts and cultural positioning for the Civic District and the nearby Bras Basah Bugis area.

The developer of the site will also be required to develop a minimum of 40% of the total gross floor area (GFA) for hotel use to synergise with the existing hotels - Swissotel The Stamford, The Fairmount, Grand Plaza Park Hotel and Peninsula-Excelsior Hotel - located in the vicinity.

The remaining can be for more hotel use or other commercial uses such as retail, food & beverage, entertainment and other uses to add to the diversity of amenities and vibrancy of the surrounding area.

A Concept and Price revenue tender system will be adopted to evaluate the tenders for the site, in line with the vision to create a distinctive development to match the strategic location of the site.

Under this system, tenderers are required to submit their concept proposals and tender prices in two separate envelopes. The concept proposals will be first evaluated against a set of criteria which include overall development concept and composition of uses as specified in the tender. Only tenders that meet the criteria will be considered for award.

At the second stage, the price envelopes of the proposals with acceptable concepts will be opened for consideration. The site will then be awarded to the tender with the highest price bid among those with acceptable concept proposals.

Meanwhile, the release of a hotel site at Kallang River which was originally scheduled to be made available on the Reserve List in December 2008 will be deferred to June 2009.

No-Go Yet For Kallang Site; Stamford Put On Reserve List

Source : The Straits Times, Dec 18, 2008

URA needs more time to finalise plans; consultants cite market conditions

THE Government has again postponed the release of new land - this time a hotel site in the Kallang River area - as the property market continues to flounder.

However, a historic site in North Bridge Road - which contains Singapore's first cinema Capitol Theatre and two other heritage buildings - has been released on the reserve list sale system as planned.

This means that the site will be put up for tender only if developers indicate interest by committing to a minimum bid.

The 1.59ha hotel site at Kallang River - part of plans to transform the Kallang Riverside into a waterfront lifestyle precinct - was also scheduled to be made available on the reserve list this month.

But its release has now been deferred to next June, said the Urban Redevelopment Authority (URA) yesterday.

It said it needs more time to finalise the detailed planning and development conditions of the site as they relate to the broader plans for the area. The URA is working with other agencies on that, it said.

'(The deferral) could be a reaction to the current poor market conditions,' said Credo Real Estate's executive director Tan Hong Boon.

The URA is probably taking advantage of the slower market to re-do its plans for the site, said Knight Frank's director of research and consultancy, Mr Nicholas Mak.

The two consultants said the site would be unlikely to attract interest even if it were made available now.

They are also pessimistic on prospects for the 1.46ha North Bridge Road site, boasting three historically and architecturally notable buildings: Capitol Theatre, Capitol Building and Stamford House.

'It's a lovely site as it is very central and next to the MRT station, but it won't likely be triggered in the next six to nine months due to the credit crunch and poor property market outlook,' Mr Tan said

Indeed, the 99-year leasehold site was to have been put up for sale directly this month but was transferred to the reserve list in late October, along with other sites, given economic uncertainties, the National Development Ministry had said.

At least 40 per cent of the North Bridge Road site's gross floor area has to be set aside for hotel use to strengthen the hotel cluster in the area, URA said.

However, in the current market, this may not be attractive to developers, said Mr Mak. 'There are already quite a number of hotels nearby.'

He said the site's development will be highly complex and the concept needs to be handled with great care. The developer will need to find the right mix of various uses such as retail to 'draw in the crowds and sustain their interest', he said.

'If done successfully, it can be an iconic development like the Fullerton Hotel. If it is not done successfully, its failure could be magnified due to its prominent location,' said Mr Mak.

To ensure its vision of creating a distinctive development is met, the URA will be selling the land parcel via a 'two-envelope' system, where developers have to submit their concept proposals and tender prices in two separate stages, with concepts considered first. The URA will open the price envelope only for shortlisted concepts and pick the highest bid. This is time-consuming with extra costs and this may deter some developers, said Mr Mak.

Smaller Flats Supply Upped

Source : The Straits Times, Dec 18, 2008

THE Housing Board will offer 4,000 smaller flats over the next two years, marking the biggest comeback for such flats which has not been built for 20 years.
Next year's supply of 2,000 three-room and smaller flats will almost double this year's supply of 1,163.

Prices of 20-year-old resale flats nearby are going at $175,000 to $180,000 for three-roomers - higher than the launch price, HDB figures showed. -- ST FILE PHOTO

HDB's move closely follows National Development Minister Mah Bow Tan's announcement in Parliament last month that there will be a steady supply of smaller flats for lower income families and for those who need to downgrade to smaller flats amid the current economic crisis.

The HDB had stopped building two- and three-roomers in the 1980s as growing families in Singapore's developing years fuelled demand for bigger flats.

But in 2004, three-roomers were re-introduced, and in 2006, HDB said it would resume building two-roomers to meet increasing demand.

HDB also launched a new project on Thursday - Dew Spring @ Yishun - under its build-to-order scheme.

It will offer 504 four-room, 144 two-room, 215 three-room units - the largest number of smaller flat types out of all of HDB's projects launched this year.

HDB's deputy chief executive, Ms Tan Poh Hong, told reporters that HDB has revived smaller flats on a larger scale as 'there are are more people who wil need to downgrade to smaller flats, as well as first timer families who would also like to start with smaller flats to be financially prudent'.

Two-roomers at Dew Spring will start at $76,000 to $90,000; three-roomers from $120,000 to $146,000 and four-roomers are priced at $197,000 to $238,000.

For the first time, HDB also released comparable prices of resale flats in the same area to demonstrate the affordability of the new flats launched.

Prices of 20-year-old resale flats nearby are going at $175,000 to $180,000 for three-roomers - higher than the launch price, HDB figures showed.

HDB has launched 6,600 homes so far this year under its BTO scheme, which builds flats when a certain demand is reached.

Of these, 883, or 13 per cent, were two-room and three-room flats.

It plans to launch another 1,180 units in the next two weeks before the year is out, which will include a further 280 studio apartments, two-room and three-room homes.

中国再推出救房市措施 个人买第二套房贷条件放宽

Source :《联合早报》December 18, 2008















上海办公楼供过于求 明年租金恐回落

Source :《联合早报》December 18, 2008







Source :《联合早报》Decemeber 18, 2008