Friday, February 27, 2009

‘It’s Not The Time To Buy’

Source : TODAY, Friday, February 27, 2009

End ‘09, early next year could be better, says CDL chief

CITY Development Limited (CDL) believes it is too early for it to start snapping up property in the downturn.

“The buyer-seller price gap is too wide still, so it’s not time to buy. The end of the year, early next year could be better,” said City Developments Limited’s (CDL) executive chairman Kwek Leng Beng at the group’s annual results briefing yesterday. Asset prices, he said, have not fallen to levels that are attractive enough.

CDL yesterday announced an after-tax profit of $580.9 million, almost a 20-per-cent dip from a year earlier. Even so, that was the group’s second-highest earnings since inception.

It attributed the fall partly to a 5.2-per-cent decline in revenue and lower contribution from its hotel operations under London-listed Millennium and Copthorne Hotels (M&C). This was mostly due to currency conversion, given the Singapore dollar’s recent strength against the British pound.

“Not unexpectedly, 2008 was a challenging year for the Singapore property market with downward pressure on both transaction volumes and sale prices after blistering performance in the previous two years, weighed down by global financial woes,” the company said.

“The group is aware of the many challenges that lie ahead.”

CDL said its balance sheet remained healthy, and it was not planning any rights issue to raise capital. It expects to stay profitable this year.

In the coming year, CDL said it would “exercise prudence” on expenses. It would “keep staff as much as (it) can” in Singapore.

CDL’s net borrowings stood at $3.4 billion, or 32 per cent of assets if fair value gains are taken into account, said chief financial officer Goh Ann Nee.

In the first half of this year, it will launch 60 units at the 724-unit Livia, 100 units at the 336-unit The Arte at Thomson, and 100 units of the 228-unit The Quayside Isle @ Sentosa Cove.

The group has 142 unsold units from projects previously launched projects, with less than 10 per cent of those high-end.

CDL is holding back its South Beach project. It added that based on a recent valuation for the year ended Dec 31, there was no impairment required for the development.

Mr Kwek refuted rumours about consortium partners pulling out of the project.

The company is planning to issue the second tranche of Islamic Sukuk in the first quarter of this year. It is likely to be three or four times larger than the first one. In January, CDL issued $100 million worth of notes under its $1-billion Islamic note programme.

Will It Be A Champion?

Source : TODAY, Friday, February 27, 2009

Mixed views on whether pricing is attractive to buyers

THE first batch of HDB flats for this year has been launched, but do they reflect homebuyers’ budgets in this downturn? And are their prices an indication of what to expect from other projects later this year?

Champion Court, at the junction of Champions Way and Woodlands Avenue 1, was launched yesterday under the Build-To-Order (BTO) system, where projects are only built when a certain level of demand is reached.

The 815 new flats include the first studio apartments in Woodlands and are priced below their equivalent market prices to ensure affordability, said the Housing and Development Board (HDB).

There are 182 three-room flats priced from $118,000 to $142,000, and 224 four-room flats with prices ranging from $194,000 to $227,000. Five-room flats — of which there are 185 — are from $247,000 to $296,000. The others are smaller studio apartments and three-room units.

Member of Parliament Lim Wee Kiak (Sembawang) who raised the issue of affordable housing in Parliament recently, said Singaporeans could be paying under $100,000 for a three-room flat if they make use of Government grants.

PropNex CEO Mohamed Ismail said he expects the project to be “five times oversubscribed” since prices are up to 40 per cent lower than resale flats in the area.

But Chesterton International’s head of consultancy and research Colin Tan does not expect response to be good. Besides the less-than-ideal location, prices are not attractive enough for the smaller-sized apartments, he said.

Mr Tan said HDB should reconsider pricing some of its new flats “in far-flung suburban locations such as Woodlands” by about $20,000 to $30,000 lower.

But Dennis Wee Group’s vice-president Chris Koh expects prices to remain constant since HDB should have “factored in” the long recession and “priced accordingly.”

HDB will launch some 3,000 BTO flats in the first half of this year, mostly in Ponggol.

Out of these, 1,400 will be smaller studio apartments, two- and three-room flats. It will also continue to monitor demand in other towns.

Applications can be submitted online at until March 11.

Those 224 Studio Flats ...

Source : TODAY, Friday, February 27, 2009

The new build-to-order (BTO) flats at Champions Court in Woodlands caught their eye, but the young couple decided to stick with their application for a four-room flat at Sengkang even though prices were similar.

Why? Bride-to-be Izyanty Asmary, 23, said she was “not comfortable” with having studio apartments — targetted for senior Singaporeans — in the same residence, and the Woodlands flats appeared to be more cramped.

For the first time, studio apartments, comprising 224 of the 815 units, will be up for sale in Woodlands. The apartments come with elderly-friendly features such as grab bars and non-slip flooring.

Member of Parliament Dr Lim Wee Kiak (Sembawang) pointed out that “different demographics would make the community more interesting. It also encourages community to help one another.”

Families can get a bigger unit, while the older folks live in the studio apartment, he noted, they could help take care of young children.

There are 30 units of 37-sq metre studio apartments priced between $57,000 to $64,000, and 164 units of 47-sq metre apartments priced from $71,000 to $80,000 up for sale.

Build-To-Order Flats In Woodlands For Sale

Source : The Straits Times, Feb 27, 2009

THE Housing Board yesterday launched its first build-to-order flat sale this year, with 815 flats in Woodlands up for grabs.

Called Champions Court, the batch of flats will include 224 studio apartments, which are being offered for the first time in Woodlands. There are also 182 three-room flats, 224 four-room flats and 185 five-room flats.

By its final update for the day, at 5pm yesterday, HDB had received 205 applications, mostly for the four- to five-room flats. There were 24 applications for studio apartments and 21 applications for three-room flats.

The monthly household income ceiling for purchasing a new three-room flat is $3,000. Those with gross monthly household incomes of not more than $8,000 can buy new four- to five-room flats, and studio apartments.

Champions Court is at the junction of Champions Way and Woodlands Avenue 1, near the Woodlands Regional Centre.

In its statement, HDB said the new flats are priced below their equivalent market prices to ensure that they are affordable to first-time buyers.

Indicative prices for the three-room flats range from $118,000 to $142,000; for the four-room flats, $194,000 to $227,000; and for the five-room flats, $247,000 to $296,000.

In the resale market, comparable three-room flats go for $200,000 to $209,000 while four-room units sell for $255,000 to $278,000, according to data provided by HDB.

Comparable five-room resale flats cost $304,000 to $345,000, it said. The 60 smaller studio apartments, which are 35 sq m in area, are priced from $57,000 to $64,000 while the 45 sq m studio units cost $71,000 to $80,000.

PropNex chief executive Mohd Ismail expects the project to be about five times over-subscribed.

'There's still strong demand for HDB flats in mature estates, particularly for four-room and five-room flats,' he said.

The absolute prices for the bigger HDB flats in mature towns such as Woodlands are still more affordable than those in estates nearer town, said Mr Ismail.

The recession has already hit the cash amount that buyers have to pay over the valuation price, but the volume of resale deals is so far largely steady, he added.

The median cash-over-valuation for resale flats in Woodlands fell from $18,000 in the third quarter of last year to $15,000 in the fourth quarter.

Applications for Champions Court can be submitted online from now until March 11.

815 BTO Flats For Sale

Source : The Straits Times, Feb 26, 2009

THE Housing Board on Thursday launched its first build-to-order flat sale this year, with 815 flats in Woodlands up for grabs.


Called Champions Court, the batch of flats will include 224 units of studio apartments - offered for the first time in Woodlands.

There are also 182 units of three-room flats, 224 units of four-room flats and 185 units of five-room flats.

Champions Court is near Woodlands Regional Centre.

In a statement on Thursday, HDB said the new flats in Champions Court are priced below their equivalent market prices to ensure that they are affordable to first-time buyers.

The three-room flats range from $118,000 to $142,000, four-room flats from $194,000 to $227,000 and five-room flats from $247,000 to $296,000.

In the resale market, comparable three-room flats go for $200,000 to $209,000, while the four-room units go for $255,000 to $278,000, according to data provided by HDB.

Comparable five-room flats cost $304,000 to $345,000, it said.

The studio apartments are priced from $57,000 to $80,000.

Applications can be submitted online from Feb 26 to March 11.

HDB Launches BTO Project In Woodlands

Source : The Business Times, February 27, 2009

THE Housing & Development Board (HDB) has launched its first 2009 build-to-order (BTO) project at Woodlands.

Champions Court, at the junction of Champions Way and Woodlands Avenue 1, has 815 units, comprising 224 studio apartments, 182 three-room, 224 four-room and 185 five-room flats.

About 50 per cent of the units are studio apartments and three-room flats, in line with the government's commitment to provide a greater supply of smaller dwellings this year, HDB said.

The studio apartments will have elderly-friendly features such as grab bars and non-slip flooring.

Three-room flats cost from $118,000 to $142,000, four-room flats from $194,000 to $227,000 and five-room flats from $247,000 to $296,000.

The units are being offered at less than equivalent market prices so they are affordable for first-time buyers, HDB said.

Eugene Lim, associate director for ERA Asia-Pacific, said: 'HDB seems to have deliberately priced the flats well below resale flats in the area.'

Likewise, PropNex chief executive Mohamed Ismail said that based on HDB's Q4 2008 figures, flats at Champions Court are priced 27 to 40 per cent lower than resale flats in the area.

The project is expected to be well received and could be about five times over-subscribed, Mr Ismail said.

Both analysts also reckon the location will be a draw.

'Woodlands is a mature estate,' said Mr Ismail. 'Besides being within walking distance of Woodlands Regional Centre and the MRT station, Champions Court is within 1km of a good number of schools. So I expect it to be quite popular.'

Thursday, February 26, 2009

Do Your Homework

Source : TODAY, Thursday, February 26, 2009

Some mortgage rates are rising; shop around before making a choice

As global interest rates fall, you would expect more homeowners to be tempted into taking up mortgages pegged to the Singapore Interbank Offered Rate (Sibor) or Swap Offer Rate (SOR).

After all, the three-month Sibor rate is currently around 0.68 per cent — just shy of its all-time low of 0.63 per cent.

However, instead of resulting in lower mortgage rates, interest payments on these pegged loans have surprisingly started to rise.

Rather than passing on savings from cheaper inter-bank lending, most financial institutions are now charging higher premiums above Sibor and SOR to reflect higher default risk, given that the economy has turned.

Banks have turned increasingly cautious over lending.

Last July, someone taking out a mortgage with DBS Bank would have paid a rate of Sibor plus 1.25 percentage points for an80 per cent loan.

Today, DBS’ mortgage rates start at Sibor plus 1.75 percentage points, with no lock-in period.

That means the total interest rate paid would now be 2.43 per cent, up from 2.25 per cent last July.

Similarly, spreads over SOR have widened.

Tellingly, some financial planners Today spoke to suggested that home-buyers should consider fixed-rate loans instead.

“Personally, I would lock in for as far as possible,” said Mr Sani Hamid, Financial Alliance’s director of wealth management.

That is because Sibor rates — while now low — rose to as high as 3.1875 per cent in 2005.

At DBS, Sibor fixed rate mortgages start at 3.25 per cent for a one year lock-in period on an80 per cent loan.

In contrast, fixed rate mortgages charge interest rates at a stable interest rate that is fixed and guaranteed in the first few years. This means that the monthly instalment amount is fixed for this period.

This brings about stability and certainty about how much you will be expected to pay in the long-run.

Another tip: Shop around for — and even ask — for the best rates possible in the competitive markets, note financial planners. You may just get a rate that is better than those published.

First Citadines Serviced Apartments Hit 70% Occupancy

Source : The Straits Times, Feb 26, 2009

THE first Citadines serviced apartment complex opened here by the Ascott company is already doing brisk business.

The firm said the 154-unit block in Wilkie Road - called Citadines Singapore Mount Sophia - is about 70 per cent occupied a month after its Jan 9 opening.

Ascott, which is wholly owned by CapitaLand, now has seven serviced apartment complexes here under its Ascott, Somerset and Citadines brands as well as two unbranded developments.

Occupancy at most of its properties is now hovering around 80 per cent, compared with more than 90 per cent at its five Somerset properties last May.

Clients at Citadines Singapore Mount Sophia include corporate guests and academics from the nearby Singapore Management University.

The development is part of the 12-storey Wilkie Edge, a CapitaCommercial Trust's development comprising offices, retail space and eateries.

The building was 70 per cent leased, according to the trust last month.

Ascott will open the first Citadines serviced apartments in Tokyo on Sunday. The 160-unit Citadines Tokyo Shinjuku is jointly owned by Ascott and Mitsubishi Estate. It will be the 11th Citadines property in Asia.

There is a minimum stay of seven nights at the Citadines development here, as with most serviced apartments in Singapore. The 146-unit Ascott Raffles Place, which had its soft opening last July, has a hotel licence allowing it to offer daily stays.

Ascott, which brought the Citadines brand to Asia in 2006, aims to open 11 more Citadines properties in the region by 2011, said Mr Gerald Lee, the chief executive of its hospitality management arm Ascott Hospitality.

Orchard Rd Sparkles After $40m Facelift

Source : The Straits Times, Feb 26, 2009

Makeover to be completed this weekend; fashion show in May to celebrate

FINAL touches to the $40 million Orchard Road makeover are expected to be completed this weekend, after a 10-month-long project to rejuvenate Singapore's main shopping strip.

One road lane has been sacrificed to create a wider pavement in front of Ion Orchard, Wisma Atria and Ngee Ann City. The extra space has been given to 25 'urban green rooms', containing benches, planter boxes and large decorative glass screens that light up at night. -- ST PHOTO: JOYCE FANG

Workers were seen yesterday scurrying around, erecting flower totems - large pillars decorated with fresh flowers - on the pavement from Forum The Shopping Mall to Liat Towers.

By this weekend, old lamp posts and electrical boxes will be stripped out.

New benches, lamp posts, recycling bins, planter boxes and other improvements are already in place along nearly 2km of Orchard Road, between Tanglin Mall and Concorde Hotel Singapore.

The walkways have been repaved, and one road lane has been sacrificed to create a wider pavement in front of Ion Orchard, Wisma Atria and Ngee Ann City.

The extra space has been given to 25 'urban green rooms', containing benches, planter boxes and large decorative glass screens that light up at night.

This is the first time Orchard Road has been extensively improved, with the aim of elevating it to the level of famous shopping streets like Paris' Champs-Elysees.

But the project had a rocky start. An initial ambitious idea by the Singapore Tourism Board, which paid for the works, to construct a glass canopy running down the stretch was promptly shot down by mall owners, who said it would require too much maintenance.

Works were then delayed by nearly two months at the start because of stalled talks with businesses, which were concerned about how the closure of one lane would affect them. Some shops and restaurants actually saw their takings drop when hoardings went up outside Wisma Atria and Ngee Ann City and the drilling began.

But with all that in the past, and to celebrate the facelift, the Orchard Road Business Association is now planning events, including a fashion show and shopping promotions, all set to begin in early May.

One idea is to hold the fashion show on what would be Singapore's longest catwalk - a specially constructed outdoor platform on the pavement stretching from Wisma Atria to Ngee Ann City.

Retailers, restaurants and cafes are also expected to take part in promotions and lucky draws to lure shoppers and diners to the area.

Hiap Hoe Launches The Beverly

Source : TODAY, Thursday, February 26, 2009

Niche residential property developer Hiap Hoe Group is to launch its latest residential development this Saturday with a starting selling price of $648 per square foot.

The Beverly is a low density development comprising 118 apartments and double-storey penthouses, with the larger units each outfitted with a private roof garden and pool.

Mr Teo Ho Beng, Hiap Hoe’s managing director, said: “We have designed The Beverly for those looking for affordable, high quality residential developments in a good location.”

The project is targeted for completion in 2013. Its show flat is in Toh Tuck Road.

Property Transactions With Contract Dates Between Feb 1st - 13th, 2009

China Property Recovery Not Expected Till H2

Source : The Business Times, February 26, 2009

Prices need to fall further before buyers are attracted, says Goldman Sachs

(SHANGHAI) China's real estate developers do not expect the property market to recover until at least the second half of this year, as prices need to fall further before attracting more buyers, according to Goldman Sachs Group Inc.

'A sustainable property market is out of sight,' Goldman Sachs analysts Thomas Deng and Kinger Lau write in a report, which was based on observations from company visits in southern China and published yesterday.

Home prices in China fell 0.9 per cent in January, the second consecutive monthly decline and the longest losing streak since the government started issuing the data in August 2005. Property prices more than quadrupled in the five years through 2007 as urban incomes rose.

Goldman Sachs said that a recent increase in property transactions is not evidence of the market bottoming out. The analysts visited China Vanke Co, the nation's largest publicly traded developer, Shenzhen Investment Ltd and Gemdale Corp.

Sale volumes in the southern city of Shenzhen, bordering Hong Kong, more than doubled to 787,800 square metres in December from 358,300 sq m in November and 338,000 sq m in October, according to a report by property agency DTZ earlier this month. House prices in the city dropped 16 per cent in January from a year earlier. -- Bloomberg

More Mass Market Projects To Launch

Source : The Business Times, February 26, 2009

Developers are planning to launch more mass market projects this weekend to take advantage of a recent surge in buying interest.

Hiap Hoe Group, a niche developer, will officially launch its 118-unit The Beverly, located at Toh Tuck Road, this Saturday. The starting selling price is $648 per square foot (psf), which Hiap Hoe says is an 'attractive starting selling price'.

'We have designed The Beverly for those looking for affordable, high-quality residential developments in a good location,' said Teo Ho Beng, the company's managing director.

The Beverly's two, three and four-bedroom apartments range from 1,120 sq ft to 4,187 sq ft, while its double-storey penthouses range from 2,099 sq ft to 3,757 sq ft and are each outfitted with a private roof garden and pool.

On the other side of the island at Pasir Ris, Sustained Land Pte Ltd will also officially launch Coastal Breeze Residences come this weekend. Two and three-bedroom units at the 63-unit development will sell for $610-$660 psf.

Sustained Land has sold 13 units in Coastal Breeze Residences since the start of 2008 in a soft launch. The units, which were mostly prime apartments on higher floors, went at an average price of $690 psf.

The remaining units are mostly three-bedders between 1159 sq ft and 1356 sq ft in size and there are also duplex penthouses. In terms of absolute value, for example, the price for a three-room 1159 sq ft unit starts at $712,000.

Meanwhile, the UOL Group is expected to launch its 646-unit Double Bay Residences in Simei sometime next week. Market talk has it that the project could be launched at $650-680 psf.

The three projects are coming hot on the heels of two successful launches earlier this month. Units at Frasers Centrepoint's Caspian condominium near Jurong Lake and Alexis @ Alexandra, a project by joint venture partners Yi Kai Group and Fission Group, sold quickly upon the projects' launches.

One market insider said that developers are taking pricing cues from each other, and making sure their newly launched projects are priced to sell. 'There is a sense that people will only be willing to buy projects in the $600-plus psf range, and also only units that don't cost too much in total. People don't really want to pay more than $600,000 or $700,000-plus in these times,' he said.

Developers are also throwing in more upmarket features into their mass market offerings to entice buyers. Each of The Beverly's 118 apartments is served by private lifts that open into the lobby of its interior. UOL's Double Bay Residences will also offer extras such as full-length windows in the kitchen, the company has said.

Wednesday, February 25, 2009

China Moves To Help Housing Market

Source : The Business Times, February 24, 2009

Beijing may scrap curbs on purchases of second homes, official media say

(SHANGHAI) China is considering a package of measures to provide long-term support for its residential housing market, including the scrapping of curbs on purchases of second homes, official media reported yesterday.

Government support: New residential development coming up. Beijing has placed residential housing on its list of 10 major industries, which will receive policy assistance

The China Securities Journal quoted an unnamed, authoritative source as saying that the National Development and Reform Commission, the top economic planning agency, was now reviewing proposals submitted by the construction ministry.

The package would aim to increase demand for owners to improve their homes, cut tax costs for people buying and selling homes, and help low-income people buy homes, the source said.

There are also proposals for the government to buy a small amount of housing stock to help it prevent excessive price fluctuations, and for steps to ensure that home buyers and developers receive ample long-term financing, the newspaper added.

Developers would be allowed to create real estate investment trusts (Reits) as soon as possible to bolster their funding, while rules restricting the amount of institutions' investment in property would be abolished or relaxed.

The newspaper did not say when the package might be introduced.

The Shanghai Securities News quoted Cheng Siwei, an influential former lawmaker, as saying that the government had placed residential housing on its list of 10 major industries, which would receive policy assistance.

But it remains unclear what specific policies will result from this, partly because the authorities are still debating whether a policy package should focus on the property market's current slump or its long-term development, the newspaper added.

Two government sources told Reuters yesterday that the State Council, or cabinet, did not plan to include the property sector in its list of industries to receive formal assistance packages.

Since last year, the government has announced a range of steps to aid the real estate market. In December, it cut business and transaction taxes for real estate sales, and said it would let people buy second homes on the same preferential terms normally reserved for those buying first homes, if floor space per person were lower than the average for the city where the homeowner lived. -- Reuters

Seeing Gold In California Housing Bust

Source : The Business Times, February 24, 2009

(LOS ANGELES) California's tortured real estate market has brought heartbreak and ruin, but some investors, speculators and first-time home buyers are also dreaming big and finding opportunities - a silver lining in the Golden State's epic housing crash.

Seizing opportunities: Investors and real estate speculators snap up foreclosed properties on the cheap to sell during the next boom that they hope is not far off

For many young couples, plummeting prices and near record-low interest rates make it possible to own a home in California for the first time.

Investors and real estate speculators, meanwhile, will be able to snap up foreclosed properties on the cheap to sell during the next boom in California's boom-and-bust real estate cycle, a boom they believe is inevitable and possibly not far off.

'This is the buying opportunity of our lifetime,' said Bruce Norris, who heads an investment group that expects to purchase some 100 homes this year in Southern California's Inland Empire region.

California - which would be the world's eighth largest economy if it were a country - saw a near-doubling in home sales in the fourth quarter, a pace surpassed only by Nevada's 133.7 per cent growth.

But experts warn that it's a dangerous game to play when nobody is really sure how low home prices will go or when they will rebound as the recession lingers, jobs dry up and residents pour out of the state in search of better prospects.

Mr Norris concentrates on the Inland Empire of Southern California, made up mostly of Riverside and San Bernardino counties, one of the fastest-growing areas of the country during the housing boom, driven partly by immigrant families who couldn't afford pricier coastal cities.

It's now one of the hardest-hit. In the past 18 months, the median home price in Riverside and San Bernardino, pummelled by the sub-prime meltdown and now recording some of the highest foreclosure rates in the state, has plummeted 55 per cent.

Norris Investment Group looks for homes built between 1980 and 1990, typically under 2,000 square feet.

Older houses come with too many maintenance 'surprises', Mr Norris says, and larger places can be tough to sell or rent in hard times.

Last month the group paid US$55,000 for a foreclosed home that was worth US$360,000 at the top of the market. Mr Norris expects to spend US$30,000 on repairs and rent it for US$1,200 a month until the market turns around.

The group also hopes to minimise risk by owning the homes free and clear, thus accruing little debt.

'You cannot have this (low) level of pricing be permanent because it costs too much to build a home here,' Mr Norris said. 'That's how you know you're making a logical decision when everything is falling around you. When you can buy a finished product someone will want to live in for US$55,000, that just has to make somebody pretty wealthy someday.'

Experts agree that California home prices will ultimately rebound but caution that real estate investing in this economy - the worst contraction since 1982 - should not be undertaken by amateurs or the faint of heart.

'You have to have a pretty strong feeling about where this is all going,' Stuart Gabriel, director of the Ziman Center for Real Estate at the University of California, Los Angeles, told Reuters. 'This cycle is so different from prior cycles that it's very difficult to extrapolate.'

'Most would argue that California is not going into the sea,' he said. 'On the other hand it's not totally out of the question that this particular period of weakness could extend for a while, and that means multiple years.'

California's roller-coaster real estate cycles can be traced to the 1970s, when home prices tripled, ignited in part by foreign investment and the end of the gold standard following decades of explosive population growth.

Home prices plunged in the early 1980s, turned around and doubled within 10 years, slumped in the mid-1990s and then blasted off again at the end of the decade. The sub-prime meltdown and recession pushed them back off the cliff.

'It's a great time to buy for people who are willing to risk a little more and be optimistic when everybody else is doom and gloom,' said Daren Blomquist, marketing and communications manager for RealtyTrac, an online foreclosure data service. But he warned: 'They will probably have to wait it out, possibly for several years.'

Chris Twoomey and his wife Jennifer illustrate the risk underlying the perceived opportunities. They moved to California from the Midwest in 2004 to pursue acting careers and had just begun to think the dream of home ownership was out of reach when the crash came and they saw their chance.

The couple pounced in January, right after Jennifer, 39, learned she was pregnant with their first child, making an offer on a small, bank-owned home in suburban Los Angeles.

But the day after the Twoomeys' offer was accepted, Chris was called into the cafeteria at his job in a cosmetics company warehouse and laid off.

'Sometimes in our dark moments we sit around and say to ourselves, 'Look, forget the acting, forget everything, this is the time to bail' (from California). We can be doing this someplace else that's still warm but doesn't cost as much,' Chris told Reuters in an interview.

'But we're sticking it out,' he said. 'It's perverse, but something inside of us does want to stay here. It's sort of a belief that because it is Southern California and because it is the kind of place where everybody wants to be, it will come back eventually.' - Reuters

US Existing Home Sales Fall 5.3% In January

Source : The Business Times, February 25, 2009

WASHINGTON - The pace of sales of existing home in the United States fell in January to a 4.49 million-unit annual rate while home prices and inventories dropped, the National Association of Realtors said on Wednesday.

Economists polled by Reuters were expecting home resales to rise to a 4.79 million-unit pace, from the 4.74 million rate initially reported for December, which was unchanged.

The inventory of existing homes for sale fell 2.7 per cent to 3.60 million from the 3.70 million overstock reported in December.

The median national home price declined 14.8 per cent from a year ago to US$170,300 - the lowest since a US$169,400 level seen in March 2003. -- REUTERS

Orchard Rd To Unveil Facelift

Source : The Straits Times, Feb 25, 2009

FINAL touches to the $40 million Orchard Road makeover are expected to be completed this weekend, after a 10-month-long project to rejuvenate Singapore's main shopping strip.

Final touches to the $40 million Orchard Road makeover are expected to be completed this weekend, after a 10-month-long project to rejuvenate Singapore's main shopping strip. --ST PHOTO: NG SOR LUAN

Workers were seen on Wednesday scurrying around, erecting flower totems - large pillars decorated with fresh flowers - on the pavement from Forum The Shopping Mall to Liat Towers.

By this weekend, old lamp posts and electrical boxes will be stripped out.

New benches, lamp posts, recycling bins, planter boxes and other improvements are already in place along nearly 2km of Orchard Road, between Tanglin Mall and Concorde Hotel Singapore.

The walkways have been repaved, and one road lane has been sacrificed to create a wider pavement in front of Ion Orchard, Wisma Atria and Ngee Ann City.

The extra space has been given to 25 'urban green rooms', containing benches, planter boxes and large glass decorative screens that light up at night.

This is the first time Orchard Road has been extensively improved, with the aim of elevating it to the level of famous shopping streets like Paris' Champs-Elysees.

But the project had a rocky start. An initial ambitious idea by the Singapore Tourism Board, which paid for the works, to construct a glass canopy running down the stretch was promptly shot down by mall owners, who said it would require too much maintenance.

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

Fusing Science, Art And Nature

Source : The Business Times, February 24, 2009


Fusionopolis' towers house scientists and engineers working on new medical solutions and technical innovations

DRIVING past Buona Vista it is hard to miss the futuristic towers that make up the first phase of Fusionopolis. Connected by a podium, the 24-storey Symbiosis and 22-storey Connexis reflect the daylight off their glass facades like gems, while the red circular logo at the top of one-north glows like a beacon in the night.

Research hub: (From above onwards) The Fusionopolis towers, one of the 13 sky gardens spread throughout the two towers, and the retail space. Fusionopolis aims to create an environment that is conducive to research, especially for the infocomm, media, science and engineering industries to incubate and test-bed ideas and products, says JTC. This, in turn, will create jobs and IP rights for Singapore

But these buildings amount to much more than architectural beauty. Officially launched on Oct 17 last year, they have become home to a scientific community of talent working hard on the next technical innovation or medical solution.

As JTC Corporation's assistant chief executive Philip Su explains, Fusionopolis aims to create an environment that is conducive to research, especially for the infocommunications, media, science and engineering industries to incubate and test-bed ideas and products. This, in turn, will create jobs and intellectual property (IP) rights for Singapore.

JTC is the master developer of one-north, the research and development (R&D) centre in the west that includes Fusionopolis, a project that has come a long way since construction began in 2003 amid the Sars outbreak.

Mr Su says JTC believes in the development's long-term potential and went ahead with it even though market confidence was low at the time. The take-up rate since has been overwhelming. 'Now I've got a problem,' he says. 'I don't have enough space.'

Attractive co-location

Costing $560 million, Fusionopolis's 120,000-square-metre phase 1 development already houses various public and private research institutes - co-location that is attractive because it promotes collaboration and the exchange of ideas.

Private tenants include Panasonic Electric Works Asia-Pacific, Seiko Instruments, Thales Technology Centre (S) and Vestas Technology R&D.

A*Star's Science & Engineering Research Council (Serc), the Media Development Authority and Spring Singapore are also there.

And the University of Illinois at Urbana-Champaign will set up its first overseas research centre at Fusionopolis. It will run a five-year programme to study how humans can interact with the digital world as seamlessly as they do with their natural five senses - an example of new frontier research called the human sixth sense programme.

Indeed, Fusionopolis could well re-invent the way research is done, by bringing cross-disciplinary capabilities under one roof to find solutions to global challenges.

Such collaboration is already going on for treatment of attention deficit hyperactivity disorder (ADHD) - a disorder that causes children to be disruptive and makes it hard for them to concentrate and learn.

A*Star's Institute for Infocomm Research, the Duke-NUS Graduate Medical School and the Institute of Mental Health are working on non-invasive therapy that helps people concentrate. They have come up with a game that could teach children with ADHD to focus, and perhaps to pay more attention to their teachers.

'Creating this technology requires a multi-disciplinary team - it takes the expertise, experience and creativity of many individuals to identify the problem, develop a solution and the technologies to implement it,' Science and Engineering Research Council chairman Charles Zukoski said last year. 'It is solving problems in this manner that will epitomise the work conducted at Fusionopolis.'

To facilitate interaction, the first phase of Fusionopolis also integrates various live, play and learn elements for the 800 or so scientists, engineers and game developers working there.

Shopping and entertainment

Some reside comfortably in the 50 serviced apartments on the 17th to 19th floors of the Symbiosis tower after work. Managed by Frasers Hospitality, each unit is about 60 sq m.

There are also retail and food and beverage outlets such as Starbucks Coffee and Harry's Bistro and Bar. In line with the Fusionopolis vision, Cold Storage is even test-bedding ideas at the Market Place @ one-north. The supermarket is equipped with digital price tags and trolleys fitted with LCD screens that feature the latest promotions.

Staff looking to take a break from all the heavy research can retreat to one of the 13 sky gardens spread throughout the two towers. Some include ponds and water wells in the landscaping, and one may even screen out telecommunications signals in future for visitors to enjoy undisturbed peace.

Beyond beautifying the environment, the sky gardens also help diffuse heat from the buildings and create energy savings.

Relaxation: The open-air swimming pool at Fitness First, a gymnasium situated on top of the Connexis tower of Fusionopolis

For those who prefer exercise as a way to unwind, there is Fitness First. The gymnasium has an open-air swimming pool and is situated on the top-most floors of the Connexis tower.

There is even a black-box theatre to bring the arts into the scientific community. Nestled between the two towers, the Genexis theatre has more than 500 retractable seats and the space can be easily configured to accommodate conferences, exhibitions and various other events.

With all these features, phase 1 of Fusionopolis can pride itself as the first high-density mixed-use development in one-north. Activity in the area is set to mount once phases 2A and 2B take shape.

The $600 million phase 2A development will be ready in 2012 and will house various laboratories, test-bedding centres and what could be Singapore's largest R&D clean room facility across 103,600 sq m of space.

Phase 2B may be up and running in 2011 and will provide up to 50,000 sq m of space for other agencies and companies working with nearby institutes.

And more developments are set to come. The entire Fusionopolis will be a 30 ha complex comprising six phases when it is fully completed, by which time it will be Singapore's icon for R&D in interactive media, physical sciences, engineering and technology.

房地产税回扣 将以09年应缴税款计算

Source : 《联合早报》February 24, 2009


但税务局也表示,由于当局今年正在为本地所有的房地产(包括私宅在内)进行重新估值,若年值(annual value)改变,当局也会根据新的年值,相应调整回扣额。







4月1日至7月31日 业主将获知回扣额







传中国将房地产业 列入十大振兴方案

Source : 《联合早报》February 24, 2009















Keen To Cash In On Mortgagee Sales?

Source : The Straits Times, Feb 22, 2009

Expect to wait as banks are more likely to restructure loans than force-sell homes

More people are showing a keen interest in monitoring auction sales of properties in order to bag a distressed sale.

The guide price for this Sentosa Cove bungalow, which comes with a swimming pool, is between $12 million and $13 million. It is one of the popular projects up for auction this week. -- PHOTO: DTZ

But the mortgagee sales that many are waiting for have yet to surface in any significant manner, property consultants said.

A mortgagee sale takes place when a bank force-sells a property at an auction after foreclosing on a mortgage. But auctions are also conducted for sales made by owners.

Last year, only $83.67 million worth of properties were sold through auctions - most of them were owners' sales, down from $407.43 million the year before. It marked the lowest point for the auction market in more than a decade.

Things could improve slightly this year. Consultants have said they expect to see a rise in loan defaults and forced or mortgagee sales this year.

Right now, they said the banks are restructuring the loans of potential defaulters, who may be offered interest-free holidays or allowed to stretch the loan period.

DTZ's senior director for investment advisory services and auction, Mr Shaun Poh, said that based on general feedback from banks and past experience, he expects to see more mortgagee sales surface in five to six months' time.

Indeed, the market could see a pickup in mortgagee sales in four to six months' time, said Knight Frank's executive director, Ms Mary Sai.

But contrary to expectations, there may not necessarily be a lot more of these sales because banks are open to working out a deal with their customers, she said.

Banks are unlikely to want to take back too many properties when they may not recoup their losses, consultants said.

Nevertheless, many potential buyers are already getting ready. 'We have been getting five to six requests a day from people asking to be put on our auction mailing list,' said Mr Poh.

For most of last year until October, his firm received just one to two requests a month.

It is the same at Colliers International. 'The demand is very strong. We can get up to 20, 30 people calling us on some days this year, compared with one to two calls a day last year,' said its deputy managing director and auctioneer, Ms Grace Ng.

'They want to be on the mailing list. They are just waiting for the market to bottom out.'

Ms Sai said potential buyers are 'coming in floods', asking to be on her company's list or calling about properties on offer.

'But it is very difficult for us to strike a deal because the buyers are putting in very low offers. They want to go only for a killing,' she said.

Ms Ng said her company has also yet to see fire-sale prices. Most properties on offer are sales by owners, not banks.

Nevertheless, if the owners are putting their properties up for sale in these times, they are obviously serious about selling, consultants said. 'They know the market and are willing to consider reasonable offers reflective of the current market,' said Ms Sai.

While there may not be a lot of mortgagee sales yet, some popular projects have surfaced recently.

For instance, a posh bungalow in 99-year leasehold Sentosa Cove and a swish St Regis Residences apartment in Tanglin Road are among the properties included in DTZ's auction on Thursday.

The guide price for the Sentosa Cove bungalow, which comes with a swimming pool, is between $12 million and $13 million, which works out to $1,449 per sq ft (psf) to $1,570 psf.

While the absolute sum is high, this is lower than the $17 million that another owner of a similar- sized house had asked for last month, and which had failed to attract any buyers.

The 3,757 sq ft unit at the 999-year leasehold St Regis has an indicative price of $2,400 psf, or about $9 million. Some units at this condo had previously sold for more than $3,000 psf.

At Jones Lang LaSalle's auction on Friday, there is an uncompleted condo for sale - a four-bedder at The Regency at Tiong Bahru.

Among the mortgagee sales this week is a one-bedder at uncompleted condo The Clift in McCallum Street at DTZ's auction, and a freehold Regency Park unit in district 9 and a Costa Rhu ground-floor apartment at Knight Frank's Tuesday auction.

Indicative prices are $1,500 psf for the 506 sq ft unit at The Clift and between $1.5 million and $1.6 million for the 1,722 sq ft Costa Rhu unit in Tanjong Rhu. Knight Frank withdrew the latter from its auction last month as there were no takers at $1.55 million.

The indicative price for the 2,260 sq ft Regency Park unit in Nathan Road is $1,000 psf to $1,200 psf, said Ms Sai. It comes with a $9,500-a-month tenancy which will expire in January next year. A bigger 3,175 sq ft unit was sold at $1,036 psf last month.

'Compared with last year, there are more attractively priced properties put up for auction this year,' said Mr Poh.

As he said earlier, there could be more mortgagee sales five to six months down the road.

HK Developer Ups Luxury Home Prices

Source : The Business Times, February 24, 2009

After selling 150 units in 10 days, they plan a 5% raise

(HONG KONG) Sun Hung Kai Properties Ltd, Hong Kong's biggest developer by market value, is raising prices for a new luxury residential project by 5 per cent after selling 150 units in 10 days.

'The response has been so good, we are raising the prices gradually.'
- Victor Lui, executive director of Sun Hung Kai Real Estate Agency

'The response has been so good, we are raising the prices gradually,' Victor Lui, executive director of Sun Hung Kai Real Estate Agency, said in a phone interview yesterday.

The builder, which released 200 apartments at its Kowloon project in the first launch, sold the 150 units for HK$14,000 to HK$20,000 a square foot, generating HK$3.5 billion (S$689.2 million) revenue, Mr Lui said. It's now selling three-bedroom units at the project, called The Cullinan, for HK$14,700 to HK$21,000 a square foot, based on Bloomberg calculations using his figures.

The sale may indicate investment in Hong Kong's luxury homes is picking up, Centaline Property Agency Ltd, one of the city's biggest real-estate agencies, said. Prices of luxury homes, defined as those worth at least HK$10 million, fell 19.2 per cent in the fourth quarter from a year earlier, CB Richard Ellis Group Inc said last week.

'There's a bunch of cash-rich people out there who prefer holding real assets such as property, gold as they become more wary of other financial investments,' said Wong Leung-sing, an associate director at Centaline. 'Under the current environment, The Cullinan sale has exceeded expectations and it'd be a harbinger of an increasingly active investment luxury market.'

Sun Hung Kai's shares rose as much as 4.2 per cent on the news, the most since Feb 9. They traded 0.8 per cent higher at HK$60.65 at 3.05pm Hong Kong time, while the Hang Seng Property Index, which tracks the shares of six developers, advanced 2.7 per cent.

The number of units sold and the revenue generated were earlier reported by the South China Morning Post.

Prices fetched at The Cullinan may entice Hang Lung Properties Ltd, Hong Kong's fourth-biggest developer by value, to sell units at its nearby Harbourside project, analyst Manfred Ho said. Shares of Hang Lung rose as much as 6.9 per cent yesterday, snapping a nine-day losing streak. They traded 4.7 per cent higher at HK$14.30.

Hang Lung has 'quite a big number of unsold units at The Harbourside, so if The Cullinan is selling well, definitely they will be one of the direct beneficiaries', said Mr Ho, a Hong Kong-based analyst at BOC International Group.

Hang Lung has about 2,000 homes unsold at its Harbourside and Long Beach developments in Hong Kong, as it held back apartment sales last year after prices fell as much as 25 per cent from last year's peak.

Sun Hung Kai may start selling the second batch of units next week, Mr Lui said, adding that the developer will decide on the number after wrapping up the first launch. Buyers in the first launch included investors from China, he said.

Sun Hung Kai is also in the final stages of negotiating the sale of four penthouse units, Mr Lui said. One of them, a 4,000 square-foot duplex, is priced at HK$50,000 a square foot while the other three smaller ones at more than HK$30,000, he said.

Standing at 270 metres, The Cullinan will be Hong Kong's tallest residential project and includes 825 units.

Still, some analysts said prices for The Cullinan are not enough to lift the entire Hong Kong property market, which is weighed down by a recession and rising unemployment.

'Hong Kong's economy is really dependent on the financial sector, which is volatile, and trade, where we don't see any sign of improvement,' Cusson Leung, an analyst at Credit Suisse Group AG, said yesterday.

Hong Kong's economy slid into a recession in the third quarter, its first since 2003, as the global slowdown hurt domestic spending and demand for exports.

Unemployment rose to 4.6 per cent in the three months ended Jan 31, the highest rate since September 2006, the government said on Feb 17.

Home prices on the Peak, Hong Kong's most-expensive residential area, slumped 30.5 per cent in the fourth quarter of 2008 from a year earlier, the steepest decline since the Asian financial crisis in 1998, CB Richard Ellis said last week. The average price was HK$16,678 a square foot, it said.

Hong Kong's record price for a luxury home was for a house in Sun Hung Kai's Severn 8 project on the Peak that sold in the first half of last year for almost HK$56,000 a square foot. -- Bloomberg

Developers' Home Sales Top 1,000 Units In Feb

Source : The Business Times, February 24, 2009

GuocoLand sells some 160 units at The Quartz after last week's price cut

Developers have achieved an 18-month high in private homes sold in a month, with the 1,000-unit mark having already been breached so far in February.

Snapped up: A showflat at The Quartz condominium developed by GuocoLand. About 98 per cent of buyers of the units are Singaporeans, 80 per cent of whom live in the vicinity, mainly with HDB addresses

Most of the developers who are prepared to pare their price expectations to more affordable levels continue to be rewarded. A near 10 per cent price chop was all it took for GuocoLand to sell off almost 90 per cent of the 182 units at The Quartz condo in Buangkok relaunched last week.

The Singapore-listed property arm of Malaysian tycoon Quek Leng Chan has found buyers for about 160 units since last Tuesday's price cut. This means the 625-unit project is now left with only around 20 units, compared with 182 units prior to the relaunch.

GuocoLand trimmed the 99-year-leasehold project's average price to $595 per square foot (psf), compared with $650 psf during the height of the market in 2007.

Besides the more competitive pricing, market watchers attributed the successful outcome to the fact that The Quartz will be ready for occupation soon. Temporary Occupation Permit (TOP) for the condo is expected in a couple of months.

The bulk of buyers are believed to have bought for their own occupation. About 98 per cent of buyers are Singaporeans, 80 per cent of whom live in the vicinity, mainly with HDB addresses, a GuocoLand spokeswoman said.

'They like the design, layout and location of the development, which is near Buangkok MRT Station and also accessible by Kallang-Paya Lebar Expressway,' she added.

The bulk of the 182 units were three-bedroom apartments. On average, a typical three-bedder of slightly under 1,100 sq ft costs around $650,000, BT understands.

Over at Jurong Lake District, Frasers Centrepoint found buyers for another 35 units for its Caspian condo over the weekend, raising total sales in the 99-year-leasehold project to 515 units.

The overall average price achieved is just over $600 psf, reflecting the sale of better-facing units in the past week. About 32 per cent of Caspian's buyers have opted for an interest absorption scheme; they will pay 3 per cent more in exchange for not having to foot beyond the 20 per cent initial payment until the project receives TOP. On average, three-bedroom units at Caspian cost $700,000 to $750,000.

At River Valley Road, Fortune Development found buyers for another six units at RV Suites over the weekend. Half the 96 units in the freehold project have been sold. The project comprises mostly units of 500-550 sq ft, and the average price is about $1,300 psf. East Coast Properties sold another four units over the weekend for its D'Chateau @ Shelford, which is priced at $1,000-$1,100 psf on average.

Market watchers note that over at Livia in Pasir Ris, some of the 30 units released at $620 psf on average on Valentine's Day weekend are still available. Units are relatively large (a typical three-bedder is about 1,259 sq ft), resulting in a bigger unit price quantum of at least $750,000 for a three-bedroom unit. Potential buyers may also be waiting for new projects to be launched in the area before deciding on their purchase.

Seasoned property consultants say that for mass-market projects to move today, they should be priced at around $600 psf at most, and the unit price should not exceed $700,000, in order for them to be affordable to HDB upgraders.

Sunday, February 22, 2009

房产咨询公司:本地甲级办公楼租金 明年底或比香港低两成

Source : 《联合早报》February 20, 2009











市区外办公楼租金 下跌情况较不严重



Friday, February 20, 2009

Avoiding Property Tussles

Source : TODAY, Thursday, February 19, 2009

Reduce risk of bargains turning into legal liabilities:

IN THE current recession, people with ready cash are looking to pick up good bargains. However, tread with care.

Reported cases that I took on over the years showed that property investors unwittingly fell into costly legal tussles because they failed to take the necessary safeguards before putting down their money.

What seem like simple and standard procedures in a property transaction can lead to expensive, drawn out legal battles. Here are four tips for minimising your risks.

Tip 1: Do on-site approval checks

The year was 1991, just after the Gulf War. Property values had dived sharply here.

My client, who owned a Lornie Road home, was faced with a lawsuit from a buyer wanting to back out of the deal.

The buyer claimed that the seller had not disclosed substantial unauthorised additions and alterations to the property, which affected its title.

At stake was the recovery of a $250,000 deposit from the buyer.

Fortunately for my client, the Appellate Court was persuaded that a seller’s obligation to disclose in a conveyance did not extend to unauthorised structures where no order or notice had been issued by the Building Control Division, as that relate only to an issue of quality and not title.

In a sale and purchase of property containing unauthorised alterations and additions, caveat emptor *applies.

This means it is for the buyer to protect himself by checking that the property is free of illegal additions and alterations before buying the option, or to include in the option to purchase, a clause enabling the buyer to exit the purchase before completion if there are illegal or unauthorised alterations and additions.

Tip 2: As a buyer, ensure you have exit or compensation clause

Last year, I represented a couple that had contracted to sell their Changi terrace house, which had an unauthorised second storey.

The buyers wanted the couple to restore the unauthorised structure, claiming they would suffer huge financial damages if they were to buy a property which required regularisation of unauthorised works.

They further argued that if the works could not be regularised, and had to be removed, this would reduce the built-in area.

It seemed like a case that was plainly in favour of the buyers.

As it turned out, the couple won the case on the argument that the contract was inadequate and did not provide for an exit or compensation clause for the buyers, where there were unauthorised works on the property.

Tip 3: Think carefully before SIGNING ON THE DOTTED LINE

Beware of buying on a whim and then changing your mind.

A caveat cannot be filed willy-nilly and unless a party has an interest in the property, he can be liable for damages and costs for wrongful filing.


In a case where a developer was suing an architectural firm for professional negligence, the claim failed because it was not filed within six years from the act of negligence.

An injured party must pursue a claim with diligence. Otherwise, it may fail because of the time bar.

The writer is director of Bernard & Rada Law Corporation. She has 22 years’ experience in property and commercial litigation.

Cairnhill Heights Sale: Would-Be Buyer Pulls Out

Source : The Straits Times, Feb 20, 2009

Developer cites poor market conditions for 11th-hour decision

A DEVELOPER has backed out of a planned $44 million purchase of an enbloc sale site in the prime Cairnhill area at the 11th hour - sparking anger from some of the home owners.

Owners of Cairnhill Heights will now get their share of the forfeited deposit, after deducting for expenses. -- ST FILE PHOTO

The firm, Jewel 1, blamed 'difficult, uncertain and deteriorating market conditions' for its decision to pull out of buying Cairnhill Heights.

The move came just 20 days before the deal to buy the 19-unit condo was due to have been completed on Feb 24, the condo's sales committee said yesterday. The developer, wholly owned by one shareholder, will have to forfeit its 5 per cent deposit of $2.2 million.

'This really feels like a stab in the back. Where is the good faith?' said one owner, also a sales committee member, who declined to be named.

The decision came despite a protracted legal battle in which Jewel fought for the right to buy the site.

The developer outlined its decision in a letter to the lawyer involved in the proposed sale.

Three sale committee members told The Straits Times they felt let down by the developer, as they regarded the firm as a partner in a deal that they had robustly defended against all challenges, believing it was a reputable property developer.

Jewel 1, which was registered in 2006, has only one shareholder and director - Mr Cheong Sim Lam. He was not available for comment.

Mr Cheong's family owns Hong Fok Realty, and he is the uncle of SC Global chief Simon Cheong.

He had agreed to buy Cairnhill Heights in May 2007, at the height of the property boom and amid a frenzy of collective sale deals.

The Strata Titles Board granted the sale in March last year. An objector at Cairnhill Heights then took the case to the High Court but lost the appeal in November.

A sale committee member who wished to remain anonymous said: 'Having been on the same side for almost two years now, sometimes fighting shoulder-to-shoulder to secure the sale, the last thing you would have expected is for your contracting party to turn around and leave you in the lurch.'

The sale committee said it has reserved all options in terms of possible legal recourse.

Owners of the 19 units will get their share of the forfeited deposit, after deducting for expenses, which are still being calculated.

If the sale had gone through, each owner would have received $1.97 million to $2.5 million, apart from the sole penthouse owner, who would have pocketed $5.5 million.

About half of the owners have rented out their units. One of the owners lives there but also own properties elsewhere in Singapore.

At least one owner is believed to have already bought a replacement property - assuming the full sale price would soon be paid - and is now stuck with two homes.

One owner, businessman Georg Mechtler, said: 'We felt aggrieved, having committed for more than two years to sell this property while the market kept climbing. Now, we have missed all our selling opportunities of this cycle. And the buyer only forfeits a miserable 5 per cent.'

Still, not all owners are upset. One said she is happy that an architectural icon has been preserved. Cairnhill Heights was designed by Singapore- based architect Geoff Malone.

'We should keep evidence of our architectural heritage,' she said.

Sentosa, Marina IRs Get Pricier

Source : The Straits Times, Feb 20, 2009

Both are revising costs upwards for 2nd time

SINGAPORE'S two integrated resorts (IRs) are getting increasingly expensive, with both developers revising their cost estimates upwards for a second time.

Construction in progress at Marina Bay Sands, certain section of which are expected to open by year's end. It was announced last week that the IR project is now estimated to cost US$5.4 billion, up from previous estimates of US$3.6 billion and US$4.5 billion. -- ST PHOTO: ALPHONSUS CHERN

An additional $590 million will need to be pumped into the kitty for the Sentosa project, while the price tag for the Marina Bay Sands development has gone up by US$900 million.

Resorts World at Sentosa yesterday revised the cost for the 49ha resort in its earnings call, bringing it up to $6.59 billion. This is the second time the budget has been revised: It was bumped up from $5.2 billion to $6 billion in November 2007.

Marina Bay Sands will cost more as well. At last week's earnings call, Las Vegas Sands Corp announced its Singapore IR is estimated to cost US$5.4 billion, an upward revision from previous estimates of US$3.6 billion and US$4.5 billion.

No explanations were given by Sands for the increase in cost, but it raised US$2.1 billion last November in a rights issue to cover its projects, including the one in Singapore.

Resorts World at Sentosa chief executive officer Tan Hee Teck said yesterday that additional funding would come from operating cash flows when the casino resort opens next year.

The extra money was needed for improvements to the design of the casino project, he said. Areas which were tweaked included pedestrian flow, the monorail stop at the resort and adjustments to the 24 attractions.

He said: 'We want to make sure each and every attraction is up to standard. We found we needed more money to bring the attractions up to a superlative level.' Moreover, construction costs had risen sharply in the last few years, he added. Steel, for example, rose from $800 per tonne in 2007 to $1,800 last year.

CIMB-GK Song Seng Wun said it was simply bad timing that the IR projects were awarded at the peak of the construction boom, which led to costs spiralling upwards.

Construction projects awarded earlier do not benefit from prices softening since the global financial meltdown, as they had locked in materials at a higher rate, Resorts World's Mr Tan said.

Despite the revision in budget and the ongoing global recession, Mr Justin Tan, managing director of parent company Genting International, said he is 'still as confident' in the success of the project.

As travellers trim their budget to take in short-haul travel, visitors from China and India who may have splurged on trips to Las Vegas or Europe would head to Singapore instead, he added.

Resorts World at Sentosa is slated to open on schedule by March next year.

One section of the resort is due for completion next week when its first 11-storey hotel, the Maxims Tower, is topped off. It will be the first development to be completed at either of the IRs.

Marina Bay Sands is expected to open in the fourth quarter of this year. However, it is uncertain which parts of the resort will be ready as Las Vegas Corp said only 'certain features' are targeted to be ready by December.

The resort has applied to the Government for a staggered opening, but has yet to receive official approval.

Sibor Dives, But Home Loan Rates Go Up

Source : The Straits Times, Feb 19, 2009

Most banks have raised their spreads to make up for increased risk and higher capital costs


A KEY interest rate that sets the cost of interbank lending has plunged in recent weeks, but those taking out new mortgages will be no better off.

The three-month Singapore Interbank Offered Rate, or Sibor, dived to 0.68 per cent this month, bringing it near the all-time low of 0.63 per cent reached in June 2003.

The rate at which banks lend to one another has been dropping since September last year, and is expected to stay low.

But new home buyers expecting interest rates for Sibor-linked housing loans to fall in tandem will be disappointed.

To compensate for increased risk and the higher cost of capital, most banks have upped the spreads that they charge above Sibor, making Sibor-pegged home loans more expensive.

At DBS Bank, a home buyer taking a loan of 80 per cent of his property's value in July last year would have paid a rate of Sibor plus 1.25 percentage points. Now, a new buyer has to pay Sibor plus 1.75 percentage points.

Even though Sibor fell from 1 per cent to 0.68 per cent between last July and now, the rate charged has actually risen from 2.25 per cent to 2.43 per cent.

The margin on HSBC's standard Sibor-pegged package now stands at 1.25 points, up from 0.7 point last July. The rate has effectively risen to 1.93 per cent, from 1.7 per cent.

However, at least one bank - Citibank - has not raised its spreads on Sibor-linked loans. A customer applying for a loan now would get the same rate as last July's.

The bank's head of secured finance solutions, Ms Vibha Coburn, said it has remained consistent in the pricing of spreads on Sibor-linked packages.

Its range of spreads is still between 0.8 percentage point and 1.25 percentage points, 'depending on the extent of the customer's relationship with the bank and the type of home loan package', she added.

Rising spreads will affect a growing number of borrowers as Sibor-linked loans have become increasingly popular after banks introduced them about two years ago.

One reason for their popularity is their transparency when compared to loans pegged to banks' own board rates.

However, although new loan applicants will feel the pinch of the higher rates, home buyers who locked into the more competitive Sibor-pegged mortgages last year are seeing their monthly instalments fall steeply in line with the nosediving Sibor.

Loans pegged to the Singapore dollar Swap Offer Rate (SOR) - another popular benchmark interest rate - have also been hit by the increasing spreads.

OCBC Bank is now charging SOR plus 1.75 points for its home loan, compared to plus 1.25 points just two months ago, according to a news report last December. This means its rate has increased from 2.25 per cent to 2.43 per cent.

Banks said they have raised their spreads because the credit crunch has made lending more expensive and riskier.

'Unlike the period of robust property markets in 2006 and early 2007, banks now have to contend with higher capital costs and increased credit risks, given the current financial turmoil and economic crisis,' said Mr Gregory Chan, OCBC's head of consumer secured lending.

Mr Dennis Ng from mortgage broker agreed: 'Property values have fallen, so default risk has definitely gone up. It's natural for banks to increase the interest margin to cater for this higher risk of lending.'

The higher margins are also being introduced because banks are seeing fewer home loan applications as the property market softens.

'If banks reduce rates, they face not only a decline in loans growth but also a decline in margins, which could affect them quite badly,' said Mr Ng. 'So they may increase their margins to make sure revenue doesn't drop that much.'

No update was available from two other banks here that offer Sibor- or SOR-linked home loans: Standard Chartered Bank could not respond by press-time while United Overseas Bank declined to comment.

Office Rents May Slide Until 2012

Source : The Straits Times, Feb 20, 2009

Rents of prime space to drop as supply outstrips demand, says Savills

AFTER two years of being squeezed by soaring rents, office tenants are finally seeing the market turn in their favour.

Rents of top-tier offices downtown are predicted to drop 30 per cent to 40 per cent this year, and a further 20 per cent to 25 per cent next year, according to property consultancy Savills. -- ST PHOTO: ALPHONSUS CHERN

Up to four years of falling or flat rents are in store for them as a wave of upcoming office space outstrips lacklustre demand, according to a new report by property consultancy Savills.

Its Asia-Pacific regional commercial head Chris Marriott expects top-grade office values here to halve from last year's peak by the end of next year, and not start to recover until 2012. Top-tier buildings downtown such as One Raffles Quay and Republic Plaza offer Grade A space.

Rents of such offices are predicted to drop 30 per cent to 40 per cent this year, and a further 20 per cent to 25 per cent next year, he said at a briefing yesterday.

The expected falls are due to the huge volume of new office space to be completed by 2011: 5.5 million sq ft, or about 30 per cent of all existing Grade A space.

At the same time, demand for new offices - which far exceeded supply recently when firms were still expanding - has become anaemic, due to the global economic slowdown, said Mr Marriott.

'Office rents have generally come off by 10 per cent from the peak last year, although for new lettings we've seen more like a 25 per cent drop,' he said.

Average Grade A rents peaked at $15.10 per sq ft (psf) last year and fell to $13.70 psf by the year end. Savills believes they will drop to $6 to $7 psf next year, leaving prime office space here some 20 per cent cheaper than in Hong Kong. Singapore's office market will see a more severe adjustment, partly because the proportion of new space in relation to existing space is bigger, Mr Marriott said.

Other property experts agree that office landlords are in for a tough time.

Cushman & Wakefield managing director Donald Han is tipping a 20 per cent decline in rents this year and another 20 per cent fall next year, although he said the drops may be bigger if Singapore's economic outlook continues to worsen.

In the past three months, most Grade A office landlords have cut rents by up to 10 per cent to 15 per cent, he said. 'Landlords...are becoming more aggressive in trying to keep their tenants happy.'

Still, he notes that even if rents bottom at $7.50 psf - his own forecast - they will remain higher than during the last downturn, when they touched $5 psf.

CB Richard Ellis executive director Moray Armstrong is not expecting rents to correct by so much. 'We have seen in previous cycles that when demand picks up, the available office supply is often very swiftly absorbed,' he said. 'Cycles here have been very short in the past, quite often in the order of two to three years.'

But now, landlords are 'very much prepared to negotiate', said DTZ Debenham Tie Leung's senior director Shaun Poh. 'Some of the landlords have stopped quoting actual prices; now they just ask tenants to make them an offer,' he said.

Existing tenants are also trying to cash in on the recession, Mr Poh said. 'Some tenants who have already settled on a price are asking to renegotiate or to get longer rental holidays.'

But not all landlords are worried. CapitaCommercial Trust, which owns 11 prime properties here, said it is 'not true' overall rents are down sharply, compared to trends in previous downturns. A spokesman said the trust charges $15 to $17 psf for Grade A space, while its overall average rent is 'only $7.44 psf'.

'We...expect to see positive rental reversions for leases renewed in 2009.'

Tenants rethink pre-booked space

THE credit crunch is forcing major tenants in Hong Kong to scale down ambitious plans to take up more office space there.

Property consultant Savills said yesterday at a press conference at SGX Centre1 that these tenants are unlikely to proceed with all the space they have booked.

The global credit crunch has battered many major financial institutions in the past year.

The firms mentioned by Savills included big names such as Credit Suisse, Deutsche Bank and Morgan Stanley. They had been due to move into the Hong Kong International Commerce Centre upon its completion next year.

Consultants say this hesitancy to take up pre-committed space has yet to occur in Singapore but it may happen in the months ahead.

Mr Moray Armstrong, executive director at property consultancy CB Richard Ellis, said: 'It's not a stretch to expect that to happen here, given that many of the pre-commitments were made by financial institutions.' He also said these institutions may choose to sublet space they cannot occupy.

This might be seen at the new Marina Bay Financial Centre, set to be ready in 2012. All three towers of prime GradeA office space have been at least partially pre-leased. Tenants include American Express, BHP Billiton, DBS Group Holdings, and the Macquarie Group.

Office Rents May Plunge 30-40% In 2009: Savills

Source : The Business Times, February 20, 2009

Rental recovery here can be seen from 2012 onwards

Grade A office rents here could fall 30-40 per cent this year and another 20-25 per cent in 2010, based on new research from Savills.

Rents here fell 1.9 per cent in 2008, the property firm said. Savills' research, which also forecasted rents at competing markets Hong Kong and Shanghai, shows that Singapore will be the worst-hit - in terms of rental declines for Grade A office space - in 2009 and 2010.

Grade A office rents here stood at $13.70 per square foot per month (psf pm) at end 2008, Savills said. This is expected to fall to $8-9 psf by end 2009, and $6-7 psf by end 2010.

Grade A rents in Hong Kong are forecast to fall by a smaller 30 per cent this year and 10 per cent in 2010. In 2008, Grade A office rents in Hong Kong grew 3.3 per cent.

Savills' data showed that Grade A rents were around HK$59.80 psf pm at the end of 2008. Savills forecasts that this will fall to HK$42 psf by end 2009 and HK$38 psf by end 2010.

As a consequence, Grade A office rents here are likely to be about 20 per cent lower than in Hong Kong by end-2010. In the second half of 2007 and early 2008, Grade A office rents in Singapore were higher than in Hong Kong as rents shot up here in 2007 and 2006.

Property firms have said in December 2008 that Singapore's Grade A office rents nearly doubled in 2007 after growing by more than 50 per cent in 2006.

But now, rents in Hong Kong are higher again as rentals here took a big hit in 2008. According to CB Richard Ellis, for example, Grade A rents fell to an average $15 psf pm in Q4 2008 - a fall of 12.5 per cent from end-2007. CBRE and Savills use different baskets of properties to calculate market rents. But both firms expect rents to fall further in 2009 and 2010 on the back of new supply.

Singapore and Hong Kong rushed to develop offices for their rapidly expanding financial services sectors in the last few years. Now, with the global downturn, an excess of unwanted space is depressing rents.

But Hong Kong's rents are expected to take less of a hit as new office supply there was rolled out earlier than in Singapore.

'With a minimum of a four year lead time for any significant office development, Hong Kong's core supply arrived in the nick of time to satisfy the burgeoning demand whilst Singapore has been caught by the unforeseen credit crisis,' said Chris Marriott, Savills Asia-Pacific's regional head of commercial.

Some 5.5 million square feet of new prime office space is due to come up in Singapore from 2009 to 2011 - about 30 per cent of existing supply, Savills said.

By contrast, Hong Kong has a smaller 4.52 million sq ft of office space coming up, which will add 6 per cent to the total stockpile.

Mr Marriott expects Hong Kong to see the quickest recovery among the three markets studied. For Singapore, rental recovery could be seen from 2012 onwards, he said. But investor interest is expected to pick up by early 2010.

There are a number of new funds with allocations for Asia which are already targeting assets regionally. Mr Marriott said: 'These institutions are already focusing on prime assets in core markets at discounts.'

In particular, they are looking at Australia, Japan, Korea, Hong Kong and Singapore, and will start buying once vendors reduce their prices, he said.

Jakarta May Let Expats Own Homes

Source : The Business Times, February 19, 2009

(JAKARTA) Indonesia is considering allowing expatriates to have their own houses in the country, The Jakarta Post reported yesterday. It quoted President Susilo Bambang Yudhoyono as saying he would ask the National Land Agency, the home minister and the state minister for people's housing affairs to conduct an in-depth study into granting expats home ownership rights.

'The government has no objection to this, provided it will benefit the people and make the country's climate more conducive to foreign investment,' Mr Yudhoyono said on Tuesday.

A 1996 government regulation states expats may only have house utility rights for 20 years, which may be extended for another 20 and 25 years consecutively.

Indonesian Real Estate chairman Teguh Satria called on the government to revise the regulation to grant expatriates a 70-year home ownership right, in an effort to make the country more competitive and conducive to foreign investment.

'If the government regulation is revised to allow expats to own homes, the prices of our apartments and other properties will rise sharply,' he said. -- Xinhua

Property Buyers Hit A Bump On Sliding Valuations

Source : The Business Times, February 19, 2009

Banks slash loan amounts before disbursing them

The rapid slide in property prices has resulted in some banks slashing the loan amount to borrowers just before it is disbursed. This has put property buyers in a quandary, forcing them to either top up the difference or pay a penalty for backing out of the loan offered.

And valuers have become the latest 'villains' as borrowers find it harder to get home loans to match their purchase prices. 'I don't tell people I'm a valuer,' sighed Lydia Sng, Knight Frank executive director.

Bankers agree that the time lag between the loan offer and disbursement can result in a final smaller loan. The loan offer, while based on an indicative valuation, contains a clause that it is subject to a formal valuation.

But borrowers who want to cancel the loan are hit with a punitive 1-1.5 per cent cancellation fee. Also, by this time, it would be hard to back out because they would have already committed to the purchase of the property.

The wobbly market is not helping. A Citigroup report last month said that, in the high-end segment, properties have seen price corrections of about 35 per cent from a year ago and they could fall by another 30-40 per cent this year.

Ms Sng said the problem is with the valuation process. 'They'll give us a call with the address, we'll give a range as we've not seen the property. It's a bit like calling the doctor and telling him your symptoms and asking for a diagnosis,' she said.

Gregory Chan, OCBC Bank head of secured lending, said: 'It is possible to receive a lower formal valuation on a property compared to the initial indicative valuation. To mitigate this, as well as to ensure valuations are realistic, OCBC Bank does not rely solely on a single valuer for indicative valuations,' said Mr Chan.

A DBS spokeswoman said the indicative value will be based on the information declared by the customer in the home loan application form.

'In the event that the formal valuation is lower due to the wrong details provided on the property, the bank will have to take the lower of either the purchase price or valuation as per regulatory stipulations. As such, the buyers will be required to top up the difference between the purchase price and valuation in cash. If the borrowers decide to abort the purchase and cancel the loan at any point after loan acceptance, a cancellation fee will apply,' said the DBS spokeswoman.

'We monitor our panel of valuers regularly to ensure that valuations are always fair and based on current market values,' said a United Overseas Bank (UOB) spokeswoman.

Jerry Tan, managing director of Jerrytan Residential Pte Ltd said his beef is that valuers sometimes look to non-comparable transactions to determine the price. But it could be comparing a five-star development to a three-star one, he said.

DTZ executive director Poh Kwee Eng said that if they were valuing a unit and there had not been a transaction in the same building for some time, they would look nearby, in similar developments. If the five-star unit was priced 20 per cent higher during last year's red hot bull market compared to a three-star one, similar premiums would still hold.

'Say, last year, your unit was sold at $1,000 per square foot and next door a unit went for 800 psf, there was a 20 per cent difference. So if the next-door unit is now selling at $500 psf, I would adjust your unit by 20 per cent upwards,' explained Ms Poh.

Some banks are said to be staying clear of certain developments where there is a wide range of valuations such as The Sail with 1,111 units and Sentosa Cove.

UOB head of loans Kevin Lam declined to comment on specific projects but offered general observations about mortgages. 'We have been conservative all along. With the recent further fall in prices, we have become even more careful,' he said.

Knight Frank's director of research and consultancy Nicholas Mak said valuations vary widely among the 1,111 units at the 63-storey The Sail. As for Sentosa Cove, 'newer developments have better views or better designs. Some earlier projects didn't have sea views,' he said.

Some ground-floor condos sited between the landed homes with the sea front were not very different to condos on the mainland, said Mr Mak. 'The value of a sea view alone is difficult to pin down,' he said.

Credo Real Estate managing director Karamjit Singh said that The Sail and Sentosa Cove, as new markets which targeted foreigners, provided their own challenges. 'The Sail was part of a new market that emerged as part of the development for the new downtown including the integrated resorts,' said Mr Singh.

He said it takes time for prices to find their equilibrium, and they have not stabilised yet. 'It's a challenge everyone faces, including banks.'