Thursday, February 5, 2009
Record 19m Homes In US Stood Vacant In 2008
Source : The Business Times, February 5, 2009
Washington looking at ways to stem the tide of foreclosures
(BOSTON) A record 19 million US houses stood empty at the end of 2008, including properties for sale and for rent, as banks seized homes faster than they could sell them and prices continued to fall.
Bleak house: The worst US housing slump since the Great Depression is deepening as foreclosures drain value from neighbouring homes and make it more likely that owners will walk away from properties worth less than their mortgages
Vacant homes in the fourth quarter increased by 6.7 per cent from the same period a year ago, the US Census Bureau said in a report on Tuesday.
The share of empty homes that are for sale, the so-called vacancy rate, rose to 2.9 per cent in the quarter, the most in data that goes back to 1956.
The worst US housing slump since the Great Depression is deepening as foreclosures drain value from neighbouring homes and make it more likely that owners will walk away from properties worth less than their mortgages.
About a third of owners whose home values drop 20 per cent or more below their loan principal will 'hand the keys back to the bank', said Norm Miller, director of real estate programmes for the School of Business Administration at the University of San Diego.
'When you're underwater and prices continue to fall, you tend to walk,' Mr Miller said. 'It's a downward spiral that's tough to stop because it feeds on itself. Foreclosures encourage other foreclosures and falling prices discourage buying.'
The figures demonstrate the intensity of the US housing crisis as President Barack Obama considers ways to help homeowners.
The Obama administration is considering government guarantees for home loans, seeking to stem the record surge of foreclosures that's hammering US property values.
The proposal, which may also have taxpayers share in the cost of reducing mortgage payments, is aimed at shielding lenders from default after they loosen loan terms for struggling borrowers.
Comptroller of the Currency John Dugan, who regulates national banks, said on Monday that 'working out the details of it is still something that's ongoing'.
Congress and the new president are grappling with how to repair the housing market as the recession enters its second year and unemployment rises. The US economy shrank the most in the fourth quarter since 1982, contracting at a 3.8 per cent annual pace, the Commerce Department said on Jan 30.
The US had 130.8 million housing units in the fourth quarter, including 2.23 million empty homes that were for sale, the Census Bureau report said.
The vacancy rate was 3.5 per cent in urban areas and 2.6 per cent in suburbs, the report said.
In addition, the report counted 4.1 million vacant homes for rent and 4.8 million seasonal properties.
'Wealth loss and housing in combination with loss in the equity market will have ripple effects,' said George Mokrzan, senior economist at Huntington National Bank in Columbus, Ohio.
'The silver lining is that while home prices are coming down, incomes have stayed about the same, and in a lot of markets we'll hit equilibrium this year. That's a good sign for the long term.' - Bloomberg
Washington looking at ways to stem the tide of foreclosures
(BOSTON) A record 19 million US houses stood empty at the end of 2008, including properties for sale and for rent, as banks seized homes faster than they could sell them and prices continued to fall.
Bleak house: The worst US housing slump since the Great Depression is deepening as foreclosures drain value from neighbouring homes and make it more likely that owners will walk away from properties worth less than their mortgagesVacant homes in the fourth quarter increased by 6.7 per cent from the same period a year ago, the US Census Bureau said in a report on Tuesday.
The share of empty homes that are for sale, the so-called vacancy rate, rose to 2.9 per cent in the quarter, the most in data that goes back to 1956.
The worst US housing slump since the Great Depression is deepening as foreclosures drain value from neighbouring homes and make it more likely that owners will walk away from properties worth less than their mortgages.
About a third of owners whose home values drop 20 per cent or more below their loan principal will 'hand the keys back to the bank', said Norm Miller, director of real estate programmes for the School of Business Administration at the University of San Diego.
'When you're underwater and prices continue to fall, you tend to walk,' Mr Miller said. 'It's a downward spiral that's tough to stop because it feeds on itself. Foreclosures encourage other foreclosures and falling prices discourage buying.'
The figures demonstrate the intensity of the US housing crisis as President Barack Obama considers ways to help homeowners.
The Obama administration is considering government guarantees for home loans, seeking to stem the record surge of foreclosures that's hammering US property values.
The proposal, which may also have taxpayers share in the cost of reducing mortgage payments, is aimed at shielding lenders from default after they loosen loan terms for struggling borrowers.
Comptroller of the Currency John Dugan, who regulates national banks, said on Monday that 'working out the details of it is still something that's ongoing'.
Congress and the new president are grappling with how to repair the housing market as the recession enters its second year and unemployment rises. The US economy shrank the most in the fourth quarter since 1982, contracting at a 3.8 per cent annual pace, the Commerce Department said on Jan 30.
The US had 130.8 million housing units in the fourth quarter, including 2.23 million empty homes that were for sale, the Census Bureau report said.
The vacancy rate was 3.5 per cent in urban areas and 2.6 per cent in suburbs, the report said.
In addition, the report counted 4.1 million vacant homes for rent and 4.8 million seasonal properties.
'Wealth loss and housing in combination with loss in the equity market will have ripple effects,' said George Mokrzan, senior economist at Huntington National Bank in Columbus, Ohio.
'The silver lining is that while home prices are coming down, incomes have stayed about the same, and in a lot of markets we'll hit equilibrium this year. That's a good sign for the long term.' - Bloomberg
Million-Dollar California Home Sales Hit A Low
Source : The Business Times, February 5, 2009
(LOS ANGELES) The number of California homes sold for US$1 million or more plunged to a five-year low in 2008 as banks tightened lending, data provider MDA DataQuick said here on Tuesday.
A total of 24,436 homes in California sold for at least US$1 million last year, down 43 per cent from 2007, San Diego- based MDA DataQuick said in a statement. It was the lowest sales count for million-dollar homes in the state since 2003.
'A lot of home sales in the upper half of the market have been on hold for months, waiting for financing,' MDA DataQuick president John Walsh said in the statement.
The drop in high-end home transactions came amid a 2.6 per cent increase in sales for California homes overall in 2008. That gain was driven by sales in less expensive parts of the state, where foreclosures dominate real estate transactions.
Homes that sold for US$1 million or more represented 6.2 per cent of all California home transactions last year. Of last year's sub-US$1 million home sales, at least 2,052 homes had previously sold for more than US$1 million, said MDA DataQuick, a unit of Richmond, British Columbia-based MacDonald, Dettwiler & Associates Ltd.
Throughout California, there were 608 home sales for more than US$5 million last year, while 386 sales were in the range of US$4 million to US$5 million, and 963 were US$3 million to US$4 million.
The number of homes sold for more than US$5 million reached a record last year, rising 7.6 per cent from 2007, MDA DataQuick said. Buyers of more than half of those homes paid in cash.
The drop in sales of high-end California homes came as mortgages were harder to get. About 45 per cent of respondents in a Federal Reserve Board survey of senior loan officers said they had tightened their lending standards on prime mortgages over the previous three months, and almost half of the 25 banks that offer non-traditional residential mortgages said they tightened standards on such loans, the board said last month.
The California statistics include home sales where public records showed there were a buyer and a seller, money changed hands, and ownership of property was legally transferred, MDA DataQuick said. The company compiles its surveys using county records and supplies real estate information to customers including public agencies, lenders and title companies.
The most expensive confirmed purchase last year was an 11,407 square foot home in the Los Angeles enclave of Bel Air, MDA DataQuick said. The six-bedroom, 10-bathroom house, built in 1926, sold for US$38 million last October.
The largest California home sold last year was a 20,000 sq ft house with four bedrooms and eight bathrooms in Orange County's Corona del Mar area. While the sale price wasn't available, public records show the April purchase was financed with a US$17.6 million mortgage, MDA DataQuick said.
The median-sized million-dollar home sold in California last year was 2,494 sq ft and had four bedrooms and three bathrooms. The median price per sq ft for all US$1 million-plus houses was US$569, down 3.3 per cent from 2007, MDA DataQuick said. Newly built homes accounted for 2,933 of last year's high-end home sales, down 53 per cent from 2007.
California, the most populous US state, has 8.51 million homes. Of those, 254,745, or 3 per cent, are valued at more than US$1 million by county assessor offices, MDA DataQuick said.
Last year, 5,243 notices of default, the first step of the foreclosure process, were recorded on homes that had sold for US$1 million or more. The actual losses of such homes to foreclosure totalled 1,612. -- Bloomberg
(LOS ANGELES) The number of California homes sold for US$1 million or more plunged to a five-year low in 2008 as banks tightened lending, data provider MDA DataQuick said here on Tuesday.
A total of 24,436 homes in California sold for at least US$1 million last year, down 43 per cent from 2007, San Diego- based MDA DataQuick said in a statement. It was the lowest sales count for million-dollar homes in the state since 2003.
'A lot of home sales in the upper half of the market have been on hold for months, waiting for financing,' MDA DataQuick president John Walsh said in the statement.
The drop in high-end home transactions came amid a 2.6 per cent increase in sales for California homes overall in 2008. That gain was driven by sales in less expensive parts of the state, where foreclosures dominate real estate transactions.
Homes that sold for US$1 million or more represented 6.2 per cent of all California home transactions last year. Of last year's sub-US$1 million home sales, at least 2,052 homes had previously sold for more than US$1 million, said MDA DataQuick, a unit of Richmond, British Columbia-based MacDonald, Dettwiler & Associates Ltd.
Throughout California, there were 608 home sales for more than US$5 million last year, while 386 sales were in the range of US$4 million to US$5 million, and 963 were US$3 million to US$4 million.
The number of homes sold for more than US$5 million reached a record last year, rising 7.6 per cent from 2007, MDA DataQuick said. Buyers of more than half of those homes paid in cash.
The drop in sales of high-end California homes came as mortgages were harder to get. About 45 per cent of respondents in a Federal Reserve Board survey of senior loan officers said they had tightened their lending standards on prime mortgages over the previous three months, and almost half of the 25 banks that offer non-traditional residential mortgages said they tightened standards on such loans, the board said last month.
The California statistics include home sales where public records showed there were a buyer and a seller, money changed hands, and ownership of property was legally transferred, MDA DataQuick said. The company compiles its surveys using county records and supplies real estate information to customers including public agencies, lenders and title companies.
The most expensive confirmed purchase last year was an 11,407 square foot home in the Los Angeles enclave of Bel Air, MDA DataQuick said. The six-bedroom, 10-bathroom house, built in 1926, sold for US$38 million last October.
The largest California home sold last year was a 20,000 sq ft house with four bedrooms and eight bathrooms in Orange County's Corona del Mar area. While the sale price wasn't available, public records show the April purchase was financed with a US$17.6 million mortgage, MDA DataQuick said.
The median-sized million-dollar home sold in California last year was 2,494 sq ft and had four bedrooms and three bathrooms. The median price per sq ft for all US$1 million-plus houses was US$569, down 3.3 per cent from 2007, MDA DataQuick said. Newly built homes accounted for 2,933 of last year's high-end home sales, down 53 per cent from 2007.
California, the most populous US state, has 8.51 million homes. Of those, 254,745, or 3 per cent, are valued at more than US$1 million by county assessor offices, MDA DataQuick said.
Last year, 5,243 notices of default, the first step of the foreclosure process, were recorded on homes that had sold for US$1 million or more. The actual losses of such homes to foreclosure totalled 1,612. -- Bloomberg
Former School Put Up For Rent
Source : The Business Times, February 5, 2009
The Singapore Land Authority (SLA) has launched the former Siglap Primary School for rent by public tender.
The 2,258 sq m property at 10 LaSalle St has a guide rent of $42,900, which works out to $1.77 psf.
Approved uses for the site include commercial, privately funded and foreign schools, arts/dance/ drama studios and child- care or kindergarten.
SLA has received enquiries from 10 interested parties. The director of its land operations (private) division, Teo Cher Hian, said: 'Based on the favourable response to our recent tenders for sites with a commercial school as an approved use, we have reason to believe this site will be similarly well received, despite current economic conditions.'
Last year, two properties were awarded for education-related use. And in 2007, eight properties were awarded for such use.
Schools that have rented from SLA include Dimensions Commercial School, Westminster Unicampus, EASB Institute of Management, JCU Singapore, Canadian International School and Curtin University.
In January, Cambridge Institute put in the top bid for the former Mee Toh School in Race Course Road. It hopes to use the building to conduct diploma and tertiary courses.
Siglap Primary School is being offered on a three- year lease with an option to renew for a further three years, then a further two years.
The Singapore Land Authority (SLA) has launched the former Siglap Primary School for rent by public tender.
The 2,258 sq m property at 10 LaSalle St has a guide rent of $42,900, which works out to $1.77 psf.
Approved uses for the site include commercial, privately funded and foreign schools, arts/dance/ drama studios and child- care or kindergarten.
SLA has received enquiries from 10 interested parties. The director of its land operations (private) division, Teo Cher Hian, said: 'Based on the favourable response to our recent tenders for sites with a commercial school as an approved use, we have reason to believe this site will be similarly well received, despite current economic conditions.'
Last year, two properties were awarded for education-related use. And in 2007, eight properties were awarded for such use.
Schools that have rented from SLA include Dimensions Commercial School, Westminster Unicampus, EASB Institute of Management, JCU Singapore, Canadian International School and Curtin University.
In January, Cambridge Institute put in the top bid for the former Mee Toh School in Race Course Road. It hopes to use the building to conduct diploma and tertiary courses.
Siglap Primary School is being offered on a three- year lease with an option to renew for a further three years, then a further two years.
First Phase Of Caspian Going For $580 PSF Average
Source : The Business Times, February 5, 2009
Frasers Centrepoint is pricing the first phase of its 99-year leasehold Caspian condo next to Lakeside MRT Station in Jurong at an average of $580 per square foot after discount for buyers who opt for normal progress payments.
Priced to sell: Analysts reckon that Frasers Centrepoint may barely be making money, based on the first-phase pricing. The project will have 712 units and is coming up on a site that was bought for $248 psf per plot ratio
Those who choose the developer's interest absorption scheme will pay 3 per cent more, or an average price of about $598 psf.
The pricing for the 250 units, which are spread across the project, is considered competitive and reflects Frasers Centrepoint's strategy of pricing to sell in the current recession.
Next to Caspian, units at Lakeholmz, which was completed four years ago and also developed by Frasers Centrepoint, are selling at about $600 psf on average in the resale market.
Further away, units at The Lakeshore are fetching about $750 psf on average and developer Far East Organization is understood to have held back some choice units facing Jurong Lake, presumably for sale later to ride on the government's plans for the district.
Frasers Centrepoint is optimistic of good take-up for Caspian. 'We've received strong interest from prospective owner-occupiers and even investors, who are now more keen to invest in brick-and-mortar property than risky financial instruments, especially if the property has a great potential upside to it,' said Frasers Centrepoint Homes chief operating officer Cheang Kok Kheong yesterday.
'Potential buyers will see Caspian's price range as attractive and offering value for money.'
The project will have 712 units in total and is coming up on a site that Frasers Centrepoint bought in late 2007 for $248 psf per plot ratio. Analysts reckon that Frasers Centrepoint may barely be making money, based on the first-phase pricing.
BT understands that the project's private preview is slated for tomorrow, to be followed by the public preview over the weekend.
'The idea is probably to raise prices for the later phases to turn in a profit for the overall project,' a market watcher said.
For the first phase, prices of typical two-bedroom to four-bedroom (with study) units range from $540 psf to $640 psf. The average price for a studio unit is about $350,000.
Frasers Centrepoint is pricing the first phase of its 99-year leasehold Caspian condo next to Lakeside MRT Station in Jurong at an average of $580 per square foot after discount for buyers who opt for normal progress payments.
Priced to sell: Analysts reckon that Frasers Centrepoint may barely be making money, based on the first-phase pricing. The project will have 712 units and is coming up on a site that was bought for $248 psf per plot ratioThose who choose the developer's interest absorption scheme will pay 3 per cent more, or an average price of about $598 psf.
The pricing for the 250 units, which are spread across the project, is considered competitive and reflects Frasers Centrepoint's strategy of pricing to sell in the current recession.
Next to Caspian, units at Lakeholmz, which was completed four years ago and also developed by Frasers Centrepoint, are selling at about $600 psf on average in the resale market.
Further away, units at The Lakeshore are fetching about $750 psf on average and developer Far East Organization is understood to have held back some choice units facing Jurong Lake, presumably for sale later to ride on the government's plans for the district.
Frasers Centrepoint is optimistic of good take-up for Caspian. 'We've received strong interest from prospective owner-occupiers and even investors, who are now more keen to invest in brick-and-mortar property than risky financial instruments, especially if the property has a great potential upside to it,' said Frasers Centrepoint Homes chief operating officer Cheang Kok Kheong yesterday.
'Potential buyers will see Caspian's price range as attractive and offering value for money.'
The project will have 712 units in total and is coming up on a site that Frasers Centrepoint bought in late 2007 for $248 psf per plot ratio. Analysts reckon that Frasers Centrepoint may barely be making money, based on the first-phase pricing.
BT understands that the project's private preview is slated for tomorrow, to be followed by the public preview over the weekend.
'The idea is probably to raise prices for the later phases to turn in a profit for the overall project,' a market watcher said.
For the first phase, prices of typical two-bedroom to four-bedroom (with study) units range from $540 psf to $640 psf. The average price for a studio unit is about $350,000.
Study Shows Jurong Turning Into Suburban Property Hotspot
Source : Channel NewsAsia, 04 February 2009
A study by real estate agency ERA has shown that the resale prices of Housing and Development Board (HDB) flats in Jurong appreciated faster than other suburban towns in Singapore.
Artist's impression of Lakeside Village, Jurong Lake District
It compared median resale prices in the fourth quarter of 2008 to those in the first quarter of the same year.
The study covered three- to five-room, and executive flats in Jurong West, Tampines and Woodlands.
The comparison showed that resale prices of three-room flats in Jurong West went up by 19.4 per cent between the first and fourth quarters of last year. This was higher than the 12.3 per cent increase in Tampines and 15.7 per cent for Woodlands.
Resale prices for larger four- and five-room units also appreciated faster by 14.1 per cent and 9.4 per cent respectively.
In contrast, resale prices of four-room flats in Tampines rose by just 8.6 per cent and 12 per cent in Woodlands. Resale prices of five-room units grew by 1.3 per cent in Tampines and 9.4 per cent in Woodlands.
Resale prices of executive flats in Jurong West went up by 16 per cent or about three times more than those in Tampines and Woodlands.
ERA said the faster rate of increase in HDB resale prices in Jurong was partly due to the government's plan to transform Jurong Lake District into a commercial and leisure hub over the next 10 to 15 years. - CNA/vm
A study by real estate agency ERA has shown that the resale prices of Housing and Development Board (HDB) flats in Jurong appreciated faster than other suburban towns in Singapore.
Artist's impression of Lakeside Village, Jurong Lake DistrictIt compared median resale prices in the fourth quarter of 2008 to those in the first quarter of the same year.
The study covered three- to five-room, and executive flats in Jurong West, Tampines and Woodlands.
The comparison showed that resale prices of three-room flats in Jurong West went up by 19.4 per cent between the first and fourth quarters of last year. This was higher than the 12.3 per cent increase in Tampines and 15.7 per cent for Woodlands.
Resale prices for larger four- and five-room units also appreciated faster by 14.1 per cent and 9.4 per cent respectively.
In contrast, resale prices of four-room flats in Tampines rose by just 8.6 per cent and 12 per cent in Woodlands. Resale prices of five-room units grew by 1.3 per cent in Tampines and 9.4 per cent in Woodlands.
Resale prices of executive flats in Jurong West went up by 16 per cent or about three times more than those in Tampines and Woodlands.
ERA said the faster rate of increase in HDB resale prices in Jurong was partly due to the government's plan to transform Jurong Lake District into a commercial and leisure hub over the next 10 to 15 years. - CNA/vm
Decision On Gillman Heights' En Bloc Sale Expected On Wednesday
Source : Channel NewsAsia, Posted: 03 February 2009
Residents of Gillman Heights condominium could learn by Wednesday if the S$548 million collective sale of their estate - to CapitaLand, Hotel Properties and two private funds - will go ahead.
That is when the Court of Appeal is expected to decide whether the law governing collective sales should have applied to former Housing and Urban Development Corporation (HUDC) estates, such as Gillman Heights, prior to last year's amendments.
And if so, what date should be used to determine the age of the condominium for the purpose of deciding whether 80 or 90 per cent of the owners need to consent to the en bloc sale.
About 87 per cent of owners had consented to the collective sale.
Last June, ten minority owners had unsuccessfully appealed in the High Court against the Strata Titles Board's decision to allow the sale to proceed.
Representing them, Senior Counsel Michael Hwang argued in the Court of Appeal on Tuesday that the sale needed 90 per cent consent since the estate only received its Certificate of Statutory Completion in 2002.
Lawyer for the purchasers, Senior Counsel Andre Yeap, disagreed, saying that the development was much older as it had been completed in the mid-eighties.
Chief Justice Chan Sek Keong, Judges of Appeal Justice Andrew Phang and Justice V K Rajah are expected to deliver their judgement on Wednesday afternoon. - CNA/vm
Residents of Gillman Heights condominium could learn by Wednesday if the S$548 million collective sale of their estate - to CapitaLand, Hotel Properties and two private funds - will go ahead.
That is when the Court of Appeal is expected to decide whether the law governing collective sales should have applied to former Housing and Urban Development Corporation (HUDC) estates, such as Gillman Heights, prior to last year's amendments. And if so, what date should be used to determine the age of the condominium for the purpose of deciding whether 80 or 90 per cent of the owners need to consent to the en bloc sale.
About 87 per cent of owners had consented to the collective sale.
Last June, ten minority owners had unsuccessfully appealed in the High Court against the Strata Titles Board's decision to allow the sale to proceed.
Representing them, Senior Counsel Michael Hwang argued in the Court of Appeal on Tuesday that the sale needed 90 per cent consent since the estate only received its Certificate of Statutory Completion in 2002.
Lawyer for the purchasers, Senior Counsel Andre Yeap, disagreed, saying that the development was much older as it had been completed in the mid-eighties.
Chief Justice Chan Sek Keong, Judges of Appeal Justice Andrew Phang and Justice V K Rajah are expected to deliver their judgement on Wednesday afternoon. - CNA/vm
Gillman Heights: Final Bid By 10 Owners To End Transaction
Source : The Straits Times, Feb 4, 2009
A LAST-DITCH attempt by 10 minority owners of units in former HUDC estate Gillman Heights to stop its collective sale was heard by the Court of Appeal yesterday.
Gillman Heights owners stand to reap about $870,000 to $950,000 per unit from the sale. -- PHOTO: CAPITALAND
This appeal is the last recourse for the owners who have fought the $548 million sale at every turn since it was approved by the Strata Titles Board (STB) in 2007. Some owners had appealed against STB's decision previously in the High Court, but this was dismissed by Justice Choo Han Teck last June.
The fate of the 607-unit, 99-year leasehold estate at Alexandra Road will be sealed today, as the judges are due to make a ruling at 4.30pm.
Senior Counsel Michael Hwang, engaged by law firm Tan Chin Hoe & Co to act for the 10 minority owners, argued yesterday that collective sale laws introduced in 1999 by Parliament had not been intended to cover HUDC estates.
Another point of contention at the hearing was the date used to calculate the age of the development. This determines if the estate needed an 80 or 90 per cent level of consent to be sold en bloc.
Currently, 80 per cent is needed if the development is more than 10 years old, 90 per cent if it is less than that.
Mr Hwang argued in the packed courtroom that because Gillman Heights obtained its certificate of statutory completion only in 2002, it needed 90 per cent. Currently, about 87.54 per cent of owners have signed the collective sale agreement.
Representing the majority owners, Mr Quek Mong Hua of Lee & Lee said, however, that it was an 'indisputable fact' that Gillman Heights was completed in 1984, making it more than 22 years old in 2007.
Senior Counsel Andre Yeap of Rajah & Tann, acting for the purchasers - CapitaLand, Hotel Properties and two private funds - argued that as homes in HUDC estates, upon privatisation, become strata-titled units, they are covered by the 1999 laws on collective sales.
Analysts that The Straits Times spoke to said the $548 million price tag is 'more attractive now than before' given the current market situation.
Owners stand to reap about $870,000 to $950,000 per unit from the sale. Chesterton Suntec International's Mr Colin Tan said that the current market favours the sellers, while buyers CapitaLand might have to put redevelopment plans on hold.
For some owners at the estate, however, it was never a question of money. One said at the earlier High Court hearing: 'The price was never our problem...You can't find another place like this.'
A LAST-DITCH attempt by 10 minority owners of units in former HUDC estate Gillman Heights to stop its collective sale was heard by the Court of Appeal yesterday.
Gillman Heights owners stand to reap about $870,000 to $950,000 per unit from the sale. -- PHOTO: CAPITALANDThis appeal is the last recourse for the owners who have fought the $548 million sale at every turn since it was approved by the Strata Titles Board (STB) in 2007. Some owners had appealed against STB's decision previously in the High Court, but this was dismissed by Justice Choo Han Teck last June.
The fate of the 607-unit, 99-year leasehold estate at Alexandra Road will be sealed today, as the judges are due to make a ruling at 4.30pm.
Senior Counsel Michael Hwang, engaged by law firm Tan Chin Hoe & Co to act for the 10 minority owners, argued yesterday that collective sale laws introduced in 1999 by Parliament had not been intended to cover HUDC estates.
Another point of contention at the hearing was the date used to calculate the age of the development. This determines if the estate needed an 80 or 90 per cent level of consent to be sold en bloc.
Currently, 80 per cent is needed if the development is more than 10 years old, 90 per cent if it is less than that.
Mr Hwang argued in the packed courtroom that because Gillman Heights obtained its certificate of statutory completion only in 2002, it needed 90 per cent. Currently, about 87.54 per cent of owners have signed the collective sale agreement.
Representing the majority owners, Mr Quek Mong Hua of Lee & Lee said, however, that it was an 'indisputable fact' that Gillman Heights was completed in 1984, making it more than 22 years old in 2007.
Senior Counsel Andre Yeap of Rajah & Tann, acting for the purchasers - CapitaLand, Hotel Properties and two private funds - argued that as homes in HUDC estates, upon privatisation, become strata-titled units, they are covered by the 1999 laws on collective sales.
Analysts that The Straits Times spoke to said the $548 million price tag is 'more attractive now than before' given the current market situation.
Owners stand to reap about $870,000 to $950,000 per unit from the sale. Chesterton Suntec International's Mr Colin Tan said that the current market favours the sellers, while buyers CapitaLand might have to put redevelopment plans on hold.
For some owners at the estate, however, it was never a question of money. One said at the earlier High Court hearing: 'The price was never our problem...You can't find another place like this.'
Horizon Towers: 2-Year Battle To Kill Deal Will End On Friday
Source : The Straits Times, Feb 4, 2009
ONE of the most protracted en-bloc sale disputes in years entered its final act yesterday when dissenters of the Horizon Towers deal opened their last-ditch court bid to kill the deal.
Horizon Towers was sold at just under $850 psf. An analyst says the $500m tag remains reasonable. -- ST FILE PHOTO
The four owners want the Court of Appeal to throw out a decision handed down last July that backed the $500 million sale of the property to Hotel Properties (HPL) and its partners, Morgan Stanley Real Estate and Qatar Investment Authority.
Objectors have been fighting for two years to have the deal overturned - a battle that has ridden right through the market slump, its boom and now back into the downcycle.
Their key objection is the loss of their homes, particularly at what they see as a giveaway price and by a process they feel was badly handled.
Owner Rudy Darmawan, who is representing himself in court, told the judges: 'I am here because I want to protect my home.'
Retiree Vincent Wong, 65, said: 'We are not here to profit...We are really fighting for our homes.'
The saga began in January 2007 when the majority owners accepted a price of just under $850 per sq ft (psf) of gross floor area for the 99-year leasehold estate in Leonie Hill. The 199 apartment owners would each have pocketed about $2.3 million while the 11 penthouse owners would have received at least $4 million each.
But when the property market began climbing after the deal was signed, many owners believed their $500 million reserve price was too low.
A series of court challenges culminated last July when the High Court dismissed a contention by sale objectors that the deal had been done in bad faith.
Yesterday, the objectors again argued that point during a hearing involving Senior Counsel. They said a higher offer of $510 million from Hong Kong firm Vineyard Holdings was not taken seriously.
About 50 people, including residents and HPL executive director Christopher Lim, were in the gallery.
The court will hand down its judgment on Friday.
HPL has just obtained provisional permission to turn the Horizon Towers site into 253 flats and eight detached houses.
So far, its sale price has held up. Credo Real Estate executive director Tan Hong Boon believes the $500 million price tag remains reasonable - at least as far as the buyer is concerned.
'They can break even at $1,300 to $1,400 psf and are still able to make a profit when the market recovers,' he said.
ONE of the most protracted en-bloc sale disputes in years entered its final act yesterday when dissenters of the Horizon Towers deal opened their last-ditch court bid to kill the deal.
Horizon Towers was sold at just under $850 psf. An analyst says the $500m tag remains reasonable. -- ST FILE PHOTOThe four owners want the Court of Appeal to throw out a decision handed down last July that backed the $500 million sale of the property to Hotel Properties (HPL) and its partners, Morgan Stanley Real Estate and Qatar Investment Authority.
Objectors have been fighting for two years to have the deal overturned - a battle that has ridden right through the market slump, its boom and now back into the downcycle.
Their key objection is the loss of their homes, particularly at what they see as a giveaway price and by a process they feel was badly handled.
Owner Rudy Darmawan, who is representing himself in court, told the judges: 'I am here because I want to protect my home.'
Retiree Vincent Wong, 65, said: 'We are not here to profit...We are really fighting for our homes.'
The saga began in January 2007 when the majority owners accepted a price of just under $850 per sq ft (psf) of gross floor area for the 99-year leasehold estate in Leonie Hill. The 199 apartment owners would each have pocketed about $2.3 million while the 11 penthouse owners would have received at least $4 million each.
But when the property market began climbing after the deal was signed, many owners believed their $500 million reserve price was too low.
A series of court challenges culminated last July when the High Court dismissed a contention by sale objectors that the deal had been done in bad faith.
Yesterday, the objectors again argued that point during a hearing involving Senior Counsel. They said a higher offer of $510 million from Hong Kong firm Vineyard Holdings was not taken seriously.
About 50 people, including residents and HPL executive director Christopher Lim, were in the gallery.
The court will hand down its judgment on Friday.
HPL has just obtained provisional permission to turn the Horizon Towers site into 253 flats and eight detached houses.
So far, its sale price has held up. Credo Real Estate executive director Tan Hong Boon believes the $500 million price tag remains reasonable - at least as far as the buyer is concerned.
'They can break even at $1,300 to $1,400 psf and are still able to make a profit when the market recovers,' he said.
Developers Will Cut, But Not Slash, Rents
Source : The Straits Times, Feb 3, 2009
THE head of a developers' association yesterday urged commercial tenants here not to expect steep rental cuts from their landlords.
Some tenants at retail outlets are asking for cuts of up to 40 per cent amid a spending slump.
Acting Manpower Minister Gan Kim Yong (right) receiving oranges at the lunch. With him are Malaysia's Real Estate and Housing Developers' Association president Ng Seing Liong (left) and Mr Simon Cheong. -- ST PHOTO: SHAHRIYA YAHAYA
But Mr Simon Cheong, president of the Real Estate Developers Association of Singapore (Redas), has asked tenants to be reasonable in their demands.
He was speaking at a Chinese New Year lo-hei lunch held at The Ritz-Carlton Millenia Singapore hotel.
He said many Redas members have already said that they intend to pass on a 40 per cent property tax rebate to their tenants.
This rebate to owners of commercial and industrial properties is part of the Government's $20.5 billion resilience package unveiled in the Budget.
Mr Chia Ngiang Hong, group general manager of City Developments - which owns malls such as Chinatown Point and Palais Renaissance - said the company will soon decide on how much savings to pass on to their tenants.
'We only ask that tenants be reasonable,' said Mr Cheong. Requests for a large sudden reduction in rentals are 'neither realistic nor sustainable for building owners in the long run', he said.
Developers say the total savings that will result from the tax rebate are far less than the 40 per cent cuts being sought.
CapitaMall Trust, which has noted a weakening in discretionary spending late last year, has said it is passing on all its $41.5 million tax rebate to tenants, which could translate into a 4 per cent rent cut.
'The retailers will always ask for more (cuts) but as I have explained, the average portfolio increase (in annual base rent for the past six years) is only 3 per cent,' CapitaLand president and chief executive Liew Mun Leong told reporters.
'If you are asking for a 30 to 40 per cent cut...you are not being realistic...It cannot be that you can survive, I cannot survive. It's not balanced,' he said.
'We spent $600 million on the malls in the past six years. Every year, I spend $100 million on improving the malls but the service level is what will generate better sales...The Government must train our service staff,' he added.
Mr Cheong said that last year had been worse than anticipated. He said Redas understands that retaining jobs is a key objective of the Budget.
'Without jobs, not only will our malls be affected but there will also be less income to service loans to buy our houses.'
Frasers Centrepoint chief executive Lim Ee Seng yesterday said that, for a start, the company will pass on all its tax savings to tenants.
There is currently no need for the company to offer any additional rent reductions but it will review the situation should the need arise, he added.
Analysts say landlords are in an awkward position this downturn. Existing tenants have asked for rental rebates to cope with the tough times. Industry sources say tenants signing up to lease space at yet-to-open malls are busy renegotiating their rents. Already, some potential tenants have pulled out of these malls, fearing a lack of business due to the weak economic climate, they add.
THE head of a developers' association yesterday urged commercial tenants here not to expect steep rental cuts from their landlords.
Some tenants at retail outlets are asking for cuts of up to 40 per cent amid a spending slump.
Acting Manpower Minister Gan Kim Yong (right) receiving oranges at the lunch. With him are Malaysia's Real Estate and Housing Developers' Association president Ng Seing Liong (left) and Mr Simon Cheong. -- ST PHOTO: SHAHRIYA YAHAYABut Mr Simon Cheong, president of the Real Estate Developers Association of Singapore (Redas), has asked tenants to be reasonable in their demands.
He was speaking at a Chinese New Year lo-hei lunch held at The Ritz-Carlton Millenia Singapore hotel.
He said many Redas members have already said that they intend to pass on a 40 per cent property tax rebate to their tenants.
This rebate to owners of commercial and industrial properties is part of the Government's $20.5 billion resilience package unveiled in the Budget.
Mr Chia Ngiang Hong, group general manager of City Developments - which owns malls such as Chinatown Point and Palais Renaissance - said the company will soon decide on how much savings to pass on to their tenants.
'We only ask that tenants be reasonable,' said Mr Cheong. Requests for a large sudden reduction in rentals are 'neither realistic nor sustainable for building owners in the long run', he said.
Developers say the total savings that will result from the tax rebate are far less than the 40 per cent cuts being sought.
CapitaMall Trust, which has noted a weakening in discretionary spending late last year, has said it is passing on all its $41.5 million tax rebate to tenants, which could translate into a 4 per cent rent cut.
'The retailers will always ask for more (cuts) but as I have explained, the average portfolio increase (in annual base rent for the past six years) is only 3 per cent,' CapitaLand president and chief executive Liew Mun Leong told reporters.
'If you are asking for a 30 to 40 per cent cut...you are not being realistic...It cannot be that you can survive, I cannot survive. It's not balanced,' he said.
'We spent $600 million on the malls in the past six years. Every year, I spend $100 million on improving the malls but the service level is what will generate better sales...The Government must train our service staff,' he added.
Mr Cheong said that last year had been worse than anticipated. He said Redas understands that retaining jobs is a key objective of the Budget.
'Without jobs, not only will our malls be affected but there will also be less income to service loans to buy our houses.'
Frasers Centrepoint chief executive Lim Ee Seng yesterday said that, for a start, the company will pass on all its tax savings to tenants.
There is currently no need for the company to offer any additional rent reductions but it will review the situation should the need arise, he added.
Analysts say landlords are in an awkward position this downturn. Existing tenants have asked for rental rebates to cope with the tough times. Industry sources say tenants signing up to lease space at yet-to-open malls are busy renegotiating their rents. Already, some potential tenants have pulled out of these malls, fearing a lack of business due to the weak economic climate, they add.
Frasers Centrepoint Previewing Caspian Soon
Source : The Business Times, February 4, 2009
Average price of low to mid-$600 psf and interest absorption expected
DEVELOPERS of at least two residential projects will be testing the market with previews soon, offering interest absorption schemes that mimic the old Deferred Payment Scheme (DPS).
First off the mark will be Frasers Centrepoint, which will begin to preview later this week its Caspian condo, a 99-year-leasehold project next to Lakeside MRT Station. The price is expected to be in the 'low to mid-$600 per square foot range' on average, to appeal to HDB upgraders.
Over at the corner of Alexandra Road and Commonwealth Avenue, Yi Kai Development and Fission Group are also expected to begin previews soon for Alexis @ Alexandra, a 293-unit freehold project comprising mostly smallish units of one and two bedders. The average pricing is tipped at above $1,000 psf. One-bedroom apartments will be priced at below $500,000. The development is near Queenstown MRT Station.
Developers of both projects have tied up with United Overseas Bank (UOB) to offer an interest absorption scheme (IAS), which, like the now-scrapped DPS, eases cash flow for buyers, as they do not make any payments beyond an initial downpayment until the project receives the Temporary Occupation Permit (TOP). This is expected to be around 2012 for both projects.
IAS buyers will have to sign up immediately for mortgages with UOB and make a 20 per cent downpayment using cash and CPF savings. UOB will pay progress billings during the projects' construction to the respective developers.
Buyers will not service the principal amount of the loan while the projects are being built, as UOB will defer collection on the principal during this period.
Collection of the interest will not be deferred; however, this will be serviced or absorbed by the developer on behalf of its buyers.
After the project receives TOP, the buyer will have to start servicing both principal and interest.
Property agents say typically, those who buy on IAS pay about 3 per cent more on the purchase price of the property than buyers who make normal progress payments.
This price differential is similar to the 3-5 per cent premium that DPS buyers used to pay compared with purchasers who opted for the normal progress payment scheme.
However, market watchers say the good thing about IAS is that buyers have to secure a housing loan at the outset from the bank, and this entails a mandatory credit-assessment of the buyer. This would weed out poor-quality borrowers dabbling in properties beyond their means, something DPS has been criticised for.
Frasers Centrepoint's Caspian, near Jurong Lake, will have a total of 712 units housed in 11 blocks, all 17 storeys high. Units range from studios to four bedders with study rooms.
The development is next to the group's Lakeholmz condo.
Market watchers note that the low to mid-$600 psf average price said to be targeted by Frasers Centrepoint is lower than the average of about $750 psf at which units in The Lakeshore, a completed development nearby, have been selling at in recent months.
'However, Caspian is a new launch with over 700 units and they have to price it more affordably if they want to attract HDB upgraders and investors in today's recessionary climate,' an analyst said.
Average price of low to mid-$600 psf and interest absorption expected
DEVELOPERS of at least two residential projects will be testing the market with previews soon, offering interest absorption schemes that mimic the old Deferred Payment Scheme (DPS).
First off the mark will be Frasers Centrepoint, which will begin to preview later this week its Caspian condo, a 99-year-leasehold project next to Lakeside MRT Station. The price is expected to be in the 'low to mid-$600 per square foot range' on average, to appeal to HDB upgraders.
Over at the corner of Alexandra Road and Commonwealth Avenue, Yi Kai Development and Fission Group are also expected to begin previews soon for Alexis @ Alexandra, a 293-unit freehold project comprising mostly smallish units of one and two bedders. The average pricing is tipped at above $1,000 psf. One-bedroom apartments will be priced at below $500,000. The development is near Queenstown MRT Station.
Developers of both projects have tied up with United Overseas Bank (UOB) to offer an interest absorption scheme (IAS), which, like the now-scrapped DPS, eases cash flow for buyers, as they do not make any payments beyond an initial downpayment until the project receives the Temporary Occupation Permit (TOP). This is expected to be around 2012 for both projects.
IAS buyers will have to sign up immediately for mortgages with UOB and make a 20 per cent downpayment using cash and CPF savings. UOB will pay progress billings during the projects' construction to the respective developers.
Buyers will not service the principal amount of the loan while the projects are being built, as UOB will defer collection on the principal during this period.
Collection of the interest will not be deferred; however, this will be serviced or absorbed by the developer on behalf of its buyers.
After the project receives TOP, the buyer will have to start servicing both principal and interest.
Property agents say typically, those who buy on IAS pay about 3 per cent more on the purchase price of the property than buyers who make normal progress payments.
This price differential is similar to the 3-5 per cent premium that DPS buyers used to pay compared with purchasers who opted for the normal progress payment scheme.
However, market watchers say the good thing about IAS is that buyers have to secure a housing loan at the outset from the bank, and this entails a mandatory credit-assessment of the buyer. This would weed out poor-quality borrowers dabbling in properties beyond their means, something DPS has been criticised for.
Frasers Centrepoint's Caspian, near Jurong Lake, will have a total of 712 units housed in 11 blocks, all 17 storeys high. Units range from studios to four bedders with study rooms.
The development is next to the group's Lakeholmz condo.
Market watchers note that the low to mid-$600 psf average price said to be targeted by Frasers Centrepoint is lower than the average of about $750 psf at which units in The Lakeshore, a completed development nearby, have been selling at in recent months.
'However, Caspian is a new launch with over 700 units and they have to price it more affordably if they want to attract HDB upgraders and investors in today's recessionary climate,' an analyst said.
Developers Still Want Demand-Side Measures
Source : The Business Times, February 3, 2009
Developers are still hoping for demand-side government measures to boost the property market.
When the government unveiled its 2009 Budget on Jan 22, it introduced supply-side measures aiming to prop up home prices by reducing the number of new homes on the market.
Ushering in a better year: (from left) Mr Cheong, president of Redas; Gan Kim Yong, Acting Minister for Manpower; and Liew Mun Leong, CEO of CapitaLand Ltd at the Redas Spring Festival lunch held at the Ritz-Carlton Millenia yesterday
To make it easier for developers to hold back some projects in these weak market conditions, the government deferred property tax for land approved for development for two years or until the project attains its temporary occupation permit (TOP) - whichever is earlier. The time developers are given to complete private residential projects will also be extended by one year.
A property tax rebate of 40 per cent for industrial and commercial properties for 2009 was also given - a move which is expected to reduce developers' operating cost and cash burden.
But supply-side measures alone are not enough to help the property market, a few developers and consultants told BT at the Real Estate Developers Association of Singapore (Redas) Spring Festival lunch yesterday.
'We are still hoping that the government will do something about the stamp duty, and also bring back the DPS (deferred payment scheme) in some way,' a listed developer told BT. Others echoed his views.
Developers want the stamp duty that buyers pay when they purchase a property reduced from about 3 per cent now, and would also like to see the collection of the tax deferred until the project obtains TOP. And bringing back the DPS - under which buyers could make just a 10 per cent downpayment, and pay the rest of the price upon TOP - will also lead to more buying interest, it is hoped.
Developers are expected to go ahead with several large project launches this year. UOL Group, for example, hopes to roll out its mass-market/mid-tier project in Simei, which is estimated to have about 600 units, sometime in the first half of this year. And property firm CB Richard Ellis estimates that another 94 projects are launch-ready.
At the lunch, Redas president Simon Cheong said that Redas stands ready to maintain a continuous dialogue with the government to ensure timely feedback so that the government's various proposals and measures can be effectively implemented.
Mr Cheong also said that many Redas members have informed him that they intend to pass on the 40 per cent property tax rebate to their tenants. 'We however only ask that tenants be reasonable,' he said. 'Requests for substantial reduction in rentals is neither realistic nor sustainable for building owners in the long run.'
Developers are still hoping for demand-side government measures to boost the property market.
When the government unveiled its 2009 Budget on Jan 22, it introduced supply-side measures aiming to prop up home prices by reducing the number of new homes on the market.
Ushering in a better year: (from left) Mr Cheong, president of Redas; Gan Kim Yong, Acting Minister for Manpower; and Liew Mun Leong, CEO of CapitaLand Ltd at the Redas Spring Festival lunch held at the Ritz-Carlton Millenia yesterdayTo make it easier for developers to hold back some projects in these weak market conditions, the government deferred property tax for land approved for development for two years or until the project attains its temporary occupation permit (TOP) - whichever is earlier. The time developers are given to complete private residential projects will also be extended by one year.
A property tax rebate of 40 per cent for industrial and commercial properties for 2009 was also given - a move which is expected to reduce developers' operating cost and cash burden.
But supply-side measures alone are not enough to help the property market, a few developers and consultants told BT at the Real Estate Developers Association of Singapore (Redas) Spring Festival lunch yesterday.
'We are still hoping that the government will do something about the stamp duty, and also bring back the DPS (deferred payment scheme) in some way,' a listed developer told BT. Others echoed his views.
Developers want the stamp duty that buyers pay when they purchase a property reduced from about 3 per cent now, and would also like to see the collection of the tax deferred until the project obtains TOP. And bringing back the DPS - under which buyers could make just a 10 per cent downpayment, and pay the rest of the price upon TOP - will also lead to more buying interest, it is hoped.
Developers are expected to go ahead with several large project launches this year. UOL Group, for example, hopes to roll out its mass-market/mid-tier project in Simei, which is estimated to have about 600 units, sometime in the first half of this year. And property firm CB Richard Ellis estimates that another 94 projects are launch-ready.
At the lunch, Redas president Simon Cheong said that Redas stands ready to maintain a continuous dialogue with the government to ensure timely feedback so that the government's various proposals and measures can be effectively implemented.
Mr Cheong also said that many Redas members have informed him that they intend to pass on the 40 per cent property tax rebate to their tenants. 'We however only ask that tenants be reasonable,' he said. 'Requests for substantial reduction in rentals is neither realistic nor sustainable for building owners in the long run.'
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