Wednesday, June 3, 2009

Condo Tenants Told To Vacate In 3 days

Source : The Straits Times, June 2, 2009

Landlord told a month ago to tear down partitions by June 3 as planning rules breached, but it kept mum

TWO hundred tenants living in 140 apartments in a condominium off Orchard Road were caught off-guard after being told on Sunday night that they have to clear out by tomorrow.

Their landlord, Ideal Accommodation, had known for at least a month that the tenants - a mix of mostly young expatriate and local professionals and college students - would have to leave, but kept the news from them. As a result, many of the tenants are now livid.

Ideal, which had leased The Grangeford condo from Overseas United Enterprise (OUE), had converted 140 apartments into 600 self-contained rooms. It began sub-letting them this year.

Doing so, however, breached planning rules, and on April 29, the Urban Redevelopment Authority (URA) told Ideal that it would have to tear down the partitions by June 3.

However, the company kept mum, and began telling tenants that they had to move out only last week. Even then, not all residents were told. Most found out only on Sunday, when they happened to walk past the property office, or got wind of it from their neighbours.

The affected residents - from places such as the United States, Hong Kong, South Korea, India and Vietnam - had signed tenancy agreements of between six months and a year.

British citizen Bernard Johnson, 23, had a rude shock yesterday when friends living in the same block told him they would have to move out.

'I didn't know what was happening. No notices pasted in the lobby, nothing. If I had not found out from friends, would my belongings have been rudely thrown out?' asked the hotel designer, who is looking for temporary accommodation and has contacted his embassy for help.

The condo building was sold en-bloc to OUE in 2007. However, the company decided to sub-let the building, rather than redevelop the site, because of the deteriorating economic climate.

Ideal spent $3 million to divide up the apartments into smaller units, and rented each out for between $900 and $1,400.

The partitioned units each came equipped with a washing machine, LCD television set and Internet connection.

According to calculations by residents and property agents, dividing an apartment into several units this way can fetch rentals of up to $8,000, compared to about $4,600 if a flat is leased to just one tenant.

The Straits Times has learnt that Ideal's managing director, Mr Tang Yong, appealed to the Ministry of National Development last week for more time to vacate the condo.

He claimed he had been given just seven days to do so, despite being told more than a month ago by the URA.

In a letter obtained by The Straits Times, he said: 'This feat is impossible to achieve within the given seven-day period as we have yet to notify 200 tenants and properly relocate them.'

He said they would need two to three more months.

Calls and text messages to the management of Ideal Accommodation went unanswered. URA would only say it was looking into the appeal.

Meanwhile, about 100 infuriated residents gathered at the lobby on Sunday night to debate their options.

One said he feared that his deposit and upfront rental money, which are with Ideal, would be lost.

Another resident, Hong Konger Dave Chan, 24, who works at the Marina Bay Sands resort, said he found out that he had to leave from a notice thrust under his door.

'Ideal should grant us a meeting to explain what we should do now or give us some options,' he said.

Another angry resident, Singaporean Danny Wong, 38, said: 'Why tell us only now? It's totally insane to find another place within three days.

'We didn't create this room problem in the first place, the people who rented it out did. We're the victims here.'

Momentum Spurs Series Of Project Launches

Source : The Business Times, June 2, 2009

But consultants warn that the buying drive may not be sustainable

STRIKING while the iron is hot, more developers - big and small - are riding on buying momentum to relaunch or spur interest in their properties.

Shelford 23: Close to half of the development's 33 apartments have been sold at an average price of $1,250 and buyers can opt for an interest absorption scheme at no extra cost

Hoi Hup Realty has soft-launched the freehold Shelford 23 in the Bukit Timah area. Of the project's 33 apartments, close to half have been sold at an average price of $1,250 per square foot (psf).

Buyers can opt for an interest absorption scheme at no extra cost, Hoi Hup told BT. The project is expected to receive a Temporary Occupation Permit (TOP) in 2012.

Hoi Hup opened Shelford 23's showflat for preview in September last year but later closed it. The average launch price then was $1,400 psf. Based on Urban Redevelopment Authority (URA) data, no units had been taken up by April this year.

Preparations to launch the freehold Holland Residences near Holland Village also appear to be under way. The development, by Allgreen Properties, comprises three five-storey blocks with a total of 83 units. It is due to obtain TOP in a few years. BT understands that private previews may start from end-June and that agents are currently ascertaining interest.

Similarly, the freehold Nathan Residences in the River Valley area may soon be back on the market. Indicative asking prices appear to start from $1,200 psf. According to URA data, developer Tat Aik Property launched the 91-unit freehold project in September last year but nothing had been sold by April this year.

Projects in the east are also getting in on the action. Private previews of Oasis@Elias in the Pasir Ris area could start in the next few weeks. BT understands that launch prices could be in the range of $600 psf. The 99-year leasehold Chip Eng Seng development has 388 units.

Meanwhile, marketing of the 26-unit Spring@Langsat near the Eunos MRT station began last Friday night.

Over in the west, City Developments (CDL) said last Friday that it is accelerating plans to launch a project at the former Hong Leong Garden Condominium.

Sentiment in the residential property sector has improved in the past few months. And brisk sales recently have encouraged more developers to try their luck.

Evan Lim & Co said last Friday that it sold the last 44 units at Parc Centennial after a relaunch some two weeks ago. And CDL said that its Botannia is fully sold, with the 33 remaining units having been taken up in the past few weeks.

Despite the activity, some property consultants warned that the buying momentum may not be sustainable until there are clear signs of a global economic recovery.

House Prices Stopped Falling In May

Source : The Business Times, June 2, 2009


(LONDON) UK house prices stopped falling in May for the first time in 20 months, adding to evidence that the property market slump is abating, a survey of real estate agents by Hometrack Ltd showed.

Holding steady: Average home prices in England and Wales are now at £155,600 after declining 0.3% in April

Average prices in England and Wales held at £155,600 (S$361,600) after they declined 0.3 per cent in April, the London-based property researcher said in a statement yesterday. On the year, values dropped 9.6 per cent.

The UK's worst recession in at least three decades may be easing as the Bank of England pumps newly printed money into the economy.

Reports last week showed that consumer confidence held at the highest level in almost a year, and house prices unexpectedly jumped by the most since 2007.

'The survey shows that pricing expectations among vendors has finally re-aligned to a level that is more in line with what the current pool of purchasers are prepared to pay,' Richard Donnell, director of research at Hometrack, said in the statement.

'The outlook for the economy remains far from certain. It is too early to rule out future price falls.'

The number of new buyers registering with real estate agents to browse property rose 6 per cent from April, when it increased by the same amount, Hometrack said.

The percentage of the asking price achieved rose to 90.3 per cent from 89.6 per cent the previous month.

Six of the 10 regions tracked by the survey reported no change in house prices. In the East Midlands, the North West, the West Midlands and Yorkshire, values declined 0.1 per cent from the previous month.

London luxury home prices fell about 20 per cent in May from a year ago and probably will not return to their 2008 highs for another five years, property broker Knight Frank LLP said in a separate report yesterday.

Some areas of the UK economy deteriorated at a faster pace in the second quarter.

An index of factory output based on a survey of 678 companies fell to minus 52 per cent from minus 39 per cent, manufacturing lobby group EEF said.

The group's forecasts show that manufacturing growth will resume next year.

Jobless claims may rise by an average of 100,000 per month 'for the next year or so, and this will be a shock for people', former Bank of England policymaker David Blanchflower told the Today programme on BBC Radio 4 yesterday.

Nationwide Building Society said last week that house prices increased 1.2 per cent on the month.

Banks approved 27,685 loans for house purchase in April, up 3.7 per cent from May, according to British Bankers Association data, and UK consumer confidence matched an 11-month high in May, GfK NOP said.

Bank of England policymakers, due to meet on June 4, will refrain from expanding their money- printing plan from the current £125 billion, according to all but two of 39 forecasts in a Bloomberg News survey of economists. -- Bloomberg

London Luxury Homes Prices Fall 20% In May

Source : The Busienss Times, June 2, 2009


They may not return to their 2008 highs for another five years: Knight Frank

(LONDON) London luxury-home prices fell about 20 per cent in May from a year ago and probably won't return to their 2008 highs for another five years, Knight Frank LLP said.

The average value of houses and apartments costing more than £1 million (S$2.4 million) in the most expensive neighbourhoods has fallen on an annual basis for 11 straight quarters.

The pace of the decline slowed in May and prices gained 1.6 per cent from April, the London-based property broker said in a statement.

'The uplift we are currently experiencing in the London market could be short-lived,' said James Hyman, a partner for residential sales at London-based broker Cluttons LLP.

There are 'few convincing signs of an upturn in the wider economy', he added.

Thousands of bankers, the main buyers of luxury homes in London, are at risk of losing their jobs as a result of the global financial crisis.

Financial companies may cut as many as 60,000 jobs by the end of 2010, according to Oxford Economics, a research company.

London luxury home prices will probably fall by a total of 30 per cent from the market's peak in March 2008, Knight Frank said.

The decline in May was the smallest since a 16.9 per cent drop in December.

Home prices across the UK fell about 11 per cent in May from a year earlier, compared with a 15 per cent drop in April, Nationwide Building Society said on May 29.

On a monthly basis, prices unexpectedly rose 1.2 per cent, the mortgage lender said.

Still, Liam Bailey, Knight Frank's head of residential research, said he sees increased competition for the few available prime properties for sale from domestic buyers, as well as rising interest from foreign buyers lured by the pound's decline against the dollar.

'The falls in capital values, cheap debt and overseas investors with dollars and euros have encouraged buyers back into the market,' Mr Bailey said.

The pound has lost 25 per cent against the dollar in the past year and 11 per cent against the euro, making homes in London more affordable for foreign investors.

That helped boost Knight Frank's Kensington branch to its best April in three years for the number of signed contracts, said Tim Wright, who heads the office.

In the Notting Hill, Holland Park and Kensington neighbourhoods, Mr Wright said two family houses went to a 'best bid' contest in which multiple buyers submitted their best offers at once.

He's had three cases in which a last-minute bidder stepped in with a higher offer for a property and scuttled a previous deal at a lower price, a tactic known as 'gazumping' in the UK.

'Supply is still thin across the price ranges,' particularly for properties worth £1 million to £2 million, Mr Bailey informed.

Luxury-property values in Mayfair rose 2.9 per cent in the two months through May, more than any other neighbourhood, Knight Frank said.

Marylebone was second with an increase of 2.7 per cent. Homes valued at £10 million or more gained 0.8 per cent during that period.

Prices may drop as little as 5 per cent in the whole of this year, less than Knight Frank's last forecast for a 10 per cent decline, Mr Bailey said.

Knight Frank compiles its luxury index from estimated values on properties in the Mayfair, St John's Wood, Regent's Park, Kensington, Notting Hill, Chelsea, Knightsbridge, Belgravia and South Bank neighbourhoods of London. -- Bloomberg

M'sian Property Prices May Be Recovering: Survey

Source : The Business Times, June 2, 2009

Outlook index rises to -36% in April from its early-March low of -58%

DESPITE a property overhang and a slump in some upmarket areas, secondary-market prices for many projects in Malaysia have not fallen below launch prices, property consultants say.

And an Internet survey suggests prices may be stabilising - or even recovering.

From its early-March low of minus 58 per cent, the Property Outlook Index rose last month to minus 36 per cent.

The improvement - for a second straight month - could signal stabilisation or even recovery, says the website's chief executive and co-founder Asim Qureshi.

Adding to the feeling that the worst may be over, investors are starting to opt for shares and property over defensive fixed deposits, he says.

According to Mr Asim, the recent pick-up in the stock market, data indicating economic recovery in the United States and China and expectations that government stimulus packages will spur activity are some of the reasons Malaysians are now more positive about property.

But sentiment could change quickly.

While the stock market has improved about 20 per cent since the start of the year, the government has conceded that the economy is in a technical recession and expects a contraction of as much as 5 per cent this year before 3 per cent to 4 per cent expansion next year.

Even so, the latest thinkproperty data is the most favourable the website has seen since it began an ongoing survey in May 2008, which has since elicited more than 1,700 responses.

Zerin Properties chief executive Previndran Singhe believes low interest rates and innovative deals - such as 5 per cent downpayments and balance on delivery, with the developer bearing all other fees and interest payments during construction - have helped spur buyer interest.

'It's true that transactions have slowed,' he says. 'But there has certainly not been a crash.'

Because liquidity is not an issue, developers selling the right product at the right price - throwing in rebates, for example - have not had to agonise too much despite the economic uncertainty. For instance, a gated development of 49 courtyard homes by Tan & Tan at Sungai Buloh just outside Kuala Lumpur, priced from RM560,000 to RM800,000 (S$232,420 to S$331,960), was reportedly sold out on the first weekend, netting the developer RM37 million.

Major selling points would have included the units being landed - albeit leasehold - and that they are already completed.

Another Internet survey, meanwhile, has revealed that despite interest in property, some people consider current prices out of their reach.

According to a survey by, 27 per cent feel the time is right for bargain hunting; 39 per cent may buy but are waiting for prices to fall; 8 per cent are contemplating a purchase; and 21 per cent are keen but could not afford it. Twelve per cent said when they finally found a suitable property, many others were vying for it.

Zerin's Mr Singhe is quick to quash any notion of super bargains, especially in popular locations.

He expects prices to hold because there is liquidity, and reckons there will be an upturn in 2011-2012. 'People still need to invest,' he says.

And except for a 20-25 per cent drop in condo prices in the KLCC area and an 18-20 per cent at Mont Kiara, secondary transactions have not dipped below launch prices.

But he agrees that most young Malaysians - those in their 20s, especially - will find the property hunt tough going, given that incomes have generally remained stagnant over the years while property prices have risen 5-7 per cent a year.

The high-rise segment is expected to remain weak throughout this year and possibly well into next year, according to Regroup managing director Allan Soo.

But he is hopeful that a pick-up in Singapore's property market will a spillover effect in Malaysia.

Hong Kong Property Warms Up

Source : The Business Times, June 2, 2009

May 1-26 home sales of 11,000 units were the highest since February 2008

(HONG KONG) Hong Kong real estate has shown early signs of regaining its status as hot property, with a new development getting a warm reception.

But, where some experts see recovery, others see just a speculative bubble.

Last week's launch by Lake Silver, a new joint venture residential project between Sino Land and MTR Corp, drew tens of thousands of prospective homebuyers despite a summer downpour - a strong showing shortly after top lender HSBC slashed its savings rate to near-zero, boosting the attraction of the 4-5 per cent average annual rental yield for property investments.

Hong Kong home sales between May 1 and May 26 were close to 11,000 units, the highest since February 2008, and surprisingly strong for a traditionally slow month ahead of the school summer break.

The early signs of a potential rebound have lit a fire under major Hong Kong developer stocks. Since early March, shares of sector leaders Cheung Kong (Holdings) and Sun Hung Kai Properties have jumped more than 70 per cent, while Sino Land has nearly tripled.

'The recent strength in the property sector was an adjustment to the earlier over-pessimism,' said Wong Leung-sing, director of research for Centaline Property Agency Ltd.

Like others, Mr Wong attributed the rebound in home sales to low interest rates and a volatile stock market which have driven investors to property in search of better returns.

But he said that the jury was still out on whether a recovery is really underway.

'If June figures track the strong numbers in May, it's quite safe to say a market recovery is on the way,' he said.

Developers are playing it safe by pricing new projects well below their early 2008 peak, reflecting lower optimism on a rapid price recovery.

Home prices are back at their pre-Lehman collapse level, after sliding 15 per cent from their March 2008 peak.

Others suggested that it is still too early to call a recovery, and the recent run-up in property stocks could be too much too fast.

'I won't suggest investors chase after property stocks as the positive factors are pretty much reflected in the surge,' said Patrick Yiu, a director with CASH Asset Management.

Sino Land, a proxy for the Hong Kong residential sector, now carries a net asset value (NAV) premium of close to 18 per cent, according to Citigroup research, making it among the most expensive stock in the sector.

Likewise, Sun Hung Kai carries a rich NAV premium close to 10 per cent.

Cheung Kong, at a NAV discount of 16 per cent, Hang Lung Properties and Kerry Properties, with their exposure to the Chinese property sector, are seen as safer bets.

Even after real estate price declines over the last year, Hong Kong properties still command significant premiums over major Chinese cities such as Beijing, Shanghai, Shenzhen and Guangzhou, according to Citigroup.

'Comparatively, Chinese property is a better bet as it seems to have more room on the upside after a plunge in mainland property prices last year,' said Mr Yiu.

With economic fundamentals still weak, heady property stock valuations suggest that the market may have run ahead of itself.

'There are people who worry they will miss their chance to buy property if they don't move now, but this is a short-term factor that will drive demand,' said Nicholas Yeo, Hong Kong and China equities manager at Aberdeen Asset Management.

'In the long term, there is uncertainty over the magnitude of an economic recovery - if we have one.' - Reuters

Dubai Developer Takes On Additional Operations

Source : The Business Times, June 2, 2009

(DUBAI) Dubai is merging control over a sprawling complex of partially built high-rises into the struggling developer behind the city-state's palm-shaped islands.

The move comes as the government tries to get its skidding property market under control.

The property developer Nakheel and a related state-run company known as the Dubai Multi Commodities Centre (DMCC) said in a joint emailed statement yesterday the move was meant to 'better accommodate current market conditions and optimise resources and expertise'.

Deeply indebted Nakheel will take control of all of DMCC's property operations.

Those consist of a 500-acre development of dozens of high-rises known as Jumeirah Lakes Towers, as well as three skyscrapers within the project. -- AP