Thursday, June 18, 2009

En Bloc Sales Are On The Way: Analysts

Source : TODAY, Jun 17, 2009

SINGAPORE has not seen a single en bloc sale in over a year. But analysts said they would not be surprised if at least one takes place by year’s end, as developers are drawing down their inventories and may need to replenish their main raw material - land.

“At this stage, the market seems to be turning a corner. There seems to be a resurgence or confidence back in the market,” said Credo Real Estate managing director Karamjit Singh, whose firm is handling about five developments which are restarting or planning a collective sale.

“Quite a few developers have begun to clear substantial inventories to a point where they are very confident in the market tomorrow and day after, and are beginning to buy land today, or at least making enquiries about what’s available to buy.”

Recent buoyant private home sales spell lower stock for developers. Some 5,526 units were sold in the primary market from January to May, surpassing the 4,435 units sold in the whole of last year.

And analysts expect the uptrend to last through to December, which means more than 10,000 units will be sold this year - a significant number for a recession year compared to the record 14,811 units sold during the market’s peak in 2007.

Financially, home builders appear to be in a good place.

Said Ms Christina Sim, director of investment at Cushman and Wakefield: “I think once a developer sells more than 50 per cent of a development, they are basically on the home stretch already. So, whatever they make on the rest of the units is basically profits. Their cash flow position would be a lot better. So financially, it’s not as risky.”

The main source of development sites come from either the Government or private sales. Since there are few public sites available, developers are expected to turn to collective sale sites. Analysts say projects that stand a higher chance of being sold en bloc are smaller ones in prime locations.

Ms Lim is hoping for at least one en bloc sale this year to get the ball rolling. Credo is more bullish, expecting more than 10 sales by the year’s end.

Not all agree with this view. Real estate firms ERA Asia-Pacific and Colliers International said current action was mainly between developers, with larger ones buying over land plots from smaller firms that want to improve cash flows. And deals there may not translate into the en bloc market. Also, developers bought many sites before the property market was affected by the global financial crisis last year.

“A lot of developers have been keeping en bloc sites and renting properties to wait for market to recover. I think they’ll tread carefully,” said Ms Grace Ng, deputy managing director of agency and business services at Colliers International.

What the analysts and industry players agree on is that en bloc sellers will have to lower their expectations in the current climate.

“I expect they would have to scale down,” said Ms Lim. Her firm, Cushman and Wakefield, is marketing Meyer Place, whose land value was set in 2007, when high-end properties at East Coast went then for about $1,800 to $2,200 per square foot. Today, prices have fallen about 30 per cent.

A Rental Boost From Foreign Students

Source : TODAY, Jun 18, 2009

Growth in number of international students has impacted rental market

SINGAPORE’S drive to become an education hub is providing a form of support for the home leasing market.

According to property and student agents, more international students in Singapore are turning to condominiums for accommodation even as the more traditional hostels and HDB flats remain in hot demand.

The influx of foreign students has visibly strengthened since the Economic Development Board launched concerted efforts to woo this bunch under the 2002 Global Schoolhouse Initiative.

From numbering 61,000 since 2003, when such annual figures were made available, international students here have surged by nearly 60 per cent to 97,000 as of last year, show Singapore Tourism Board statistics.

The official goal is to host 150,000 international students here by 2015. But already, this growing group’s presence is making itself felt in the home rental market.

Even though official data show that private rents have fallen 14.7 per cent from its peak in the third quarter of last year, it is a different story in areas like Boon Lay, Jurong West and Queenstown, say an ERA property agent who specialises in foreign student accommodation.

These are places where international students congregate, as they are near major tertiary institutions such as Nanyang Technological University (NTU) and the Management Development Institute of Singapore, said the agent, who wanted to be known only as Tony.

For example, the rent for a three-bedroom HDB flat in Boon Lay was about $1,300 monthly three years ago; now it can go up to $2,400, he said.

And the pullback in the overall property market has not necessarily brought down rents significantly. “Demand in that area is still quite high. Owners know that lots of students are looking for houses, so they are keeping prices high,” said Tony, a Vietnamese who is a former NTU student himself.

He estimates there are currently more than 400 Vietnamese students in NTU, compared to just about 70 five years ago.

“I encountered a case where the starting price was only $2,000, but because I brought in eight people (to share the flat), the owner managed to push up prices to $2,450,” he said.

Demand has also spilled over to the condominium segment.

Mr Lin Yu Wei, 23, a Taiwanese student of Raffles College in Beach Road, stays in Killiney Apartments in the Somerset area with two roommates, paying a monthly rent of $1,000.

“Most of my friends also prefer to stay in the city area. It’s nearer to our school and the shopping malls. Most of them will consider convenience as the most important factor,” he said.

Although he previously stayed in a cheaper student hostel, Mr Lin said he preferred his current environment as he has privacy and does not need to worry about his belongings.

On this recent trend, Kaplan Singapore’s deputy director of marketing, Mr Alvin Teo, said international students typically stay in hostels when they arrive, but move out together in groups to condos as they make friends.

“Some of the students, especially the Chinese ones, are quite well-to-do. Their parents want the best for them and opt for condos,” said Mr Teo, whose school has 3,200 foreign students.

Another pull is the phenomenon of landlords partitioning the living room of a condo to make way for more rooms in a unit - making rent more affordable for a student wishing to stay in a private estate, said property agents.

“A lot of owners have done it - it’s common knowledge in Singapore,” said property agent Clinton Poh.

Rents in such condos range from around $500 to $600, and are cheaper than an unaltered HDB room in the same area which goes for $700 a month, said another property agent, who declined to be named.

Such housing also caters to S-Pass holders who prefer their privacy albeit in a smaller room, rather than squeeze in with a roommate, said Mr Poh. Such housing can usually be found around Geylang and Balestier, which are also areas popular with students.

温州炒房团 重新追捧上海房地产

Source : 《联合早报》June 18, 2009
















世邦魏理仕(CB Richard Ellis)环球研究部大中华区董事马雪明在受访时认为,温州客的重返上海,从一定意义上,反映了目前购房者(投资者)对市场信心的重新建立,以及基于近期交易市场表现所重新确定的未来市场升值预期,同时,也是市场基于通胀预期所作出的决定。


Top-End Bungalows Going, Going, Gone

Source : The Businesss Times, June 18, 2009

7 good class bungalows sold in April and May, more deals in the works

The most prestigious segment of Singapore's residential property sector has picked up over the past two months.

The numbers are for bungalows with the minimum plot size of 1,400 square metres (about 15,069 square feet) stipulated for GCBs in the 39 GCB areas (GCBAs) here gazetted by the Urban Redevelopment Authority (URA). However, if bungalows with land areas below 1,400 sq m are also included, the April-May period saw 10 caveats - again significantly higher than the three caveats lodged in Q1.

Hot sale: Movie star Jet Li bought this Binjai Rise bungalow last month for $19.8m Seven good class bungalows (GCBs) were sold in April and May - up from just two transactions in Q1 2009 - according to Savills Singapore's analysis of caveats captured by URA Realis.

'The higher GCB sales in April and May reflect the general improvement in investment sentiment on the back of the stockmarket rally. Some GCB buyers could also be savvy investors who made money in the stock market. Going ahead, they may feel that there's more upside than downside for GCB prices,' says Savills' director for prestige homes Steven Ming.

The biggest GCB transaction in May (and also so far this year) was the $30 million sale of 2A Ridley Park, which has 27,233 sq ft land area. The price works out to $1,101 per square foot (psf) of land area - also the highest on a unit land price basis in 2009.

At least one other transaction has been done at above $1,000 psf recently, although it has yet to be reflected in caveats: 1 Cluny Hill, which was sold for $16.2 million or $1,081 psf based on its 14,985 sq ft plot size. Forbes Property Realty Network brokered the deal.

Douglas Wong, director, luxury homes at CB Richard Ellis, notes that GCB investors in Singapore often own two or more such properties - one for their own residence and the rest for investment. 'With the recent increase in activity, they may consider it opportune to liquidate some of their GCB holdings and get some cash back to plough into other investments or their business,' he said.

Compared with just three GCB transactions in Q1, Mr Wong expects some 14-17 deals in Q2. 'Assuming the stock market is able to hold up till the end of 2009, we estimate that some 38-45 GCBs could be sold for the whole of 2009, amounting to a total quantum of some $700-800 million,' he added. This would not be far off from the $827 million from the sale of 51 GCBs last year.

Other notable GCB transactions in May include a property at Jervois Road that sold for $13 million ($862 psf), and another bungalow at Binjai Rise that was sold for $19.8 million ($871 psf) to international action star Jet Li.

The highest ever psf price attained for a bungalow in a GCB area is $1,899 psf for 32H Nassim Road in October 2007. But the area of that plot is 13,423 sq ft, less than the minimum GCB plot size. That's why the GCB benchmark is generally considered $1,308 psf - the price obtained for 15 White House Park, with 22,012 sq ft land area, in August 2007.

Activity in the landed housing market first started picking up this time around in the 'low-end' segment - meaning terraced and semi-detached houses - about three months ago, said Michael French, MD of Asia Premier Property Consultants.

'We have not seen such buying levels in the market for a long time,' he said.

The activity then filtered up to smaller bungalows of about 4,000-8,000 sq ft. Then, about four weeks ago, demand for GCBs took off, with several large deals being concluded in May.

More big GCB deals are on the cards. BreadTalk founder and chairman George Quek is looking to sell his 2 Swettenham Road GCB and the price tag could be as high as $33 million, or $991 psf. Mr Quek bought the property, with 33,293 sq ft land area, with his wife last year for $27 million or $811 psf. He has appointed Newsman Realty to handle the sale, and the firm's managing director, KH Tan, hopes to get $33 million for the 1960s bungalow.

The property will be sold through a closed tender on June 30. Mr Tan has pre-selected 30 prospective buyers whom he intends to invite to view the property and to participate in the bidding exercise. Part of the proceeds from the sale will be donated to charity.

More High-End Properties Up For Auction

Source : The Business Times, June 18, 2009

They include Belmont Road bungalow, Fernhill Road site and condo units

As action in the property market drifts up to the high end, more top-notch properties are surfacing at auctions.

A good-class bungalow (GCB) on Belmont Road, a 7,000-square-foot freehold site on Fernhill Road and condo units at St Regis Residences, Leonie Towers and Gallop Gables are among properties that will go under the hammer next week.

Up for sale: This 30-year-old good-class bungalow on Belmont Road has been put up for sale at an indicative price of $26 million to $30 million

The GCB at 62 Belmont Road has been put up for sale at an indicative price of $26 million to $30 million. This works out to $797 to $919 per square foot (psf) based on the sprawling site of 32,627 square feet.

The existing single-storey bungalow, which will be offered at Knight Frank's auction on June 23, is more than 30 years old.

'The property can be rebuilt into a new two-storey bungalow with a basement. And there's space for a tennis court and swimming pool,' says Knight Frank executive director and auctioneer Mary Sai.

Colliers International's auction on June 24 will feature a recently renovated two-storey freehold bungalow with six bedrooms and a maid's room at 2 Branksome Road, off Tanjong Katong Road.

The property is being offered at an indicative price of $9 million or $815 psf of land area, says Colliers deputy managing director and auctioneer Grace Ng. The bungalow has a swimming pool and Balinese-style decor.

A trustee sale of a 7,232-sq-ft freehold vacant site in Fernhill Road is indicatively priced at $6.5 million to $7 million, which reflects a unit land price of $641 to $691 psf of potential gross floor area (GFA). This excludes any development charge that may be payable.

The site is zoned for residential use with a 1.4 plot ratio - the ratio of maximum potential GFA to site area. It can be developed into a small apartment project or a landed housing development.

Jones Lang LaSalle (JLL) is auctioning the property on June 26.

Another property at the event will be a sheriff's sale of a maisonette on the 12th floor of Leonie Towers, a freehold condo at Leonie Hill. The indicative price is $2.6 million to $2.8 million or $895-$964 psf of strata area.

The sheriff's sale is being held to recover a debt owed by the owner, which is a company, to two individuals. The unit will be sold with vacant possession.

Colliers is also offering at its auction an apartment with four bedrooms plus a maid's room on the 13th floor of St Regis Residences. It is also selling a two-bedroom unit with a utility room on the third level at Gallop Gables.

The Gallop Gables unit, which is leased until August 2013, has a prospective price of $1,400 to $1,500 psf of strata area, working out to $1.6 million to $1.7 million. That translates to a net annual yield of about 2.7 per cent.

The St Regis unit's indicative pricing is $5 million or $2,358 psf. The property is subject to a two-year tenancy starting this month, with a monthly rental of $11,000.

If all of the above properties are sold at the various auctions next week, it would provide a fillip to auction sales this year, which totalled $47.7 million in the first five months.

The figure for the whole of last year was $83.7 million - an 11-year low.

JLL's head of auctions Mok Sze Sze says 'the competitive method of auction bidding is the best way to fetch the optimum price for owners of high-end properties, especially if they are rare and few in supply'.

Home Prices In US To Fall 14% More: Deutsche

Source : The Business Times, June 18, 2009

New York, Orange County leading drop as higher unemployment offsets lower prices

(CHICAGO) US home prices may fall another 14 per cent, led by the New York and Orange County, California, metropolitan areas, before reaching a bottom as an increase in unemployment offsets lower prices, Deutsche Bank AG said.

Precarious situation: Financial firms have cut more than 183,000 jobs in the Americas in the global credit crisis, driving down prices and rents in the New York area

'Affordability is no longer the driving issue in the housing market, and we believe prices still have a ways to fall in many areas before home prices reach their trough,' Deutsche Bank analysts led by Karen Weaver, wrote in a report yesterday. 'The bottom is getting closer, but we are not there yet.'

Home prices are forecast to fall 41.7 per cent from their peak, Ms Weaver said.

That's higher than a forecast she released in March and reflects 'the actual declines to date and the expected future impact on home prices from rising foreclosure inventory and unemployment'.

In March, Deutsche Bank had forecast a 16.5 per cent decline in 'current-to-trough' prices. While today's projection is less than that, many metropolitan areas will still see steep declines, the report said.

In the New York metropolitan area, they may drop 40.6 per cent from the first quarter to the bottom, the report said, less than Deutsche Bank's March estimate of 47.4 per cent.

Financial firms have cut more than 183,000 jobs in the Americas in the global credit crisis, driving down prices and rents in the New York area.

In New York City, Manhattan co-op prices slid the most since 1995 in the first quarter, according to data from Miller Samuel Inc and broker Prudential Douglas Elliman Real Estate.

The New York metropolitan area's median home price peaked in the second quarter of 2007 at US$552,000 and has since fallen to US$446,000, the report said.

Home prices in Orange County, California, are forecast to fall another 19.1 per cent, Deutsche Bank said.

Prices in the Los Angeles- Long Beach-Glendale metropolitan area may fall another 11.3 per cent from the first quarter to the bottom. In Riverside-San Bernardino-Ontario, they may fall 14.3 per cent.

California leads the nation in foreclosures. US foreclosure filings surpassed 300,000 for the third straight month in May and may hit a record 1.8 million in the first half of the year, RealtyTrac Inc said in a June 11 report.

The US unemployment rate will likely exceed 10 per cent by early next year, Deutsche Bank said. -- Bloomberg

HK Office Space Prices Llikely To Rebound: CBRE

Source : The Business Times, June 18, 2009

34% jump in prices seen this year amid signs of economic recovery

(HONG KONG) Hong Kong city centre office prices, down by almost half since Lehman Brothers Holdings Inc's collapse, may rise 34 per cent this year, as speculators bet on local economic recovery, CB Richard Ellis Group Inc (CBRE) said.

Softening rents: Prime office rents in Hong Kong fell 19 per cent in the first five months of 2009 and may drop a further 11 per cent this year as companies shelve expansion and hiring plans to cope with the recession, says CBRE

The average price of prime office units in the central business district may rise to as much as HK$13,000 (S$2,450) per square foot (psf) by year-end from HK$11,167 in May as rich individuals seek alternative investments to stocks and bank savings, Benedict Ma, an analyst at CBRE, said in an interview on Tuesday.

Low borrowing costs and bank-savings rates of almost zero are prompting investors to buy office space in Hong Kong, where rents are the world's fourth-highest. The benchmark three-month interbank loan rate fell to a four-year low as liquidity surged after Hong Kong issued record amounts of the local currency to preserve its fixed exchange rate.

'A lot of the activity in the strata office market is not fundamentally driven, it's much more speculative as rents are still falling,' Rhodri James, executive director of office services at CBRE, said on Tuesday. 'The key thing is do we see the economy turning around in six to 12 months? This justifies why they are buying today.'

The strata market refers to units or floors, instead of whole buildings: there are four such prime office buildings in Central and neighbouring Admiralty, according to CBRE. Average prices fell as much as 49 per cent from their peak of HK$16,900 after Lehman collapsed in September, Mr Ma said.

There were four sales of prime office strata units exceeding HK$100 million in value between January and May, compared with 21 in the first half of 2008, Mr James said.

Still, gains in office prices may leave investors 'exposed' if the economy and rents fail to recover in the next six to 12 months, Mr James said.

Job cuts by HSBC, Television Broadcasts Ltd and PCCW Ltd pushed Hong Kong's unemployment rate to a three-year high of 5.3 per cent in May. The economy contracted 7.8 per cent in the first quarter from a year earlier as exports slid the most since 1954.

Some investors may expect real estate to rebound first. The Hang Seng Property Index, tracking six of the city's largest developers, has gained 35 per cent this year, compared with the 24 per cent increase in the benchmark Hang Seng Index.

Billionaire Lee Shau- kee, Henderson Land Development Co chairman, sold a floor of office space at The Galleria on Queen's Road Central for HK$18,000 psf earlier this month, 59 per cent more than another floor in the same building sold for in May, Sing Tao reported on June 11.

Bonnie Ngan, a Henderson spokeswoman, declined to comment on the report.

The value of office space is rising even as falling rents cut yields to 3.9 per cent from 5 per cent at the end of 2008, CBRE said. By comparison, a HK$150,000 deposit with HSBC Holdings plc, the bank with the most branches in Hong Kong, generates annual interest of 0.001 per cent, or HK$1.50.

Hong Kong's lending benchmark three-month interbank offer rate, or Hibor, was at 0.334 per cent on Tuesday, down from 0.949 per cent at the beginning of the year.

'People will have positive cash flow in buying grade A offices because the Hibor is very low,' said Alvin Yip, head of investment for South China at UK-based real estate broker DTZ Holding plc said by phone yesterday.

Low rates and lack of investment alternatives mean overall office prices may rise as much as 15 per cent in the third quarter from the second even as rents are little changed, Peter Chan, director of commercial department at Centaline Property Agency Ltd, one of Hong Kong's biggest realtors, said earlier this week.

Prime office rents in Hong Kong fell 19 per cent in the first five months of 2009 to average HK$42.76 a square foot per month and may drop a further 11 per cent this year as companies shelve expansion and hiring plans to cope with the recession, CBRE forecasts.

The office vacancy rate in Central rose to 4.8 per cent in April, from a recent low of 0.9 per cent in February 2008, even without new supply, said Simon Lo, Hong Kong-based director of research and advisory at Colliers International.

CBRE forecasts the rate will rise to 7 per cent on Hong Kong Island this year.

'There're no fundamentals to support price increases,' Mr Lo said in an interview. 'If you are brave enough and have plenty of cash, you may hold it for two years and expect to make some decent gains while forgetting about rental yields.' - Bloomberg

No Further Fall Seen In China Property Prices

Source : The Business Times, June 18, 2009

(SHANGHAI) China's property prices are unlikely to fall further as increased money supply and credit expansion inflate asset prices, BNP Paribas said, citing China Real Estate Chamber of Commerce president Nie Meisheng.

Residential prices will be the first to rebound, driven by urbanisation, followed by commercial property such as shopping centres, BNP Paribas wrote in a note yesterday, citing comments made by Ms Nie at a June 11 workshop organised by the bank.

China's domestic banks extended a record 5.84 trillion yuan (S$1.24 trillion) of loans in the first five months of 2009, almost triple the value a year earlier. Zurich-based UBS AG forecasts new credit may reach eight trillion yuan in 2009.

Housing prices in 70 Chinese cities fell 1.1 per cent in April from a year earlier, the smallest drop in three months, according to data from the National Development and Reform Commission.

The central bank has cut interest rates five times since September, scrapped quotas that limited lending and pressed banks to support the government's four trillion yuan stimulus programme. China's property sales rose 45.3 per cent in the first five months to one trillion yuan from a year earlier, the statistics bureau said on June 10. That compares with a 19.5 per cent decline for all of 2008.

China's government is unlikely to adopt a property tax within three years due to 'several technical difficulties', Ms Nie said, according to the BNP Paribas report.

A measure of property developers on the Shanghai Composite Index has more than doubled this year, leading gains among the five industry groups on the gauge. -- Bloomberg

Property Transactions With Contract Dates Between June 1st - 6th, 2009

Changi Rd, Balestier Properties Up For Tender

Source : The Business Times, June 17, 2009

A SITE with corner frontage along Changi and Still roads with approval for development into a commercial and residential project, as well as a refurbished shophouse in Balestier with a six-storey rear extension block have been put up for tender with a total price tag of over $40 million.

At Balestier: The shophouse will be sold with vacant possession while the six-storey extension is leased to a hostel operator till year-end at $20,000 a month

The sale of the two freehold properties has been instructed by Foo Kon Tan Grant Thornton, the receiver and manager of Consult Asia Pte Ltd, which owns the two assets.

They are being offered separately through two tenders that close next month. DTZ is handling both tenders.

The Changi Road property, with a land area of 28,545 sq ft, has been granted written permission for a proposed five-storey commercial building integrated with an adjoining five-storey residential project of 26 apartments. The development will also have two basement levels.

The receiver and manager is optimistic of achieving above $30 million for this property, which is near Eunos MRT Station.

Based on $30 million, the unit land price works out to $505 per square foot of potential gross floor area (GFA). There is no development charge on the site.

'A new investor could come in and get the project - both the apartments and strata commercial units - launch-ready for sale within a few months, assuming they stick to the existing approved plan,' says DTZ's senior director for investment advisory services Shaun Poh. The price expectation for the Balestier Road property is above $10 million. The two-storey shophouse will be sold with vacant possession while the extension at the back is leased to a hostel operator till the end of the year at a monthly rental of $20,000.

The property has a site area of 3,639 sq ft and an approved total GFA of 10,883 sq ft.

Under Master Plan 2008, the property is zoned for commercial and residential use with a 3.0 plot ratio (ratio of maximum potential GFA to site area).

The tender for 331/333 Balestier Road closes on July 23, while that for the Changi Road site closes on July 22.

May Sees Sharp Rise In Housing Starts And Permits

Source : The Business Times, June 17, 2009


(WASHINGTON) New US housing starts and permits surged in May from record lows, while producer prices rose at a slower pace despite higher gasoline prices, boosting prospects for the economy's recovery from recession.

The Commerce Department said yesterday housing starts jumped 17.2 per cent to a seasonally adjusted annual rate of 532,000 units, as ground-breaking for multi-family units surged 61.7 per cent after falling 49.4 per cent in April.

A separate report from the Labor Department showed the seasonally adjusted index for prices paid at the farm and factory gate increased by 0.2 per cent versus a 0.3 per cent April rise. Prices compared with a year ago notched their steepest falls since 1949.

'It's a sign that housing is stabilising, but it's too early to say that we've seen the bottom. We'd probably need to see several months of stronger sales and better housing starts to give a convincing signal that we're going to see a housing recovery,' said Gary Thayer, senior economist at Wells Fargo Advisors in St Louis.

Housing market data, including new and existing home sales, have shown signs of bottoming in the slide, but the surge in mortgage rates following a spike in Treasury debt yields could hamper recovery.

The housing market's collapse is the main trigger of the longest US decline in output since the Great Depression. A survey on Monday showed US home builder sentiment eased in June as buyers fretted over rising mortgage costs.

Compared to the same period last year, housing starts dived 45.2 per cent. New building permits, which give a sense of future home construction, rose 4.0 per cent, the biggest advance since June last year, to 518,000 units in May.

Building completions fell 3.3 per cent to 811,000 units, dragged down by single family homes which fell 9.4 per cent to a record low 491,000 units. Completions for multi-family units rose 7.7 per cent in May.

The slower pace of increase in May producer prices was a relief for investors who of late have been preoccupied with inflation in the wake of the surge in government bond yields.

Compared with the same period last year, producer prices fell 5 per cent for the largest decline since August 1949, the Labor Department said.

'This is still consistent with inflation being a very moderate risk at this time,' said Zach Pandl, economist at Nomura Securities in New York.

Core producer prices, which exclude food and energy costs, dropped 0.1 per cent in May compared with a forecast for a 0.1 per cent rise, and after a 0.1 per cent increase in April. This was the largest decline in monthly core producer prices since October 2006, when they fell 0.5 per cent.

In contrast with May 2008, core producer prices stood 3 per cent higher.

The Labor Department said that a 2.9 per cent rise in finished energy goods more than offset a 1.6 per cent decline in the index for finished consumer foods for the change in headline producer prices. Petrol prices rose 13.9 per cent.

US industrial production slid a steeper-than-expected 1.1 per cent in May from the prior month with output off sharply at factories, utilities and mines, a Federal Reserve report showed yesterday.

The data suggest that any slowdown in the pace of the recession that many economists have pointed to in recent weeks may be uneven. The capacity utilisation rate for total industry, a measure of slack in the economy, fell to 68.3 per cent, the lowest level on records dating back to 1967. -- Reuters

Jet Li Buys $20m Bungalow

Source : The Straits Times, June 17, 2009

ACTION star Jet Li and his wife, Nina, have bought a coveted good class bungalow (GCB) on Binjai Rise for $19.8 million last month, The Business Times (BT) reported on Wednesday.

Jet Li has reportedly bought a coveted good class bungalow on Binjai Rise for $19.8 million last month. -- PHOTO: AP

The bungalow, in the Bukit Timah area, works out to cost $871 per square foot based on the freehold land area of 22,723 square feet, said The BT report.

GCBs, with their stringent planning requirements, are the creme de la creme of Singapore's housing market. There are only about 2,400 such bungalows in Singapore.

The move is seen as a sign that Li is sinking deeper roots in Singapore, after he announced plans to set up a base in Singapore for his charity and disaster-relief group One Foundation.

The Jet Li One Foundation Singapore was registered in June 2008 and the Beijing-born Li is understood to have taken up Singapore citizenship, following in the footsteps of fellow China-born superstar Gong Li, who became a Singapore citizen last November.

According to BT, Mr Li told a Forbes Global CEO Conference here in September last year that Singapore offers the right conditions for grooming future NGO leaders.

Earlier media reports also said that Mr Li moved his two daughters and wife to Singapore in 2007 for his children's education.

Mr Li led a life of hardship as a child (his father died when he was two) but he persevered to emerge as China's overall national wushu champion for five consecutive years in the 1970s. He began his acting career in the early 1980s, starting with Shaolin Temple and today has about 40 movies under his belt.

He became a US citizen in the 1980s.

When contacted by BT, a spokeswoman for Singapore's Immigration and Checkpoints Authority declined to confirm if Mr Li is now a Singapore citizen, saying 'due to reasons of confidentiality, the ICA will not discuss individual cases publicly'.

Fernvale Crest Has Thrice The Number Of Applicants Compared To Units Available

Source : Channel NewsAsia, 15 June 2009

The Housing and Development Board’s (HDB’s) latest Build-To-Order (BTO) project in Sengkang has attracted almost thrice the number of applicants compared to units available.

Fernvale Crest flats

Fernvale Crest has a total of 1,992 applications versus 700 units available.

Fernvale Crest has, by far, the most number of small flats in a BTO development.

Its two-room flats were the least popular, with 169 applications versus 140 units available, but they were nevertheless fully subscribed.

The four-room flats were nearly ten times oversubscribed, with 1,149 applications versus 188 units available.

A two-room flat costs S$74,000 to S$98,000, while a three-room flat costs S$116,000 to S$157,000, and a four-room flat costs up to S$250,000. - CNA/yt

Euphoria In Property Home Sales Likely To Wane

Source : The Straits Times, June 16, 2009

Experts say sellers may be raising prices too optimistically amid uncertain times

THE euphoria in the private home market is tipped to start tapering off in the wake of the weaker stock market, although no one expects sales to plunge to the dismal levels seen late last year.

Recent sales data suggests the market has touched bottom and is climbing its way back up, spurred by developers cutting prices and offering incentives as well as a feeling among buyers that they had better move fast before the bargains go.

New private home sales have crossed the 1,000 unit mark every month since February with 1,668 transactions last month, the highest since August 2007, according to data from the Urban Redevelopment Authority yesterday.

Deals done in April and last month show that home prices have generally risen from their first-quarter lows, said CBRE Research.

Knight Frank chairman Tan Tiong Cheng points to a lift in confidence: 'There's a bit of euphoria out there, brought about by the recovery of stock markets around the world since March, and many who have made money in the stock market would have ploughed it back into the property market.'

Developers have begun testing the market by pushing prices up by, say, 2 per cent to 3 per cent a week, consultants said.

And some buyers have been rushing to showflats and putting down deposits - much like the boom days, even though Singapore remains in a recession.

However, the increased activity remains confined to the residential market, said Mr Desmond Sim, Jones Lang LaSalle's associate director of research.

'This, in our regard, is largely fuelled by softer prices and strong latent demand, which alone will not be sufficient to sustain an overall recovery in the market,' he said.

Unless the overall economy improves, it may still take 'quite some time' before the super-luxury launches come back.

'Singaporean buyers tend to be very kiasu and overzealous. One buys, the rest all go out to buy,' said a market watcher who declined to be named.

Thanks to these buyers, sellers have raised their asking prices - sometimes rather dramatically. The result will possibly be slower sales for this month.

'Individual sellers are shifting their goal posts and taking their properties out of the secondary market,' said Mr David Neubronner, executive director, residential at Credo Real Estate. For instance, high-end condo Ardmore II was selling for below $2,000 psf earlier this year but sellers now want as much as $2,500.

But that sort of rise is far too optimistic in today's market, say experts.

Home prices have dropped by about 30 per cent from January last year. Although prices in the past three months have generally gone up by 10 per cent, they are overall still about 20 per cent off the peak, said Mr Neubronner.

The two key underlying concerns - falling rents and a supply glut - will moderate any rise in home prices, he said.

'The more conservative people will see a 'W' shaped recovery but I see prices plateauing for over a year or 18 months,' he said, adding that demand from foreigners in the region and upgraders will keep the market steady.

A market watcher said home prices may continue to run a bit more before they lose steam so now is an opportune period for developers to launch projects, he said.

As Citigroup put it in its recent report, this is a window in a weak market, rather than the start of a cyclical upturn.

Developers with land bought at levels before the peak of 2007 will want to rush the launch of their projects, experts said.

But that excludes luxury-end developers, who are staring at a likely worst-case scenario of further price drops.

Top-end home prices are expected to fall nearly as much as they have risen - rises that at times were not backed by fundamentals, experts said.

There is still the risk of deferred payment defaults in the high-end segment, which could add to developers' supply.

'People believe that the worst is over but no one knows for sure,' said a market observer. The great fear among developers and speculators now is a repeat of what happened around the start of the decade.

'The property market then recovered from the 1997 crisis. En bloc sales also came back. There was a rush but it lasted less than a year before the bust came,' said the observer.

'And then it was quiet for a few years before the slow recovery came.'

High-End Market Hots Up

Source : TODAY, Jun 16, 2009

Prime district home sales almost double; analysts say recent stock market rally is fuelling interest in property

SALES of private residential properties surged to their highest level in nearly two years in May. According to the latest data by the Urban Redevelopment Authority released yesterday, overall home sales totalled 1,668 units last month, the highest monthly figure since the all-time record of 1,723 units was set in August 2007.

Purchases of private homes in the prime districts, which include Holland Road, River Valley and Newton, nearly doubled in May with 617 units sold, compared with 322 in April.

Market watchers said the spike in transaction volumes was due to the recent stock market rally, coupled with optimistic consumer confidence and liquidity.

Said Mr Donald Han, managing director of Cushman and Wakefield: “Back in late March and April, the regional stock markets went up by about one-third. This fuelled a lot of the liquidity that is coming back into the (property) market.”

CBRE Research’s executive director, Mr Li Hiaw Ho, said there was a significant amount of interest in high-end properties last month. “Five units of The Orange Grove were sold at the median price of $2,320 per square foot (psf), while one unit each of Boulevard Vue and St Regis Residences was sold at $2,602 psf and $2,200 psf respectively,” said Mr Li.

Mrs Ong Choon Fah, head of consulting at DTZ Debenham Tie Leung, said the May figures suggest that the bullish sentiment in the mass market projects has started to filter up to the luxury segment. “The momentum has certainly picked up. A few projects have seen very brisk sales,” she said.

According to URA data, the most popular developments were Martin Place Residences, The Wharf Residence, The Arte and The Mezzo. These four projects, located in the prime districts of 9, 10 and 11, as well as the city fringe areas, made up more than 30 per cent of the sales. The median prices of units there ranged from $903 to $1,423 psf.

Mr Desmond Sim, associate director of Research at Jones Lang LaSalle, said discounts given by the property developers and strong latent demand helped to boost sales.

Looking ahead, DTZ’s Mrs Ong said prices in the prime districts are likely to go up when more investors comes back into the market, prompting developers to launch the high-end properties in their inventories.

But analysts also warned that the current rebound in the property market may not be sustained. “Activity remains confined within the residential market. This, in our view, is largely fuelled by softer prices and strong latent demand which alone will not be sufficient to sustain an overall recovery in the market,” said Mr Sim.

“Unless there are improvements in the overall economy, it may still take quite some time before we see the return of ‘super-luxury launches’ which may fetch an average $5,000 psf as affordability still remains the main factor to entice buyers.”

Sales Of New Private Homes Up 37% On-Month In May

Source : Channel NewsAsia, 15 June 2009

Sales of uncompleted private homes climbed 37 per cent on-month in May as improving market sentiments and optimism of an economic recovery spurred more home buyers to snap up properties.

A total of 1,668 units were sold last month, up from 1,214 in April, bringing the total number of units sold in 2009 to 5,526. This is more than the 4,435 units sold for the whole of last year. But it remains lower than the market peak of 14,811 sold in 2007.

Home sales in the mid-tier market picked up pace in May. The developments that sold the most units last month were Martin Place, The Wharf, The Arte and The Mezzo.

These four projects, which are in the prime districts and the city fringe areas, made up more than 30 per cent of the sales.

The median price for these developments ranged between S$903 and S$1,423 per square foot.

Deputy managing director of agency and business services, Colliers International, Grace Ng, said: "There are more properties sold above S$1,000 per square foot. For example, in the month of April, the percentage of properties sold above S$1,000 per square foot is about 28 per cent. In May, this crept up to 29 per cent.

“It seems like physical property prices have corrected more in these categories. In the core central region, property prices corrected over 15 per cent. In the outside central region, it contracted about 16, 17 per cent."

Sales of mid-tier and mass-market developments remained strong.

Projects that had a median price of less than S$900 per square foot made up 45.9 per cent of the total units sold.

Analysts say the buoyant sales could be credited to the upswing in the stock markets.

Associate director of ERA Asia Pacific, Eugene Lim, said: "The current rally is predominantly driven by the upswing in the stock market. Over the past months, we saw the stock market rally, not only in Singapore, but across Asia. This improved sentiments among investors and this is probably the main reason behind people buying units today."

Most analysts say it is uncertain if the coming months will see similar sales, but they expect at least 1,000 sales a month.

Ng said: "We expect that the number of units sold will still be above 1,000 in the month of June and the next few months. But whether it is sustainable will depend on a few factors -- like whether there is a sustained recovery in the property market, whether there are clear signs of declining exports, and whether the developer will increase prices."

And should the momentum persist, analysts say the total number of units sold this year may exceed 10,000.

Lim said: "With the current momentum, we do expect to see more launches coming up. So buyers will have more choice. We will see the momentum continuing unless the market changes for the worse."

And analysts say prices are unlikely to increase much despite strong sales. This is because developers are more focused on clearing stock, rather than making high profits in the current environment.

Lim said: "The main agenda of developers today is to clear stock. And they will be very focused on pricing it competitively to move units rather than go for high profits."

Developers launched a total of 1,161 units in May, up seven per cent compared to April. - CNA/yt