An Elite Investment Gets Its Day In The Sun

Source : The Business Times, August 13, 2009

Sales of Good Class Bungalows gather steam, with some predicting healthy price rise

The Good Class Bungalow (GCB) market has sprung to life with high-net-worth individuals stepping up their purchases.

July was an especially action-filled month which saw about 20 GCB transactions worth a total of more than $300 million. To put this in perspective, the entire first quarter of this year saw GCB deals worth only $27.5 million.

The action picked up in April, when $56 million worth of GCBs were transacted. It gathered pace in May and June, each month seeing deals amounting to around $188 million. In July, the market went ballistic.

So far this year, around 50 GCB deals have been transacted, according to caveats data compiled by property consultants and information on the latest transactions obtained by BT.

The year-to-date tally of over $800 million is healthy, considering that the whole of last year saw just 51 deals worth $830 million.

GCB agents expect the sales flow to continue in coming months. CB Richard Ellis's director, luxury homes, Douglas Wong said: 'It's likely that a total of 60-65 GCBs will be sold in the whole of 2009 - more than the 51 GCBs sold in 2008. The total quantum is likely to be around $1.1 billion to $1.2 billion, about 35-45 per cent higher than the quantum of $830 million in 2008.'

Savills Singapore director of investment sales & prestige homes Steven Ming says that 'although we do not expect the spike in GCB sales that was seen in May to July to be sustained, we do expect to still see healthy buying activity continue for the rest of the year'. He expects 60-70 transactions for the whole of 2009.

Apart from the general feeling that the worst of the financial crisis is over, he cites the low mortgage and deposit rates as reasons for the GCB market revival.

Agreeing, Newsman Realty managing director KH Tan notes that high-net- worth individuals prefer GCB investments to letting their cash idle in banks. They are also wary of investing in financial products following the Lehman debacle, he said.

'Another group of GCB buyers are foreigners who have become Singapore PRs and PRs who have become citizens,' adds Mr Tan, who recently brokered the $38 million sale of a Cluny Park bungalow.

BT understands the property was sold by former Kim Eng Securities managing director Douglas Ooi to a buyer who also picked up No 3 Cluny Hill earlier this year.

'When the IRs (integrated resorts) are ready, even more rich people from overseas will come to Singapore and become citizens. Some would be interested to invest in the GCB market,' said Mr Tan.

Typically, one has to be a Singapore citizen before one can own a GCB. However, PRs are known to have been given permission by the government on a case-by-case basis to buy small GCBs with land areas of about 15,000 sq ft, depending on their contribution to Singapore, according to Mr Tan.

Major GCB deals in recent months include a site at Dalvey Road said to have been sold by a certain Thomas Chan Ho Lam, for $27.01 million. Interestingly, a person with the same name is also understood to have bought a bungalow at Belmont Road for $30.5 million last month from Ong Kok Thai, managing director of Vanguard Interiors and the Peranakan Place Group.

Meanwhile, GuocoLand chairman Sat Pal Khattar is believed to be the seller of a bungalow at Rochalie Drive, which fetched $18.32 million. BreadTalk founder and chairman George Quek is reported to have sold his 2 Swettenham Road bungalow for $29.2 million to developer Simon Cheong.

The GCB market peaked in 2006 with $1.23 billion of transactions involving 119 deals. The following year saw 87 deals for a total $1.15 billion, according to CBRE figures. In the first seven months of this year, 47 deals totalling $710 million took place, CBRE said.

However, BT has learnt there are about six other transactions not yet captured in caveats, located in places like Belmont and Leedon roads, Maryland Drive and Astrid Hill. If these were to be included, the year-to-date tally would cross $800 million.

GCBs are the creme de la creme of Singapore's housing market, with stringent planning requirements.

There are only about 2,400 such bungalows in Singapore's 39 gazetted GCB Areas.

Mr Tan estimates GCB prices could increase about 20 per cent on average over the next 12 months.

Says Savills' Mr Ming: 'GCBs, being limited in availability, are a highly sought-after investment among the well heeled. As more rich are created, demand for these exclusive bungalows will gradually outstrip available supply for sale.'

Prepared Industrial Land Allocation Falls In Q2

Source : The Business Times, August 13, 2009

Negative 32.2 ha compares with net allocation of plus 14ha in Q1

Net allocation of prepared industrial land went into negative territory in the second quarter for JTC Corporation, as the downturn continued to take a toll.

Coming soon: Phase 2A of Fusionopolis is under construction and is expected to be finished by 2013

JTC's Q2 facilities report shows net allocation was negative 32.2 hectares, compared with a net allocation of plus 14 ha in Q1 and 34 ha in Q2 2008.

Gross allocation in Q2 this year slid to 5.4 ha. And termination jumped to 37.6 ha, from 16.7 ha in Q1. Almost half of total terminations stemmed from the electronics segment. And almost a quarter of terminations was due to companies consolidating operations.

Net allocation of generic land and specialised parks also moved into negative territory in Q2.

Net allocation of generic land was negative 7.1 ha, down from plus four hectares in Q1 and significantly lower than 26.7 ha in Q2 2008. As gross allocation fell 77 per cent quarter-on-quarter to 2.5 ha, termination rose 37 per cent to 9.6 ha in Q2. The manufacturing sector accounted for 74 per cent of gross allocation.

Net allocation of specialised parks dropped to a negative 25 ha versus plus 10 ha in Q1 and 7.3 ha in Q2 2008. This was also due to lower gross allocation and higher termination. Gross allocation plunged 85 per cent quarter-on-quarter to 2.9 ha, while termination rose three-fold to 28 ha.

Wafer Fab Park accounted for 65 per cent of termination within specialised parks, with 18.3 ha in Q2, which widened net allocation for Wafer Fab Park from negative 6.5 ha in Q1 to negative 18.3 ha in Q2.

In JTC's ready-built factory (RBF) segment, net allocation remained negative in Q2 but improved slightly, climbing to negative 7,800 sq m versus negative 8,900 sq m in Q1, thanks to a 64 per cent increase in gross allocation to 17,800 sq m. Higher gross allocation was partly offset by higher termination, which rose by 30 per cent to 25,600 sq m in Q2.

The RBF occupancy rate was 0.3 percentage points lower at 97.4 per cent.

Meanwhile, Phase 2A of Fusionopolis is under construction and is expected to be finished by 2013, JTC said yesterday.

Consultants See Slower Slide In Office Rents

Source : The Business Times, August 13, 2009

But most are conservative about the strength of space absorption for the rest of 2009

Some property consultants reckon the worst is over for falling office rents. And one even expects net take-up of space to turn positive by the fourth quarter of this year if the economy does reasonably well.



























Cushman & Wakefield's mid-Q3 analyses show the decline in prime office rents has slowed. For instance, Raffles Place Grade A office rents fell 18 per cent from $10.61 in Q1 to $8.70 in Q2. But since then, they have dipped just 2.9 per cent to $8.45.

The same trend is showing up for prime office rents in the Shenton area. They have dropped 5.8 per cent from Q2 to $6.32 - a smaller decline compared with the 17.9 per cent drop from $8.17 in Q1 to $6.71 in Q2.

The prime office vacancy rate at mid-Q3 is 6.1 per cent, up 0.4 of a percentage point from Q2.

'As economic conditions continue to stabilise, we will see the flow-through to improved space absorption happening over the next few months,' said Cushman & Wakefield research director Ang Choon Beng.

'On a more optimistic note, if Singapore's GDP performance comes in at the better end of current estimates, we could potentially see positive space absorption by Q4 2009.'

Singapore's Q2 GDP jumped 20.7 per cent quarter-on-quarter but the government remains fairly guarded, keeping its GDP forecast for the year at a contraction of 4 to 6 per cent.

Net take-up of office space here has been negative for three consecutive quarters since Q4 2008 - a result of weakening demand for office space and rising supply.

Other consultants that BT spoke to agree that office rents have fallen at a slower pace, but are more conservative about the strength of space absorption for the rest of the year.

'It's probably a little bit early to forecast positive take-up over the second half,' said CB Richard Ellis's executive director for office services Moray Armstrong. For one thing, some companies may have introduced downsizing plans that will only take effect in the months ahead, he said.

There could still be downward pressure on rents in the next few quarters and positive take-up of space might not emerge until next year, he added.

Jones Lang LaSalle's head of markets in Singapore Chris Archibold is also cautious about where net take-up could head in Q4. 'There are little bits of expansion here and there but they are very few and far between at the moment . . . and we're still seeing some organisations downsizing,' he said.

All three consultancies reckon a game of musical chairs is going on in the office market - leasing activity has been dominated by companies relocating for better propositions, such as more competitive rents or more efficient floor plates. As BT reported last week, several firms are moving to new buildings such as Mapletree Anson and Straits Trading Building.

Hotel Royal Family Offering Guillemard Apt Block For Sale

Source : The Business Times, August 13, 2009

Fragrance Group picks up freehold site at Changi Road for $33.56m

Melodies Limited, controlled by the Lee family of Hotel Royal, is selling a 20-storey freehold apartment block in Guillemard Road which it developed 11 years ago.

Cassia View, which received Temporary Occupation Permit in 1998, comprises a total of 72 units

The price is about $70 million, reflecting $783 per sq ft based on existing strata area of 89,362 sq ft.

Colliers International, which is marketing the property, Cassia View, through an expression-of-interest exercise, says that the buyer could either spruce up the 72 units and sell them individually or tear down the property and redevelop it.

Cassia View is understood to have utilised the maximum gross floor area (GFA) allowed for the site based on a 2.8 plot ratio under Master Plan 2008. The site is zoned for residential use.

Nevertheless, Colliers executive director (investment sales) Ho Eng Joo reckons the buyer could redevelop the property, given its age, as there may be scope for improving the layout to better suit current tastes.

Based on Cassia View's GFA of 105,823 sq ft, the $70 million price reflects a land cost of $661 psf per plot ratio if the new owner chooses to redevelop it.

Some 28 of Cassia View's existing 72 units are currently let on short-term leases of up to a year.

Dakota Residences, a 99-year leasehold condo nearby, is now selling for about $900 psf on average.

The expression-of-interest exercise for Cassia View closes on Sept 2.

Separately, Fragrance Group last week picked up a freehold site in Changi Road for $33.56 million.

The deal was brokered by DTZ. The land area is 28,545 sq ft.

Fragrance said that it plans to develop the site into a five-storey mixed development comprising commercial space and apartments.

It intends to start construction and sale of the project in the second half of financial year 2009.

Kaki Bukit Industrial Site Attracts 18 Bids

Source : The Business Times, August 13, 2009

An industrial site along Kaki Bukit Road 2, put up for sale by the government, drew an impressive 18 bids by the close of tender yesterday.

The Urban Redevelopment Authority (URA) said that the highest bid received for the 30-year leasehold site was $12.1 million, more than double the minimum bid price of $5 million.

That highest bid, which works out to just under $105 per square foot per plot ratio (psf ppr), was placed by Kng Development, whose shareholders include Ng Teng Yeng, brother of property tycoon Ng Teng Fong; Kim Chan Wah and Ng Hock Lye.

Kng's bid is 16.5 per cent above the second highest bid of $10.4 million, or $90 psf ppr, submitted by Lee Siaw Ling, Low Khoon Huat and Ang Lai Huat.

It is also higher than the $72 psf ppr which Eastpoint Development paid for a 30-year leasehold industrial site along Kaki Bukit Road 3 in August 2007.

This latest site, offered from the government's reserve list, has an area of 1.07 ha and a gross plot ratio of one. CBRE Research says that the breakeven cost for Kng Development is likely to be $250 psf.

'The robust response to the tender reflects the prevailing improving business sentiment,' said Li Hiaw Ho, executive director at CBRE Research.

He noted that the top six bids were all above $75 psf ppr and 'could be reflective of the bidder's expectations that Singapore's manufacturing sector will improve in the near future'.

Colliers International director (industrial) Tan Boon Leong said that the large number of bids received was not surprising as the 'quantum amount is small'.

He thinks that the good response reflects greater confidence in the economy, as well as the fact that the plot lies within a mature industrial estate and is zoned for a Business 2 development, which means that it can be developed for a range of clean, light and general industrial uses.

Mr Tan also said that some of the bids were placed by contractor developers 'who are probably more competent in judging their construction costs, and with prior experience, may thus be bolder when it comes to putting in bids'.

URA's decision on the award of the tender will be made after the bids have been evaluated, and disclosed at a later date.

Buying The Ultimate Home

Source : The Business Times, August 13, 2009

LANDED HOMES

With only about 2,400 units of good class bungalows in the market, almost any GCB would be a rare find

THEY are wealthy and successful people who can probably afford to buy any home they want, but many of them are being drawn towards good class bungalows (GCBs). There are only 39 designated GCB areas in Singapore and Binjai Park is one of them. However, these areas are not all equal. Douglas Wong, director of luxury homes at CB Richard Ellis says: 'Some GCB locations are more prestigious than others.'

If one is looking for exclusivity, the most expensive GCBs are generally in the Nassim and Lady Hill areas. This is followed by those in the Tanglin vicinity.

For instance, the current asking price for GCB land in the Nassim area is between $1,500-$2,000 per square foot (psf) whereas in Chestnut Drive, GCBs have been known to have transacted at around $550 psf, says Mr Wong.

There are also pros and cons to buying either an old bungalow or a newly built one. 'Some old GCBs have unique architectural features and come with a rich heritage. Buyers, however, have to be prepared to set aside some money to refurbish and upgrade the building and fit it out with modern conveniences,' says Mr Wong.

New buildings, he says, can be tailored to specific tastes but also be expensive. But what usually pushes up prices is the location.

A martial arts movie star who picked up a GCB at Binjai Park for $19.8 million at around $871.36 psf earlier this year appears to have gotten a good buy.

It was reported that the seller of the house had incurred a loss of $1.2 million on the deal, having bought the property in early 2007 for $21 million, or $924 psf.

William Wong, managing director of RealStar Premier Property Consultant says that the selling price for a newly built GCB will generally be higher than that of an old GCB. 'The choice normally depends on whether the buyer is price sensitive,' he says.

Mr William Wong also points out that a new house might take as long as two years to build although it is more likely to be built to the owner's precise specifications.

If one is looking for exclusivity, the most expensive GCBs are generally in the Nassim and Lady Hill areas, says Mr William Wong. This is followed by those in the Tanglin vicinity such as the Rochalie, Bishopsgate and Chatsworth areas.

On the prices, GCBs in the Tanglin vicinity range from $1,200-$1,400 psf for the top of this category. 'Other popular GCB areas are in the Swettenham, Pierce, Dalvey, Cluny Park areas where prices can range from $1,100-$1,300 psf,' he added.

'1,000 psf is the standard price for an average GCB. Prices have been moving up over the last six months. Now is a good time to buy as there is a huge demand with many permanent residents trying to purchase GCBs of 15,000 sq ft in size,' added Mr William Wong.

Permanent residents are permitted to buy landed property, but only with permission from the government. Foreigners cannot easily buy a GCB or any other landed home here as the government restricts foreign ownership of residential property. However, foreigners who take up Singapore citizenship may buy landed property.

The exception to the restrictions is the gated residential enclave of Sentosa Cove, where ownership rules were eased to allow foreigners who are not permanent residents to buy landed homes or land plots, though permission is still needed.

Apart from some restrictions on ownership, CBRE's Douglas Wong says that one of the common misconceptions when buying a GCB is that some buyers unknowingly pay a premium for a home that actually falls outside the designated GCB areas. 'Some buyers think that as long as a bungalow has a land area of 15,070 sq ft, it is considered a GCB, not knowing there are only 39 designated areas,' he added.

Before buying any home, it is also useful to do some checks. For instance, Mr Douglas Wong says that it is useful for a surveyor to be called in to assess and ascertain the site boundary for issues such as encroachment.

A structural surveyor or engineer can also be engaged to assess the structural integrity of a house, especially if it is an old or conserved bungalow. It is also important to check with the relevant authorities about possible drainage and road reserves as this could affect the the boundary setbacks.

Finally, the terrain, shape of the site and frontage are other physical characteristics that are important, especially if one is going to build a new house.

But with only about 2,400 units of GCBs in the market, almost any GCB would be a rare find.

Donald Han, managing director of Cushman & Wakefield, points out that GCBs represents just 3.5 per cent of total landed housing and a mere one per cent of total private residential stock.

'The majority are owned by the who's who - and are seldom placed for sale in the market. On the contrary, there's an increasing pool of buyers made up of high net worth individuals, GCB collectors as well as permanent residents who are looking to buy GCBs for their own use,' he adds.

GCB buyers are a discerning group of investors who also have a different view on what makes a good investment. 'Yields are not part of the investment criteria - which is typically less than 2 per cent,' said Mr Han.

Instead most see GCBs as a good long-term asset class of investment, 'especially in land-scarce Singapore where land value appreciates over time'.

And Mr Han believes that the outlook for GCBs is also good. 'Generally, GCB prices have fallen by 35 per cent since the peak last year; and with the improved outlook in real estate sector, we expect further price upside in this sector,' he said.

NZ House Prices Rise For A 3rd Month In July

Source : The Business Times, August 11, 2009

(WELLINGTON) New Zealand house prices rose for the third month in July, signalling the property market is recovering and may help the economy emerge from a recession.

Recovery mode: House prices in New Zealand rose 0.7% from June and have gained 1.3% from a low in April, according to a new report

Prices rose 0.7 per cent from June and have gained 1.3 per cent from a low in April, Quotable Value New Zealand Ltd, the government valuation agency, said in an e-mailed report.

Reserve Bank governor Alan Bollard last month kept the benchmark interest rate at a record-low 2.5 per cent and said he is unlikely to raise borrowing costs until late 2010.

Rising consumer confidence, housing demand and immigration are helping New Zealand recover from its worst recession in three decades.

'There are signs that more vendors are putting their properties on the market,' Glenda Whitehead, valuation manager at Wellington-based Quotable Value, said in the report. 'This is perhaps in response to reports of shortages of listings and signs that values have stopped declining.'

House prices slumped last year amid a credit crisis and a plunge in consumer confidence. By March, prices were 9.3 per cent lower than a year earlier.

In July, prices were 5 per cent lower than a year earlier, yesterday's report showed.

New Zealanders are more optimistic about the housing market, with 27 per cent of 600 people surveyed in July saying they expect prices will rise, ASB Bank Ltd said in a report last week.

Sixty-four per cent said it was a good time to buy a home. Annual immigration growth accelerated to the highest level in more than two years in June, while house sales rose 40 per cent.

Consumer confidence rose to an 18-month high in the second quarter, according to a survey by Westpac Banking Corp and McDermott Miller Ltd. -- Bloomberg

Property Transactions For Districts 1 To 14 With Contract Dates Between July 16th - 22nd, 2009

Dubai Home Prices Drop Further

Source : The Business Times, August 11, 2009

(DUBAI) Dubai house prices fell by 24 per cent in the second quarter from the prior quarter but the pace of decline slowed, in line with improving global property markets, Landmark Advisory said on Sunday.

Prices fell less in the same period in Abu Dhabi, as the United Arab Emirates' (UAE) capital, home to most of the country's oil, continues to weather the global downturn better than its neighbour.

The average sale price for villas in Dubai fell 24 per cent while apartments declined 17 per cent, Landmark said.

Prices for villas and apartments fell 32 per cent and 23 per cent respectively in the first quarter from the fourth quarter, the firm said in its May report.

Dubai's once-booming real estate sector has been hit hard by the global financial crisis, but the pick-up in more mature markets such as the United States and Britain is starting to cheer investors.

Prices in the US rose in May for the first time in three years while prices in Britain gained for a third month running in July.

House prices in Dubai are likely to stabilise by the fourth quarter, after falling 9 per cent in the second quarter from the previous quarter, Colliers International said last week.

Rents for villas in Dubai fell 19 per cent to 220,350 dirhams (S$86,480) in the second quarter, while apartment rents dropped 23 per cent to 129,900 dirhams, Landmark said.

Transaction volumes rose 25 per cent and 20 per cent respectively as more people relocated to Dubai from the neighbouring emirates of Abu Dhabi and Sharjah, it said.

In Abu Dhabi, sale prices fell by up to 11 per cent for apartments in the second quarter and 8 per cent for villas compared with the previous quarter, but prices are unlikely to suffer further significant declines, the report said.

The rate of decline also slowed as prices for both categories fell 20 per cent and 30 per cent respectively in the first quarter from the fourth quarter, Landmark said in May.

Rents for both apartments and villas fell by roughly 10 per cent in the second quarter, it said, adding average rents would likely fall significantly as more supply enters the market.

Seven emirates make up the UAE federation.

Landmark Advisory is part of real estate brokerage and consultancy Landmark Properties, which has offices in the UAE and London. -- Reuters

一个单位约七人申请 榜鹅预购组屋抢手

Source : 《联合早报》August 13, 2009

尽管经济前景不明朗，榜鹅预购组屋（BTO）项目Punggol Residences的申购反应非常热烈，每个单位平均有7人申请，是过去一年来，建屋发展局在榜鹅推出的四个预购项目中，申购率最高的项目。

鉴于反应踊跃，建屋局打算本月在榜鹅推出另一个预购组屋项目。根据建屋局网站的数据，截至昨天傍晚5时，Punggol Residences的769个优质单位共收到5215份申请。申请昨天午夜截止。

Punggol Residences的五房式单位最受欢迎，平均每个单位约有10人申购。（建屋局照片）

其中，五房式单位的申购情况最为热烈，154个单位有1606人申请，平均每个单位有10.4人申购。四房式的反应也不俗，615个单位有3609人申请，平均每个单位5.9人抢购。

组屋单位面积从91平方米到114平方米不等，四房式组屋的售价介于26万4000元至32万2000元，五房式则介于34万4000元至40万9000元。

建屋局发言人昨天受询时说，这批预购组屋的申购反应良好，显示买家觉得此项目物有所值。

发言人指出，建屋局将不断在榜鹅新镇推出新的组屋项目，进一步朝实现“优质榜鹅21”的愿景迈进。

纵观榜鹅过去的另三个预购项目，申购率一直徘徊在每个单位平均两三人申请。

于今年3月推出的The Nautilus @ Punggol的519个四房式和五房式单位，共获得1400多份申请，平均每个单位有2.7人申购。去年12月推出的Punggol Regalia729个单位有至少2000人申请，平均每个单位收到2.8份申请。Punggol Arcadia的750个单位则有2300多人抢购，平均每个单位有3.1人申请。

对于Punggol Residences颇高的申购率，受访房地产分析员并不感到意外。

博纳集团总裁伊斯迈受访时说，榜鹅一带转售组屋的平均溢价（cash-over-valuation，简称COV）过去几个月开始增加，已突破1万元大关，现在的平均溢价为1万5000元，导致转售组屋失去吸引力。

伊斯迈说：“务实的买家宁可购买新的预购组屋，因为他们无需支付任何溢价。”

他也指出，尽管经济不景气，这个项目仍可吸引这么多申购者，恰恰反映了组屋市场仍有需求。

Dennis Wee房地产经纪行董事许家荣同意说：“其实，经济情况越糟，人们越想购买政府组屋，因此预购组屋的需求往往保持强劲。”

许家荣解释说，这批新组屋价格合理，况且屋主购买新组屋时，还能享有高达四万元的额外公积金购屋津贴，节省买屋费用。

此外，与几个月前推出的The Nautilus@Punggol项目比较，Punggol Residences的地点更为适中，所建造的也是设计较出众的优质组屋，所以获得更多公众青睐。

Punggol Residences将建在榜鹅径（Punggol Walk）和榜鹅域（Punggol Field）交界处，估计在2013年第一季完工。

建屋局今年已推出了约2800个预购组屋，而由于需求强劲，它打算把供应量增至8000个或以上。

虽然大部分新组屋将位于榜鹅新镇，但它也正在观察其他新镇的组屋需求，若有需要，它将在这些地方推出新的预购组屋项目。

国家发展部长马宝山上月底谈及组屋市场时说，要是四房式和五房式组屋有需求，政府下来或许会推出更多这类单位。

Law Firms To Lose Right To Hold Property Deal Money

Source : The Straits Times, August 12, 2009

Ministry seeks feedback on proposals to protect buyers and sellers

ALL payments for property deals will in future be held by the Singapore Academy of Law (SAL) or commercial banks, and not law firms.

General details of how this will work were released by the Law Ministry yesterday as it sought public feedback on a final solution to the longstanding problem of lawyers running off with their clients' money.

In the last five years, rogue lawyers have absconded with almost $20 million in funds meant for property transactions, and held in client accounts in law firms.

The Law Ministry's proposals were sparked by the need to protect monies entrusted to lawyers by buyers and sellers of properties.

For instance in 2007, a 47-year-old woman who sold her property for $740,000 and hoped to use the gains of $200,000 to get out of bankruptcy, came to grief when the lawyer she hired, Zulkifli Amin, skipped town with her money.

It was part of a $6 million loot he had stolen from conveyancing transactions entrusted to him to handle.

The case showed that earlier moves to safeguard such deposit monies were inadequate.

After rogue lawyer David Rasif fled with $11 million in 2006, the rules were changed so that at least two lawyers had to sign off on cheques withdrawing more than $5,000 from clients' accounts.

Despite this, Zulkifli still managed to disappear with $6 million in November 2007.

The Law Ministry's recommendations will stop lawyers from handling monies meant for property deals altogether and provide for punishments if the rules are breached.

Property buyers and sellers will not be inconvenienced.

The SAL takes over the role of the law firm in holding the deposit, which it pays out in due course.

Clients do not have to deal with the academy directly.

The moves follow the recommendations of a review committee appointed by Chief Justice Chan Sek Keong and chaired by Justice V.K. Rajah last year. A team headed by Senior Counsel Wong Meng Meng then worked out the implementation.

Under the current system, a prospective buyer gives a cheque for the deposit on the transaction price to the seller's law firm once he has exercised his option to buy. The money is kept in the client's account for 12 to 14 weeks while lawyers work to complete the sale, and then it is released to the seller.

In future, the cheque will be replaced by a cashier's order payable to the SAL which the buyer's lawyer can forward directly to the academy.

The balance of the sale price will also be paid by cashier's order - to the seller, the lawyer for his legal fees, and the property agent for his commission.

While the SAL will be the main body to hold the conveyancing deposits, the ministry is in talks with local banks such as UOB, OCBC and DBS to provide the service.

A spokesman for heavyweight firm WongPartnership said the proposed changes would have minimal impact on the conveyancing transactions of large law firms, which already have 'stringent measures' in place.

It should even reduce administrative work, said Ms Edna Lim, a lawyer from a small firm, Jing Quee & Chin Joo.

'While the details have yet to be established, there would be no inconvenience if the firm's role is to forward the cashier's order to SAL on the client's behalf,' she said.

Lawyer Amolat Singh noted that the changes would be an enlargement of the SAL's role, which now holds deposits paid by owners of new homes, worth about 5 per cent, to guarantee against defects in construction.

The funds are released to the developer only a year after owners have taken occupancy.

A Law Society spokesman said the society would be responding to the recommendations.

The public may view further details at the Law Ministry's website at www.minlaw.gov.sg .

Feedback may be faxed to 6332-8842 or e-mailed to MLAW_Consultation

@mlaw.gov.sg by Aug 26.

Joo Chiat Shophouses Sold For S$25.6m To World Class Land

Source : Channel NewsAsia, 11 August 2009

A cluster of 18 shophouses fronting Joo Chiat Road and Onan Road has been sold to property developer World Class Land for S$25.6 million.

This translates to S$410 per square foot on the existing gross floor area of the properties.

World Class Land is a unit of public-listed Aspial Corp.

The freehold site consists of two back-to-back rows of nine shophouses, each three-storeys tall.

The total gross floor area of the 18 shophouses is estimated to be about 62,500 square feet.

Under the 2008 Master Plan, these shophouses are gazetted as conservation buildings.

In a statement, Aspial said it plans to develop a mixed commercial and residential project at this newly-acquired site.

The costs of the acquisition and development will be funded internally and through bank borrowings. - CNA/yt

Aspial Unit Bags 18 Shophouses For $25.6m

Source : The Business Times, August 12, 2009

WORLD Class Land, a subsidiary of listed Aspial Corporation, has bought a cluster of 18 freehold shophouses fronting Joo Chiat and Onan roads for $25.63 million.

'The transacted price reflects $410 per square foot on the existing gross floor area of 62,489 sq ft. Upon redevelopment, the property may have the potential of achieving a gross floor area of 81,000 sq ft,' said Credo Real Estate managing director Karamjit Singh, whose firm handled the sale of the properties through a tender that closed last week.

The seller is a family trust.

The properties comprise two back-to-back rows of nine units of three-storey shophouses with a site area of 35,440 sq ft.

Under Master Plan 2008, the shophouses along Joo Chiat Road are gazetted as conservation buildings with a 3.0 gross plot ratio, while the portion that fronts Onan Road is zoned for residential use with a 1.4 gross plot ratio.

'The buyer may consider refurbishing the buildings while adding more floor area to the shophouses in Joo Chiat Road before renting them or selling them as individual shophouse units,' Mr Singh said.

'As for the Onan Road shophouses, the buyer has the option to redevelop them into a residential block of up to five storeys or refurbish them for sale or investment.

'The tender attracted developers and private investors with experience in restoring conservation shophouses.'

Battered Owners Hopeful As Home Sales, Prices Rise

Source : The Business Times, August 11, 2009

But analysts remain sceptical on the longer-term outlook for property prices

(LONDON) For homeowners around the world struck by the collapse of property markets, figures showing the downward spiral may be halting are the most meaningful signs yet of a possible economic recovery.

False dawn? Despite price rises in Britain (next), China and the United States (left), IHS Global Insight warns that there may be surprises in store as houses could become less affordable

As battered banks and stocks rally again, news that US house prices are finally rising after nearly three years of traumatic decline offers the greatest hope to hard-pressed homeowners from California to Krakow.

The sub-prime home loan crisis in America was the pressure-point that exposed underlying global financial chaos - and many economists say that property prices there are the linchpin for confidence in broader economic recovery.

US home sales have been rising and the latest Standard & Poor's/Case Shiller index of home prices in 20 major US cities showed a 0.5 per cent increase between April and May - the first monthly rise since 2006.

'This is the first time we have seen broad increases in home prices in 34 months. This could be an indication that home price declines are finally stabilising,' said Standard & Poor's analyst David Blitzer.

Data from the National Association of Realtors also showed that the median price of existing US home sales was US$181,600 (S$261,704) in June - 15 per cent lower than a year ago, but up from US$174,700 in May.

Celia Chen, an analyst at credit rating agency Moody's, said that there were 'tantalising signs that the descent in house prices is at least moderating', but warned that house prices will not reach their 2006 highs until 2020.

Joel Naroff at Naroff Economic Advisors disagreed with that downbeat view, saying the increase 'could start increasing much more rapidly than projected'.

Analysts remain sceptical on the longer-term outlook for property prices as stable economic growth remains vulnerable to rising unemployment and government strategies for a clean exit from recession after unprecedented fiscal stimulus.

But that is doing little to dampen cautious optimism on property markets.

Official data in China is showing house prices in 70 cities were up 0.8 per cent in June from May, rising for the fourth straight month, while real estate investment nationwide rose 9.9 per cent in the first half of the year.

In Britain, house prices rose by 1.1 per cent last month to just under £160,000 (S$384,808) from June, but were down 12.1 per cent over 12 months, a survey from home-loans provider Halifax showed this week.

In neighbouring Ireland, however, prices have fallen by up to 40 per cent from their peak in 2006 and are still going down - with the government now working to provide 90 billion euros (S$184 billion) in guarantees to the loan market.

Likewise, Spain's second-biggest bank BBVA has forecast that house prices, after a decade-long, tourism-fuelled property boom, will still fall by nearly 30 per cent between 2008 and 2011 before they start to recover.

In the Gulf emirate of Dubai, house prices have almost halved over the past year. The sector there is struggling with a shortage of liquidity and job security for expatriates who represent over 80 per cent of the population.

The decline in Dubai has had wider implications, with US bank Morgan Stanley saying that world steel production will remain below 75 per cent capacity as it awaits a revival in the construction sector in the Middle East.

And, despite the price rises in Britain, China and the United States, IHS Global Insight analyst Howard Archer warns that there may be surprises in store.

'We suspect that they will be prone to relapses over the coming months,' Mr Archer said, referring to British house prices.

He warned that houses could become less affordable because of 'the economic climate of recession, sharply rising unemployment and slowing wage growth'. -- AFP

Strong Demand For HDB's Build-To-Order Punggol Flats

Source : The Straits Times, Aug 13, 2009

APPLICATIONS for the build-to-order (BTO) Punggol Residences flats have been flooding into the Housing Board (HDB).

As at 5pm on Wednesday, the HDB had received 5,215 applications for the 769 flats on offer at the Punggol site.

This works out to a subscription rate of 6.7 times for the development, which comprises 615 four-room and 154 five-room flats. There were 3,609 applications for the four-room flats and 1,606 applications for the five-room units.

The deadline for applications is midnight on Aug 12.

Punggol Residences, situated at the junction of Punggol Walk and Punggol Field, is located within the precincts of the future Punggol Town Centre.

It is a five-minute walk from the Punggol MRT station and the bus interchange, while the Tampines Expressway is a short drive away.

The prices range from $264,000 to $322,000 for the four-room units and $344,000 to $409,000 for the five-room flats.

The prices are comparable to those at Punggol Regalia, a similar premium BTO project next to Punggol Residences, which was launched in December last year.

To date, the HDB has launched about 2,800 flats under the BTO system and, given the strong level of demand, is committed to stepping up its supply to 8,000 or more units. It is set to unveil another BTO project for Punggol later this month.

'The consistently high subscription rates for the BTO projects in Punggol Town are testament that the town has become a much sought-after place to live in,' the HDB spokesman said.

The HDB believes the launch of new BTO projects in Punggol will further contribute towards realising the 'Punggol 21-Plus' vision of a waterfront town for the 21st century.