Source : The Business Times, September 23, 2008
Do you think that the latest news on Lehman Brothers' collapse indicates that the global economic climate would worsen further, or is the worst over for the sector that you operate in?
Kenny Yap
Managing Director
Qian Hu Corporation
MY gut feel is if US congress approved the US$700 billion rescue package and no more banks collapse, we might be seeing the end of the global financial crisis. Typically, after one or one-and-a-half years of crisis, people kind of get used to that, learn ways to move on and become less panicky. If there's no more bad news, confidence should be back by year end. Let's hope for a better tomorrow!
John Koh
Managing Partner
WMRC LLP
THERE are currently uncertainties in the financial markets and global economies which are unlike what most people have seen in the last decade or so, and it is extremely difficult to predict whether market conditions are heading south or northward simply because the world is very different from what it used to be 10 years ago. WMRC LLP has been actively assisting our clients in the private banking and asset management sectors since our inception, and we have seen good years as well as bad ones. Looking at the current situation, we will continue to do good work for our clients as we believe bad times present lurking opportunities which many would have missed. Surviving bad times is the best test of one's true mettle and besides, pockets of opportunities continue to exist in times like these.
Jackie Cheng Ee Lieng
CEO
Hisaka Holdings
YES, I think it will trigger further downside for the global economy, because most traditional banks are still exposed to investment banks - be it through their structured products or through collaboration on funding investments. There are likely to be more investment banks that have yet to come clean on the status of the exposure. Now, my view is that the financial authorities around the world must assure the public that they will save all the traditional banks so as to restore the confidence of the public. This will prevent mass withdrawals by depositors, which would only make things worse.
Tuesday, September 23, 2008
State Land Sale Revenue Doubles In 07/08: SLA
Source : The Business Times, September 23, 2008
Singapore Land Authority (SLA) on Tuesday said that the total land sale revenue due to the State for the financial year ended March 31, 2008 doubled to hit $12.4 billion, from $6.2 billion in the previous year.
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The numbers mark a steady increase for 10 straight years now, since the property slump in 1997/98, SLA said when it released its annual report for its 2007/08 financial year.
On the back of a property sector boom and strong demand for state properties for office, education and commercial uses, SLA's operating income achieved an all-time high, increasing by 14 per cent to $100.9 million from $88.6 million a year ago.
SLA's total operating surplus reached for the year ending March 31, 2008, was $17.1 million, close to that achieved in the previous financial year.
There are 4,016,162 sq m in total estimated gross floor area of State properties managed by SLA, which is a new record. This is translated into a 87 per cent occupancy rate.
Looking ahead, SLA aims to do more in the area of spatial information, it said. SLA is responsible for the management of a land data repository and data exchange among public agencies. It is also a key agency in a whole-of-government effort to establish a national spatial data infrastructure.
Singapore Land Authority (SLA) on Tuesday said that the total land sale revenue due to the State for the financial year ended March 31, 2008 doubled to hit $12.4 billion, from $6.2 billion in the previous year.
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The numbers mark a steady increase for 10 straight years now, since the property slump in 1997/98, SLA said when it released its annual report for its 2007/08 financial year.On the back of a property sector boom and strong demand for state properties for office, education and commercial uses, SLA's operating income achieved an all-time high, increasing by 14 per cent to $100.9 million from $88.6 million a year ago.
SLA's total operating surplus reached for the year ending March 31, 2008, was $17.1 million, close to that achieved in the previous financial year.
There are 4,016,162 sq m in total estimated gross floor area of State properties managed by SLA, which is a new record. This is translated into a 87 per cent occupancy rate.
Looking ahead, SLA aims to do more in the area of spatial information, it said. SLA is responsible for the management of a land data repository and data exchange among public agencies. It is also a key agency in a whole-of-government effort to establish a national spatial data infrastructure.
UK Housing Market 'On Its Knees', Says Rightmove
Source : The Business Times, September 23, 2008
Properties may see more weakness: BOE chief economist
(LONDON) UK house prices fell for a fourth month in September as the global credit crisis intensified, locking out homebuyers and forcing the sale of the country's biggest mortgage lender, a report by Rightmove plc showed.
'The housing market is on its knees and will remain so until financial institutions address the disastrous state of the mortgage funding markets,' said Miles Shipside, commercial director at Rightmove.
'While this market provides a good opportunity to trade up, it requires a degree of bravery.'
The average asking price for a home fell one per cent from last month to £227,438 (S$595,559), Britain's most-used property website said yesterday. From a year earlier, prices fell 3.3 per cent.
The property market may face further weakness in coming months, provoking 'painful' adjustments for many families, Bank of England chief economist Spencer Dale said last week.
HBOS plc agreed to a takeover by Lloyds TSB Group plc after plunging home values and the financial market crisis destroyed the value of the company and added to the threat of a recession.
Prices dropped the most in the East Midlands, where they fell 5.3 per cent this month, and values declined 3.9 per cent in the south-west, Rightmove said. In London, house prices rose 4 per cent this month after a 5.3 per cent drop last month.
Lenders are reeling from higher borrowing costs in interbank lending on concerns about losses stemming from the collapse of the US housing market.
The US Treasury last week announced a US$700 billion plan to buy troubled assets and avert a financial meltdown. The pound rose against the dollar yesterday, trading at US$1.8439 as of 8.49am in London. The currency has still fallen 7 per cent since the beginning of last month.
The UK economy entered a recession in July, forecasts by the Confederation of British Industry, the country's largest business lobby, show.
Growth stalled in the second quarter, ending the longest period of uninterrupted economic expansion in more than a century.
Prime Minister Gordon Brown suspended the tax on home purchases of less than £pounds;175,000 this month. Still, the number of new listings per estate agent fell to a record low, Rightmove said.
'The changes in stamp duty are just tinkering at the edge of the system,' Mr Shipside said. 'At best they will give slightly more choice to first-time buyers.'
Commercial property derivative prices suggest that commercial property values will continue to fall until 2010 as concerns about the UK economy blunt demand, the Bank of England said in its quarterly bulletin published yesterday.
Other residential housing data also show that the slump has deepened. Home sales plunged to a 30-year record low last month, the Royal Institution of Chartered Surveyors said on Sept 9. Prices fell by the most in a quarter century, HBOS said on Sept 4.
Bank of England policy makers said that they are still concerned the fastest inflation in a decade will become embedded in the economy, making them more reluctant to lower interest rates, minutes of this month's meeting showed.
They voted 8-1 to keep the rate at 5 per cent, with David Blanchflower voting for the biggest reduction since the Sept-11 attacks and Timothy Besley abandoning a push for higher rates. -- Bloomberg
Properties may see more weakness: BOE chief economist
(LONDON) UK house prices fell for a fourth month in September as the global credit crisis intensified, locking out homebuyers and forcing the sale of the country's biggest mortgage lender, a report by Rightmove plc showed.
'The housing market is on its knees and will remain so until financial institutions address the disastrous state of the mortgage funding markets,' said Miles Shipside, commercial director at Rightmove.'While this market provides a good opportunity to trade up, it requires a degree of bravery.'
The average asking price for a home fell one per cent from last month to £227,438 (S$595,559), Britain's most-used property website said yesterday. From a year earlier, prices fell 3.3 per cent.
The property market may face further weakness in coming months, provoking 'painful' adjustments for many families, Bank of England chief economist Spencer Dale said last week.
HBOS plc agreed to a takeover by Lloyds TSB Group plc after plunging home values and the financial market crisis destroyed the value of the company and added to the threat of a recession.
Prices dropped the most in the East Midlands, where they fell 5.3 per cent this month, and values declined 3.9 per cent in the south-west, Rightmove said. In London, house prices rose 4 per cent this month after a 5.3 per cent drop last month.
Lenders are reeling from higher borrowing costs in interbank lending on concerns about losses stemming from the collapse of the US housing market.
The US Treasury last week announced a US$700 billion plan to buy troubled assets and avert a financial meltdown. The pound rose against the dollar yesterday, trading at US$1.8439 as of 8.49am in London. The currency has still fallen 7 per cent since the beginning of last month.
The UK economy entered a recession in July, forecasts by the Confederation of British Industry, the country's largest business lobby, show.
Growth stalled in the second quarter, ending the longest period of uninterrupted economic expansion in more than a century.
Prime Minister Gordon Brown suspended the tax on home purchases of less than £pounds;175,000 this month. Still, the number of new listings per estate agent fell to a record low, Rightmove said.
'The changes in stamp duty are just tinkering at the edge of the system,' Mr Shipside said. 'At best they will give slightly more choice to first-time buyers.'
Commercial property derivative prices suggest that commercial property values will continue to fall until 2010 as concerns about the UK economy blunt demand, the Bank of England said in its quarterly bulletin published yesterday.
Other residential housing data also show that the slump has deepened. Home sales plunged to a 30-year record low last month, the Royal Institution of Chartered Surveyors said on Sept 9. Prices fell by the most in a quarter century, HBOS said on Sept 4.
Bank of England policy makers said that they are still concerned the fastest inflation in a decade will become embedded in the economy, making them more reluctant to lower interest rates, minutes of this month's meeting showed.
They voted 8-1 to keep the rate at 5 per cent, with David Blanchflower voting for the biggest reduction since the Sept-11 attacks and Timothy Besley abandoning a push for higher rates. -- Bloomberg
US Credit Crisis Worse Than S&L: Survey
Source : The Business Times, September 23, 2008
(NEW YORK) Sixty percent of US commercial real estate executives surveyed said they believed the current credit crisis had eclipsed the Savings & Loan crisis of 1989-1991 as having the greatest impact on the state of the industry.
Nearly 80 per cent said they did not believe the meltdown of financial powerhouses - the bankruptcy of Lehman Brothers Holdings Inc, Bank of America Corp's takeover of Merrill Lynch & Co and American International Group's bailout by the federal government - signalled the end of the crisis, according to law firm DLA Piper's 2008 State of the Market Real Estate Survey released on Sunday.
The survey was distributed in August and 424 recipients responded. But the cataclysmic events on Wall Street in the third week of September prompted the law firm to conduct follow-up questions on Sept 15, and 307 responded.
'We seem to running in place at best, and at worst, we're in some sort of a free fall,' said Jay Epstien, chairman of the US real estate practice for the law firm.
The survey was conducted before US Treasury Secretary Henry Paulson called on Friday for the government to spend hundreds of billions of dollars to rescue financial companies from defaulted mortgages and other toxic debt that have threatened to undermine the financial system.
Still, the respondents were bleak, with 90 per cent describing themselves as having a bearish outlook for the next 12 months for US commercial real estate market, up from 68 per cent from a year earlier, when the credit crisis began. Half those who said they were bullish believed they could find good opportunities resulting from distressed properties and loans.
The commercial property market has come to a near halt since the credit markets became unhinged and sources of financing dried up.
One of the cheapest and most often-used sources of debt that helped drive the commercial real estate boom was the commercial mortgage-backed securities (CMBS). Last year, the CMBS market accounted for US$230.19 billion worth of securitised commercial mortgages, according to the Commercial Mortgage Securities Association. This year the total fell to US$12.15 billion, and there have been no new issuances since June.
About 46 per cent of the respondents said they did not believe securitised lending transactions financed by the CMBS market would return to prior levels until after 2010. -- Reuters
(NEW YORK) Sixty percent of US commercial real estate executives surveyed said they believed the current credit crisis had eclipsed the Savings & Loan crisis of 1989-1991 as having the greatest impact on the state of the industry.
Nearly 80 per cent said they did not believe the meltdown of financial powerhouses - the bankruptcy of Lehman Brothers Holdings Inc, Bank of America Corp's takeover of Merrill Lynch & Co and American International Group's bailout by the federal government - signalled the end of the crisis, according to law firm DLA Piper's 2008 State of the Market Real Estate Survey released on Sunday.
The survey was distributed in August and 424 recipients responded. But the cataclysmic events on Wall Street in the third week of September prompted the law firm to conduct follow-up questions on Sept 15, and 307 responded.
'We seem to running in place at best, and at worst, we're in some sort of a free fall,' said Jay Epstien, chairman of the US real estate practice for the law firm.
The survey was conducted before US Treasury Secretary Henry Paulson called on Friday for the government to spend hundreds of billions of dollars to rescue financial companies from defaulted mortgages and other toxic debt that have threatened to undermine the financial system.
Still, the respondents were bleak, with 90 per cent describing themselves as having a bearish outlook for the next 12 months for US commercial real estate market, up from 68 per cent from a year earlier, when the credit crisis began. Half those who said they were bullish believed they could find good opportunities resulting from distressed properties and loans.
The commercial property market has come to a near halt since the credit markets became unhinged and sources of financing dried up.
One of the cheapest and most often-used sources of debt that helped drive the commercial real estate boom was the commercial mortgage-backed securities (CMBS). Last year, the CMBS market accounted for US$230.19 billion worth of securitised commercial mortgages, according to the Commercial Mortgage Securities Association. This year the total fell to US$12.15 billion, and there have been no new issuances since June.
About 46 per cent of the respondents said they did not believe securitised lending transactions financed by the CMBS market would return to prior levels until after 2010. -- Reuters
France More Resilient To Home Price Woes
Source : The Business Times, September 23, 2008
(PARIS) Ewa Filipiak, an economist who's been apartment-hunting in Paris for six months, has decided now is not the time to buy.
'It's a good time to wait and see - I think chances are getting better for finding something exceptional,' said the 29-year-old.
House price falls in Britain, Spain and Ireland have made headlines and now the slide has reached France. But several factors suggest the French market may prove more resilient than some, and Paris could even defy the trend.
People returning from August vacations who had become used to seeing a steady appreciation in the value of their homes were in for a shock when they unpacked their suitcases this year.
A national notary office report earlier this month showed existing home sales fell 25 per cent outside the French capital in the first half of the year, and Paris figures show transactions within the city's 'peripherique' ringroad dropped 20 per cent over the 12 months to June.
Nationally, average prices in France more than doubled in the decade to 2007. Now they're appreciating at their lowest rate in 10 years - and even falling in some areas - so buyers are holding back.
While 10 years of boom preceded the slowdown, in France, taxes and stricter banking rules had kept the rally more discreet than in more free-wheeling British and Spanish markets.
And just as the surge was less spectacular, so may be the slump, partly because mortgages are at fixed interest rates and cautious French households have kept debt in check.
Against a backdrop of stalling economic growth, tougher access to credit, record-low confidence and eroding purchasing power, sales data suggest falls could be right ahead.
Economist Alexandre Mirlicourtois from Xerfi consultancy predicts French prices will drop in coming months as the market corrects from years of rapid expansion, and as banks with weaker balance sheets tighten their purse strings. He estimates prices will drop nationally by 15 per cent before rising again in 2012.
HSBC France sees prices falling at an unspecified rate through 2009 before firming again in 2012.
Though prolonged, that may be less steep than in Spain, where some analysts expect homes could lose 30 per cent of their value in real terms over the next few years.
In Britain, data from the country's biggest mortgage lender HBOS showed prices already fell for the seventh month running in August to stand 12.7 per cent below year-earlier levels.
Realtors are also admitting signs of a shift.
'Prices have been disconnected from the economy, so now they're set to correct and return to reality,' said Rene Pallincourt, president of national realtors group Fnaim. Now, the general mood is one of worry, he said: slowing growth prospects are hitting real estate. Earlier this month, the government cut its 2008 growth forecast to about 1.0 per cent, from 1.7 to 2.0 per cent.
But several factors suggest price falls in France would be moderate. Mortgages are generally shorter than in the UK or the United States. A high birth rate generates regular, baseline demand. And then there's the debt factor. Most agree that Paris, propped up by the monuments, museums and leafy avenues so attractive to high-end buyers, is well positioned to avoid the worst of a market slump. -- Reuters
(PARIS) Ewa Filipiak, an economist who's been apartment-hunting in Paris for six months, has decided now is not the time to buy.
'It's a good time to wait and see - I think chances are getting better for finding something exceptional,' said the 29-year-old.
House price falls in Britain, Spain and Ireland have made headlines and now the slide has reached France. But several factors suggest the French market may prove more resilient than some, and Paris could even defy the trend.
People returning from August vacations who had become used to seeing a steady appreciation in the value of their homes were in for a shock when they unpacked their suitcases this year.
A national notary office report earlier this month showed existing home sales fell 25 per cent outside the French capital in the first half of the year, and Paris figures show transactions within the city's 'peripherique' ringroad dropped 20 per cent over the 12 months to June.
Nationally, average prices in France more than doubled in the decade to 2007. Now they're appreciating at their lowest rate in 10 years - and even falling in some areas - so buyers are holding back.
While 10 years of boom preceded the slowdown, in France, taxes and stricter banking rules had kept the rally more discreet than in more free-wheeling British and Spanish markets.
And just as the surge was less spectacular, so may be the slump, partly because mortgages are at fixed interest rates and cautious French households have kept debt in check.
Against a backdrop of stalling economic growth, tougher access to credit, record-low confidence and eroding purchasing power, sales data suggest falls could be right ahead.
Economist Alexandre Mirlicourtois from Xerfi consultancy predicts French prices will drop in coming months as the market corrects from years of rapid expansion, and as banks with weaker balance sheets tighten their purse strings. He estimates prices will drop nationally by 15 per cent before rising again in 2012.
HSBC France sees prices falling at an unspecified rate through 2009 before firming again in 2012.
Though prolonged, that may be less steep than in Spain, where some analysts expect homes could lose 30 per cent of their value in real terms over the next few years.
In Britain, data from the country's biggest mortgage lender HBOS showed prices already fell for the seventh month running in August to stand 12.7 per cent below year-earlier levels.
Realtors are also admitting signs of a shift.
'Prices have been disconnected from the economy, so now they're set to correct and return to reality,' said Rene Pallincourt, president of national realtors group Fnaim. Now, the general mood is one of worry, he said: slowing growth prospects are hitting real estate. Earlier this month, the government cut its 2008 growth forecast to about 1.0 per cent, from 1.7 to 2.0 per cent.
But several factors suggest price falls in France would be moderate. Mortgages are generally shorter than in the UK or the United States. A high birth rate generates regular, baseline demand. And then there's the debt factor. Most agree that Paris, propped up by the monuments, museums and leafy avenues so attractive to high-end buyers, is well positioned to avoid the worst of a market slump. -- Reuters
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