Wednesday, December 21, 2011

Demand for mass market homes 'to be stable'

BUYERS may be reeling from the tough property measures announced earlier this month but analysts do not expect this to last long.

They say in a report that demand for mass market homes will be unaffected although prices could fall 5per cent to 10 per cent.
The report stressed that the measures are largely targeted at foreign buyers, a group that is not prominent in the mass market property segment.

Data from the Urban Redevelopment Authority shows that locals dominate the private home purchases in the suburbs where mass market homes are located.

Singaporeans accounted for 69.9 per cent of caveats lodged for homes outside the central region, while foreigners took up a 14.4 per cent share.

Foreigners were more active in the city centre and city fringe districts, accounting for 28.7 per cent and 20.2 per cent of the caveats lodged in those areas.

The report also suggested that the various property measures introduced since September 2009 have failed to dampen new home sales. It added that the market has been supported by mass market and upgrader-type homes.
The measures were introduced to counter the excessive inflows of foreign liquidity.

The new measures are unlikely to be permanent due to the nature of Singapore's open economy. Still, foreigners who had been thinking of buying a home here are probably having second thoughts in the light of the added stamp duty.

Under the new measures, foreign buyers will have to pay an extra 10 per cent on top of the existing buyer's stamp duty of about 3 per cent.

The impact would be felt the most in prime and luxury residential properties with prices expected to fall between 10per cent and 15 per cent next year. Mass market homes could fall by 5 to 10 per cent. Separately, landed home prices will likely see a smaller correction of less than 5 per cent, since foreigners are generally not allowed to buy and supply is limited.

Some developers of properties in the prime districts are already trying to woo buyers back to the market by offering discounts.
Agents marketing the Verv at River Valley said the developer is shaving 10 per cent off the prices of its remaining apartments. A 1,010 sq ft apartment now costs $2.25 million.

At Loft at Nathan, another River Valley project, a 1,980 sq ft penthouse that would previously cost about $1.8 million now costs about $1.7 million.

Both projects are not new launches. The Straits Times understands that the two offers were made in response to the recent measures.

Developers are definitely watching the market now. They will probably re-assess the sector again towards the end of January, and perhaps we might see more offers then.

Source: The Straits Times – 19 December 2011

Friday, December 16, 2011

MUCH ADO ABOUT NOTHING

The dive in property stock prices following the Dec 7 announcement of additional cooling measures is an admission by the market that it believes that the bulk of home buying in recent quarters - if not years - were investment purchases and not driven by owner-occupiers or upgraders as many had claimed for so long.
How else can we interpret the strong reaction and thinly-disguised anger and bitterness in some of the comments in news reports over the recent days? I was actually more taken aback by these comments than the actual measures themselves. However, the party which should be the most aggrieved - the developers - appears to have taken the latest measures far better than others.

The day after the announcement of the additional buyers' stamp duties of between 3 and 10 per cent on certain transactions, the developers came out in droves - 22 in all - to bid for a landed housing site in Chestnut Ave in Upper Bukit Timah. There is no doubt that the buyers of landed homes are less affected by the cooling measures, but the number of bids and the prices were above expectations. Only one developer was successful, which means 21 others had spare cash to spend. Is this a sign of vulnerability?

If indeed the majority of home purchases this year had been underpinned by strong demand fundamentals - shrinking household sizes and rapid population growth that had resulted in severe undersupply as suggested by some analysts four to five months ago - why is there a panic reaction now?

We have been overwhelmed by numerous negative comments, with almost all analysts predicting at least a 10-per-cent drop in home prices in the next year, with some forecasting a plunge as much as 30 per cent. This translates to an average loss of 2.5 per cent per month or 7.5 per cent per quarter.

Such a steep drop in such a short period - if it occurs - indicates a severe loss of market confidence. Maybe we are thinking about the last decline during the global credit crisis that followed the collapse of Lehman Brothers. However, we should not forget that Singapore experienced its deepest post-independence recession then. Are we expecting a recession of the same magnitude next year? The latest economists' forecast is that the Singapore economy will grow 3 per cent next year.

If you had read the report in question, the 30-per-cent drop was predicated on slower population growth and unprecedented home supply, not on slower economic growth or a recession. Some analysts have also drawn comparisons to the 1996 price decline which was precipitated by the introduction of anti-speculation measures in May that year. It is not a fair comparison as the problem then was rampant speculation and it was nipped in the bud. There was no low-interest rate environment.

From the statements accompanying the announcement of the latest measures, it is clear that the authorities see potential destabilising investment flows as the problem. Clearly, they are saying that it is a money issue first before it is a real estate problem. However, most of our market analyses thus far have largely ignored this aspect or dwelt on it only in passing.

Many continue to treat it as a real estate problem, ignore the economic aspect of it and then still expect buyers to be rational in their buying. It will be by pure chance if their calls turn out to be right. I am not saying these analysts are wrong but if you truly understand the complexity of the real problem, it is premature to call a drop in prices at this point in time.

I would also not be unduly worried by some analysts' comments that the heavier stamp duties are making a dent in Singapore's standing as a major property investment destination while giving rivals such as Hong Kong a boost. These comments do not give due recognition to what many respected economists are warning about - the destabilising investment flows into our part of the world.

To continue with a non-interventionist approach in the face of such hot money would be foolhardy - it would be courting disaster. In fact, I would say the current measures have enhanced Singapore's standing as a safe haven and an extremely attractive property investment destination.

Colin Tan is head of research and consultancy at Chesterton Suntec International.
Source: Today - 16 December 2011

COOLING MEASURES BITE MARKET SEGMENTS DIFFERENTLY16

The year is ending on a sombre note for the private residential market, with severe cooling measures announced earlier this month imposing an additional buyers' stamp duty (ABSD) of 10 per cent on purchases by foreigners.

While prospective buyers, including locals who may be affected by the 3 per cent ABSD, are expected to remain on the sidelines in the next few months, not all private homes will suffer the same impact from the measures.

Landed homes seen resilient

Landed homes will likely be the most unscathed, while speculative products, such as shoebox apartments, will likely experience weakened buying interest. The difference is underpinned by product heterogeneity, foreigners' participation and also the financing capabilities of the buyers' for each product type.
Landed homes are expected to enjoy resilient buying interest next year, as the buyers are predominantly locals who are the least affected by the cooling measures while the supply of such homes is limited. However, non-landed residential properties in the prime districts, which are fairly exclusive, may be more affected as foreigners account for a large share of buyers.

Shoeboxes to be worst hit


Shoebox apartments, particularly those smaller than 500 sq ft each, have gained popularity from 2009 but the success is set to come to a halt next year. There is less motivation to consider buying smaller-sized apartments, particularly when average prices moderate. The typical buyer who finds the shoebox unit acceptable during the price run-up from 2009 to this year may no longer prefer such a home or investment if there are better and larger offerings.

Even before the latest cooling measures were imposed, various developments with shoebox units had been scheduled for completion next year, meaning there will be increased competition between sellers. Although owners will generally hold shoebox units, especially those who had purchased this year and want to avoid paying the hefty sellers' stamp duty, there are some who bought in 2009 and last year who have enjoyed capital appreciation and are considering selling.
Moreover, if a Singaporean can at most hold two private residential properties to avoid paying ABSD for his new purchase, there is less incentive to purchase a smaller-sized apartment. The buyer will likely wish to exercise his limited option on buying a larger or standard-sized unit. There may also be some shoebox home owners who hope to relinquish their units in order to go for more attractive larger sized apartments if prices ease next year.

Suburban condo interest not excessively weakened


The suburban condominium market, with fairly homogenous offerings, will likely see moderated buying interest due to economic challenges. However, as the buyers are mostly HDB upgraders or those owning fewer than two private properties, interest is unlikely to be excessively weakened by the ABSD.
Although the economic slowdown will severely affect job stability, there are still home seekers working in the "evergreen" or fairly recession-proof industries, such as oil and gas, education or statutory boards. They may have continued confidence in financing their homes and appropriately-priced suburban condominiums can appeal to this profile of buyers.

This year has been intense for the private residential market as prices jumped notwithstanding the cooling measures implemented in January that included sellers' stamp duties of as high as 16 per cent. While there is less justification for this month's cooling measures given that economic conditions had moderated late in the year, the latest measures are likely to achieve the best effect in reining optimism in market sentiment.

The dichotomy in the market means that owners of properties which are expected to see weaker buying interest should strive to hold on and emerge from the uncertainty. Property owners can also take a longer-term view by consenting to competitive rental rates, as ultimately there may be opportunities to renew leases at higher rents or even resell at better prices, should the economic and intrinsic property market fundamentals eventually improve.

Source: Today-December 2011
Ong Kah Seng is a director at R'ST Research, an independent property market research firm in Singapore.

Sunday, December 11, 2011

HDB resale prices to hold up, say experts

PRICES of Housing Board (HDB) resale flats are expected to hold up as supply is tight but sales volumes could soften as buyers assess their options in the light of new cooling measures.

Experts say a stand-off between buyers and sellers is likely over the coming weeks as the stamp duty rules sink in. They believe most buyers will take a wait-and-see attitude, with some holding off purchasing a resale flat in anticipation of private home prices falling.

HDB resale prices rose 3.8 per cent to a record in the three months to September and are now 35 per cent higher than in the fourth quarter of 2009 - the last time prices fell. Resale prices then dipped just 0.8 per cent before rebounding and heading north again.

But while HDB resale prices are correlated to how values move in the private mass market, they are likely to be more insulated from the stamp duty measures as many buyers, unlike in the private market, are first-timers and owner-occupiers rather than investors or foreigners.

Analysts do not expect the public market to be overly affected unless private home prices fall 'significantly'.
But even if private home values drop by 15 to 20 per cent next year, HDB resale prices might dip by a more moderate 5 to 10 per cent instead.

There is enough demand for such homes... Even though HDB housing supply has been ramped up, these flats have not entered the market yet as they are either still being built or serving out their minimum occupation period.

Mass-market home prices to ease by between 5 and 10 per cent next year, which could lead to HDB resale prices dipping 3 to 5 per cent in tandem. Even during the global financial crisis, the HDB market was still manageable with sales activity remaining healthy.

While HDB resale volumes might come off slightly, prices are expected to remain stable or dip slightly... But I would expect the HDB resale price index and cash-over-valuations paid to start coming down by the first quarter of next year.

Any dip in prices is likely to occur only in the second or third quarter of next year.


If sales of new private homes slow to below 1,000 units a month for a period, developers might have to reduce prices and this might have a knock-on effect on the HDB resale market.

Experts say developers will also have to rethink pricing for executive condominiums (ECs) if mass-market home prices fall sharply.

There has to be a comfortable price gap between ECs - a public-private housing hybrid - and mass-market private homes.

If mass-market home prices fall, EC prices will have to drop accordingly. If EC buyers think that mass-market home prices are going to decline, they may wait for EC prices to follow suit. Or if some of them think that they may be able to afford private homes when prices correct, they may opt to buy private.

ECs are usually about 20 per cent cheaper than private mass-market condos, experts note.

The new measures are the toughest on foreign buyers and corporate entities. They will now be hit with an additional buyer's stamp duty of 10 per cent. This is on top of the existing stamp duty of about 3 per cent.
Permanent residents buying their second and subsequent homes and Singaporeans buying their third and subsequent homes will have to fork out an additional buyer's stamp duty of 3 per cent.

The proportion of foreigners in the mass-market segment has been increasing over the past few years.
Foreigners accounted for 15 per cent of all suburban home purchases in the three months to September. This is up from 5 per cent in 2009 and 7 per cent last year.

Source: The Straits Times – 10 December 2011

Developers dangling discounts for buyers

DEVELOPERS are already offering packages on homes to offset the stiff new stamp duty measures that came into effect only two days ago.

Far East Organization is offering a 5 per cent relief package to affected buyers at all of its already-launched projects.

It will reimburse buyers 3 per cent of the unit price to offset the new stamp duty. Buyers will also get a furniture voucher worth 2per cent of the flat price.

They will get the voucher only after putting down a 30 per cent deposit if the project has not been completed.

The package applies across the board to Singaporeans, permanent residents (PRs) and foreigners, so foreigners will still be worse off after the new measures.

Far East's already-launched projects have another discount that differs between properties.
Prices of units at its Seastrand project in Pasir Ris Drive 3 are discounted by up to 14per cent, making the cheapest unit an estimated $937 psf. But with only three- and four-bedroom units left and the smallest three-bedder at 1,109 sq ft, the minimum purchase now would cost about $1.04 million before stamp duty.
With an additional 10per cent buyer's stamp duty for foreigners of $104,000 now, Far East's relief package would help a buyer save almost $52,000 - about $30,000 initially and the rest subsequently.
However, a Far East agent said that unofficially the discount rate could go up to 16 per cent of the original unit price. This means buyers can negotiate a 21 per cent discount off the original total price by combining the uniform 5 per cent cut with the discount that applies to the Seastrand.

This would more than offset the extra stamp duty incurred, although it is believed that the discount applies on a case-by-case basis.

Far East has not announced a deadline for its relief package but the agent said it could last until the end of this month.

The Seastrand's temporary occupation permit (TOP) is expected on Dec31, 2016.
Wing Tai's luxury Helios Residences at Cairnhill Circle is also offering a relief package, said a company sales agent.

Buyers will get a cash rebate of up to 2per cent of the total price upon payment. That goes up to 2.5 per cent at the start of the second year of occupation and 3per cent at the start of the third year.
They will not be allowed to sell their unit for three years following purchase.

The smaller units can cost around $4.2million, said the agent, adding that the relief package is meant to help 'lessen the burden' on customers.

The agent said the deal is only applicable to Helios Residences, as its target market is foreigners, who are more likely to be affected by the stamp duty imposition, but did not specify a deadline. Helios Residences obtained its TOP on Jan 28.

Sales agents at Keppel Land, UOL and CapitaLand did not know of any discount packages being offered.

Agencies said their firms were not offering discount packages, but some said they might be able to negotiate an additional 1 per cent cash rebate.

Source: The Straits Times – 10 December 2011

REACTIONS TO NEW PROPERTY MEASURES


Sentosa Cove property may be impacted: analysts
By UMA SHANKARI

(SINGAPORE) The residential market in Sentosa Cove - where foreigners and corporations accounted for 46 per cent of home purchases in the first 11 months of 2011 - could be hit especially hard by the latest round of cooling measures, say analysts.


With properties there going usually in excess of $15 million, the stamp duty increases for those segments would now work out to close to $2 million - which buyers might be unwilling to swallow, said International Property Advisor chief executive Ku Swee Yong.

According to data compiled by SLP International, the proportion of homes in Sentosa Cove bought by foreigners rose to 41 per cent in the period from January to November 2011. And corporations picked up another 5 per cent of all homes sold, according to the firm's analysis of caveat data from URA Realis.

This is a jump when compared to foreigners' and corporations' share of 33 per cent from January 2009 to December 2010.

Sentosa Cove is the only part of Singapore where foreigners don't need to be permanent residents (PRs) to buy landed homes, so the residential enclave has typically been popular with that segment of buyers.

Their share of purchases grew even as overall transaction volume dipped. And now, volumes could fall even further as foreigners hold off on buying in the wake of new measures - which include an additional buyer's stamp duty of 10 per cent for foreigners and corporations, on top of the existing buyer's stamp duty of up to 3 per cent.

'I think the sales in Sentosa Cove were already slowing recently, in line with the rest of the market,' said DTZ's chief operating officer for South-east Asia, Ong Choon Fah. 'And now, things will be even slower for a while.'

Analysts estimate that about 60 per cent of the units in the high-end residential enclave are owned by foreigners.

And while a fair number of these foreigners are owner occupiers, there are also a fair number of investors who will now face a shrinking pool of buyers when they try to re-sell their properties.

Analysts noted that the 'intent' of the latest round of measures seems to be to limit foreign purchases.

'While the impact from higher entry cost is broad-based, we see more heightened risk in the prime segment (such as in Sentosa) where foreigners and PRs account for some 44 per cent of all sales (up from 20 per cent in Q1 2009),' said Goldman Sachs analysts Paul Lian and June Zhu in a note yesterday.

But DTZ's Mrs Ong noted that the limited supply of homes in Sentosa Cove - just around 2,400 - works in favour of the micro-market there.

And developers and investors who are looking to sell their units on the island generally have good holding power, she added. 'Sellers are likely to adopt a wait and see attitude, rather than offload their properties through fire sales.'

Source: Business Times - 9 December 2011

A different take on latest property curbs


Let's have more carrots for Singaporeans instead of wielding the stick on foreign buyers.
By Ku Swee Yong


THE latest round of measures to promote what the government claims would be 'a stable and sustainable property market' begs many questions. Let's begin with the basic parameters. First of all, the additional buyer's stamp duty (ABSD) is applicable only to the private residential segment, not to other segments such as office, retail, industrial, HDB shops, HDB flats, Executive Condominiums (ECs), etc. So perhaps a more appropriate claim should be 'a stable and sustainable private real estate sector'.


Next, the key objective listed was 'to promote a sustainable residential property market where prices move in line with economic fundamentals'.

Prices of private residential properties have continued to rise, albeit more slowly in the last two quarters. According to the Urban Redevelopment Authority, prices are now 13 per cent above the peak in Q2 1996 and 16 per cent above the more recent peak in Q2 2008.

In the many overseas seminars I have spoken at, I am always happy to reassure investors that as a broad guiding principle, foreigners and Singaporeans are not treated any differently when investing in Singapore. However, now we have imposed a 10 per cent ABSD on foreigners who purchase residential units. If we apply these stamp duties on the residential real estate asset class, does it imply that other asset types, such as commercial properties, stocks, capital equipment, cars, COEs, etc are also likely future candidates for additional stamp duties if the public perception is that a particular asset is beyond Singaporeans' reach?

Or, if the stock market becomes too hot and the Straits Times Index surpasses the October 2007 peak of 3,850 points by 20 per cent, reaching, say, 4,600 points, will the authorities also implement higher stamp duties on foreigners' stock investments, 'owing to the small market size of the SGX' to make the stocks more affordable for Singaporeans?

What about stamp duty on foreigners' purchase of COEs because the COE pool is limited? What is the significance of measuring our private residential prices against the previous peaks? And what has this got to do with foreigners today, given that in 2006-2008, prime properties such as St Regis Residences, Ardmore II, Sentosa Cove, Orchard Residences and were snapped up mainly by foreigners.

Most foreigners invested in Singapore's long-term future as part of their portfolio diversification and wealth protection for their families. Why were such measures to curb foreign ownership (individuals, families or institutional funds) of residential properties not implemented at that time when the luxury residential sector was booming hot?

I have expressed in several articles that the climb in the private residential index is the result of strong sales at new record prices in mass-market launches. This climb is mainly contributed by Singaporeans and Singapore permanent residents (PRs). The proportion of foreigners purchasing in the mass market is low, at 10-20 per cent as the mass-market residential segment is not considered 'investment grade'. I have also provided data to show that foreigners have not been significant contributors to the increase in mass-market home prices.

The fundamental cause of the climb in mass-market prices has been the strength of HDB resale prices, where the rate of growth is higher than that of the private residential index. Owners of HDB flats feel confident about the rising values of their flats. And since money in savings accounts devalues due to the prolonged 5 per cent inflation, and mortgage costs are low, they look for safe, secure investments. This leads them to purchase private residential properties for rental income and as an inflation hedge.

Unfortunately, the new measures do not address the rising HDB resale prices and so the effect on mass-market private apartment prices may be limited. Likewise, newly launched ECs and ECs that are not yet privatised will not be hit hard in terms of volume and price.

I believe that landed properties may suffer a direct, but limited, impact. A handful of Singaporean investors who buy many landed properties for the long term will be affected. They may not mind paying the extra 3 per cent ABSD if they can find their ideal landed property investments. That said, a Good Class Bungalow (GCB) collector wishing to invest in a $30 million house will be paying around $1.8 million (6 per cent) stamp duty if this were his third or more residential property. If he were to purchase the GCB under a trust, for wealth transfer purposes, a $3 million stamp duty would also apply.

This round of measures will positively benefit the strata office, retail and industrial segments of the property market. Many mass-market investors will surely flock to these products, as well as more exotic overseas properties. We should expect to see more 150-sq-ft retail units or tiny industrial units for sale. Time will tell whether such investments will turn out to be stable and sustainable for the property market, or not.

The biggest impact will be felt by developers of luxury residences who are more dependent on foreign investors. Several developers have overseas sales offices to promote their Singapore residential products. However, foreign investors wishing to buy a $10 million Orchard Road property will now think many times about paying almost $1.3 million (13 per cent) in buyer stamp duties. This is not a measure that increases the amount of equity foreign investors need to put into their properties; it is a tax which once paid cannot be recovered. Our residential market has just got uglier in terms of investment returns.

The other stakeholder group directly hit by the measures are the real estate agents, many of whom are active in promoting Singapore residential properties in Indonesia, China, Malaysia and Hong Kong. Following closely behind would be the relationship managers in private banks active in prospecting foreign high-net-worth individuals (HNWIs) and getting them to park their investments under Singapore trusts. Then we have the priority bankers, the mortgage bankers, the contractors and interior designers who serve the high end market. Many rice bowls, if not already shaken by the global jitters, will surely be shaken now.

My main worry remains: What is the signal perceived by foreigners?

There are genuine foreign buyers who prefer to purchase the roofs over their heads. For example, A*Star and our medical fraternity have gone overseas to attract foreign doctors and medical researchers to work in Singapore. They may relocate here for our high quality of medical practice but these professionals also need homes for their families. Not every foreigner likes to pay rent. Many prefer to build up equity through purchasing their own homes and taking bank loans.

There is another group under the MAS Financial Investor Scheme (FIS) worth mentioning. HNW families applying for the FIS invest $10 million into Singapore are allowed to apply $2 million towards the purchase of a residential property for their own use. Probably the most expensive PR scheme in the world, the FIS has a long queue of HNWIs, some having waited over a year for approval. The latest measures mean that if they choose to apply $2 million of their $10 million investment into a residential unit, they need to pay ABSD in excess of $260,000 depending on the value of the property purchased.

Overall, I think these measures will effectively grind the luxury residential segment to a crawl. Foreign residential property funds will also surely stay out while this tax is in place. The measures could be less effective in the mass markets, given the bulk of Outside Central Region (OCR) launches are snapped up by Singaporeans who feel confident about their rising HDB valuations. Recall the queues and fast-paced sales at recent OCR launches.

I would hope for a tweak in the policy to allow foreigners to buy their first home at the existing 3 per cent buyer stamp duty. Many foreigners are here to work and to settle down with their families and they have a genuine need to own one home for shelter. Singapore is a country made successful by the influx of foreigners in the last two centuries and it must remain an open economy in order to survive. The Economic Development Board, the Monetary Authority of Singapore and other government agencies' efforts to attract foreign investors to our shores may be tougher if this signal were read negatively as a protectionist measure.

Foreigners who are already settled here but who have not purchased their homes may feel short-changed by such discriminatory policies, especially when there is insufficient evidence that foreigners are the main cause for the rise in home prices.

With the new measures, are we signalling: Our right hand welcomes you while our left hand blocks you from getting a comfortable life? Would we want the government agencies to slow down the pace in attracting foreign financial institutions and MNCs to expand in Singapore? That will reduce demand for housing but it will also weaken the robust job environment.

This policy aimed at foreigners will harm our reputation as an investment capital. Instead of penalising foreigners with heavy taxes, we could give more incentives to support Singaporeans and Singapore PRs. Already, loan-to-value ratios for purchasing properties are more attractive for Singaporeans than those for foreigners. Let's have more carrots for Singaporeans instead of wielding the stick on foreigners.

The writer is CEO of International Property Advisor Pte Ltd and author of the book: 'Real Estate Riches - Understanding Singapore's property market in a volatile economy'

Saturday, December 10, 2011

Citizens of 5 countries to pay same stamp duty as S'poreans

CITIZENS of five countries that have free trade deals with Singapore, including the United States and Switzerland, will be treated as Singaporeans for the purposes of the new stamp duty measures.

When they buy a private home, Americans, Swiss and nationals from Liechtenstein, Norway and Iceland will be treated the same as Singapore citizens, the taxman said in a guide on Wednesday. This will enable them to avoid the new 10 per cent additional buyer's stamp duty that foreigners now have to pay when they buy a private home.

Free trade agreements usually ensure that a country's citizens are accorded certain trade protections when they are in the partner nation.

The Additional Buyer's Stamp Duty (ABSD), as the new levy is called, was announced by the Government on Wednesday and hits foreigners hardest. They have to pay an additional stamp duty of 10 per cent when buying a home. But the foreigners from these five countries can apply for remission or relief.

The Inland Revenue Authority of Singapore (Iras) website says they must provide identification, acceptance to option to purchase/sale, the purchase agreement and the ABSD declaration form.

Under the new rules, permanent residents (PRs) buying a second and subsequent property will pay an additional 3per cent stamp duty, while Singaporeans buying their third or subsequent homes must pay an extra 3per cent.

The rule is also that for purchases made by two or more parties with mixed residency status, such as a Singaporean with PR, the higher rate will be imposed.

But Iras also gave examples of situations where remissions can apply. These are in cases where married couples have mixed residency status.

For example, a PR who currently owns a property while his Singaporean spouse owns none can apply for relief from the additional stamp duty when they co-purchase a home.

In another scenario, a PR and a Singaporean spouse co-own a property. When they next jointly buy a property, they can apply to be exempt from the 3 per cent levy.

The relevant documents have to be submitted to Iras.

Relief will also be provided for qualifying developers.

Iras also said that people who want to downgrade from private housing to an HDB flat will be allowed a concessionary period to sell their private residential properties. The application for relief in such cases can be made through the HDB.

Source: The Straits Times – 9 December 2011

Friday, December 9, 2011

Private property prices may slide in next 6 months

The Government's latest round of property market cooling measures – imposing a range of additional buyer's stamp duties on private home purchases – helps most genuine owner-occupier buyers, specifically citizens and permanent residents who may be affected by affordability issues.

More importantly, it gives a clearer direction for the private home market, which had exhibited optimism despite the last round of cooling measures in January and the uncertainty in the external environment. Prices are expected to fall up to 8 per cent in the first half of next year.

Direct impact on foreigners

The most immediate impact of the measures will be a slowdown in foreigner purchases – a natural result of the hefty 10 per cent additional duty. The duty can be considered appropriate as foreigners have had sufficient opportunities to enter the market and have been stepping up purchases of private homes in recent years, with no policies specifically targeted at them.

The measure may also provide some support for the leasing market now that fewer foreigners are expected to buy a private home. There will be some foreigners who will not be put off by the 10 per cent additional duty as Singapore appeals to them as a politically stable and physically safe country. But this group is expected to consist of the really affluent, whose wealth is unscathed by the current economic headwinds from the United States and Europe, and who need a property in a place with excellent fundamentals.

Demand for non-residential property to rise

The January measures sparked a move to strata-titled non-residential property as investors sought out alternatives. The new measures will likely encourage investors to continue to sniff out such non-residential units – i.e. office, retail and industrial spaces.
But it must be highlighted that an excessive run-up in the prices of such properties may also prompt the Government to react as the viability of smaller businesses is challenged. Nevertheless, the shift to non-residential property investments in a bid to avoid the private home buyer stamp duty can be viewed as a positive for an investor as he or she will be diversifying his or her entire property portfolio.

Psychological deterrence

Singaporeans and PRs who are genuine owner occupiers, as well as citizens not buying a third or subsequent home, will not have to pay the additional buyer's stamp duty. While the number of locals who do not "stop at two" may not be large in the first place, the new measures mean that what is left in the pool of private property purchasers will now be strictly first and second home buyers.

Although the Singaporeans or PRs who have to pay the additional buyer's stamp duty will pay a lower rate than foreigners, they may still be deterred. Psychologically, the duty creates a disincentive, for such buyers are indeed paying more than their peers, particularly in the case of developer sales where prices are fairly uniform.

Selective property re-pricing

With the new measures, a persistent demand contraction leading to price falls will be more likely, especially amid global economic challenges. Private home prices may fall by up to 8 per cent in the first half of next year but this is still expected to be fairly property-specific and short-lived as there are many opportunistic buyers looking to purchase their dream property.

The desire for the dream property has intensified as society becomes increasingly sophisticated and individuals aspire to a higher quality of life. Also, as first time private home buyers do not have to pay the additional duty, they may stop hesitating on the purchase decision and realise their dream.

By Ong Kah Seng – director at R'ST Research, an independent property market research firm in Singapore.

New cooling measures: Shifting the goalposts

Are the latest cooling measures – specifically targeted at the private housing market – what many Singaporeans have been waiting for since the General Election in May?

Wednesday's announcement of an additional buyer's stamp duty of 10 per cent for foreigners and 3 per cent for Permanent Residents already owning one or more properties and for Singaporeans already owning two or more properties caught the market by surprise.

The reaction of the Real Estate Developers Association of Singapore (REDAS) was understandably one of deep disappointment. Almost a whole year of residential land sales have been snapped up. Millions of dollars have been poured into these ventures. The sudden introduction of the measures is akin to shifting the goalposts halfway during the game.

The problem is probably one of miscommunication. In all its actions to date, the authorities have not let on that investment buys could be a problem. In fact, all four earlier sets of cooling measures were aimed at reducing speculation and stabilising prices. Now, it seems all of us were fooled. A statement or two indicating otherwise would have been greatly appreciated. At least, some developers would have factored this in as a risk when bidding for sites.

Then again, aren't developers supposed to factor in such risks?
Many analysts have singled out luxury homes as the market segment that stands to lose the most. Are we not forgetting that buyers in this segment are more concerned with the product than its price. Is an outlay of a mere 10 per cent more going to deter the ultra-rich from any of these purchases.

For sure, nobody likes to be discriminated against. All the developer has to do is to raise the price by 10 per cent but offer to absorb the additional stamp duty. The problem is psychological rather than real. Admittedly, sales for this market segment have been slow but it will not be any slower because of the new measures, unless of course, the product is more high-priced than high-end.
Wednesday's announcement came very soon after Minister of National Development Khaw Boon Wan's wish that the HDB first-timers' application rate for the Build-To-Order launch would fall below 2 times was fulfilled way beyond his expectations. Has the focus now shifted to fulfilling citizens' upgrading aspirations? It appears to be so.

The supply of Executive Condominiums (ECs) has been raised for next year. On the Government's Confirmed List of land sales for the first half of next year, five are for ECs. It is also probably recognition of the fact that the latest stamp duty changes would not correct private property prices soon enough or at least not enough to fulfil some of the upgrading aspirations. Depending on demand, we can expect more EC sites to be offered for sale in the coming years.

Apart from what is likely to have been miscommunication, I would say the measures are finally addressing the problem of excessive liquidity and the dangers it could pose for a small open economy like Singapore's.

Compared to the earlier changes in January, where up to 16 per cent in seller's stamp duty may be imposed depending on the timing of the divestment, the current set of changes is actually less drastic but more effective. But will it be enough?

To potential first-time private home buyers expecting a sharp drop in prices, it is too early to cheer. Even if property prices were to start to correct from today, it may be many months before they reach your affordability levels.
Time and time again, I have advised against under-estimating the liquidity challenge. How many of us thought that the cooling measures imposed in January marked the start of a decline of the residential market. I can tell you there were many red faces thereafter, some of them of very prominent market analysts.
How many times have our neighbours played our local investors out by changing the rules mid-way, but has this stopped property investments in these countries? The answer is no.
It is well-known that Hong Kong and Singapore are two favourite property investment destinations for mainland Chinese investors. If you have not been monitoring Hong Kong property prices, take a look now and then look at Singapore's. Then tell me whether the effectiveness of the current measures can be sustained over time.

by Colin Tan – head of research and consultancy at Chesterton Suntec International.

Source: Today - 9 Dec 2011

COOLING MEASURES: A BOLT OUT OF THE BLUE

The announcement of the latest set of cooling measures for the residential market yesterday probably drew extreme emotions from many in Singapore - either cheers or despair, depending on which side you are on.

The emotions - accentuated by the fact that it came right out of the blue - are probably enough to induce a heart attack, some would say.

The new rules were specifically targeted at investment buys, while the announced plans to increase the supply of Executive Condominiums recognises the fact that the majority of potential upgraders have been largely left out of the current market run-up.

The announcement probably came as a shock to many but you could say the warning signs were there, the increased buying from foreigners and the ever shrinking apartment sizes being offered on the market.

However, it does not mean that all investment buys will be affected as the rules left just enough room for some investment buys by Permanent Residents (PRs) and Singapore citizens. PRs buying their first property and citizens their second property onwards are not affected.

Already people are asking me whether the new measures will induce a price correction? It really depends on the reaction of developers and how much of the current purchases are investment buys.

If the majority of buyers have been investors, the measures have the equivalent effect of a sudden price increase of 3 per cent or more on the market.

Sales will be a lot slower in the coming weeks or maybe even months. Investors may stay away while genuine buyers will take their time to commit. Depending on how long this phase drags on, some developers may panic and start offering bigger discounts.

However, if they hold their nerve, there is enough liquidity in the market to overcome this latest set of measures, provided of course, the expected economic slowdown next year does not hit us hard.

Source: Today - 8 December 2011
by Colin Tan, head of research and consultancy at Chesterton Suntec International.

GOVT MOVES TO CURB FOREIGN HOME OWNERSHIP

To curb excessive investment demand on private homes, the Government is imposing additional stamp duties - over and above the existing tax - on certain categories of property purchases from today.

It also announced yesterday that it will inject sites that can potentially yield a total of 14,100 units in the Government Land Sales (GLS) Programme for the first half of next year. Of these, about 7,000 units will be from sites on the Confirmed List.

The imposition of the additional stamp duties surprised analysts and industry players, with the Real Estate Developers' Association of Singapore (REDAS) criticising the timing of the cooling measure which comes as the Singapore economy is headed for a slowdown next year.

Foreigners and corporations will be the hardest hit, needing to pay a 10 per cent Additional Buyer's Stamp Duty (ABSD) on any private residential property.

Singaporeans will pay a 3 per cent ABSD on the third and subsequent properties, while permanent residents (PR) will pay a 3 per cent ABSD on the second and subsequent properties.

Singaporean first-time buyers and upgraders, and buyers of HDB flats will not be affected.

Some relief will be provided to alleviate the impact on affected Singaporeans, for instance those who marry foreigners or PRs and will be subject to the higher ABSD as a couple.

Reliefs will also be provided for qualifying developers and for purchases falling within the scope of Singapore's international trade agreements.

Details of the reliefs will be provided on the Inland Revenue Authority of Singapore website.
Explaining the move, the Ministry of Finance and the Ministry of National Development said in a joint press statement that "even with the current economic uncertainties, the demand for private residential property remains firm. Given the uncertainty in stock markets and with interest rates remaining low, private property in Singapore continues to attract investors, local and foreign."

It said: "Excessive investment demand will however make the property cycle more volatile, and thus increase the risks to our economy and banking system."

The authorities noted that private home prices are currently 13 per cent above the peak in the second quarter of 1996 and 16 per cent above the more recent peak in the second quarter of 2008.

The joint statement added: "A higher ABSD rate for foreign buyers in particular is necessary, in view of the large pool of external liquidity and strong buying interest from abroad, and the relatively small size of the Singapore market."
 
Move is 'drastic', say analysts
Property analysts described the cooling measure as "drastic". However, they noted the rising foreign ownership of private homes and increasing prices.

Adding that a very small percentage of Singaporeans own a third home, head of research and consultancy at SLP International Nicholas Mak said: "This is a pre-emptive strike in preventing an increase in buying demand from foreigners, especially the non-residential foreigners."

Mr Chris Koh, director of Dennis Wee Group, noted that foreign ownership of private properties has increased from 30 per cent last year to 33 per cent to date, pushing prices to unrealistic levels.
However, International Property Advisor chief executive Ku Swee Yong felt the measure "aimed at foreigners may be missing the mark".

He argued that the recent spike in private home prices - especially in outside central regions (OCR) areas such as Ang Mo Kio, Pasir Ris and Chua Chu Kang - were driven primarily by Singaporeans.
"I worry that the price index will continue to rise (albeit more slowly) while at the same time we leave foreign investors with a bad taste in their mouths," said Mr Ku. He added: "Many foreigners are here to work and settle their families down and they need to own one home for shelter over their heads."
REDAS said in a press release that it was "disappointed in the lack of consultation on the latest measures". It said: "They came as a surprise as the current market outlook is uncertain. The good take up rate in the primary market is driven by the increased number of new launches and unique selling points of certain projects. It is not indicative of a return to a speculative market."
It added: "Given that the local economy is expected to slow down next year, we believe these measures are untimely."

On the GLS programme for the first half of next year, the Government said the supply - which is less than the 8,100 units offered under the Confirmed List in the second half of this year - takes into account "the ample pipeline supply and the dampening effect of the ABSD".

The Government added that it will "continue to monitor the property market and adjust our property policies in step with changes in the market and the economy".

Source: Today- 8 December 2011

British property entrepreneur eyeing Singapore luxury market

A property entrepreneur who is behind London's luxurious One Hyde Park project and who has decked out yachts and jets for tycoons is turning his sights to Singapore.

Briton Nicholas Candy told The Straits Times that he sees 'massive opportunities' here.

A mixed-use project possibly comprising a hotel, high-end homes and luxury retail valued at 'hundreds of millions', for example, would be something he would be keen to work on.
'It's finding the right site and the right partner; we wouldn't do it without a local partner,' Mr Candy says.

'We haven't got anything specific today but if we could find something, we would be very happy to. I think in the next year or so, we should be able to hopefully find a site.'

Mr Candy, 38, who set up the interior design and development management firm Candy & Candy with younger brother Christian, also said that he has spoken with some potential partners although nothing has been signed.

The brothers built the One Hyde Park residential development in London's Knightsbridge, where a penthouse unit sold for £136 million (S$274 million) to Ukraine's richest man, tycoon Rinat Akhmetov, in April.

Only 18 apartments in the 80-unit project designed by star architect Richard Rogers remain unsold. The remaining units have been sold for a total of £1.4 billion.

The firm is known for its super-luxury standards and has designed and outfitted yachts, jets, luxury cars and lavish homes for wealthy and famous clients, including royal families, Indian steel magnate Lakshmi Mittal and Hollywood actress Gwyneth Paltrow.

While money has been flowing from Asia to London, especially in the past five years, Mr Candy said he is looking in the opposite direction for expansion.

'Asia already is one of the financial hubs of the world but there are lots more opportunities. Also, it hasn't suffered as badly in the global financial crisis... and seems to be quite resilient.'

Mr Candy said Hong Kong, Singapore and Shanghai, where the firm is working on a project designed by architect Zaha Hadid, are the Asian cities he likes best.
But he added that Singapore seems to be a easier place to do business than Hong Kong, where many established players dominate the purchases of sites.

'What's the great thing about somewhere like Singapore is that you can do things at a very quick speed. What you dream, you can build here,' he added.

Source: The Straits Times – 1 December 2011

Property prices in Asia heading towards correction

Recent reports have signalled that property prices across China and other parts of Asia are heading towards a correction.

But regional developers and market observers say it is not all doom and gloom yet for the sector.
The integrated resorts and international events like the F1 have brought the spotlight on Singapore.

They have also piqued foreign investors' interest to invest in luxury properties, say analysts.

But now investors and analysts are bracing themselves for a looming correction in the property market.
And this time, even luxury properties will not be spared.
Panache Management CEO Alex Schlaen, said: "It will be very minor because the luxury (property market) didn't recover to the heights of 2007, versus the mass market which went way beyond the peak of 2007. This market will see a correction of between 10 and 20 per cent. The correction will probably last for two years and it will probably start recovering back to the new peaks that we haven't seen yet in Singapore."

Now, he reckons that Singapore's property prices still lags Hong Kong and has a lot of room to catch up.

And he says prices in Singapore will only reach at par with Hong Kong in 10 years.

This means investors can potentially make a profit from the Singapore market.

While China's real estate market is seeing more cities with lower property prices, some property developers Channel Newsasia spoke to are still bullish on the property market in China.

Candy & Candy founder Nick Candy, said: "The best locations are in Shanghai. I won't think it will have a 30 per cent drop. If there is a large correction, I believe it would recover quickly again. I am very bullish on China. I believe that China is a great place to invest. I think people will do very very well there."

The Pudong River is where Nick Candy, who made his fortunes developing homes for High Networth Individuals including Hollywood stars, will be making his mark in Asia.

Source : Channel NewsAsia – 29 Nov 2011

Thursday, December 8, 2011

21 HDB blocks in Redhill Close chosen for SERS

Twenty-one blocks of HDB flats in Redhill Close have been chosen for the government's Selective En bloc Redevelopment Scheme (SERS).
They are blocks 1 to 3 and blocks 5 to 22, with a total of 878 units.

The Housing and Development Board (HDB) will build about 1,200 units of two-room, three-room, four-room and five-room flats in Henderson Road to re-house the flat owners.

The new blocks, to be ready in 2017, will be built up to 48-storeys high, offering panoramic views of the city skyline.

The current flats, built in 1955, will be more than 60 years old by the time the residents move out.
The HDB said the replacement flats are at a prime location, within walking distance from Redhill and Tiong Bahru MRT stations.

Facilities such as shops, markets and food centres are just a stone's throw away.

Many recreational facilities and spaces such as children's playgrounds and fitness corners for adults and the elderly, a hard court and community garden, as well as a multi-storey car park will be provided. The HDB said these facilities will provide ample opportunities for social interaction.

Eligible flat owners will be invited to register for the new replacement flats in the fourth quarter of 2012.

The HDB will hold an exhibition from December 7 to 13 at Bukit Merah Community Centre to provide more information on the development.

The site is the 76th site to to benefit from SERS, which offers residents the opportunity to move to a brand new flat nearby with a fresh 99-year lease, better design and modern facilities.

Source : Channel NewsAsia – 3 Dec 2011

High-end home deals fewer this year: study

Transactions in Singapore's high-end residential market, such as upmarket apartments/condos in choice districts and bungalows on Sentosa Cove, have fallen this year, but non-permanent resident foreigners' share has gone up for both categories of properties.
Analysts attribute the increase partly to mainland Chinese fleeing restrictions on property buying in their home market and instead parking their monies in Singapore's property market. As well, some investors may be inclined to escape the economic gloom in Western economies and to favour the relatively healthier economies in Asia. Singapore stands out as a property buying destination in Asia for its transparency, political stability and relative safety.

In the first 11 months of this year, 1,285 caveats were lodged for apartments and condos in districts 1, 4, 9, 10 and 11 priced at least $2,000 per square foot of strata area - down 33 per cent from the same year-ago period. The figure for full-year 2010 was 2,156.
However, non-PRs' share of purchases of non-landed homes in these five districts priced at over $1,951 psf (or $21,000 per square metre) has increased from 28.4 per cent last year to 37.8 per cent in the first 11 months of 2011.

The latest figure surpasses the 31.1 per cent in 2007 and 33.2 per cent in 2008 - during the earlier foreign buying frenzy. Based on URA Realis caveats data as of Nov 30, the total foreign buying pool (PRs and non-PRs combined), Indonesians have been the top buyers since 2007.

Their share of the total number of caveats (including purchases by Singaporeans and companies) edged up from 15.4 per cent in full-year 2010 to 16.4 per cent during Jan-Nov 2011. However, the 236 upmarket apartments/condos they have bought this year is about 35 per cent shy of the 363 units they acquired in full-year 2010.

On the other hand, the number of upmarket apartments picked up by mainland Chinese has risen from 136 for full-year 2010 to 170 in Jan-Nov 2011. Their share of total buying also doubled from 5.8 per cent to 11.8 per cent.

A longer-term comparison reflects a similar picture. The number of high-end apartments bought by Indonesians has roughly halved from 438 in 2007 to 236 in Jan-Nov 2011, while the number of caveats lodged by mainland Chinese has quadrupled from 43 to 170.

Indians - who did not even feature among the top five nationalities of foreign buyers in 2007 - were the fourth largest foreign buyers of high-end apartments in Jan-Nov 2011, with 31 caveats or a 2.2 per cent share of total purchases.

Traditionally Indonesians have been the predominant buyers of high-end apartments in Singapore. But recently, the Chinese and Indians have increased their presence in this segment, as wealth levels rise on the back of strong economic growth.

As well, property buying curbs in China are driving some mainland Chinese to park monies in Singapore. Overseas Chinese buyers are also finding that they fit hand-in-glove in Singapore because of the ethnic similarity. When they walk into a showflat here, they find sales people speaking to them in Mandarin, and sometimes even entertaining them with a nice Chilli crab dinner.
Over at Sentosa Cove (where foreigners don't need to be PRs to qualify to buy landed homes), the Chinese are the biggest foreign buyers (PRs and non-PRs combined) of bungalows. They purchased five of the total 20 bungalows transacted in Jan-Nov this year. Singaporeans bought eight bungalows.

As a whole, non-PR foreigners picked up seven bungalows in the upscale waterfront housing district in January-November 2011, giving them a 35 per cent share of total purchases, up from their 33.3 per cent share in full-year 2010.

The average price of bungalows transacted on Sentosa Cove has risen 11.1 per cent from $1,910 psf on land area for full-year 2010 to $2,122 psf for January-November 2011. In absolute dollar quantum, the average price per bungalow transaction has appreciated 7.7 per cent from $17.1 million to $18.4 million. The total number of Sentosa Cove bungalows transacted has slipped from 54 last year to 20 in Jan-Nov 2011.

Transaction activity in Singapore's high-end residential sector is expected to remain subdued in the next few quarters against the backdrop of a turbulent global economy.

But the market should continue to attract regional and global high net worth clientele interest, as they look for safe havens to store their wealth. Singapore is one of the two AAA-rated countries in Asia.

Source: Business Times – 5 December 2011

Good Class Bungalows, high-end condos in district 10 see buyer interest

Good Class Bungalow (GCB) transactions in the prestigious Tanglin Hill are very rare. The most recent, according to a caveat lodged on Nov 3, was for a 21-year-old GCB on a freehold site of 34,585 sq ft. It was sold for $57 million ($1,648 psf) in a private-treaty deal. Both the seller and buyer were Singaporeans. The psf price is just slightly higher than that of a GCB located across the street that was built in 1992 and sits on a 23,982 sq ft plot. This GCB changed hands in April for $38.8 million ($1,618 psf).

Meanwhile, a GCB at Victoria Park Road on a freehold elevated site of 32,077 sq ft was sold for $48 million ($1,496 psf) a fortnight ago. A caveat has yet to be lodged. The last time the property changed hands was just two years ago, when it was sold for $38.67 million ($1,205 psf). Hence, the seller saw a 24% capital appreciation.

Given the rather gloomy economic outlook and market uncertainty, the recent Tanglin Hill and Victoria Park Road deals took about three months to negotiate and close. This is because there aren't too many buyers at this end of the market, given the large quantum price and most of the buyers being owner-occupiers looking to tear down and redevelop the existing property into a luxurious bungalow for their own use. Large GCB plots of at least 30,000 sq ft that can be sub-divided into two smaller GCBs are also becoming increasingly scarce.

Including the recent transaction at Tanglin Hill, there have been only three transactions that have crossed the $50 million mark in the last 12 months.

Smaller GCBs with land areas of 15,000 to 16,000 sq ft in prime districts 10 and 11 (Bukit Timah, Chancery Hill and Bukit Tunggal) that had asking prices of $24 million to $26 million at the beginning of the year have been transacted at $22 million to $23 million. The transaction prices of these GCBs are probably 5% to 8% below what the owners were asking for at the start of the year — an indication that sellers were prepared to adjust their prices downwards to meet buyers' expectations.

HIGH-END CONDOS

In the Tanglin area, there have also been some transactions in the high-end condominium segment. In the Tanglin area is the 46-unit luxury condo 8 Napier, located next to Gleneagles Hospital and Medical Centre and the Singapore Botanic Gardens. According to URA, as at end-October, 27 units in the luxury condo have been sold. The project was completed last year.

Last year, some units purchased for $3,550 psf four years ago were sold on the secondary market at an average of $3,200 psf. From last December to September this year, units sold in the low-rise development ranged from $3,000 psf for second-floor units to $3,527 psf for higher-floor units.
There seems to be interest in old condos with spacious apartments. At the 274-unit freehold Tanglin Park condo developed by City Developments Ltd (CDL) 22 years ago, there were two transactions in the week of Nov 1 to 8, based on caveats downloaded from URA Realis as at Nov 23. A 1,593 sq ft three-bedroom apartment on the eighth level was sold for $3.2 million ($2,009 psf). This is the fifth time the unit has changed hands in the last 16 years (URA's database of caveats go back only to January 1995).

Tanglin Park's main attraction is its location; being in a quiet and exclusive neighbourhood is definitely an advantage.

Another condo that is known for its luxurious and spacious apartments is the 330-unit Ardmore Park by Wheelock Properties that was completed 10 years ago. Ardmore Park is a perennial favourite not only because of its spacious units but also its facilities and landscaping.

The condo attracts a good mix of investors and occupiers, although these days, most of the buyers are looking to buy for their own occupation.

Source : The Edge – 28 Nov 2011

Wednesday, December 7, 2011

2nd Bedok waterfront project to be launched

Another new waterfront private residential development is about to be launched for sale in the Bedok neighbourhood, hot on the heels of CapitaLand's controversial Bedok Residences project.

Called Archipelago, the 577-unit development is a collaboration between the UOL Group and Singapore Land.

Between 180 and 200 units will be up for sale during the first phase of the launch, with preview sales expected to start from tomorrow.

Situated in Bedok Reservoir Road, facing the reservoir, it is priced below the recently launched CapitaLand project nearby, which sparked debate on its queuing system for applicants.

Average prices for Archipelago are slightly above $1,000 psf. It is understood that the smallest 527 sq ft one-bedroom units will be priced below $600,000, which translates to around $1,138 psf.
Apartments at Archipelago are a mix of one-, two-, three-, four- and five-bedroom units and penthouses.

Units with studies are also available. Homes are larger too, averaging 1,332 sq ft.

The Straits Times was also told bigger units make up a majority of the homes at the development, with two- and three-bedroom apartments making up 63 per cent of the total homes.

Twenty-four strata-titled landed homes are also included. Foreigners will be eligible to buy the three-storey homes of more than 4,000 sq ft, expected to cost above $3 million each.

Source: The Straits Times – 1 December 2011

Is the Singapore property market headed for a fall?

Property has been enjoying a boom like no other in the past two years but if Standard Chartered's experts are right, the good times are coming to an end.

The bank's analysts have turned markedly bearish, with a report predicting residential rents and prices plunging 30 per cent over the next three years.

This will be a painful reversal given that prices surged 18 per cent last year - as Singapore bounced back from the global financial crisis - and a further 6 per cent in the first nine months of this year.

Stanchart sees problems ahead, including slower population growth due to stricter immigration policies and the unprecedented supply of completed homes coming onstream.

Rock-bottom interest rates could also edge up from 2013, further dampening the market. The debt crisis in Europe and concerns of a severe downturn in China could also have a significant impact on demand and prices.

After four rounds of cooling measures since September 2009, the Urban Redevelopment Authority (URA) has found price gains moderating for eight consecutive quarters.

They inched up just 1.3 per cent from the second quarter to the three months to Sept 30.
Transaction volumes also dropped 25 per cent in the third quarter as global uncertainty and stock market volatility took their toll on sentiment.

So with all asset classes said to move in cycles - the classic boom and bust scenario - is the Singapore property market headed for a sustained downcycle and a correction in prices?

Economic outlook

The euro zone crisis is one of the big factors determining where the property market heads, experts note.

Singapore's economy, buffeted by global weakness and uncertainty, is expected to grow at a sluggish 1 per cent to 3 per cent next year but that could worsen if Europe's woes escalate or a full-blown financial crisis erupts.

Experts add that while any contraction in the global economy will hurt Singapore, the extent remains unknown as the European crisis plays out in slow motion.
There are also other mitigating factors in play.

Property markets go through cycles, just like economies. Only if you are in an emerging market where there is a long period of strong economic growth, might you have a long property market upcycle.

Employment and businesses are affected when the economy contracts so this will affect buying sentiment and the ability to buy homes.

Prices will fall if the major global economies deteriorate as Singapore's economic growth will be affected.

DBS economist Irvin Seah said slowing economic growth typically places a heightened risk of depreciating asset values.

But housing demand in Singapore has remained in good shape as unemployment remains low with wages continuing to rise.

The local property market is also known to be fairly resilient, experiencing just a short blip during the global financial crisis before a sharp rebound at the end of 2009, Mr Seah noted.

However, he highlighted the scenario of a hard landing in China - Singapore's largest export market - as possibly impacting the market most severely.

But the risk of a hard landing in China is 'moderate' and not big enough to warrant concern as yet.
A recession coupled with job losses is likely to drag prices down.
The moment when potential buyers feel insecure about their future source of income is when they pull back from buying or begin to divest.

In a downturn, foreign capital could also become defensive and pull back from investing overseas, some experts say.

On the other hand, while another global crisis might also dampen sentiment, it might lead to more money being pumped into the markets as governments act to salvage their economies.

Already, there is talk of a third round of quantitative easing by the United States Federal Reserve.
These high levels of liquidity flooding the market might find their way to Asia and continue to support property prices.

Interest rates

Low interest rates that are making mortgages far more affordable have also helped to support the housing market.

And with the United States Federal Reserve pledging to keep rates low until mid-2013, rates here are also likely to remain flat.

However, Stanchart property analysts say that low borrowing costs are not enough to sustain the market.

The increase in the public housing income ceiling and the lower pricing of new HDB flats - expected to siphon demand from the private sector - should still lead to price falls.

Private home buyers are estimated to spend more than 38 per cent of their monthly gross income on mortgage repayments even though rates are only at 1.1 per cent, the report noted.

This is slightly higher than the Government's target of 30 per cent to 34 per cent. 'If interest rates normalise to the 10-year average of 4 per cent, we estimate the proportion of income spent on mortgage repayments to rise to 50 per cent,' it added.

Rising interest rates are expected to reduce affordability and trim market demand, possibly leading to prices dipping as well.

However, as some experts note, any decision by the US Fed to raise rates will mean that its economy is finally on the mend and that could signal that the global economy is out of the doldrums, which is good news for investors.

Slower population growth
Tighter immigration policies have recently been introduced in response to unhappiness over strained infrastructure and congestion.

The Stanchart report noted that population growth is expected to be halved to 1.5 per cent to 2 per cent for the next three to five years as the Government looks to encourage productivity gains and reduce its reliance on foreign workers.

But this reduction might have a knock-on effect on leasing demand and rents, especially with foreigners - including permanent residents - making up 37 per cent of the population.

Experts note that if demand from tenants falls, rents and correspondingly yields - which are already low at 2.6 per cent to 3 per cent - will fall, with prices following eventually.

But AmFraser Securities equity analyst Lau Wei Chong noted that although the intake of foreigners has slowed, the Government maintains its open door policy to talent, which will see the population continue growing. This continued influx will mitigate any sharp fall in property prices, he said.

Oversupply

The large number of completed units from the bumper supply of state land releases raises the question of whether these homes can be absorbed by the market.
The report noted that the number of homes to be launched for sale is similar to that in 2000, when prices plummeted 20 per cent.

As of the third quarter, 37,400 homes are in the pipeline seeking the required pre-requisite conditions to be launched.
This is similar to the 36,400 units in the first quarter of 2008 and the 37,500 units in the second quarter of 2000.

Prices fell 25 per cent in 2009 and 18 per cent in 2001, the report pointed out.

Completions are also expected to peak in 2015 with a staggering 47,000 units built. This is almost three times the number of private homes developers sold last year, which was itself a record.

The unprecedented supply of new HDB flats - 50,000 in total for this year and next - will also divert buying demand from the private sector.

However, the population has expanded by about 2.8 per cent a year over the past 10 years while the number of completed homes has increased by 2.1 per cent a year.

Given the way the growing population has outpaced the housing stock, this has led to a backlog of demand for homes.
If the economic crisis is not too severe, this will help to mitigate the sharpness of any price correction.

Source: The Straits Times –27 Nov 2011

Opportunistic buying at the high end

Property consultants have noted that there has been some opportunistic buying at the top end of the market. Many of those on the hunt are looking for condominium units for their own stay, and therefore prefer completed projects with spacious units. With the ongoing European debt crisis, and global market uncertainty, people prefer not to flash their wealth and adopt a more conservative outlook.

One such condo that has seen a pick-up in interest is the 164-unit freehold Grange Residences, which was completed in 2004. Older condos that have seen transactions of late are the 39-unit Nassim Jade in Nassim Road, which was completed in 1999 and the 72-unit Nassim Mansion on Nassim Hill that was completed 34 years ago.

Even though these transactions are at their near record-highs, they are still lower than the prices achieved at new luxury condos in the same neighbourhood as these tend to command a premium.

Further up along Nassim Road is the newly completed, fully-sold, 100-unit Nassim Park Residences. Buyers don't mind the older condos in prime locations as these tend to have spacious units. Those who value space but who may not wish to stretch their budgets beyond $10 million for the new offerings in the market tend to look at the three- and four-bedroom units in the older estates, which are generally priced in the $5 million to $10 million range. And they are not necessarily going for the high-profile condos either.

These older condos also represent value as developers of new luxury projects that are completing or recently completed are holding on to their asking prices. Some of these were launched at the peak of the market before the global financial crisis and generally, prices at the top-end of the market are still slightly below the peak in late 2007. Hence, older condos in the same neighbourhood that are priced below these new condos are attracting value-for-money buyers.

Analysts sees more "opportunistic buying interest" in the top-end of the market. Some buyers are hunting for 'fire sales', but most owners are holding on to their asking prices, and that's why there are few transactions.

New condos that are realistically priced are also attracting buyers. One of the newly completed luxury projects that is seeing some buying interest is The Orange Grove with just 72 exclusive units located in Orange Grove Road, just off Stevens Road.

The 120-unit, 999-year leasehold Duchess Residences located in Duchess Avenue was completed recently. It is located within a quiet and established housing estate with mainly semi-detached and detached houses, off Bukit Timah Road. The condo saw two units change hands in sub-sales recently.

Units at Duchess Residences are sought after because of their proximity to good schools such as Chinese High School, Hwa Chong Institution, Nanyang Primary School and National Junior College. It is in a quiet location surrounded by landed homes. Most of the condos in the area tend to be in the main road and are older. So, as the newest development there, Duchess Residences stands out.

Source: The Edge – 21 November 2011

GCBs sold at surprisingly high prices

Two good-class bungalows (GCBs), one in Tanglin Hill and the other in Victoria Park Road, have been sold for a total of S$105 million.

According to The Strait Times, both properties were acquired by Singaporeans. The two-storey Tanglin Hill bungalow was sold for S$57 million (approximately S$1,648 psf). It was completed in 1990 and is located on a 34,579 sq ft site with a built-up area of 8,000 sq ft.

Meanwhile, the bungalow at Victoria Park Road was sold for S$48 million (around S$1,496 psf).
The report said the high prices fetched for the two properties were surprising, as many had expected the property market to cool before the end of the year.

Source : PropertyGuru – 28 Nov 2011

Far East sells 34 units of The Scotts Tower

Far East Organization yesterday said that it has sold 34 units of its 231-unit The Scotts Tower at an average price of around $3,100 per square foot (psf).

Prices for the District 9 property nestled at the intersection of Scotts Road and Cairnhill Road start from $1.94 million for a 624 sq ft one-bedroom small office, home office (SoHo) apartment.

The 103-year leasehold The Scotts Tower is the first project to be rolled out under the Far East SOHO brand, which aims to provide a distinctive collection of modern, new-generation SoHo apartments in Singapore.

Conceptualised by the Red Dot award-winning co-founder and principal architect of UNStudio in Amsterdam, Ben van Berkel, the 31-storey The Scotts Tower consists of one to three-bedroom apartments and four-bedroom penthouses, expansive landscaped gardens, sky terraces, penthouse roof gardens and other recreational facilities.

Far East said that it will bring forward the official launch of The Scotts Tower to tomorrow
 (Dec 7) following the positive response to preview sales which started on Nov 25. A total of 34 units out of the initial 56 one and two-bedroom apartments released for the preview were snapped up.

The developer has sold more than 1,000 SoHo apartments since 2004, when it launched Singapore's first SoHo development at Central, above Clarke Quay MRT station.

Since then, it has also launched two other SoHo-style projects - The Tennery at Upper Bukit Timah and The Cape at Amber Road.

Source: Business Times – 6 December 2011

Private homes launched may hit 10-year high

THE number of new private homes hitting the market this year will likely be the highest in a decade thanks to a surge of launches recently, say analysts.

Experts say about 18,300 new homes could be released this year, surpassing the 16,500 or so last year - the highest so far in a decade - and easily trumping the annual average of 9,900 between 2001 and 2010.

The numbers have been rocketing this quarter as developers rush out homes in what is usually a quiet period.

There were several major launches in October and last month, including Sim Lian's Parc Vera condo in Hougang, City Developments' The Palette in Pasir Ris, and the CapitaLand project Bedok Residences.

More new projects are likely to follow this month, say industry watchers, bucking the festive-season trend for a sales slowdown.
Rushing to release projects earlier allows developers to ride on the prevailing home-buying momentum.

Some developers have managed to expedite the sales preparation process and shorten the period from a typical timeline of between nine and 12 months to between six and nine months.

Pushing homes out for sale now also means getting a head start on the large batch of government land sales sites that were sold this year and which are expected to debut in the market next month.

A UOL Group and SingLand joint-venture started sales of its Archipelago project last Friday with average prices hovering just above $1,000 psf. About 200 homes were expected to be launched in the first phase of sales. The UOL Group declined to reveal sales figures, adding that more details would be released next week.

Far East Organization's 231-unit The Scotts Tower in Scotts Road will be launched next week, two years after plans to reconfigure the then 68-unit luxury development into smaller units were announced.

Far East's The Hillier, a 528-unit project in Hillview Avenue, near the upcoming Hillview MRT station, and the 435-apartment The Nautical in Sembawang being built by MCC Land, will be launched within the next two weeks.

Agents said prices at The Hillier are expected to be around $1,200 psf, with 503 sq ft one-bedroom units to go for about $750,000.

Indicative prices for The Nautical are expected to range between $850 and $1,000 psf.

Source: The Straits Times – 6 December 2011

Tuesday, November 29, 2011

New building guidelines take effect

A MINIMUM plot size requirement of 1,000 square metres and a guide on the maximum number of dwelling units (DUs) for non-landed residential estates were put into effect by the Urban Redevelopment Authority (URA) yesterday.

According to the new guidelines, the minimum plot size requirement for flat developments island- wide is now 1,000 sq m (about 10,763.9 sq ft), with the view to provide more space for landscaping and communal facilities.

In addition, for all breakaway proposals from existing landed housing for either flat or landed housing developments within non-safeguarded landed housing areas, the aggregate land area for the left-behind plots must also satisfy the minimum plot size.

The impact of this guideline will be felt particularly in the area of en bloc sales for landed housing.

Separately, a guide on the maximum number of DUs for flat and condominium developments within GPR (gross plot ratio) 1.4 residential estates was introduced.
The DU guide is also applicable to residential components of mixed-use developments, within GPR 1.4 residential estates, and other low-rise, low-density residential areas.

A more stringent formula was developed for areas such as Telok Kurau Estate, which has seen a rapid injection of a large number of units, resulting in significantly higher traffic volumes along the existing narrow local access roads, noted URA.

'If the number of units are being restricted, on average unit sizes will be larger. For developers looking to achieve the same per square foot pricing, you are looking at a higher total quantum that may or may not be supported by the market,' pointed out Ms Tang.

The guidelines will only take effect with respect to new applications, added Ms Tang, noting that any formal applications (excluding outline applications) submitted prior to Nov 24 which had been granted provisional permission or will result in provisional permission being granted will be evaluated under the old guidelines.
Kovan and Joo Chiat/Jalan Eunos estates were also identified as potentially problematic clusters.

URA and the Land Transport Authority are conducting a joint study to determine if more stringent DU guides are required based on the infrastructural capacity of the area.

The study is expected to be completed by the third quarter of 2012.

Source: Business Times – 25 November 2011

Private resale home prices remain flat, indicating cautious mood

Resale prices of private homes rose a touch last month, reversing a slight dip in September, but the overall trend suggests a period of flat values.

The new Singapore Residential Price Index (SRPI) flash figures out on Monday showed that prices rose 0.9 per cent last month, rallying from a 0.1 per cent dip in September.

The overall SRPI - which tracks a basket of completed non-landed projects - points to a cautious market, with monthly price movements mostly fluctuating within a range of just one per cent or less this year.

Prices of centrally located homes, excluding small apartments of less than 500 sq ft, posted a gain of 1 per cent last month compared with the 0.4 per cent dip in September.

Non-central area values rose 0.8 per cent, building on September's 0.1 per cent increase. Prices for small apartments inched back 0.9 per cent after a 3.5 per cent drop in September.

Experts offered various reasons for the trends seen in the SRPI index, which is compiled by the National University of Singapore.
The index's ups and downs could be due to its nature as a monthly snapshot, and there were fewer caveats lodged in October.

The fluctuation could also be due to prices reaching a turning point.
The underlying trend is still up ever so slightly. This is to be expected as there is still positive economic growth.

There could be a to and fro between the HDB resale and private resale mass market segments, which could have led to the varying impact on prices. In addition, there is also a high correlation between new and resale prices.

Developers who command some sort of pricing power when they launch new projects will invariably bootstrap prices in the neighbourhood.

What this means is that if prices of new units increase too much, it will divert demand to the resale market, which then reacts by increasing prices.

Source: The Straits Times – 29 November 2011

Monday, November 28, 2011

Share of mainland Chinese buyers of Singapore private homes rises

THE share of mainland Chinese buyers of private homes among all non-Singaporean buyers hit a record high in the third quarter, as property-cooling measures in China drove home hunters here.

Chinese bought 30.6 per cent of the private homes sold to non-Singaporeans between July and September, up from 26.1 per cent in the second quarter.

Singaporeans still made up the majority of buyers, with 64.8 per cent of all private home sales in the third quarter made to locals. But this is a drop from 67.9 per cent in the previous quarter.

Private home sales to all buyers in the third quarter slumped 24.5 per cent from the second quarter to 6,879 units, and were also lower than the average of 8,003 and 9,167 units per quarter in 2009 and 2010, respectively.

However, buying among mainland Chinese dipped to 682 homes in the third quarter, only a shade lower than the 707 in the previous three months.

Mainland Chinese buyers are increasingly looking to buy properties overseas, including Singapore, as a result of property cooling measures in China which have led to residential property prices falling in some cities.
The predominantly Chinese population, good infrastructure and education system, and the safe and clean environment make Singapore property an attractive investment option for mainland Chinese investors to park their money or buy a home for their children studying here.
Beijing's cooling measures as one factor driving buyers here. In recent months, China has taken steps such as tightening home lending.

One reason for the rising proportion of Chinese buyers is that some of the nationalities that have traditionally invested here are now more interested in their own home markets.

Indonesians, for example, are probably looking at their own home now as their own economy is growing rapidly.

Indonesians formed 17.5 per cent of foreign buyers in the third quarter, snapping up 389 units. In the second quarter, they bought 441 units, or 16.3 per cent of foreign buyers.

Other nationalities prominent among foreign buyers included Malaysians, with 18.9 per cent, and Indians, 11.1 per cent. Together, buyers from China, Malaysia, Indonesia and India made up 78 per cent of all foreign buyers.

For the first nine months, mainland Chinese bought 1,933 private homes, 8.4 per cent more than in all of last year. Most of the units cost $1 million each or less. They bought 835 units in this bracket, 503 units priced at $1 million to $1.5 million, and 62 units costing over $5 million.

The east was especially popular with this group of house hunters. Of the units bought by the Chinese from January to September, 419 - or 21.7 per cent - were in Districts 15 and 16. District 15 includes Katong, Joo Chiat and Amber Road while District 16 takes in Bedok and Upper East Coast.

Total private home sales could fall. Private home sales will continue to be supported by demand particularly from upgraders as long as the pricing is reasonable. However, if the scenario of a disorderly euro zone default or a China hard landing materialises, this will significantly dampen purchase demand and price growth in 2012.

Source: The Straits Times – 25 November 2011

New BTO launch brings 2011 total to record high

Seven build-to-order (BTO) projects containing 4,200 new flats were launched by the Housing Board on Thursday - bringing the total for this year to a new record.

The projects are in Bedok, Bukit Panjang, Hougang, Punggol and Yishun. They include Acacia Breeze @ Yishun, Golden Cassia in Bedok town, and Fajar Spring in Bukit Panjang town, next to the Fajar LRT station.

This brings the total number of BTO flats offered this year to 25,200 - a record number of such units launched in a year. The Housing Board's target for this year was to launch 25,000 BTO flats.

Due to demand for 'leftover' flats, the September BTO launch saw a muted response, with some estates and flat types undersubscribed with just one day left to apply. But for a BTO launch in May, nearly 4,000 units were oversubscribed by more than three times, with more than 13,000 people applying.

For this round, the applications close on Nov 30 and at least 95 per cent of the flat supply - excluding studio apartments - will be set aside for first-timer households, which can also enjoy housing grants.

Minister for National Development Khaw Boon Wan said this month that second-timers could expect more chances of being invited to select a flat in the future.

He said then that after most of the first-timer queue was cleared, balloting rules would be tweaked to enhance the chances for second-timers, probably towards the end of next year.

Flats on offer range from 387.5
 sq feet studio apartments with a starting price of about $78,000 in Hougang DewCourt to 1,237.8
 sq feet five-room flats in Hougang Capeview, costing about $444,000.
The HDB also released prices of the flats inclusive of grants - a three-room flat in Yishun priced from $156,000 will cost from $121,000 after taking grants into consideration.

Analysts confidently expects the flats in Bukit Panjang, Yishun and Hougang to be oversubscribed by at least three times as they are in mature estates, complete with amenities like schools and shops, and close to public transport.

Three times is a good amount for flats to be oversubscribed by, as one can expect about a third of applicants to drop out of the process.

The HDB will offer another 25,000 BTO units next year. The next BTO launch will take place in January, with 3,890 flats offered for sale in Chua Chu Kang, Punggol, Sengkang and Tampines.

Source: The Straits Times – 25 November 2011

Wednesday, November 23, 2011

High-end housing project breaks ground at Capitol site

A high-end residential project will soon rise at the site of the iconic Capitol Building and Stamford House as it broke ground yesterday for a possible launch between March and April next year.

The residential project, which is expected to house 34 units, is part of a landmark mixed-use development plan that will comprise retail, hotel, residential and theatre facilities when completed. 

The Capitol Theatre will be conserved and transformed into a cinema with 800 seats. 

Its developer, Capitol Investment Holdings, said it has awarded the S$338 million contract to Japanese firm Shimizu Corp for the restoration of the site.

The entire project is expected to be completed by the fourth quarter of 2014.

Source: Today -23 Nov 2011

Tuesday, November 22, 2011

Singaporeans advised to be prudent when purchasing property

Minister for National Development Khaw Boon Wan said Tuesday that Singaporeans should be prudent when purchasing property.

There is a wide range of housing options and prospective buyers should think wisely and buy within their budget, he said.

Mr Khaw was responding to a question asked by Pasir Ris-Punggol Member of Parliament (MP) Gan Thiam Poh on whether there were plans to review the existing pricing policy for HDB flats to ensure that public housing remains affordable for Singaporeans.

He cited the deteriorating global economic situation as one of the reasons to be wary.

"The current low interest rate will not stay low forever. Any global economic recession may also affect their (Singaporeans') jobs.
"On the other hand, existing HDB owners should refrain from cashing out their flats without thinking through their subsequent housing plans," he said.

Mr Khaw also said several Build-to-Order(BTO) launches have stabilised prices of new HDB flats since May and that BTO prices are affordable for newlywed first-timers.

The minister also commented on the issue of second-timers purchasing flats.

"For second-timers, the issue is more complicated as they rely more on the resale market and our influence over the resale market is indirect.

"The current resale prices are the results of an imbalance in supply and demand. We are taking active steps to re-balance them, but we need time," he said.

Source: The Straits Times – 22 November 2011

Monday, November 21, 2011

Rochor flats hot property?

Some housing analysts are predicting that HDB flats in Rochor Centre could become hot property now that they have been slated to make way for the North-South Expressway (NSE).

Residents have been offered a relocation package that includes priority for a new flat in Kallang.
This may appeal to those looking for a quicker way of buying into the Kallang area.

Such practices are not uncommon.
Housing analysts said such practices surfaced when the government carried out similar relocation programmes under the Selective En-bloc Redevelopment Scheme, which offered similar compensation packages as those offered to Rochor residents.

But analysts said potential buyers should think twice, as units in Rochor normally cost 10 to 20 per cent more, given their city location.
Recent resale data showed a three-room unit in the area went for S$470,000, with a cash premium of $50,000.

Tighter rules over the purchase of resale flats should also cause potential buyers to reconsider.
The HDB has suspended sales of Rochor Centre units for a month to give residents time to consider the relocation package before selling their units.

Source : Channel NewsAsia – 17 Nov 2011

Students help potential buyers queue for Bedok Residences units

SINGAPORE: Units at a new property launch will go on sale on Wednesday, but some 500 people are already queuing for them. 

And about 100 of them are students. 

Most of the students said they are helping family or friends queue for a spot in Bedok Residences, a development coming up at Bedok New Town.

Interested buyers must get a queue number, and the students said they are being paid about S$10 an hour to do the job.

Residents in the area said some of them have been there since 10pm on Sunday.

Bedok Residences will have 583 units and is part of a 15-storey integrated development consisting of residential units, a shopping mall and a transportation hub.

The development is by CapitaLand Residential Singapore and CapitaMalls Asia.

Source: ChannelNewsAsia - 21 Nov 2011

Thursday, November 17, 2011

Housing market set for prolonged downturn: Daiwa

The housing market in Singapore is heading for a prolonged downturn and overall private home prices are forecast to fall between 22 and 26 per cent in the next three years, Daiwa Research said. "We believe the residential property market could remain depressed for several years, triggered initially by a likely forthcoming gross domestic product slowdown (in 2012) and lingering global economic uncertainty," it said.

From late next year, Daiwa said, structural issues such as the rapid build-up in unsold inventory in the primary market and vacant rental units will take centre stage and keep home prices and rents in check for several years.

The mass-market segment will hold up slightly better than high-end properties, supported by better affordability and the resilience in the resale prices of Housing and Development Board flats, Daiwa said.

The house has downgraded its view of Singapore's property sector to "Negative" from "Neutral", adding that "it is hard for us to see the developer shares outperforming the Straits Times Index over the next six months" despite their underperformance in the year to date.

Source: TODAY – 18 November 2011

NO EN BLOC, NOW BACK TO BUSINESS

After its proposed en-bloc sale fell through earlier this year, Tanglin Shopping Centre is turning its attention to rejuvenating the mall and reminding shoppers it is still open for business.

The 40-year-old shopping centre took out a full-page newspaper advertisement yesterday, declaring: "We are staying".

Management council member Anil Bhatia, who sat on the now-dissolved en bloc committee, told Today the owners have "absolutely no immediate plans" for another en bloc sale attempt.

"A lot of it depends on price," said Mr Bhatia. "Everyone wants a good price and the market is not very good right now. If there's an uptrend, then it's a different matter."

Despite a one-month extension, the shopping centre failed to attract any bidders to meet its S$1.25 billion reserve price by the September deadline.

The management council plans to focus for now on reminding shoppers that it is business as usual at the shopping centre. It is also refurbishing the space. "With the en bloc, a lot of people thought it was the end, so one of our tasks is for people to know that we are still here," he said.

More advertisements will be run and the council is also working out a marketing strategy. "All the new malls that have come up are very comprehensive ... we are a very niche mall - antiques, tailoring, restaurants - and we are going to try to market that," said Mr Bhatia.

Source: Today -17 Nov 2011