Should Notice of Death be filed?

Source : Sunday Times - 5 Oct 2008

Q My mum died recently. She jointly owned a flat with my brother. Is it necessary to file a Notice of Death as we do not wish to incur legal fees? Doesn’t my brother become the owner automatically with my mum’s death? If so, why must he file a Notice of Death?

A If your mum and your brother owned the flat as ‘Joint Tenants’, your brother became the sole owner when your mum died.

An instrument of Notice of Death should be registered with the Singapore Land Authority to name your brother as the sole registered proprietor as soon as possible.

By doing this, firstly, the Land Register maintained by the Singapore Land Authority is updated on the status of the ownership, and secondly, any interested party in respect of the flat will be able to ascertain that your brother is the sole registered proprietor of the flat by conducting a title search with the Singapore Land Authority.

Mabel Lim
Partner, Harry Elias Partnership

Advice provided in this column is not meant as a substitute for comprehensive professional advice

Spruced-up Balestier set to create buzz

Source : Sunday Times - 5 Oct 2008

This is the last in a four-part series on the property scene in or around ‘colourful’ spots of Singapore

HOME buyers hankering after a place in or near the city but daunted by the high prices could be pleasantly surprised by the choices coming up in one area: Balestier.

The district, once known as a crime-infested area, has been spruced up recently, with private condos sprouting up.

While police raids of its massage parlours still make the news sometimes, the area’s old-world charm is undeniable and its proximity to the city centre makes it attractive.

Because of its colourful past, it is often viewed as the poorer cousin of Novena and Newton, whose properties command higher prices though they are just next door.

But Balestier is now up-and-coming, with the Urban Redevelopment Authority (URA) marking it as one of Singapore’s important ‘identity nodes’ and implementing plans for its rejuvenation.

URA recently awarded the last piece of state land in Balestier to a Hiap Hoe joint venture for hotel and commercial development. The developer also has to build and manage a public space called Zhongshan Park, meant to boost the profile of the Sun Yat Sen Nanyang Memorial Hall in Ah Hood Road, off Balestier.

Analysts say the development will add to the vibrancy of the area, already famed for eateries specialising in local fare such as duck rice. Balestier is also home to numerous budget hotels such as the Fragrance and Hotel 81 chains, popular with tourists and student travellers.

As at the end of last year, there were about 600 hotel rooms in Balestier. Another 50 rooms are due for completion this year, not including the new hotel site, said URA.

In addition, Balestier is dotted with old walk-up flats around Jalan Datoh and Jalan Rama Rama that attract clients such as foreign workers and students because of the cheap rents, say analysts. Rents are around $2,000 a month - cheap for a near-city location, says Savills director Ku Swee Yong.

He added that some of these flats can be bought for around $800 per sq ft (psf) or less. However, many are making way for new freehold condos, especially following a spate of en bloc deals last year.

Property developer City Developments (CDL), for example, snapped up a host of sites such as The Albany, Lock Cho Apartments and Comfort Mansion. Down the road, it also bought Concorde Residences, Balestier Court and Bright Building.

Mr Ku said prices at CDL’s yet-to-be-launched condo, The Arte at Thomson, could even hit $1,400 to $1,500 psf - the top range for the area - if the market is good.

Newer existing condos such as The Marque @ Irrawaddy and The Verve went for around $1,100 to $1,200 psf in the first half. But in recent months, prices at The Verve have slipped just below $1,000 psf.

In contrast, Novena condos such as Lucida and the Soleil @ Sinaran fetch about $1,400 psf.

On the other side of Balestier, there are newer condos along Martaban Road, such as Ecoville and Medge, going for $883 to $958 psf.

Investors can also consider Balestier’s historic shophouses, with as many as 150 gazetted for conservation. Some boast architectural styles that date back to the 1840s.

Property agent Frank Lim is selling a row of five adjoining two-storey shophouses opposite Shaw Plaza for $14 million. In total, they bring in rents of $59,000 a month - which give a yield of around 5 per cent, say property analysts.

This level is reasonably attractive and can be improved if investors choose the right tenant mix, said Knight Frank research and consultancy head Nicholas Mak.

Lighting shops have emerged as a major theme in the area’s tenant mix. There are also eateries, karaoke bars, shopping malls and mom-and-pop shops offering goods that run the gamut from vintage sunglasses to coffee beans.

Conservation experts at URA say they have noticed an influx of foreigners renting shophouses and renovating the buildings to live in.

URA is looking into greening the fairly built-up area and exploring ways to make the walking experience along the road ‘more conducive’, said deputy director of physical planning Tan See Nin.

He noted the number of private homes due for completion by 2011 in Balestier will reach 860 units.

Balestier is home to the Global Indian International School and Curtin University is opening a new campus there next month. It is targeting 5,000 students, with 1,000 enrolled by year’s end.

Unhappy residents express concerns over new access road

Source : Channel NewsAsia - 5 Oct 2008

Residents affected by the new access road to the Serangoon Gardens foreign workers’ dormitory have expressed their concerns to their Member of Parliament.

They are unhappy that the road will link the site to a few thousand landed homes along Ang Mo Kio Avenue 1, and they said buses ferrying the foreign workers will create traffic congestion and noise.

The new access road shifts the dormitory entrance to Ang Mo Kio Avenue 1, near Tai Hwan and Mei Hwan estates.

Eleanor Tan, Mei Hwan estate resident, said: “We only knew about the new road yesterday and that is a dangerous spot. I live exactly opposite the new road and I see accidents along the slip road.”

At a dialogue session, Aljunied GRC MP Lim Hwee Hua said the new road will take six to nine months to build.

She said: “There could be another opening further up north, although I know that the Land Transport Authority has looked at that possibility with exactly the same intention – to minimise the need to go all the way down. Nonetheless, I’ll bring it back again to LTA and ask them to take a deeper, closer look at it. To see whether that can be done or not.”

Mrs Lim added that the new dormitory will only be operational when the access road is completed. She also clarified that the road is not part of the current Central Expressway (CTE) widening plan. It was specifically conceptualised as a result of the dormitory.

Talks are also underway with the authorities to step up security patrols, at least for the first year.

The existing neighbourhood committee that has already been formed to address the issue will now be expanded to include 10 to 15 more members. These committee members are also residents who have specific concerns with regard to the foreign workers’ dormitory.

Tsu Chin Siang, Tai Hwan estate resident, said: “Most likely they have to build a long fence towards Ang Mo Kio Avenue 1, so that at least you disadvantage them from coming back to Tai Hwan estate.”

It is unclear when the dormitory will be operational, but Mrs Lim said she hopes the tender can be put up by next month so that the expected five-year lease on the dormitory can be completed at an earlier date.

She added that the residents’ requests will be given to the future dorm operators.

For bailout to work, US housing recovery is vital

Source : Business Times - 6 Oct 2008

A housing upturn may induce banks to lend again: analysts

Washington’s financial bailout plan is now law. So the credit spigot will start flowing again, banks will resume lending, and an economic recovery can begin, right? Wrong.

Experts say the most important thing that needs to happen before the US$700 billion bailout even has a chance of working: Home prices must stop falling. That would send a signal to banks that the worst has passed and it’s safe to start doling out money again.

The problem is the lending freeze has made getting a mortgage loan tough for everyone except those with sterling credit.

That means it will take several months or longer to pare down the glut of houses built when times were good - and those that have come on the market because of soaring foreclosures - before home prices start appreciating.

Housing is a critical component to the US economy and by extension the availability of credit. Roughly one in eight US jobs depends on housing directly or indirectly - from construction workers to bank loan officers to big brokers on Wall Street.

A turnaround in housing prices would boost confidence in the wider economy and, experts hope, goad banks into lending again.

‘Housing traditionally does lead the economy through a recovery. I think it’s going to be critical for a sustained recovery in this cycle, too,’ said Gary Thayer, senior economist at Wachovia Securities.

Sung Won Sohn, an economics professor at California State University, Channel Islands said the near certainty of a recession makes it too risky for the thousands of small and medium-sized banks across the country to lend to small borrowers.

‘Banks know the economy is getting worse, so … they will keep being cautious,’ said Prof Sung.

Still, the government hopes that by scooping up bad mortgage debt and other toxic assets, banks eventually can clean up their shaky balance sheets, crack open the vaults and send money washing through the system again. The rescue plan also raises the federally insured deposit limit to US$250,000 from US$100,000, a move that could boost banks’ reserves and further grease the lending wheels.

Representative Barney Frank, the Financial Services Committee chairman said the measure was just the beginning of a much larger task Congress will tackle next year: overhauling housing policy and financial regulation in a legislative effort comparable to the New Deal.

Meanwhile, the Treasury Department is moving swiftly to get the plan started. Treasury Secretary Henry Paulson said on Friday he has been lining up outside advisers as his staff works out details on a multitude of complex issues.

But several hurdles could trip up the plan. For starters, even when the Treasury starts buying bad assets, some banks may hoard the cash they receive in return until they see how the plan pans out.

That has the potential to make the lending logjam worse, said Vincent R Reinhart, former director of the Federal Reserve’s monetary affairs division. ‘They may sit on the sidelines and wait to see (the bailout) get some traction. The problem is if everybody sits on the sidelines, nobody gets in the game. It’s a risk.’

But Jim Gillespie, chief executive of Coldwell Banker Real Estate, said he hopes that lower prices, combined with the government’s actions will jump-start stagnant demand. The federal bailout plan ‘will give people reassurance that mortgage money is available.’ - AP

US Q3 apartment market vacancy rises

Source : Business Times - 6 Oct 2008

The US apartment vacancy rate in the third quarter rose to its highest level in more than three years, as the economy weakened and diluted the greatest source of apartment demand - job growth.

Job losses outweighed the increase in demand for apartments from former or would-be home owners, said Sam Chandan, chief economist of real estate research firm Reis.

According to Reis’ results for July-September, the US apartment vacancy rate rose 0.1 percentage points to 6.1 per cent, the highest vacancy level since the second quarter 2005, when the US housing market reached its peak and would-be renters were borrowing big to buy homes.

‘Whenever the economy is slowing, when the job market is weak, particularly for young people, it undercuts the rate of household formation and the demand for apartments,’ Mr Chandan said, adding that the third quarter is usually the strongest of the year.

However, the US economy lost 299,000 jobs in the third quarter, according to the most recent Labour Department statistics. Job loss typically impacts new entries into the labour market hard, and about 70 per cent of young adults 20 to 30 years old typically are apartment dwellers.

‘This is a real key demographic for rental demand for apartments,’ Mr Chandan said. When they can’t get a job, they usually remain in their parents’ home or double up with roommates, he said.

The average US monthly rent, including free-months rent and other perks designed to lure tenants, reached US$999 up just 0.5 per cent, its weakest increase since the second quarter 2005, Reis said in its report released on Monday.

Of the 79 metropolitan areas Reis follows, New York had the lowest vacancy rate at 2 per cent, followed by Long Island at 2.8 per cent and Central New Jersey at 2.9 per cent.

Outside of small markets, where one or two buildings can move the needle, areas hard hit by the housing collapse, such as those in Florida and several California markets, saw vacancy increase and rent growth weaken or decline.

Columbia, South Carolina, a small market, saw the greatest vacancy rise, up 1.8 percentage points to 12.2 per cent. But Jacksonville Florida, a much larger market, was second with vacancy up 0.4 percentage points to 11 per cent.

Austin, Texas saw the greatest rent growth, up 2.1 per cent to US$786 a month, Reis said.

By market, Long Island New York, a pricey market and the hard-hit housing areas of Jacksonville, Florida, and San Bernardino/Riverside, California saw monthly rent fall by 0.3 per cent. Rent also fell in Florida’s Orlando and Fort Lauderdale areas, Reis said.

The Pacific Northwest areas, home of some of the US strongest companies, such as Google, Microsoft Corp and Boeing Co, saw the strongest rent growth over the past 12 months, with Tacoma, Washington topping the list at 7.7 per cent and Seattle at 7.6 per cent.

Florida markets saw the weakest rent, with Palm Beach rent falling 0.7 per cent and Miami average rent falling by 0.1 per cent.

Over the long run, when job growth rebounds, the US apartment market will benefit from the return of traditional stricter lending standards.

‘For a lot of young people not having to make that down payment allowed them to become homeowners sooner over the last couple of years,’ Mr Chandan said.

‘With (down payments) becoming a factor again, we’ll return to a situation where we’ve been historically, where younger households tend to be renters because they have to save a while before they can afford a home.’

While some apartment landlords may suffer in the short run, apartment companies, such as AvalonBay Communities, Equity Residential, UDR and Mid-America Apartment Communities will benefit in the long run.

Financial system here safe: Tharman

Source : Straits Times - 6 Oct 2008

No need for panic as regulatory approach ensures banks are solid

THE questions came fast and furious: How well are insurance policies protected? Are offshore banks safe? Can the Government make banks raise the guaranteed amount for deposits?

In an uncertain economic climate that has seen seemingly rock-solid financial institutions in the United States topple one after another, anxious residents yesterday quizzed the Finance Minister himself on Singapore’s financial system.

Mr Tharman Shanmugaratnam assured them Singapore is ‘not in the same situation as the US’.

‘We need not panic,’ he told residents at a dialogue in Toa Payoh East.

One resident noted that if there is a run on a bank here, depositors are protected for up to $20,000 in their accounts. ‘I think many of us have more than $20,000. Can the minister do something to make the bank increase the guaranteed amount?’ he asked.

Mr Tharman replied: ‘I can assure you our Singapore banks are well regulated and there is no risk and no reason whatsoever to have a run on our banks.’

Singapore has been ‘old-fashioned’ in its strict regulatory approach to make sure banks have adequate assets, and do not over-lend to property owners.

‘So frankly, you need not worry about how solid our banks are, your money is safe,’ he said.

If banks are made to increase the guaranteed amount from $20,000, it will mean higher costs, ultimately borne by the customer. ‘So I would say this system is better: regulate the banks well, keep deposit insurance cost low.’

To another resident who wanted to know how well-protected Singaporeans’ insurance is, Mr Tharman stated categorically: ‘You can have equal confidence in our insurers.

‘Any insurance company operating in Singapore, including the foreign companies, have to abide by strict regulations.’

As for offshore banks, they are required to maintain assets in Singapore to meet their liabilities, he added.

‘It is not possible for anyone to say all banks are safe, but what I can say is our local banks are safe, and foreign banks in Singapore are subject to tighter regulations compared to most other places.’

Ultimately, consumers must have their eyes open when going to financial institutions, and judge where their money is safe, he said. ‘This is a responsibility that you have. Especially when people offer you higher interest or higher returns, your eyes must open even wider.’

The minister repeated this point when telling reporters later that there were lessons to be gleaned from the crisis.

The system can be improved, he acknowledged, whether on the part of the regulator, the Monetary Authority of Singapore (MAS); financial institutions; or the consumer.

‘The MAS approach is one that balances regulation with responsibility on the part of the institution and the investor. All three play a part, and in all three areas, I’m sure there can be improvements, coming out of the recent problems.’

But he warned against over-regulating, saying risk is inherent in the system.

‘We have to avoid swinging in a pendulum-like fashion when it comes to the regulation of financial products.

‘There have to be improvements in marketing and selling and disclosure. There are learning points coming out from the recent problems.

‘(But) let’s not swing to over-regulation because that is going to increase costs and it’s going to reduce the range of products that meet everyone’s needs.’

He cited as an example Lehman Bonds, which, as late as July, were rated A1 by credit-rating agency Moody’s. The highest rating is Aaa.

‘Should MAS say A1 bonds should not be bought by people? I think that would be over-regulation, but it turned out that Lehman Bonds went bust.

‘So it’s an example of how there is risk in the system, there is no way you can get it out of the picture by over-regulation unless you over-regulate to the extent you cut out options to sensible investors.

‘So let’s find a suitable middle ground (to) improve the system.’

Economy may slow for ’several quarters’

Source : Straits Times - 6 Oct 2008

But strong fundamentals will see Singapore past global crisis: Tharman

HEAVILY exposed to the global economy, Singapore will see an economic slowdown that could last ’several quarters’, not just one or two quarters, said Finance Minister Tharman Shanmugaratnam yesterday.

In tandem, unemployment is expected to increase.

But he also sounded a note of optimism, saying with its strong fundamentals, Singapore will ride out the crisis - and emerge better than most countries.

Mr Tharman was addressing some 300 grassroots leaders and residents of Toa Payoh East, after a three-hour walkabout which saw him, among other things, opening an exercise corner for the elderly.

Accompanied by MPs from the Bishan-Toa Payoh GRC, including Mrs Josephine Teo, it was his first ministerial walkabout since taking charge of the finance portfolio this year.

During the 80-minute dialogue that followed, residents asked 13 questions covering topics from foreign talent to greater rewards for grandparent caregivers.

But the focus was on the darkening economic outlook amid increasingly gloomy news from the United States - and the world - on what some have termed ‘the worst financial crisis since the 1930s’.

So grassroots leader Raymond Teo, 39, wanted Mr Tharman’s opinion of the US$700 billion (S$1 trillion) package to bail out troubled financial institutions in the US, and how it impacts Singapore.

The minister expressed relief that the US Congress had supported the package, as it is a step forward.

But it is ‘not a full solution’ in addressing the real malaise: shortage of capital in the banks, he noted. This, the new US President would have to work out when he takes over in January.

And because the problems are ‘deep and extensive’, it will take ‘a year or two’ before the world emerges from the crisis, he later told reporters.

Meanwhile, the crisis has moved into what he calls ‘its second phase’.

‘It’s no longer just a financial crisis,’ he said. ‘It is now an economic crisis.’

Growth is slowing in the US, Europe, Japan, and even China and India, he noted. ‘So globally the economy is slowing down. This is a fact we cannot escape.’

Thus, Singapore ‘will see an economic slowdown which, from all indications, will last not just one or two quarters, but may last several quarters, because we’re heavily exposed to the global economy’.

But he stressed that Singapore is armed with strengths that will see it safely through the crisis.

First, the unemployment rate is low.

So while fewer jobs will be created in the next few quarters, the starting level is ‘much lower’ than most countries.

Second, Singapore has a diversified economy.

‘Some sectors are still doing well,’ he said, citing marine engineering, construction and manufacturers of high-value products. Even in the embattled financial services industry, wealth management and private banking are doing well.

Third, the Government is in a strong fiscal position, ‘and we’ll be able to take the necessary actions if the situation turns much worse’.

He said: ‘Frankly, it was just as well we decided not to spend all the surplus that we earned last year.’ Part of it was given to Singaporeans as Growth Dividends.

‘This crisis shows the merits of thinking not just short-term but medium- to long-term,’ the minister added.

Exuding confidence about the country’s strong fundamentals, he told Singaporeans to keep their eye on the medium- to long-term future, as the short-term problems can be dealt with.

‘If we keep our focus on education, continuous training, and attracting new investments and new industries here - which is what we’re doing - Singapore will continue to do well.

‘So we’ll ride through the down cycle …I feel we’re going to come through it better than most countries - not just in the region but even most developed countries.’

Asked for the full-year economic growth forecast, he said the Trade and Industry Ministry will reveal the numbers on Friday. Trade and Industry Minister Lim Hng Kiang had warned growth might dip ‘a bit below’ 4 per cent this year.

One resident, technician Ali Khan, 43, said he was assured by Mr Tharman’s replies, as he and his friends had been worried about their job security.

‘It gives me some confidence that despite the downturn, we’ll be all right in the long run.’

Five times more rental flats recovered

Source : Straits Times - 6 Oct 2008

147 units seized from tenants who made profit from illegal sub-letting

MORE rental flat cheats are being exposed, with the number of flats seized by the Government for illegal subletting increasing five-fold this year.

New figures obtained by The Straits Times show that 147 rental flats have been recovered by the Housing Board as at end August, compared to just 28 flats recovered last year. Less than 20 flats were seized in 2005 and 2006 each.

This year’s number is set to go up further as the HDB steps up its efforts to weed out errant tenants who abuse their rental flats to make profits.

Rental flats rates currently range from $26 to $205 for a one-roomer and $44 to $275 for a two-roomer, depending on household income and other factors.

There is a long waiting list of more than 4,000 applicants for these flats, which the Government reserves for needy, low-income families that cannot afford to buy a home or pay market rental rates.

What rental cheats do is sublet these rental flats at market rates instead of staying in them. Many flats are being sub-let for about $1,000 a month, netting their original tenants handsome profits.

The Straits Times had reported in May a surge in the number of such tenants illegally sub-letting rental flats to cash in on the demand for low-priced housing.

Demand has spiked on the back of last year’s property boom, which has upped rentals islandwide, and an influx of foreign workers looking for cheap accommodation.

Anecdotal evidence, based on interviews with residents, shows that in some estates, as many as one in five rental flats were illegally rented out, often to foreign workers or students from Malaysia, China and India.

‘It’s great that HDB is discovering more of such cases,’ said MP for Pasir Ris-Punggol GRC, Mr Teo Ser Luck.

‘These units shouldn’t be used for profit and denied to a citizen who is really in need,’ he said.

The HDB has stepped up its enforcement blitzes, extending its net to more areas across the country. This was partly in response to a call-for-action by MPs, residents of rental blocks and genuinely needy Singaporeans who have been left waiting in the queue.

‘I fully support HDB’s enforcement actions. Rental flats shouldn’t be used as a money-making machine,’ said North West District Mayor Dr Teo Ho Pin, who is also MP for Bukit Panjang.

HDB said the increased awareness of such abuse this year has helped in its enforcement, with more residents calling its hotline. Of the 147 units recovered, 31 units - or 21 per cent - could be traced to feedback from residents.

The increase in such cases comes at a time when local demand for rental flats have escalated - a ‘worrying trend’ singled out by Prime Minister Lee Hsien Loong in his National Day Rally speech.

The number of people seeking such flats has ‘tripled’ in just a year, he said. There are about 4,387 in the waiting list as at June, with a waiting time of nine to 18 months. In 2006, the wait was just two to six months.

HDB has since said it will ramp up its current stock of rental flats from 42,800 to 49,860 by end-2011. Tenants illegally renting out their home can lose the flat and face a five-year ban from renting or buying HDB property.

Be prudent, start small

Source : Sunday Times - 5 Oct 2008

These are not the best of times, but the Housing Board’s new and resale markets are still holding strong. Last week, in its balloting exercise, the HDB drew an overwhelming response for some of its priciest flats at the 50-storey Pinnacle@Duxton in Tanjong Pagar. There were almost 1,500 applications for the 428 four- and five-room flats on offer, or 3.5 hopefuls for every unit. The 111 five-room flats there start at $545,000 and hit $645,800 for a 49th-storey unit - the most expensive new HDB flats - yet there were still 372 applicants.

We wonder how many of them are young married couples. Assume a young couple’s combined income is $8,000, which is the HDB’s ceiling for new flat applicants, and they plan to take out a $500,000 loan stretched over 30 years. If they are eligible for an HDB loan whose interest is 2.6 per cent, their monthly instalment is about $2,000. And they can use $1,600 from their CPF. It is painless. But what they do not reckon with is that at the end of the 30-year period, they would have paid a total sum of about $800,000 because of the interest, and there will be nothing left in their CPF, except the minimum sum.

Such couples will be asset-rich, cash-poor, which is the position many Singaporeans are in today. Of course, they can imagine their pay and property prices going up over the years. But as the current financial crisis shows, bad times can come unexpectedly, and there is always the possibility of losing one’s job. There are also other young couples who commit themselves to condos and cars before they have built up adequate savings. In a downturn, they will not be able to offload them without suffering losses. To these young couples, we advise prudence. Property in Singapore is a good long-term investment, probably one of the best. But the wisest thing to do is to start small. Buy a three- or four-room HDB flat in a location that does not come with a huge premium. Then scale up as savings accumulate.