When a price fall isn’t a price fall

SISV Services is fixing problem with caveats lodged for some subsale deals

PRIVATE home prices have fallen but in some cases, the drop may not be as much as suggested by SISV Services’ Realink database.

Savills Singapore has spotted more than 60 instances of ‘duplicate caveats’ listed at different prices for the same transaction and which give the impression of a unit changing hands within a span of a few months at a significantly lower price, when in fact it hadn’t.

The common thread running through these cases is that they involved subsale deals transacted in the past six months for projects which either received Temporary Occupation Permit in 2008 or are nearing TOP.

For example, Realink shows a caveat for a 47th floor unit at The Sail @ Marina Bay sold in the subsale market in September for $508,024 or $858 psf, when actually the unit was sold for $1.45 million or $2,450 psf and which was caveated three months earlier (and also shown in Realink). The lower price was the price at which the developer first sold the unit back in 2005.

In another instance, Realink shows a caveat for a unit at Park Infinia at Wee Nam in November for $1.16 million or $868 psf, one-third lower than the $1.77 million or $1,325 psf caveat lodged for the same unit two months earlier. Actually, both caveats were lodged by the same buyer, who paid the higher price.

Rodyk & Davidson LLP partner Tang Woon Ee told BT that it was ‘good practice’ to advise clients who buy in the subsale market to lodge two caveats. The first is when the buyer exercises his subsale option and has to fully pay up the initial 5 per cent deposit; this caveat will reflect the actual transacted price.

Then, two or three months later, when this subsale transaction is completed and the buyer enters into a fresh sale and purchase agreement (SPA) with the developer, the buyer should lodge another caveat to protect his interest in the unit. This fresh SPA will reflect the original price at which the developer sold the unit, since this is the price it is entitled to collect.

‘So if the developer originally sold the unit to Buyer 1 for $1 million and Buyer 1 later sells to Buyer 2 in the subsale market for $1.2 million, the fresh SPA issued by the developer to Buyer 2 will still reflect the $1 million price; the profit (or loss) made by Buyer 1 from his subsale transaction is not relevant to the developer,’ Ms Tang explained.

As a result, the original sale price of the unit gets reflected in the second caveat lodged by the purchaser in the latest subsale deal. In this instance, two caveats will be lodged by Buyer 2 for the same transaction - the first at $1.2 million followed by another a few months later at $1 million.

SISV’s Realink database, by listing both caveats, gives the impression that the price of the unit has fallen about 17 per cent in the past three months.

Said Ms Tang: ‘A caveat is a legal claim against a property. When the developer issues a fresh SPA to a buyer who picked up his unit in the subsale market, it establishes a relationship between the buyer and the developer - that’s a caveatable interest.’

SISV Services is in the midst of rectifying the problem, which has been caused by the service provider not eliminating ‘duplicate caveats’ lodged for subsale transactions which show the original price at which the developer sold the unit a few years ago (and which is listed in the fresh Sale & Purchase Agreement issued by the developer to the latest subsale buyer).

An SISV Services spokesman attributes the problem in Realink to an increase in subsale cases involving projects originally sold on deferred payment schemes (DPS) as the original buyers who may have picked up their units from developers a few years ago are now feeling the pinch from the economic downturn and facing difficulty getting bank loans.

This has led to an increase in subsales being registered and duplicate caveats showing up, according to him.

To fix the problem, SISV Services has added a ‘history’ button, next to transactions with two or more caveats lodged, for the professional version of Realink. ‘Users can view the caveats’ history and if they see the latest price is identical to the initial transaction in the primary market say a couple of years ago, they can disregard the latest caveat as being a ‘duplicate’,’ the spokesman said.

‘For the free version of Realink available to the public, we are in the process of devising a computer programme to help us identify the duplicates, so we may remove them.

‘We didn’t remove the duplicate caveats earlier because we could not determine readily that they were ‘duplicates’ as we do not have the buyers’ names in the raw caveats data that we buy from SLA (Singapore Land Authority).’

Savills Singapore compiled a list of over 60 subsale transactions covering projects like The Sail, Cosmopolitan, The Esta, Park Infinia at Wee Nam, The Sea View, The Azure, Watermark, The Calrose and Parc Emily where Realink’s database showed latest caveats at significantly lower prices than caveats lodged for the same units just a few months earlier. Typically, the latest caveated price was also the original transacted price for the unit a few years ago.

Savills did individual searches for a few of these cases using Singapore Land Authority’s Inlis system and, in each instance, found two caveats being lodged for the property by the same buyer, just a few months apart - and with the second caveat at a lower price than the first.

Raw caveats data that SISV Services purchases from SLA does not contain information on the buyers’ or sellers’ identities to protect privacy. SLA confirmed that it provides identical data to both SISV Services and the Urban Redevelopment Authority.

Interestingly, URA’s Realis system does not list these ‘duplicate caveats’ that do not reflect the latest transacted prices.

When asked how it sifts out caveats lodged when developers issue a fresh SPA based on original sale price, a URA spokeswoman said: ‘If a caveat is lodged against a developer, we will ascertain whether it is a new sale or a fresh agreement arising from a subsale.

‘We do this by checking whether a caveat for the same unit has been lodged against the sub-seller, whether a previous caveat has been lodged for the unit when it was originally sold and also against our database on new sales compiled from monthly surveys of developers. If the caveat is lodged against a developer arising from a sub-sale, we will not show the record in Realis.’

On the duplicate caveats in SISV Services’ Realink database, Savills Singapore director for investment sales and prestige homes Steven Ming said: ‘Analysts who do not distil the information carefully can come to very wrong conclusions of the market, thus further aggravating the already weak market conditions.

‘Had end-users, investors and property owners relied on such data without first seeking a professional opinion, they can easily be making a misinformed decision as a result.’

There may also be a minority of rogue agents who may use such erroneous low-priced caveats to their advantage in convincing less savvy owners to close on low offers given market conditions, he added.

Source : Business Times - 3 Jan 2009

Q4 private home price slide is worst in decade

Some consultants notice yawning bid-ask gaps leading to distressed transacted prices

IN its worst showing since Q4 1998, the official private home price index slid 5.7 per cent in Q4 last year over the preceding quarter. For full-year 2008, the index fell 4.3 per cent, reversing a 31.2 per cent jump in 2007.

Property consultants are predicting a further decline of 10-20 per cent this year in the benchmark index, with upmarket homes continuing to be the worst hit, as in 2008. This sector was the most overheated during the run-up in 2006 and 2007.

‘The bid-ask gap is very high; any buyer that comes in now wants to make sure he’s buying at very attractive prices to cushion against future risk. As a result, most transacted prices are quite distressed,’ said DTZ executive director Ong Choon Fah.

BT understands buyers are looking at prices at least 20 per cent below Q3 2008 levels before they are willing to commit.

URA’s non-landed private home price index for Core Central Region (CCR) fell 6.3 per cent quarter-on-quarter in Q4, or a full-year drop of 5.5 per cent. CCR includes the prime districts, financial district and Sentosa Cove. In the Rest of Central Region, the price drop was 5.5 per cent for Q4, and 4 per cent for the full year. Outside Central Region, a proxy for suburban mass-market locations, suffered the smallest declines, of 4.7 per cent in Q4 and 1.6 per cent for the whole year.

The declines in URA’s indices were far smaller than the price drops estimated by property consultants. CB Richard Ellis said that last year, average prices of new luxury homes under construction fell 30 to 35 per cent for prime districts 9 and 10, while those in Marina Bay and Sentosa Cove eased 10-13 per cent.

URA’s price indices are weighted according to the moving average mix of transactions for the preceding 12 quarters, and this tends to make changes in the indices more muted during sharp market swings.

For this year, JP Morgan analyst Chris Gee said: ‘The critical factor that will affect private home prices in 2009 - probably more importantly than the economy and jobs market - will be banks’ financing of property. Banks seem happy to lend to the right type of buyers, but they’re more conservative on valuations and tighter on loan-to-value.’

As for developers, smaller players have already started to chop prices. ‘Among bigger developers, some are restructuring their portfolios and re-evaluating their risk positions,’ DTZ’s Mrs Ong noted.

A seasoned developer pointed to a diversity of strategies among developers, according to their financial strength, profit margin for each project and their view of when the recovery will take place. ‘Some will cut and sell; some will package things that effectively give more discounts; some will lease instead of selling; some will just sit it out and wait for better times.

‘Projects will be slowed down or delayed, stretching out the supply coming into the market, which in itself is a regulating mechanism,’ he said.

In the public housing segment, the Housing & Development Board’s (HDB) resale flat price index still inched up 1.5 per cent quarter-on-quarter in Q4 to scale a new peak. But this was slower than the 4.2 per cent rise posted in Q3.

ERA Asia Pacific associate director Eugene Lim said: ‘We’ve been seeing more transactions with decreasing cash-over-valuations (COVs). The days of transactions with above $50,000 COVs are over.’

He is predicting a sub-1 per cent rise in the HDB resale flat price index for each of Q1 and Q2 this year. ‘If the recovery takes longer, we may see the price index flatten in H2 2009 before decreasing, if the situation worsens.’

Knight Frank director Nicholas Mak predicted a 5 to 10 per cent correction in HDB resale flat prices this year, as the weakening economic conditions filter into the HDB market.

ERA’s Mr Lim noted that ‘in uncertain times, home buyers go for the ’safer’ option of HDB flats to ease their financial burden’. He estimated 30,000 to 31,000 HDB resale transactions were done in 2008 - surpassing the 29,436 in 2007.

As for the private housing sector, CBRE predicted developers may sell 5,000-6,000 units in 2009, as falling prices boost take-up. It put the figure for last year at 4,300 to 4,400 units - just 30 per cent of 2007’s record volume. Sales also slowed in the secondary market. CBRE estimated about 7,400 to 7,600 resale deals were done last year - against nearly 21,000 transactions in 2007. The 1,600 to 1,650 subsale deals it estimated for 2008 were also a far cry from the 2007’s figure of 4,863.

Source : Business Times - 3 Jan 2009

HDB resale prices could dip soon

Economic slowdown expected to lead to people downgrading later in year

PRICES of HDB resale flats have continued to rise even as the economic downturn takes its toll on jobs, wages and private home prices.

But analysts warn this recent steady rise may not last long.

According to flash estimates of HDB’s Resale Price Index released yesterday, prices of flats in the fourth quarter of last year rose 1.5 per cent over the preceding quarter.

This figure is considerably lower than the 4.2 per cent increase in the third quarter, and it is the first time that growth has dipped below 3 per cent in six months, said real estate agency PropNex.

But while average prices of HDB resale flats are now at an all-time high, property analysts say that they are likely to dip some time this year.

‘Sentiment is pretty soft as many people are taking a wait-and-see approach,’ said Mr Eric Cheng, executive director of HSR Property Group. ‘If prices dip, they will do so in the second and third quarters of this year.’

Mr Eugene Lim, associate director of ERA Asia Pacific, said: ‘With the economy likely to contract further and more layoffs expected in the months ahead, home buyers have become very practical.

‘In uncertain times, home buyers go for a ’safer’ option - HDB flats - to lessen the financial burden. This is especially so for the ’sandwiched’ class that may find private housing a little too stretched for their comfort.’

Mr Nicholas Mak, Knight Frank’s director of research and consultancy, said: ‘Buyers are increasingly cautious and prefer to purchase HDB flats instead of private homes to limit their exposure to the uncertain market. A number of homeseekers are re-aligning housing requirements from aspirations to functional needs.’

He expects prices to remain flat in the current first quarter, and overall prices to drop 5 to 10 per cent in the full year.

‘At the moment, there are still people who need homes. But the economic slowdown and job losses will eventually cause some people to downgrade from larger flats to smaller ones, and only by the second quarter will we start to see a pronounced rate of decline,’ he added.

PropNex chief executive Mohamed Ismail is slightly more optimistic.

‘If the economy does not improve… there will be more downgraders and cautious home buyers in the wake of retrenchments and tighter budgeting. If more people shy away from the bigger flats above the $500,000 mark, it’s just a matter of time before prices dip.’

‘Clarity will come in the second half of the year. But we should still see overall average growth of between 3 and 5 per cent in 2009.’

What seems certain to decline, however, are cash-over-valuations (COVs).

‘The days of transactions with above $50,000 COV are over. Remote exceptions are well-renovated flats with unobstructed, panoramic views,’ said ERA’s Mr Lim.

Mr Ismail agreed: ‘Today, the bigger flats that are valued at $500,000 and above on the resale market can sit without a buyer for two to three months. The en bloc frenzy of last year has already dwindled, affecting the demand for the bigger flats.’

Added Mr Lim: ‘We are thus likely to see the COV statistics continue to decline in the coming quarters.’

Source : Straits Times - 3 Jan 2009

HDB resale price index up 1.5% in Q4

PUBLIC housing resale prices have stubbornly continued to climb even as private home prices are accelerating downhill and pundits are betting on flat prices still holding firm this year if not seeing a modest single-digit growth, then staying level for the most part.

Flash estimates from the Housing and Development Board (HDB) showed that its resale price index grew by 1.5 per cent in the fourth quarter, after six quarters of robust growth of at least 3 per cent per quarter.

On the heels of this slower growth, ERA which has a 45-per-cent market share of the resale flat market predicts a “sub-1-per-cent increase” in resale prices in the first two quarters this year.

“If the (economic) recovery takes longer, we may see the price index flatten in the second half before decreasing if the situation worsens,” said ERA Asia Pacific associate director Eugene Lim.

PropNex chief executive Mohamed Ismail was even more bullish, expecting 3- to 8-per-cent growth this year. This would be slower than last year’s estimated 13.9 per cent overall increase in prices, but there would still be growth as demand exceeds supply, predicted Mr Ismail.

But one analyst found a certain “perversity” in the buoyancy of the resale market. Calling the 1.5-per-cent growth in the last quarter “alarming”, in light of the recession and gloomy outlook, Chesterton Suntec International research director Colin Tan asked “Why are people buying? Why are they paying a higher price despite the fact that their incomes may be affected in the future?”

As the market’s resale prices are factored into HDB’s pricing of new flats, the overall rise in the prices of public housing coupled with more expected job losses ahead could work out adversely for prospective buyers, he said.

Nonetheless, prices should be tightly reined in by an almost zealous reluctance by buyers now to fork out cash above valuation (COV). “The days of transactions with above $50,000 COV are over,” said Mr Lim.

With further economic contraction expected, buyers have become “very practical”, he said “Most start by making offers below valuation, and invariably, most deals today are closed at valuation, or at most $5,000 to $30,000 over.”

What most of the property players Today spoke to agree on, is that smaller flats three- and four-room units will benefit from strong demand.

Mr Ismail expects prices of three- and four-room flats to grow by 5 to 8 per cent, and larger flats to post increases of 1 to 3 per cent. “There will be more downgraders and cautious home buyers in the wake of retrenchments and tighter budgeting,” he said.

Mr Victor Ong, 29, of Huttons RealEstate Group, said foreigners, too, were eyeing smaller units.

The resale price index for the full quarter, as well as more detailed public housing data and upcoming new flat supply, will be announced at the month’s end.

Source : Today - 3 Jan 2009

Dismal home sales stats not seen since ‘98

THE comparison rings with foreboding the last time private home prices took a bigger dive than this, it was exactly a decade ago, in the midst of the Asian financial crisis.

In the last three months of 2008, the private resident property price index dropped 5.7 per cent, more than double the rate of decrease a quarter ago, according to flash estimates. The final tally due for unveiling in four weeks’ time which would include dismal sales data from the last two weeks of December could be even more depressing.

And in the year ahead, with the worst yet to come for the economy, analysts are warning that prices could decline by 10 per cent at best, and more than 25 per cent at worst.

For some private home-owners, this brings back dark echoes of 1998, when prices tumbled by one-third.

The biggest plunge of 13.2 per cent came in the third quarter, followed by a 8.7 per cent slide before prices finally rebounded.

Already, the last three months’ drop in private residential property prices is more than what some analysts had expected, which was a 3- to 4-per-cent dip. But does this herald a repeat or worse of the market’s performance in 1998?

Property experts Today spoke to would not commit to saying so, but it was clear the usually upbeat lot was taking a subdued view of the future.

“This (current drop) could mean that there’s some sort of breakthrough,” said Chesterton Suntec International research director Colin Tan.

“There has been a stalemate all this time in the market, but we can tell for certain that the prices are coming down now.”

Investors vs buyers: Who will out wait the other?

Overall, prices of private homes dipped a modest4.3 per cent year on year. How far prices will come down this year would depend on property investors rather than developers, said analysts.

Unlike 10 years ago, when developers were giving discounts on their surplus properties, this time it is individuals who bought during the “unusual” property boom in recent times who are now setting the prices.

In the current climate, it’s often about how long they can hold on to their properties before selling it at a loss, or whether they can hold out for the next upswing. Indeed, the last quarter’s decline in prices could be due to the “overly-invested” looking to raise quick cash or make a quick exit, said ERA Asia Pacific’s associate director Eugene Lim.

For now, those investors with enough fortitude are holding out for as long as they can.

“Sellers are not willing to let go at fire sale prices. And a lot of agents are optimistic that things will pick up; the overall feeling is better than in the last financial crisis,” said property agent Angeline Chong, 35.

But, by and large, buyers have the definite upper hand. Most, especially in the high-end segment, says Mr Lim, are waiting in anticipation of price decreases, and astute ones are shopping around for value buys.

Agent Peter Yu, 40, who has seen the ups and downs of the market since 1988, said: “1997 was a crazy time, and so was last year, but people are still buying … It’s all about price, it’s a buyer’s market.”
Developers have muscle to hold on

Meanwhile, developers are likely to hold off new property launches for now, and focus on clearing unsold units in currently marketed projects.

According to CB Richard Ellis, six major mass-market projects launched this year had sold just20 to 46 per cent of units as of end-2008.

This year and the next will also see more than 7,000 units bought under the Deferred Payment Scheme completed. With the financial crunch and banks tightening credit lines, it is a question of how many may be returned to developers should buyers fail to find the needed financing.

Still, price cuts by developers are unlikely as “many of them have done well over the last two years” and have the financial muscle to wait out the downturn, said ERA’s Mr Lim.

The one segment that has seen the greatest dive in prices last year: Luxury homes.

According to CBRE, new projects under construction in districts 9 and 10 saw a 30- to 35-per-cent fall in prices; those in the much touted Sentosa Cove and Marina Bay experienced a 10- to 13-per-cent dip.

But overall, adds CBRE: “The fall in prices may encourage sales and push take-up volume to 5,000 to 6,000 units for the entire year.”

Source : Today - 3 Jan 2009

Private homes continue freefall; HDB prices hold up

The fourth quarter’s 5.7 per cent drop is the sharpest in a decade

THE deepening economic crisis sent private home prices plunging 5.7 per cent in the fourth quarter of 2008 - the steepest drop in a decade.

The dramatic fall has effectively brought an end to Singapore’s four-year property rally as prices had already dived 2.4 per cent in the previous quarter as jittery buyers flee the market.

Prices for 2008 overall are down 4.3 per cent compared with 2007, according to flash estimates from the Urban Redevelopment Authority (URA) yesterday.

This is a striking turnaround from the 31.2 per cent spike in private home prices in 2007, the peak of the boom.

But Housing Board (HDB) flats continue to buck the trend, climbing 1.5 per cent in the fourth quarter following a 4.2 per cent increase in the third.

This means HDB resale flat prices have reached a new peak since the 1996 high.

Prices rose 13.9 per cent in 2008, building on the 16.6 per cent increase in 2007.

Analysts say the gloomy economic outlook has turned home-buyers even more cautious, leading to a fall in demand even as developers begin to soften prices of new launches. Potential buyers are waiting on the sidelines in anticipation of further price cuts, said CBRE Research executive director Li Hiaw Ho.

Prices for apartments in the core central area suffered the most - down 6.3 per cent in the three months to Dec 31, while those in the rest of the central area slipped 5.5 per cent. This follows declines of 2.7 per cent and 2.4 per cent respectively in those areas in the third quarter.

But the falls in some prime projects were even more severe. CBRE’s Mr Li said the luxury segment has taken a hammering with projects under construction falling 30 to 35 per cent in prime districts 9 and 10, while those in Marina Bay and Sentosa Cove fell 10 to 13 per cent.

The URA’s website showed home prices at Ardmore Park, for example, declining around 30 per cent, from an average of almost $3,000 psf in February to March, to around $2,115 psf in December.

Prices of suburban homes fared better. They were down 4.7 per cent in the fourth quarter, following a 1.5 per cent drop in the previous three months.

ERA Asia Pacific associate director Eugene Lim said prices of such homes have already dipped to ‘very reasonable levels, due to recent launches where developers were sensitive to the poor economy’.

Mr Lim also felt that the drop in private home prices - the largest since the last quarter of 1998 - proves that ‘fire sales’ have started as sellers look to bail out and raise cash amid the recession.

Knight Frank’s director of research and consultancy, Mr Nicholas Mak, said the decline of median prices of sub-sales - 10.6 per cent in the third quarter and 7.5 per cent in fourth quarter - confirms this theory, based on his firm’s analysis.

Take Sentosa’s The Azure. The median subsale price in the fourth quarter was $1,200 psf, down from around $1,700 psf in the previous two quarters, said Mr Mak. That means a 1,300 sq ft flat that cost $2.21 million might now go for just $1.56 million.

The URA recently revealed that about 10,450 unfinished homes were sold under deferred payment, which allows buyers to postpone payments until projects are completed. This has raised concerns that such homes are at risk of default or distressed sales if prices fall more.

The URA and HDB flash estimates were based on transactions in the first 10 weeks of the fourth quarter. They will be updated in four weeks.

The head of research and consultancy at Chesterton Suntec International, Mr Colin Tan, said December’s transactions could render the final figure two to three percentage points worse than the estimate.

CB Richard Ellis predicts prices will fall 10 to 15 per cent this year and Knight Frank tips falls of 13 to 20 per cent.

Meanwhile, analysts say that most developers can hold off launches over the short to medium term if necessary.

Yet the market is not short of buyers and investors out for bargains, said ERA’s Mr Lim. ‘While the immediate future may be bumpy, we are confident there is light at the end of the tunnel.’

Source : Straits Times - 3 Jan 2009

Private home prices down 5.7% in Q4, HDB resale flat prices still up

Prices of private, non-landed residential properties in Singapore fell 5.7 per cent in the last quarter of 2008.

The quarter-on-quarter drop in private home prices is more than double the 2.4 per cent decrease in the July-September quarter.

Experts said the steep fall is fuelled by deteriorating sentiment. Market players are also matching prices to falling valuations.

Nicholas Mak, consultancy and research, Knight Frank, said: “The individual sellers are being more realistic in their offer price, though there are some segments of sellers who are still resisting, or still hoping to sell at break-even (prices) or at a profit.”

In contrast to the freefall in private home prices, new HDB data on Friday showed HDB resale flats continued to buck the trend, climbing 1.5 per cent in the fourth quarter - following a 4.2 per cent increase in the third quarter.

Experts said this resistance is expected to continue into the downturn.

Eugene Lim, associate director, ERA Asia Pacific, said: “Buyers are coming from people who are upgrading (and) people who are downgrading…also, from the increase in the population of Prs (permanent residents). So the (demand for) HDB resale flats is very strong.”

Observers said they expect flat or slow declines for public housing prices compared to steeper devaluations in the private home sector.

They said this is the trend during times of uncertainty when home buyers opt for the safer option of HDB flats.

Knight Frank estimated that by the end of 2009, private home prices could come down as much as 20 per cent, while HDB flat prices could decline by 5 to 10 per cent.

In a statement released on Friday, the Urban Redevelopment Authority (URA) also reported price changes in three geographical regions for the fourth quarter.

Non-landed private residential property came down by 6.3 per cent in the Core Central Region, while it dipped 5.5% per cent in the rest of the Central area.

In areas outside the Central Region, prices slid by about 4.7 per cent.

Source : Channel NewsAsia - 2 Jan 2009

Private home prices down 5.7% in Q4, HDB resale flat prices still up

Prices of private, non-landed residential properties in Singapore fell 5.7 per cent in the last quarter of 2008.

The quarter-on-quarter drop in private home prices is more than double the 2.4 per cent decrease in the July-September quarter.

Experts said the steep fall is fuelled by deteriorating sentiment. Market players are also matching prices to falling valuations.

Nicholas Mak, consultancy and research, Knight Frank, said: “The individual sellers are being more realistic in their offer price, though there are some segments of sellers who are still resisting, or still hoping to sell at break-even (prices) or at a profit.”

In contrast to the freefall in private home prices, new HDB data on Friday showed HDB resale flats continued to buck the trend, climbing 1.5 per cent in the fourth quarter - following a 4.2 per cent increase in the third quarter.

Experts said this resistance is expected to continue into the downturn.

Eugene Lim, associate director, ERA Asia Pacific, said: “Buyers are coming from people who are upgrading (and) people who are downgrading…also, from the increase in the population of Prs (permanent residents). So the (demand for) HDB resale flats is very strong.”

Observers said they expect flat or slow declines for public housing prices compared to steeper devaluations in the private home sector.

They said this is the trend during times of uncertainty when home buyers opt for the safer option of HDB flats.

Knight Frank estimated that by the end of 2009, private home prices could come down as much as 20 per cent, while HDB flat prices could decline by 5 to 10 per cent.

In a statement released on Friday, the Urban Redevelopment Authority (URA) also reported price changes in three geographical regions for the fourth quarter.

Non-landed private residential property came down by 6.3 per cent in the Core Central Region, while it dipped 5.5% per cent in the rest of the Central area.

In areas outside the Central Region, prices slid by about 4.7 per cent.

Source : Channel NewsAsia - 2 Jan 2009

Angry buyers clash with developer Wing Tai over alleged defects

AN UGLY spat that has already resulted in a police report lodged against a homeowner is brewing between listed property giant Wing Tai and some foreign investors of its three-year-old luxury condo near Orchard Road.

The development, which briefly set a record price of more than $2,000 per square foot when it was launched, has more than 130 units in all.

At least 15 unit owners most of them foreigners who were buying their first Singapore properties have come forward with a series of complaints claiming that poor workmanship has led to problems including cracked parquet flooring, chipped marble tiles, watermarks on walls and shattered glass panels on the balconies.

Some of these owners spoke to Today on condition of anonymity. They said they did not even want their condo to be named, for fear that it would drive down resale values.

The complainants said that the average cost of a two-bedroom unit had been more than $2 million; one investor had bought six such units for a total of $15 million, and one couple paid $7 million for a single four-bedroom apartment.

The latest incident on Monday morning which happened as contractors were called in to rectify problems after similar incidents saw a glass panel fall more than nine storeys from an unoccupied unit on to the swimming pool area. The impact shattered the panel and flung broken glass shards into the pool and as far as 20 metres away. No one was hurt.

According to residents, it is the fifth time a glass panel on a balcony had either shattered or fallen from a height.

When contacted, spokesman Clement Augustine from the property developer Winworth Investment a subsidiary of Wing Tai Land said the company takes a “serious view on safety on all our developments”.

Mr Augustine added that the glass panels used had met all industrial safety standards. In addition, each panel had been laminated with safety film to prevent them from shattering.

Winworth has lodged a police report over the latest incident, with Mr Augustine suggesting that the glass panel could have been tampered with.

Mr Augustine said that the owner of the affected unit had refused entry to Winworth’s representatives to investigate the latest incident. “From the pieces recovered (on the ground), we noticed that the safety film was broken. We cannot rule out the possibility that there may be wilful damage to the glass,” Mr Augustine said.

In response, the unit owner brushed off the fact that a police report has been lodged against him. He told TODAY that the condo’s management council - made up of some of the homeowners - that decided to ask an independent surveyor to assess the damage in his unit before the developer was allowed access.

The owner said he had told Winworth’s representatives they could enter his unit the next day. “It’s like when you have a car accident, you let the police do its investigation first, then you call the insurance before you go and repair the car,” he said.

The face-off was a development in a saga - already involving a lengthy exchange of emails and letters - simmering in the quiet and exclusive neighbourhood.

Disputing Winworth’s assertion that the defects were due to “wear and tear”, a handful of frustrated homeowners claimed they had spent thousands of dollars out of their own pocket on interior repair works.

One resident described the situation as “frustrating and insulting”. She said: “Most of the people living here are CEOs or managing directors. They can easily afford the repairs. The issue is having to take time off from running their companies to stay at home and supervise the repair and enhancement works.”

Conceding that some unit owners may not have inspected the apartments thoroughly before buying, she added: “When you pay that sort of money, you would assume the unit would be of the highest quality or at least a minimum standard. You don’t go into a Gucci or Hermes shop and check on every stitch in the bag that you have just bought.”

Mr Augustine said that the development had been granted its TOP (temporary occupation permit) in mid-2005. He denied that there had been shoddy workmanship and said that in any case defects which had been highlighted within the one-year liability period “have long since been addressed”.

Homeowners should channel their current grouses to the condo’s management corporation, which is responsible for its maintenance, he said.

The condo is now managed by Knight Frank Estate Management, which residents say took over at the beginning of last month from PSF.

Mr Augustine insisted that the units had been handed over their buyers only after each buyer had been given the opportunity of inspecting their homes and declaring themselves satisfied with the quality.

Even so, the developer had provided complimentary repair service for “genuine” complaints, Mr Augustine said.

He said: “There remain isolated incidences where a few owners may not have carried out diligent maintenance works, or have suffered willful damage to property, or whose property is the subject of wear-and-tear. Obviously, we are unable to address these matters because these owners should be responsible for their own repairs.”

Source : Today - 2 Jan 2009

Tenants leaving with debt unsettled

Crisis takes its toll on rental market

THE economic crisis is posing a new problem for landlords: tenants who break leases or even skip town without notice, leaving debts in their wake.

Property agencies told The Straits Times that increasing numbers of tenants, mostly foreign, are cutting short their leases on anything from high-end luxury apartments to Housing Board flats.

Advice on how to break leases is also making the rounds on some online expatriate forums such as www.expatsingapore.com, as the financial crisis takes its toll on a previously booming rental market and expats get sent back home.

The discussions on these sites range from how to renegotiate with landlords to how to find replacement tenants and even how to make a run for it.

C&H Realty managing director Albert Lu put the number of cases at about 5 to 10 per cent out of 100 rental agreements in the last few months of 2008 - compared with ‘a rare few’ in 2007.

ERA Asia Pacific associate director Eugene Lim said that while there were no tenants breaking leases in 2007, the firm has seen 10 corporate tenants struggle with their rent recently.

These companies, which often lease high-end apartments in prime districts 9, 10 and 11, have had to look for replacement tenants and make up the difference in rents after cutting staff numbers.

Rents themselves have also started to fall. While the official index dipped just 0.9 per cent in the third quarter following an increase of 2.5 per cent in the April-July period, agents say rents have fallen as much as 20 per cent in some areas.

PropNex agent Michael Tan, 37, who specialises in leasing prime district apartments, cited units at Cosmopolitan in River Valley. They used to go for $8,500 for a 1,300 sq ft three-bedroom home but levels have dropped about 24 per cent to $6,500 per month.

Cost-cutting measures and retrenchments mean there are fewer expats renting pricey flats, said Mr Tan.

Although agents are seeing the effects of the crisis more severely in the high-end rental market, even HDB landlords have not been spared.

Dennis Wee property agent Sally Tan told The Straits Times that two Indian nationals had skipped town without paying the last month’s rent. This was six months after they signed a one-year contract to rent a three-room flat in Yishun for $1,800.

Ms Tan said the two tenants, who were working in a foreign bank’s IT department, told her by SMS that they were leaving for good and left the key in the flat’s letterbox.

When she rushed to the flat, all their belongings were gone and a day later, their telephone lines were terminated.

‘It poses a lot of problems for agents and landlords. We also can’t get the same level of rent,’ she said. The same flat is now being rented for $1,600 a month.

The director of Dennis Wee Properties, Mr Chris Koh, said landlords of such tenants have little recourse as tracing them in their home country would be too costly.

Landlords can cut their losses by keeping the deposit paid by the tenant and finding a replacement as soon as possible.

If the tenant can be located, landlords can take legal action at the Small Claims Tribunal, said Mr Koh.

Breaking lease agreements does not always have to be nasty, however, said HSR Property Group executive director Eric Cheng.

Most rental contracts with foreigners have a ‘diplomatic clause’ which states that tenants can break the lease after a year if they have a valid reason, such as returning to their home country.

‘Tenants in this case should give their landlords two months’ notice so a replacement can be found,’ said Mr Cheng. Even if one year is not up, tenants can still negotiate with landlords so a mutually beneficial arrangement can be sorted out, he added.

Meanwhile, agency bosses expect the situation to get worse in the next six months to a year as firms continue to cut costs and retrench staff.

The recent flood of units onto the rental market from en bloc projects where developers have postponed redevelopment, such as Fairways in Telok Blangah or Grangeford at Leonie Hill, could also contribute to the softening of the rental scene, they added.

As ERA’s Mr Lim put it: ‘I would say we’re only seeing the beginning.’

Source : Straits Times - 1 Jan 2009

Prime rents on Orchard Rd dip 1.9%

First slide in 5 years; rents may shrink 5% to 10% more in first half-year: CBRE

PRIME shop rents on Orchard Road have fallen for the first time in five years as consumers tighten their belts and additional supply in the form of new malls starts flooding the market.

Rents could shrink a further 5 to 10 per cent in the first half of this year, said CB Richard Ellis (CBRE) yesterday.

A report by the real estate services firm said monthly prime rents on Orchard Road for the fourth quarter of last year were down 1.9 per cent from the quarter before.

At an average of $36.10 per sq ft, this marks ‘the first time that prime Orchard Road rents headed south since the fourth quarter of 2003′, said the report.

Compared with the fourth quarter of 2007, rents contracted 0.8 per cent - a stark reversal of the 5.4 per cent growth seen from 2006 to 2007, the report added.

Prime suburban rents for the fourth quarter also slipped for the first time since the second quarter of 1999.

They fell 1 per cent from the third quarter to average $29 per sq ft, and could fall a further 2 to 3 per cent in the first half of this year, said CBRE.

The firm said although retail rents ‘were resilient’ in previous economic downturns, they are falling this time around because of an influx of supply.

About 6.36 million sq ft of new mall space will emerge by 2012, said CBRE, with 20 to 30 per cent along the Orchard Road belt.

The famed shopping strip will see its first new malls in 10 years with Ion Orchard, 313@Somerset and Orchard Central - and all are due to open this year.

About another 20 per cent of the new space will come from the Marina Bay Sands integrated resort.

Stores that opened in the fourth quarter last year included a 8,000 sq ft Nike Store in Wisma Atria, a 3,200 sq ft Sephora store in Ngee Ann City and a 16,146 sq ft National Geographic store in VivoCity.

NTUC FairPrice opened its third hypermart in Jurong Point’s new extension last month, while furniture store Ikea has undergone a $25 million refurbishment to expand its premises by about 40 per cent.

Ms Letty Lee, director of retail services at CBRE, said: ‘There is keen leasing interest, especially for unconventional suburban malls like Jurong Point and Ang Mo Kio Hub, because they are in the heartlands and have a ready catchment area.

‘But going forward, the increase in supply means the demand for the space will be relatively weaker.’

Although property analysts at CBRE and Knight Frank project a 5 to 15 per cent decline in prime Orchard Road rents this year, Singapore Retail Association (SRA) president Jannie Tay is tipping a 30 to 50 per cent drop.

Dr Tay, an outspoken opponent of rising retail rents, said: ‘Rents have risen as much as 80 per cent in the last three years, while business has fallen from 30 to 50 per cent (in the recent downturn).

‘Expectations of good times, integrated resorts and high tourism levels are gone. Retailers are negotiating directly with the landlords. At the moment, they need help to stay afloat and to survive.’

Mr Nicholas Mak, director of research and consultancy at Knight Frank, said: ‘Fifty per cent is very drastic, and 30 per cent may be the limit.

‘Given the economic situation, you can have individual examples of such a drop. It is possible.’

Still, on average, Knight Frank estimates prime retail rents on Orchard Road and at suburban malls will slip 5 to 15 per cent this year.

Ms Sulian Tan-Wijaya, senior director of retail and lifestyle at Savills Singapore, said: ‘I’m generally in agreement with CBRE’s estimates. But the question mark is how many tenants are going to renew their leases.

‘They could drop out, either due to the recession or if they fail to reach agreements with landlords. It’s easier to make projections once those figures are known.’

CBRE said: ‘Downward pressure on rents is unavoidable. We expect re-negotiations to commence in 2009, after the Chinese New Year festivities.’

Source : Straits Times - 1 Jan 2009

Prime rents on Orchard Rd dip 1.9%

First slide in 5 years; rents may shrink 5% to 10% more in first half-year: CBRE

PRIME shop rents on Orchard Road have fallen for the first time in five years as consumers tighten their belts and additional supply in the form of new malls starts flooding the market.

Rents could shrink a further 5 to 10 per cent in the first half of this year, said CB Richard Ellis (CBRE) yesterday.

A report by the real estate services firm said monthly prime rents on Orchard Road for the fourth quarter of last year were down 1.9 per cent from the quarter before.

At an average of $36.10 per sq ft, this marks ‘the first time that prime Orchard Road rents headed south since the fourth quarter of 2003′, said the report.

Compared with the fourth quarter of 2007, rents contracted 0.8 per cent - a stark reversal of the 5.4 per cent growth seen from 2006 to 2007, the report added.

Prime suburban rents for the fourth quarter also slipped for the first time since the second quarter of 1999.

They fell 1 per cent from the third quarter to average $29 per sq ft, and could fall a further 2 to 3 per cent in the first half of this year, said CBRE.

The firm said although retail rents ‘were resilient’ in previous economic downturns, they are falling this time around because of an influx of supply.

About 6.36 million sq ft of new mall space will emerge by 2012, said CBRE, with 20 to 30 per cent along the Orchard Road belt.

The famed shopping strip will see its first new malls in 10 years with Ion Orchard, 313@Somerset and Orchard Central - and all are due to open this year.

About another 20 per cent of the new space will come from the Marina Bay Sands integrated resort.

Stores that opened in the fourth quarter last year included a 8,000 sq ft Nike Store in Wisma Atria, a 3,200 sq ft Sephora store in Ngee Ann City and a 16,146 sq ft National Geographic store in VivoCity.

NTUC FairPrice opened its third hypermart in Jurong Point’s new extension last month, while furniture store Ikea has undergone a $25 million refurbishment to expand its premises by about 40 per cent.

Ms Letty Lee, director of retail services at CBRE, said: ‘There is keen leasing interest, especially for unconventional suburban malls like Jurong Point and Ang Mo Kio Hub, because they are in the heartlands and have a ready catchment area.

‘But going forward, the increase in supply means the demand for the space will be relatively weaker.’

Although property analysts at CBRE and Knight Frank project a 5 to 15 per cent decline in prime Orchard Road rents this year, Singapore Retail Association (SRA) president Jannie Tay is tipping a 30 to 50 per cent drop.

Dr Tay, an outspoken opponent of rising retail rents, said: ‘Rents have risen as much as 80 per cent in the last three years, while business has fallen from 30 to 50 per cent (in the recent downturn).

‘Expectations of good times, integrated resorts and high tourism levels are gone. Retailers are negotiating directly with the landlords. At the moment, they need help to stay afloat and to survive.’

Mr Nicholas Mak, director of research and consultancy at Knight Frank, said: ‘Fifty per cent is very drastic, and 30 per cent may be the limit.

‘Given the economic situation, you can have individual examples of such a drop. It is possible.’

Still, on average, Knight Frank estimates prime retail rents on Orchard Road and at suburban malls will slip 5 to 15 per cent this year.

Ms Sulian Tan-Wijaya, senior director of retail and lifestyle at Savills Singapore, said: ‘I’m generally in agreement with CBRE’s estimates. But the question mark is how many tenants are going to renew their leases.

‘They could drop out, either due to the recession or if they fail to reach agreements with landlords. It’s easier to make projections once those figures are known.’

CBRE said: ‘Downward pressure on rents is unavoidable. We expect re-negotiations to commence in 2009, after the Chinese New Year festivities.’

Source : Straits Times - 1 Jan 2009

Property prices down but not property taxes

WITH reference to Tuesday’s article, ‘Home sales to stay weak next year’, I cannot help but ask the Inland Revenue Authority of Singapore (Iras) why it is not reducing property tax for the coming year.

Official Urban Redevelopment Authority private and public housing sale transactions and rents dropped by 20 to 25 per cent in the second half of last year, compared to the year before, but Iras revised most property taxes upward by some 25 to 30 per cent in April-May. It said the annual value of Singaporeans’ properties was in line with the general reassessment of similar properties.

I have just received my property tax and TV licence fee bill for this year. It is disappointing that Iras does not look at the worldwide economic downturn, which affects Singapore. Singapore already faces a recession and property prices have plunged by 20 to 25 per cent in the past year since the United States subprime crisis surfaced.

Many expatriates have left or will leave Singapore as a result of multi-national companies’ cost-cutting exercises. With a surplus of 11,500 condominium apartments coming onstream this year, it is obvious that private as well as public property rents will come down.

Iras always ask property owners to submit their notice of objection to the Chief Assessor of Property Tax, but frankly I doubt many of us have the time and resources to do it.

I appeal to Iras to be more proactive and lower 2009 property taxes by 20 to 25 per cent for all property owners to alleviate our burden.

David Goh

Source : Straits Times - 1 Jan 2009

GDP growth shrinks to 1.5%, focus on saving jobs

Prepare for tough year ahead with no quick turnaround in sight: PM Lee

With the economy likely to contract further and more layoffs expected in the months ahead, Prime Minister Lee Hsien Loong has urged Singaporeans to brace for a difficult 2009, especially the first half.

GDP growth plunged to just 1.5 per cent in 2008 - down from 2007’s 7.7 per cent pace and a full point below the November estimate of 2.5 per cent. It’s also below what seemed to be the more bearish forecasts - of around 1.7 per cent.

With the economy in recession and faced with a ‘highly uncertain’ outlook, more companies will be forced to downsize, he said in his most sobering New Year message to date.

The 2008 growth pace - slowest since 2001 - indicates that the economy, contrary to earlier expectations, remained in the red for a second straight quarter in Q4 in year-ago terms. GDP growth in the first nine months of 2008 amounted to about 2.8 per cent.

Against the preceding quarter, Singapore’s GDP has been in decline since Q2 2008, as the slump in external demand extended beyond exports and the tourism sector to the broader economy.

Economists expect at least two more negative quarters through the first half of 2009.

That would spell a more severe slump than the last big downturn in 2001, when the economy suffered three periods of quarter-on-quarter contraction and four quarters of year-on-year declines.

The one certainty in the current global economic crisis is - things cannot turn around overnight, Mr Lee said. So there will be no quick rebound, but more likely several more years of slow growth.

‘We must therefore prepare for a difficult year ahead, and especially the first half of 2009,’ Mr Lee said. ‘Our economy will probably contract further. More companies will be forced to downsize. So far we have not seen many job losses, but I expect more retrenchments in the next few months. We must be psychologically prepared.’

The upcoming Budget on Jan 22 will focus on protecting jobs, Mr Lee said, promising more measures to keep viable companies afloat, including help with rental and wage bills. On top of recent initiatives, the government is also looking into further financing support for firms.

But there remain opportunities even in recession, Mr Lee pointed out. Hence the Budget will also see measures to build up new and long-term capabilities and hone Singapore’s competitive edge. There will also be moves to help companies build up their operations, and also encourage new businesses to grow.

While the Budget package will not restore high economic growth overnight, it should soften the impact of recession on Singaporeans and the economy, Mr Lee said.

And if more measures become necessary, ‘we have the resources, and the will, to do more to see Singapore through this recession’, he assured.

Compared to the 1997 Asian financial crisis, the current crisis is more difficult for Singapore to overcome because it is global, Mr Lee said. ‘Still, it will not last forever. After a few years, conditions will go back to normal, though we cannot expect a quick return to the boom years before the crisis.’

But it’s not all bleak. Investments in Singapore - while well below 2007 and 2008 levels - could still exceed S$10 billion this year.

Despite the storm clouds, Mr Lee said, Singapore has good reasons to be ‘quietly confident’, having upgraded and grown the economy during the good times, lived within its means and ‘patiently built up sizeable reserves’.

Source : Business Times - 1 Jan 2009

Time to lower home prices

Property developers should consider this step to lure back buyers

WHEN a property boom here ends, the first casualty is usually home supply.

Sure enough, the Government put a stop to new land sales early this month, as it did in the last two downturns, making it as good an indicator as any that a property slump had arrived.

Developers have also been cutting supply throughout the year, pushing back en bloc redevelopments and putting some launches on hold indefinitely.

But though reducing supply is necessary to prevent the market from collapsing, it is clearly inadequate as a cure at this point. No land plots have changed hands for months, new launches have slowed to a trickle - and yet buyers are still not biting. Property ads have dried up and showflats are starting to resemble ghost towns.

When sales came to a standstill this year, developers blamed the financial crisis and government policy actions, such as the removal of the deferred payment scheme. But house hunters pointed to just one reason: Home prices are still too high.

The economy has shrunk for the first time since 2001, mass retrenchments are on the cards, and monthly sales of new homes have plummeted so much that experts warn total sales this year could reach an 18-year low. Yet private home prices - at least according to the Urban Redevelopment Authority’s (URA) price index - have not dropped by much.

In the third quarter, the URA’s price data registered a fall of 2.3 per cent from the second quarter, after rising about 4 per cent in the first half of the year. This means prices in September were still higher than in January.

Anecdotally, analysts estimate that prices in the fourth quarter fell by up to 20 per cent in some developments. But prices jumped so much in the recent upturn - 31 per cent last year alone - that even if the URA’s index does log an unlikely 20 per cent drop this quarter, prices at year-end would still be higher than at the start of last year, and far above the pre-boom levels in 2005.

Not all developers can cut prices for their projects without incurring big losses, especially those who bought plots at the peak of the boom last year. But developers who were canny enough to pick up land at the trough of the market have plenty of room to manoeuvre.

One example is CapitaLand’s Latitude condominium at Jalan Mutiara. The developer bought the site for about $500 per sq ft (psf) in 2005 and sold units up to last month at $2,400 to $2,500 psf.

But down the road, Mutiara View is going for under $1,200 psf, while across the street, the new boutique condo RV Suites has been sold for $1,300 to $1,400 psf. According to agents, CapitaLand has quietly lowered prices recently to $2,000 to $2,100 psf.

Hong Leong’s Aalto along Meyer Road is another example. The site was bought for about $410 psf in 2005, but units were sold for well over $2,000 psf last year and this year. No new units have been sold since May, according to URA data.

To be sure, there are valid reasons for developers not to cut prices.

For one thing, selling homes at lower prices could result in a fall in the valuations of their properties, which could in turn hurt their balance sheets and make it more difficult for them to raise funds in an already tight credit market. And some argue that slashing prices could also set off a price war.

But there are also compelling reasons to start lowering prices. Key among them is that the see-who-blinks-first game is clearly turning in favour of buyers. Prices are already falling, pushed down by smaller developers squeezed for cash and individual home sellers anxious to offload their units.

A boutique condominium in the Novena area reportedly gave significant discounts - from over $1,300 psf down to just under $1,000 psf - after the financial crisis hit hard in October. At soon-to-be-completed developments such as City Square Residences in Kitchener Road, prices have fallen from a high of over $1,000 psf last year to less than $800 psf for some units in recent months.

Developers have said for months that they will maintain prices and ride out the storm. But the situation is set to worsen sharply for sellers as the economy contracts sharply. Even developers who can hold out are likely to find their property valuations hit anyway as prices come down throughout the market.

Lowering prices will bring buyers back into the market. Many have been waiting on the sidelines since early last year, when prices starting shooting up beyond their means.

Evania, a 35-unit condo in Upper Paya Lebar, moved 15 units last month after dropping prices from nearly $900 psf in March to just above $600 psf.

More positive news like this is exactly what is needed to restore sentiment in the market.

As for the threat of price wars, there is little basis in the argument. Prices are going to fall in any case, with or without a price war. The suggestion here is not for steep price cuts, just ‘realistic’ prices that will tempt buyers back into the market.

City Developments took some flak from its rivals after it priced its mass market condo Livia in Pasir Ris at an attractive $650 psf on average. But the launch was a huge success - and it has not caused a downward spiral.

Industry players have suggested that the Government step in with demand-boosting measures such as waiving, discounting or deferring stamp duty; resurrecting a fine-tuned version of the deferred payment scheme; and tweaking CPF rules to allow buyers more financing leeway.

Developers themselves have already started absorbing stamp duty and interest for selected projects, and rolled out gimmicks such as renovation allowances and vouchers for electrical appliances.

These measures might help make the buying environment more conducive, but nothing would speak more persuasively to potential buyers than a discount.

In a year when everything is going to go on sale, property developers should consider joining the crowd.

Source : Straits Times - 31 Dec 2008

For sale: 1,181 new HDB flats of all sizes

Flats in Choa Chu Kang, Punggol will be offered under built-to-order plan

THE Housing Board is bringing down the curtains on a busy year with one more sales exercise - this time for 1,181 flats in Choa Chu Kang and Punggol.

It is offering everything from studio apartments to five-room flats, with prices ranging from $58,000 to $428,000.

The flats are being offered under the build-to-order scheme where construction begins once a certain number of sales has been achieved.

A total of 7,793 flats has now been offered under the scheme this year, with demand generally robust despite flat sales in the broader property market.

One of the latest projects is Sunshine Court on Choa Chu Kang Avenue 3, opposite the Sunshine Place neighbourhood centre, which houses a supermarket, foodcourt and shops.

It offers standard flats of 164 studios, 117 three-room and 171 four-room units, costing between $58,000 and $236,000 each.

This is the first time 30-year lease studio apartments - meant for Singaporeans over 55 - have been offered for sale in Choa Chu Kang, said the HDB.

The studios will have elderly-friendly features such as grab bars and non-slip flooring, as well as built-in wardrobes, kitchen cabinets and cooking facilities.

PropNex chief executive Mohamed Ismail said the flats are attractively priced at less than $250 per sq ft, for three-roomers of roughly 700 sq ft, and 970 sq ft four-room homes.

Prices provided by HDB indicate that the flats are $60,000 to $80,000 cheaper than comparable resale flats in the area.

The second project - Punggol Regalia - is at the junction of Punggol Field and Punggol Place and near the future Punggol Town Centre.

It offers premium flats with 546 four-room and 183 five-room units, priced from $252,000 to $428,000 each.

They are around $33,000 to $86,000 cheaper than similar resale flats nearby of about six years old, said the HDB.

It added that the prices mean the average household would not need to fork out more than 25 per cent of their monthly income to service their loans.

Mr Ismail anticipates strong demand for three- and four-roomers at Choa Chu Kang, as the project is in a mature estate.

At the HDB’s last sales launch - Dew Spring @ Yishun - earlier this month, such flats proved very popular, attracting many more applicants than the number of available units.

So far, 487 applications have been lodged for the project’s 216 three-room units and 1,452 for the 504 four-room flats; only 152 bids have been received for the 144 two-room flats.

Smaller flats are now making a comeback, as the HDB is providing a steady supply of such homes for lower-income families and those homeowners who need to downgrade during the economic slowdown.

The HDB has said it will ramp up supply to around 4,000 units over the next two years to meet surging demand.

It will also continue to build up critical mass of new homes in Punggol.

Applications can be made on the HDB website www.hdb.gov.sg until Jan 12.

Source : Straits Times - 31 Dec 2008

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Bank lending turns cold in November

Loans to businesses slide, economists warn of more trouble ahead

Bank lending fell over the month in November, for the first time in nearly two years, as loans to businesses declined and more companies went bust, an early sign of the damage that the financial crisis is inflicting on the economy here.

Total Singapore-dollar bank loans at the end of November stood at $273.2 billion, down one per cent from the end of October - the first monthly slide in bank lending since December 2006, the latest figures from the Monetary Authority of Singapore show.

Over the year, overall bank lending was still up by 20.7 per cent, but that’s the slowest pace of growth since January.

‘It is a reflection that the global economic crisis has hit domestic shores,’ said OCBC economist Selena Ling.

Loans to businesses slid 2.2 per cent over the month to $159.6 billion at the end of November, the first monthly drop since April last year. The biggest decline was in loans to the transport, storage and communications sector, which fell 19.8 per cent over the month to $9.1 billion at end-November.

But the slowdown in lending growth was evident across most business and consumer loan segments.

Housing and bridging loans - the biggest category of consumer lending - grew just 0.5 per cent over the month. Compared to a year earlier, the growth was 8.5 per cent - the slowest since July 2007. Car loans and credit-card borrowing also grew over the month to end-November, but loans for share financing plummeted to their lowest level since June 2006.

Economists here expect bank lending growth to slow sharply in 2009, as the property sector cools, banks tighten credit standards and businesses and people cut back on borrowing.

Analysts at Standard Chartered Bank warned earlier this month that overall bank lending here could even contract slightly in 2009 compared to this year as business and consumer sentiment worsens, though others suggested that slow, but still positive year-on-year growth is more likely.

Song Seng Wun, senior economist and head of research at CIMB, said that while lending to some sectors could shrink, overall loans growth will likely be supported by continued drawdowns of existing property-related loans - by far the biggest chunk of bank lending here.

‘We’ll probably see mid to high single-digit growth,’ he said.

OCBC’s Ms Ling said that the slowdown in bank lending has been visible ‘for a couple of months’.

‘We are expecting loans growth to continue to decelerate. Although loans growth tends to be a lagging indicator, the whole Singapore economy is in a technical recession.’

The advance estimate of fourth-quarter economic growth to be released this Friday ‘will probably reflect a contraction in growth again, both in year-on-year and quarter-on-quarter terms’, she added.

Already, more businesses have folded in the first 11 months of this year than in the whole of 2007, data from the Insolvency and Public Trustee’s Office (IPTO) show. From January to November, 123 firms were forcibly wound up, compared to 106 for the whole of 2007 and 130 in 2006. But the numbers are still far below those seen in the wake of the Asian financial crisis, when the number of companies in compulsory liquidation soared to 370 in 1999.

‘I think the crunch will come probably in January, whether it’s personal or corporate bankruptcies,’ Ms Ling said. ‘These things take a couple of months to reach IPTO and if you count back to September, which was when Lehman Brothers blew up . . . you will probably see the numbers start to spike from January onwards.’

CIMB’s Mr Song said that more company failures are ‘inevitable’ in the months ahead, given the pressures faced by local businesses. ‘External demand has fallen off so much.’

Goh Chong Theng, Rabobank International’s Singapore general manager, told BT earlier this month that the bank had become ‘much more cautious and conservative in approving new loans’.

‘There will be many corporate failures - SMEs and large companies - due to the global recession and credit tightening,’ he said, when asked about the likely impact of the financial crisis in Singapore.

Source : Business Times - 31 Dec 2008

Bank unfair to existing home loan clients

WHEN I signed up for a home loan from DBS Bank in May 2005, my rate was pegged to the Special Mortgage Rate.

The Special Mortgage Rate has increased from 4.25 per cent in May 2006 to the current 5.5 per cent. The increase was due to the hike in interest rates during those periods.

Since last year, although the Singapore Inter-Bank Offered Rate (Sibor) and fixed deposit rates have decreased significantly, the Special Mortgage Rate has yet to decrease. The fixed deposit rates and Sibor are now lower than when I first took the loan.

DBS is not being fair to existing customers who took the loan earlier. As my loan has not been drawn down due to the deferred payment scheme and is locked in, I am not entitled to the low interest rate currently available in the market.

When queried, the explanation was that DBS no longer uses the board rate and its new loan packages now follow the Sibor, so it will not revise the Special Mortgage Rate. DBS said my package has a cash rebate component, which warrants the higher interest rate. That I understand, as when I signed for the package with DBS, the rate was actually higher than in other packages available. However, after careful calculation, I decided to sign with DBS because the package was still more attractive. The difference of interest rate was not more than 2 per cent from the market rate which it is currently.

I must add that DBS did offer me a repriced package based on the Sibor, in which the terms and conditions are worse than in my original package. In addition, I will lose the cash rebate.

The fair practice would be for DBS to decrease the Special Mortgage Rate to a reasonable range of between 4 and 4.5 per cent. This would benefit all customers and not only those who contacted the bank.

I have sent DBS an e-mail message, asking if it plans to revise its Special Mortgage Rate upwards in future, once interest rates start to increase but I have yet to receive a reply. If it does revise the Special Mortgage Rate upwards, there is indeed a major flaw in its argument against revising the Special Mortgage Rate downwards.

It would be even worse if DBS revises the Special Mortgage Rate upwards, even before current interest rates reach the high of more than 3 per cent for fixed deposit rates.

Last but not least, I hope the Consumers Association of Singapore or the relevant authorities will comment and look at whether banks in Singapore have been fair to their customers.

Khor Eng Hao

Source : Straits Times - 31 Dec 2008

Size does matter

While the focus has been shifted to 2-room flats, the 4-room is still most popular

AS the Housing Board launched its last Build-To-Order (BTO) exercise for the year, offering 1,181 units in Punggol and Choa Chu Kang, applications for its Dew Spring @ Yishun, which draw to a close today, reflect an interesting trend.

While just 864 flats are up for grabs at Dew Spring, 2,091 applications had been received as of 5pm yesterday not surprising, given the trend of oversubscription for BTO projects, and the robust public housing market despite the downturn.

But the 2-room flats have not proved as popular as bigger units. Just last month, National Development Minister Mah Bow Tan said the HDB would focus on building more smaller flats, so more low-income families can own their homes.

For the 144 2-room units up for grabs at Dew Spring, there were 152 applications. This compares to 487 applications for 216 3-room and 1,452 applications for 504 4-room flats.

Are Singaporeans just not ready for a smaller living space, as some analysts contend?

A HDB spokesperson revealed that the response to the 2-room units at Dew Spring was, in fact, “good compared to past BTO exercises, where the subscription rate was generally less than 50 per cent”.

“From our experience, 2-room flat buyers are usually applicants wishing to monetise their existing bigger flats and move to smaller flats,” she said. “They generally prefer flats which are ready for immediate occupation. Hence, the demand for 2-room flats usually improves when the flats are nearing completion.”

PropNex CEO Mohamed Ismail pointed to a general mentality that “a basic home for any young family is ideally 3- or 4-rooms”, to cater to children. Two-room flats would appeal mainly to retirees or those on a tight budget.

Chesterton Suntec International research director Colin Tan suggested that Singaporeans are not yet ready to live in a tight space like Hong Kongers, and the depressed demand for small flats could indicate a threshold: The 2-room units at Dew Spring are about 48 sqm, compared to 67-sqm for a 3-room and 93-sqm for a 4-room flat.

In addition, Mr Mohamed Ismail noted that those buying direct from the HDB a second time, like downgraders, would have to fork out a resale levy. Given the difference in prices at Dew Spring -$76,000 to $90,000 for a 2-room and $120,000 to $146,000 for a 3-room buyers would likely opt for the bigger unit.

Nevertheless, the HDB will continue to forge ahead with building more small flats, which present an option for older Singaporeans wanting to monetise their assets for their retirement needs.

“We expect that smaller flats will be in greater demand given the increasing ageing population, and demographic changes that Singapore is undergoing,” said the spokesperson.

More studio, bigger flats on offer

By contrast, 4-room flats have always been hugely popular in BTO exercises this year, the average subscription rate was 300 per cent, said HDB.

And more will come online with the launch of the Punggol Regalia and Sunshine Court projects yesterday.

As of 5pm yesterday, already, there were 117 applications put in for 546 4-room units (priced between $250,000 - $312,000) at Punggol Regalia, and 46 applications for 183 5-room units ($342,000 - $428,000). The project, located near the future Punggol Town Centre, offers premium flats with better finishes.

As for Sunshine Court along Choa Chu Kang Avenue 3, studio apartments on offer will be fitted with elderly-friendly features like grab bars and non-slip flooring. There were 29 applications for 164 such units ($58,000 - $66,000 for 35-sqm, and $72,000 - $80,000 for 45-sqm) as of last night.

But again, it was the 4-room units that proved hottest: 158 applications for 171 units ($202,000 - $236,000).

In light of the recent debate on new flat prices, the housing board said the units are priced affordably, with average households forking out about 20 per cent of their monthly income to service their mortgage, which can be fully paid using CPF funds.

Source : Today - 31 Dec 2008

US home prices fall a record 18% as recession continues

Prices of single-family homes in October plunged a record 18 per cent from a year earlier, according to the Standard & Poor’s/ Case-Shiller Home Price Indices released yesterday that indicated a US housing market in the throes of a deep recession.

The battered housing market is critical to the economy, with a wide-ranging impact from the construction industry to the sale of appliances and furniture.

After hurting economic growth for multiple quarters, a continued deterioration could delay a turnaround for the world’s largest economy, which has been in a recession since late last year.

The composite index of 20 metropolitan areas fell 2.2 per cent in October from September. The price drops, both on a year-over-year and month-over- month basis, came in worse than expectations based on a Reuters survey of economists.

‘The bear market continues; home prices are back to their March 2004 levels,’ Mr David M. Blitzer, chairman of the Index Committee at Standard & Poor’s, said in a statement.

As of October, the 10-City Composite Home Price Index is down 25 per cent from its mid-2006 peak, and the 20-City Composite Home Price Index is down 23.4 per cent, he said.

The United States housing market is in the worst downturn since the Great Depression, as a huge supply of unsold homes, tighter lending standards and record foreclosures push down home prices.

Economists believe the US housing market will not begin to recover until home prices fall far enough to stimulate demand, which has dropped off precipitously as potential buyers stay sidelined.

Separately, consumer confidence fell to a record low this month as the worst job market in 16 years hammered sentiment, the Conference Board said yesterday.

The business research company said its Consumer Confidence Index fell to 38 this month from a slightly downwardly revised 44.7 last month.

The median forecast of economists polled by Reuters was for a reading of 45. Their 62 forecasts ranged from 40 to 51.1.

At the same time, business activity in the Midwest continued to shrink this month but at a less severe rate than expected, and input prices fell sharply, a report showed yesterday.

‘The further erosion of the Consumer Confidence Index reflects the rapid and steep deterioration of economic conditions that occurred in the fourth quarter of 2008,’ said Ms Lynn Franco, director of the Conference Board’s Consumer Research Centre.

‘The overall economic outlook remains quite dismal for the first half of 2009, and only a modest recovery is expected in the second half.’

Chief among consumers’ woes has been spiralling job losses in recent months.

US employers axed 533,000 jobs from payrolls last month alone, the most in 34 years, according to Labour Department data released earlier this month.

Meanwhile, the Institute for Supply Management-Chicago business barometer rose to 34.1 from 33.8 last month. Economists had forecast the index at 33. A reading above 50 indicates expansion while a reading below 50 indicates contraction.

Source : Straits Times - 31 Dec 2008

Medium- to long-term prospects for S’pore property sector still strong

Singapore’s commercial and residential property sectors will remain attractive to investors in the medium to long term.

Property watchers told Channel NewsAsia that is because of Singapore’s status as an international financial hub.

2009 looks set to be a difficult year by all accounts, but market watchers said property investment fundamentals here remain strong.

As global financial institutions cut costs, they are likely to move operations out of expensive cities in the US and Europe to Asian countries such as Singapore, where the cost of doing business is cheaper.

For example, Singapore’s corporate tax rate is 18 per cent, compared to 29 per cent in the UK and 40 per cent in the US.

And this could spur demand for office space in financial centres like Singapore, presenting investment opportunities for the commercial property sector.

Christopher Fossick, managing director, Southeast Asia, Jones Lang LaSalle, said: “Financial institutions are growing, in many cases from hundreds to thousands of jobs here in Singapore. The bigger these institutions become, the more real estate they need.”

But there are opportunities in the residential market as well. The closing gap between debt servicing and rentals, as well as falling valuations in 2009, could see many investors looking for a good deal.

Eugene Lim, associate director, ERA Asia Pacific, said: “For example, those in district 9, 10, and 11, they tend to be more elastic, the prices. So when the economy is not doing too well, the prices come down quite a lot, especially amongst those who have, for example, bought from the developer and then now need to sell to raise cash flow. They are prepared to cut losses.”

Observers said Singapore’s property market will offer rich pickings to investors who have their eyes on long-term returns.

Source : Channel NewsAsia - 30 Dec 2008

HDB launches 2 new BTO projects in Choa Chu Kang, Punggol

The Housing and Development Board (HDB) launched two new housing projects in Choa Chu Kang and Punggol on Tuesday in its last sales exercise of the year.

It will offer a total of 1,181 flats, from studio apartments to 5-room units, under the Build-To-Order (BTO) system - where flats will be built only after most of the units in a specific site have been booked. This brings the total number of flats launched for 2008 to 7,793.

The first project is called Sunshine Court, where 164 studio apartments, 117 3-room flats and 171 4-room flats will be built and sold at between S$58,000 and S$236,000.

Located along Choa Chu Kang Avenue 3, the estate will be situated opposite a neighbourhood centre, which has amenities such as a supermarket and food court.

This is the first time that studio apartments are being offered in Choa Chu Kang and they will be fitted with elderly friendly features like grab bars and non-slip flooring.

The second project, Punggol Regalia, which will be located near the future Punggol Town Centre, offers premium flats with better finishes. There will be 546 4-room and 183 5-room flats, costing between S$252,000 and S$428,000.

In light of the recent debate on new HDB flat prices, the Board said the units are priced affordably, with average households forking out about 20 per cent of their monthly income to service their mortgage, which can be fully paid using CPF funds.

For example, a family with a household income of S$2,200 will end up paying a monthly mortgage of about S$460, after factoring in the Additional CPF Housing Grant (AHG) of S$20,000, for a typical 3-room unit at Sunshine Court that is priced at S$135,000.

Applications for the new flats can be submitted online from December 30 to January 12 at www.hdb.gov.sg.

Source : Channel NewsAsia - 30 Dec 2008

DTZ expects 2009 to echo property price plunge of 2008

Prime district property prices fall by 20%; similar decline seen in 2009

Prices of condominiums and apartments in the prime districts have fallen by more than 20 per cent in 2008 on a year-on-year basis, says DTZ.

DTZ is also forecasting a further decline of 15-20 per cent for this segment of the market in 2009.

Based on its preliminary analysis of official data, DTZ said that prices of non-landed freehold private homes in the prime districts fell by 14 per cent quarter-on-quarter (qoq) in the fourth quarter of 2008.

This follows two consecutive quarters of declines of around 4.5 per cent each.

The prime districts include District 9, 10 and 11.

Overall average prime prices fell 21.6 per cent year-on-year (yoy) to $1,160 per square foot (psf), below the level of $1,200 psf registered in Q207.

Freehold non-landed homes outside the prime districts fell in Q408 but at a lower rate of 9.3 per cent qoq or 10.5 per cent yoy.

Landed housing prices also fell 5.7 per cent qoq, or 2.9 per cent yoy, islandwide in Q408.

The fall in prices follows dismal developer sales in October and November with only 112 and 192 units sold in the primary market respectively, compared to the monthly average of 444 units sold in the first nine months of the year.

DTZ said that based on caveats lodged, preliminary data from URA’s REALIS showed that the number of transactions in the year is only about 35 per cent of last year’s 38,100 units.

On the upside, the percentage of HDB upgraders continued to grow. In 2008, a higher proportion of purchasers with HDB addresses was registered with 37 per cent of all buyers expected to be HDB upgraders in 2008 compared to 22 per cent in 2007.

Based on available caveats in URA’s REALIS, the number of buyers with HDB addresses in Q408 is 582. While this is a preliminary number, it represents 43 per cent of total caveats lodged so far in the fourth quarter. DTZ noted that this is higher than the 41 per cent in Q308, 36 per cent in Q208, and 28 per cent in Q108.

‘HDB upgraders buy mainly for owner occupation, so falling private home prices is a good opportunity for them to upgrade with greater affordability,’ said DTZ senior director (research), Chua Chor Hoon.

But DTZ said that the downturn in the economy will deter buyers from committing to property purchases and sales are expected to continue to remain low in 2009.

Lower rental returns will not help either.

DTZ said that average monthly rents of prime non-landed homes decreased in Q408 by 9.4 per cent qoq or 9.2 per cent yoy to $4.36 psf.

Outside the prime districts, rents held up better with an increase of 2 per cent yoy, despite a fall of 1.2 per cent qoq.

The extent of price corrections is still uncertain but Nomura has already adjusted its forecasts. In March, it forecast average prices in the luxury sector to fall by 32.3 per cent from the 2007 peak over 2008-2010 - 16.9 per cent in 2008, 10.3 per cent in 2009 and 9.3 per cent in 2010.

It now expects luxury prices to fall 43.8 per cent from the peak, and mass residential prices to fall 32.1 per cent as yields move out by an additional 25-50 basis-points.

OCBC analysts also believe that high-end property prices could decline by 15-20 per cent in 2009 due to weak sentiment, unsold inventories and potential risks of buyers’ default and fire-sales.

OCBC expects mass market property prices to remain resilient, supported by the stability in HDB prices. For the mid-market properties, it expects prices to fall further in 2009, with a projected decline of 5-10 per cent.

Source : Business Times - 30 Dec 2008

JTC to bulk up space at Jurong business park

Area to be increased by 20%; some parts to see plot ratios raised

The economy may be slowing but the government has already set its sights on riding the recovery. To meet future demand for space, JTC Corporation plans to expand the International Business Park (IBP) in Jurong by 20 per cent and will raise plot ratios for some areas in the park.

Property consultants generally welcomed the news and believe that the new supply, which will enter the market only in the mid to long term, will have little impact on the weakening property market.

First established in 1992, the IBP now consists of 21 land parcels spanning 25 hectares, and JTC has fully allocated these plots. The park is home to several global technology firms such as Creative Technology, Acer and Dell.

‘We are expecting a surge in demand for business park land in this area in the next economic upturn, which land intensification on existing IBP land alone would not be able to address,’ said a JTC spokesman yesterday.

To prepare ‘land supply in advance to meet investors’ needs, we are planning to develop land parcels adjacent to the IBP for its expansion’.

JTC will be adding five parcels or around five hectares of land along the IBP’s southern boundary. With a plot ratio of 2.5, this will generate some 125,000 square metres of new business park space.

JTC has also been receiving requests from existing IBP lessees to intensify land use. The overall occupancy rate for multi-tenanted buildings at the park has been high, at around 90 per cent.

To meet these needs, plot ratios for around 14.8 hectares of land will be increased from 1.4 to 2.5.

In line with the redevelopment, the government is looking to improve the area’s road network by creating two road linkages to direct traffic from the IBP to the Ayer Rajah Expressway and the Pan Island Expressway.

It could take another 3-4 years for the IBP’s revamp to be completed, estimates JTC. The redevelopment will complement the Urban Redevelopment Authority’s (URA) 2008 Master Plan to create a suburban commercial hub in Jurong.

‘There is potential to create synergy between the IBP and the proposed developments in Jurong Gateway, the commercial precinct of the Jurong Lake District,’ said the JTC spokesman.

JTC’s announcement comes amid a cooling economy and a softening property market - consultants are predicting a fall in demand for industrial space and rents in the coming year. But some whom BT spoke to remain sanguine about prospects for the extra IBP space coming up.

‘Business park space is still a good alternative for those looking at office space outside the Central Business District (CBD). As long as rentals in the CBD are considered high, interest in business parks will be healthy,’ said Knight Frank’s head of industrial business space, Lim Kien Kim. ‘I don’t think this new supply will significantly affect rents for business parks in general.’

According to its website, JTC charges a land rent of around $60.57 per square metre (psm) per annum, or a land price of $913 psm on a 30-year lease for IBP sites with a plot ratio of 2.5.

DTZ’s executive director Ong Choon Fah also believes that the new IBP supply will not pose a big concern. ‘This is long-term . . . There will always be market cycles, so we must not lose sight of the long- term goals . . . Announcing this now also allows market players to be aware of what is happening in the future, so they can start to plan.’

Cushman & Wakefield Singapore managing director Donald Han says that the new IBP plots could also be put on the reserve list if they are released in a subdued market. Reserve list sites are launched for tender only upon successful application by a developer with an undertaking of a minimum bid acceptable to the state.

‘I don’t think (the government) will force feed the market,’ he said.

Alongside JTC’s redevelopment plans for the IBP, URA also released other updates to its 2008 Master Plan for the Jurong Lake District yesterday. They include the rejuvenation of Teban Gardens and Pandan Gardens, and road improvement works for Faber Terrace and Faber Hills.

Source : Business Times - 30 Dec 2008

Rejuvenation for Jurong residential areas

Better connectivity and more housing choices are on the cards

MORE residential areas in Jurong are to be rejuvenated as part of the Urban Redevelopment Authority’s (URA) 2008 Master Plan to develop commercial hubs outside the Central Business District.

Supporting the growth of the Jurong Lake District, Faber Terrace, Faber Hills, Teban Gardens and Pandan Gardens will soon enjoy better connectivity and more housing choices.

Various infrastructure plans in the region will proceed ‘notwithstanding the current economic downturn’, said URA in a release yesterday.

The government will be enhancing roads at Faber Terrace and Faber Hills. Not only will this improve the area’s traffic situation, it will also allow more low and medium-density housing fronting Sungei Ulu Pandan to be built in future, said URA.

Noting that traffic along the Ayer Rajah Expressway in the area can be heavy, DTZ’s executive director Ong Choon Fah agreed with the plans. ‘If you build up the Jurong Lake District, you will also need to find an accessible way to get there,’ she said.

According to URA, new residences at Faber Terrace and Faber Hills will be private and could include landed property as well as low- and medium-density condominiums. The area could be suitable for cluster housing, said Cushman & Wakefield Singapore managing director Donald Han.

Teban and Pandan Gardens will also undergo rejuvenation. Two public housing sites at Teban Gardens are already under the selective en-bloc redevelopment scheme, and PUB’s ABC Waters programme for the Pandan Reservoir will further enhance waterfront living in the area.

There are also plans to improve Teban and Pandan Gardens’ connectivity with the Jurong Lake District.

The district - comprising a commercial centre at Jurong Gateway and a leisure hotspot at Lakeside - could attract more large and global companies and the redevelopment of the International Business Park would further support this. As JTC Corporation also said yesterday, it plans to add another five hectares of land and raise plot ratios for some areas in the park.

Knight Frank director of research and consultancy Nicholas Mak pointed out that multinational corporations do pay attention to where the workforce is when they pick a site for their headquarters or factories. ‘To know that (workers) are all living around is good, there is a ready pool of labour,’ he said.

The announcements are also ‘a signal to potential developers and investors that there is still land around the Jurong Lake area available,’ he added.

URA also provided more updates on the development of Jurong Lake District yesterday.

For instance, dredging works to deepen the Jurong Lake for more water-based activities are already underway.

Source : Business Times - 30 Dec 2008

Rejuvenation for Jurong residential areas

Better connectivity and more housing choices are on the cards

MORE residential areas in Jurong are to be rejuvenated as part of the Urban Redevelopment Authority’s (URA) 2008 Master Plan to develop commercial hubs outside the Central Business District.

Supporting the growth of the Jurong Lake District, Faber Terrace, Faber Hills, Teban Gardens and Pandan Gardens will soon enjoy better connectivity and more housing choices.

Various infrastructure plans in the region will proceed ‘notwithstanding the current economic downturn’, said URA in a release yesterday.

The government will be enhancing roads at Faber Terrace and Faber Hills. Not only will this improve the area’s traffic situation, it will also allow more low and medium-density housing fronting Sungei Ulu Pandan to be built in future, said URA.

Noting that traffic along the Ayer Rajah Expressway in the area can be heavy, DTZ’s executive director Ong Choon Fah agreed with the plans. ‘If you build up the Jurong Lake District, you will also need to find an accessible way to get there,’ she said.

According to URA, new residences at Faber Terrace and Faber Hills will be private and could include landed property as well as low- and medium-density condominiums. The area could be suitable for cluster housing, said Cushman & Wakefield Singapore managing director Donald Han.

Teban and Pandan Gardens will also undergo rejuvenation. Two public housing sites at Teban Gardens are already under the selective en-bloc redevelopment scheme, and PUB’s ABC Waters programme for the Pandan Reservoir will further enhance waterfront living in the area.

There are also plans to improve Teban and Pandan Gardens’ connectivity with the Jurong Lake District.

The district - comprising a commercial centre at Jurong Gateway and a leisure hotspot at Lakeside - could attract more large and global companies and the redevelopment of the International Business Park would further support this. As JTC Corporation also said yesterday, it plans to add another five hectares of land and raise plot ratios for some areas in the park.

Knight Frank director of research and consultancy Nicholas Mak pointed out that multinational corporations do pay attention to where the workforce is when they pick a site for their headquarters or factories. ‘To know that (workers) are all living around is good, there is a ready pool of labour,’ he said.

The announcements are also ‘a signal to potential developers and investors that there is still land around the Jurong Lake area available,’ he added.

URA also provided more updates on the development of Jurong Lake District yesterday.

For instance, dredging works to deepen the Jurong Lake for more water-based activities are already underway.

Source : Business Times - 30 Dec 2008

Wider variety of housing in the west

RESIDENTS in the west can look forward to having a wider variety of homes to choose from in the next few years.

The Urban Redevelopment Authority (URA) yesterday announced detailed plans to rejuvenate estates such as Teban and Pandan Gardens, and Faber Terrace and Faber Hills - part of a bigger makeover for the Jurong district.

As the existing International Business Park expands, infrastructure upgrading works will also be carried out at surrounding housing estates by national water agency PUB and the Housing Board.

Dredging works by the PUB to deepen Jurong Lake to allow for more recreational water activities, for example, have already begun.

Under its Active, Beautiful, Clean (ABC) Waters Programme which aims to convert canals and reservoirs into a scenic network of waterways, PUB plans to build a new waterfront promenade with boardwalks, bridges and wetlands at Jurong Lake.

At Teban and Pandan Gardens, the HDB has been rejuvenating these estates through various upgrading programmes and its Selective En-bloc Redevelopment Scheme (Sers). Sers involves the relocation of residents in public housing that is about 30 years old to newly developed high-density projects located nearby.

Road improvement works at Faber Terrace and Faber Hills will also allow more quality low- and medium-density housing fronting Sungei Ulu Pandan to be built to support the growth of the Jurong Lake District, said URA.

A 1.9ha private residential and commercial site next to Jurong East MRT was also put on URA’s reserve list last month.

Knight Frank’s director of research and consultancy Nicholas Mak does not expect the plans to have any immediate significant impact on the market.

But Colliers International’s research and advisory director Tay Huey Ying said the plans to enhance residential estates ‘will add variety to housing options…and help entice home purchasers’.

‘This can help to boost population in this area - a critical ingredient if the Jurong Gateway is to be a success.’

Source : Straits Times - 30 Dec 2008

Jurong to get more business space

Expansion of business park will position Singapore for recovery

THE economic outlook is all gloom but the Government is already positioning Singapore for the next upturn by unveiling plans to beef up the supply of business park space in Jurong.

Its ambitious move comes even as demand in the property sector has fallen dramatically in recent months while office rents have dipped.

Industrial landlord JTC Corporation said yesterday it will develop 5ha south of the existing International Business Park. This will yield 125,000 sq m, or about 1.35 million sq ft, of rentable space.

The development will help JTC ’secure investments and anchor key companies’ in an effort to better place the economy for the next upturn, it said.

Site surveys will start next month and infrastructure work, including improvements to the park’s road networks, will begin in March. Two new road linkages to the Ayer Rajah Expressway and Pan-Island Expressway will be created.

Companies can lease space in the business park from 2011, said JTC.

Market watchers told The Straits Times that the Government is stimulating economic activity with the development while also seeking to avoid the kind of office space crunch that has hit businesses in recent years.

The economic boom that preceded the financial crisis saw prime office rents double to almost $19 per sq ft last year. This sparked a scramble to build more office space, including government moves to release transitional office sites to relieve pent-up demand.

While this has now led to concerns that Singapore could face an office space glut over the next two years, some analysts feel that early preparation of sites enables the market to respond faster when the economy does pick up.

Colliers International’s research and advisory director, Ms Tay Huey Ying, said she did not think there would be a glut, and that this ‘will help in ensuring a U-shape recovery instead of a V-shape one when the global economy recovers’.

CIMB-GK economist Song Seng Wun said government investment in public infrastructure like Jurong Island or Changi Airport during downturns has traditionally ‘worked well for Singapore’.

Even though the impact on economic output ‘will not be massive’, such work will benefit local firms, added Mr Song.

The International Business Park - 21 land parcels of about 25ha - is Singapore’s first such park. Established in 1992, it has drawn renowned tech firms such as Dell and Acer to set up shop.

JTC said a review of the park’s masterplan was timely as the Urban Redevelopment Authority had recently announced a dramatic makeover for Jurong in its 2008 Masterplan.

The industrial town is to be redeveloped into Jurong Lake District - a 360ha mini metropolis of homes, hotels, shops, eateries and offices linked to the MRT via walkways and waterways.

It will consist of Jurong Gateway, the up-and-coming commercial hub of the West, and Lakeside, which is being developed as a destination for young families, with tourist attractions and parks complemented by water activities.

JTC said ‘there is potential’ for synergy between the expanded business park and the rejuvenated Jurong Gateway.

Collier’s Ms Tay agreed that more business park space will add critical mass and ‘aid in the realisation of the Government’s vision for the Jurong Lake District’.

To complement the commercial developments, the surrounding housing estates will be rejuvenated by various statutory boards. This will mean upgrades to Teban and Pandan Gardens and the Faber Terrace areas in the next few years.

Source : Straits Times - 30 Dec 2008