Housing market set for prolonged downturn: Daiwa

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

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

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

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

Source: TODAY – 18 November 2011

NO EN BLOC, NOW BACK TO BUSINESS

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

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

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

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

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

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

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

Source: Today -17 Nov 2011

MORE CHANCES FOR SECOND-TIMERS?

Balloting rules for second-time buyers of new HDB flats will be tweaked to improve their chances, National Development Minister Khaw Boon Wan said yesterday.

Writing on his blog, Mr Khaw did not elaborate on the possible changes. But he said the changes will likely be made towards the end of next year, "after we have cleared most of the first-timer queue".

Sharing the statistics for the July Build-To-Order (BTO) exercise, Mr Khaw noted: "As only 5 per cent of new flats were reserved for second-timers, their success rate is low."

Apart from being eligible for just a small proportion of the new flats, second-time buyers - unlike first-time buyers - only have one chance at the ballot.

In the July BTO exercise, 3,556 flats were on offer. More than 11,000 applications were reportedly received.

According to Mr Khaw, about one in 10 of second-time buyers was invited to pick a flat, of whom 54 per cent chose to do so.

In comparison, 73 per cent of first-time buyers were successful in the queue. Of these, about 60 per cent took up the offer to select a flat.
This is an improvement from previous launches, when only about half of first-time buyers did so.

"With this ramped-up construction programme and priority in treatment, newlyweds now stand a very high chance of succeeding in BTO selection," Mr Khaw wrote.

Property analysts noted that there is a significant pool of second-time buyers including families with young children and upgraders. By turning its attention to this group - and increasing their balloting chances for new flats - the Government would also address the shortage of resale flats and stabilise the prices in this segment, they added.

SLP International research head Nicholas Mak said: "As more second-timers go for a new flat, this will reduce demand (for resale flats) and hence stabilise the price of resale flats - in line with the Government's policy of making homes more affordable for everyone."

ERA Realty key executive officer Eugene Lim said that apart from increasing the quota of new flats set aside for second-timers, the Government could also tweak the resale levy to help this group. "But I would not suggest removing the resale levy altogether as it will just send a flood of second-timers seeking a new flat," said Mr Lim.

PropNex chief executive Mohamed Ismail reiterated that the focus "must still be on the first-timers". He said: "New generations of first-timers will always come and their needs have to be addressed."

NEW BUS INTERCHANGE TO BENEFIT 8,500 COMMUTERS DAILY

About 8,500 commuters are expected to benefit daily when the new Clementi bus interchange opens on Nov 26.
The new 8,100 sq metre facility will be the sixth Integrated Transport Hub, where bus interchanges and MRT stations are seamlessly linked with adjoining commercial developments.
It will allow residents to switch between bus and train in air-conditioned comfort.
The Land Transport Authority said more such interchanges will be constructed at Bedok, Bukit Panjang, Hougang Central, Joo Koon, Jurong East, Marina South and Yishun in tandem with redevelopment in the areas.
This is in addition to the existing five at Serangoon, Boon Lay, Toa Payoh, Sengkang and Ang Mo Kio which are fully integrated with the rail stations and adjoining commercial developments.

Source: Channel News Asia - 17 Nov 2011

Rochor residents sad to leave

HDB residents affected by the land acquisition of Rochor Centre have said they are sad to leave their convenient and familiar surroundings.

Come 2016, the 567 households there will have to say goodbye to their estate.

This is to make way for the North-South Expressway's (NSE) southern stretch that will be an underground tunnel from Toa Payoh Rise to East Coast Parkway.
Some residents have been living there for more than 30 years, since the development went up in 1977.

They were informed of the land acquisition exercise when HDB officers went door-to-door on Tuesday to distribute the notification letters and information kits.

Sixty-two-year-old resident Sae-Huan Sinet said: "I'll miss this place, and I'm worried if the new place will be as convenient, if it's as convenient for elderly residents."

Another resident, Madam Tan, who is in her 70s, said: "Many of the neighbours here are my relatives, living in flats above and below mine."

"A change of environment might not be a bad thing. As long as we have a flat to live in, it's ok," said 62-year-old resident Chan Tuck Wah.

Residents who are affected will be offered a new flat in Kallang.
HDB said most residents will be able to move to a brand new flat that is at least of equivalent size.
In some cases, HDB said residents may also enjoy net proceeds.
For instance, a three-room Rochor flat of 67 square metres — the most common unit-type — has an estimated market value of S$445,000.

About 70 per cent of the residents own such units.

A new flat in Kallang, after factoring in a S$30,000 discount, will cost S$342,000.

The subsidy will only apply to home owners who have not enjoyed more than one housing subsidy so far, and do not own private property.

Home owners will be given an additional S$4,800 to cover other expenses such as stamp fees.
This means a flat owner stands to gain more than S$100,000 in proceeds.

Work on the NSE will start in 2013, but work will be conducted in phases.

Residents will be able to stay in their homes until their new flats in Kallang are completed in 2016.
Commercial tenants of Rochor Centre will also be moving out.
Those who took over the premises before 1999 will receive payouts of S$60,000 each.

An additional S$30,000 will be given to those who choose to continue business at an alternative premise.

But tenants said the compensation is too little.

Hiap Guan Goldsmiths & Jewellers manager Sammy Fong said: "This S$60,000 has been offered for many years; there's been no change in the amount over the years. It's not a big sum of money."
Turning Point Academy owner Amy Koh said: "I'm about to renovate my shop. The deposit has been paid. If I go ahead with the renovation now, when the government takes back the land, I'll not be able to earn back the money spent."

Another building that will make way for the new expressway is the 41-year-old Nanyang Pho Leng Building.

The building is home to a Teochew clan association, which has more than 1,000 members.

Channel NewsAsia understands there are hundreds of ancestral tablets housed on the third floor of the building, which will need to find new homes or be returned to the members.

The clan association directors could not be reached for comment.

Source : Channel NewsAsia – 15 Nov 2011

New expressway sparks big land acquisition

The government has announced the full alignment for the 21.5-kilometre-long North-South Expressway (NSE), with the southern segment unveiled on Tuesday.

The final 5.6-kilometre stretch of the expressway will be an underground tunnel beginning from Toa Payoh Rise and ending at East Coast Parkway.

It will pass along Thomson Road, Bukit Timah Road and Ophir Road before leading to the East Coast Parkway Expressway.

In January, the Land Transport Authority (LTA) had announced the alignment for the northern segment between Admiralty Road West and Toa Payoh Rise.

When ready by 2020, NSE, which is Singapore's 11th expressway, is expected to cut travel time for motorists by up to 30 per cent.
For example, a journey between Yishun and the city currently takes about 30 to 35 minutes.

With the NSE, the same journey can be completed between 20 and 30 minutes.

LTA chief executive Chew Hock Yong said: "We were looking for the southern segment to link up in a nice way to the ECP so it has to take a certain alignment that comes round that way into city.

"The city is very built-up so the southern segment is all underground, and as much as possible, we follow the alignment of existing rounds, so as to minimise the acquisition of private properties and we use state land to build the expressway."

But several properties will have to make way for the southern segment. Two full lots and 21 partials lots will be acquired.
They include four HDB blocks of flats at Rochor Centre which has been around since 1977.

This will be the largest acquisition of HDB flats to date. Mr Chew said: "We studied the alignment, and in the city it gets very crowded and at that area, there are MRT lines that are running there.

"There's the Bugis MRT station and there's the Downtown Line station being constructed, there is a canal running along Rochor Canal and for engineering reasons, the road has to be of a certain level of straightness… because the cars would have to travel at a certain speed.

"So taking all that into account, that was the alignment that we have to settle on and unfortunately it will affect the blocks that are there."

Residents of 567 flats at Rochor Centre will be offered relocation benefits similar to those offered under the Selective En Bloc Redevelopment Scheme (SERS).
Eighty-three per cent of the flats acquired are three-room units.
HDB will build about 810 units of new flats at Kallang as replacement housing for the residents affected.

Located next to Kallang River, residents will also be well-served by a good transportation network, with the Kallang MRT station being a five-minute walk.

Some 187 rental shops and eating houses at Rochor Centre will also be affected.

They will be given a 10 per cent preferential discount off the monthly rental rates when they successfully tender for other HDB rental commercial properties, or when they take over other HDB rental commercial properties through assignment.

Nanyang Pho Leng Association, located at Keng Lee Road and which has been in operation since 1970, will have to make way for the NSE.

The Nanyang Pho Leng Building is home to a Teochew clan association, which has more than 1,000 members.

LTA said the association will be given assistance in their purchase of and relocation to a replacement property.
Land acquisition notices have been handed out since 12pm Tuesday and the Singapore Land Authority has gazetted the lands affected by the acquisition.
Some state properties will also be making way for the NSE.
They include Lee Ah Mooi Old Age Home and Victoria Street Wholesale Centre.
They will be able to complete their current tenancy or licence when the NSE works starts.
The lease for Lee Ah Mooi Old Age Home has been extended till September 2013.
Advance works for the NSE will start progressively from 2013, and major construction works will start in 2015.

The construction of the NSE will benefit residents living in the north and north-eastern sectors of Singapore as it caters to the expected growth in traffic demand generated by new developments there.

It will connect towns along the north-south corridor — Woodlands, Sembawang, Yishun, Ang Mo Kio, Bishan and Toa-Payoh — to the city centre.

Running parallel to the Central Expressway, NSE will help to alleviate the traffic load on the heavily-utilised expressway, as well as the major arterial roads nearby such as Thomson Road and Marymount Road.

The NSE is expected to cost the government some S$7 billion to S$8 billion.

Source : Channel NewsAsia – 15 Nov 2011

Two-thirds of previewed Palette units snapped up

The Palette residential development at Pasir Ris Grove saw a brisk take-up of 200 units at its preview launch last weekend.
City Developments Ltd (CDL) released a total of 300 units in the 99-year-leasehold development at the preview.

The average selling price of the 892-unit residential project, located within walking distance to Pasir Ris MRT Station, was in the range of $870 per square foot, with prices beginning at $561,000 for a 495-sq-ft one-bedder on a low floor and $1.8 million for a 2,217-sq-ft penthouse.

Unit layouts in the 12-block project range from one-bedders (up to 700 sq ft) to four-bedders (up to 1,798 sq ft).

The residential development also has a total of 10 penthouses (from 2,217 sq ft to 2,562 sq ft), of which all four units launched last weekend have already been taken up.

Warm responses have also been noted in other project launches located primarily in the heartland regions.

Notably, Sim Lian's 99-year-leasehold residential project, Parc Vera, has met with keen interest from local buyers and has sold about 200 out of 240 units since its launch on Oct 28 at an average price of $800 per sq ft.

Located along Hougang Avenue 7, the 452-unit development is also close to recreational sites such as the Serangoon Park Connector and Punggol Park.

According to a property consultant, most of the buyers of Parc Vera already reside in the North-Eastern part of Singapore, with many citing proximity to their parents' homes as a priority.

Despite concerns that residential prices are near a top, continues to expect healthy sales in the heartland regions on the back of real demand from local buyers.

As HDB prices continue to soar, there is a narrow price differential between public and private homes.

Source: Business Times – 15 November 2011

Resale flat supply crunch calls for tweaks

HOME-buyers hoping for a fall in home prices must have been disappointed by recent housing figures.

Housing Board (HDB) resale flat prices rose 3.8 per cent in the third quarter to a fresh record. Prices have risen some 35 per cent since the first quarter of 2009. That was the last quarter which saw a price fall - albeit by just 0.8 per cent.

HDB resale flat prices' ability to defy gravity is puzzling at one level, because HDB is already ramping up supply of HDB flats aggressively. But the new flats being built are available only to Singaporean couples and families and will be ready only in a few years. 

Meanwhile, underlying demand remains strong. Singles, permanent residents and those who have already bought subsidised HDB flats before, have to turn to the HDB resale market for affordable housing.

But the biggest reasons underpinning the price rise in the HDB resale market could be the supply crunch created by a mix of recent and past policies.

Analysts say some measures introduced recently to cool the property market have created incentives for HDB flat-owners to hold on to their flats and not sell them. Rules were tightened to weed out would-be speculators who want to buy HDB flats to 'flip' (resell) or rent out in the short-term. The rules did not affect those who already owned HDB flats. The result: existing HDB owners hang on to their flats. Fewer put up their flats for sale, creating a supply crunch.

Analysts point to another rule that makes it difficult for buyers to move homes. This requires HDB flat-owners to prove they have sold their existing flat before they can qualify for higher 80 per cent financing on their next home. Otherwise, they get only 60 per cent. 

ERA Realty key executive officer Eugene Lim said this policy is making sellers reluctant to let go of their units.

The rule was meant to discourage speculation in properties by increasing the cash amount buyers must pay for a second mortgage. But analysts say the rule is unnecessary in the HDB market since no household is allowed to own more than one HDB flat anyway.

This is one rule that merits review. One simple solution around this problem is that the Government allow 80 per cent bank financing for all HDB home-buyers, on condition that they sell their existing HDB homes within three to six months. 

There is another big factor explaining the supply crunch. This is the fresh supply of new HDB flats that turn five years old and can be sold on the resale market.

New HDB flats are sold at subsidised prices to Singaporean couples and families, who must live in them for five years. After that, they can be sold to Singaporeans and permanent residents.

The number of flats built fell drastically after 2005 as the Sars outbreak and economic crises in the early 2000s had created an unsold stock of tens of thousands of HDB flats. In response, HDB scaled back its building programme. In 2006, 2007 and 2008, the number of flats completed were 2,752, 5,111 and 3,183 respectively.

What this means is that in the last decade, the resale market had an annual injection of 11,000 to 30,000 flats which turned five and could be resold. But the number will shrink in the next three years: from 2011 to 2013, there will be only about 11,000 flats for the entire period.

Of course, considered against the existing stock of one million HDB flats, this drop might not be significant. But it does exacerbate the supply crunch amidst a market with robust demand.

So the overall picture is that supply looks set to remain tight for the next two years at least. Resale prices are thus likely to remain firm.

Analysts say there are some short-term solutions that can be considered. One is to review the financing rule for HDB owners. Some people think the Government can go further, to introduce new policies to compel HDB owners who do not really need their flat to sell it.

HDB flat-owners are allowed to rent out the whole flat after five years. If they can afford to live elsewhere, perhaps they should let go of their flats to help ease the pressure in the market.

Another way to raise short-term supply of resale flats is to create incentives for HDB resale flat-owners to sell, rather than rent out, their units.

One way is to impose a levy on income from renting out HDB flats. Owners now have to declare all rental income as part of their personal income tax returns. But many have incomes below the threshold for paying income tax anyway, so they do not have to pay any taxes. A direct levy of, say, 30 per cent imposed on rental gains from renting out HDB flats may tip some owners into deciding to sell instead of rent out their units. 

Unlike a change in ownership criteria, a levy on rental income has the advantage of being easier to tweak, or scrap when the market no longer needs it.

Source: The Straits Times – 15 November 2011

S'pore, US among top destinations for rich Chinese migrants

About 60 percent of the rich Chinese people, each of whom has a net asset of at least 60 million yuan (S$12.12 million), said they intended to migrate from China, a report has found.

About 14 per cent of them have either already migrated from China or have applied for migration.

The three most favoured destinations by the Chinese rich are the United States, Canada and Singapore. The US is the first choice of some 40 per cent of the people interviewed, according to a white paper jointly released by Hurun Report and the Bank of China (BOC) on Saturday.

According to US Citizenship and Immigration Services (USCIS), the number of Chinese applicants for investment immigration has exceeded applications from any other country or region.

'Among all the destinations in terms of investment immigration, the US always outstands all other options as the country does not impose any quota,' said Jiao Lingyan, a client executive of the investment immigration department of the Beijing-based GlobeImmi International Education Consultation Co.

'The minimum amount required for investment immigration to the US is US$500,000 (S$641,130). But it should be noted that this applies to investments in projects recommended by authorities in the US. People considering these projects should take into account that they may not make profits,' Mr Jiao said.

'It is worth noting that the minimum amount for investment immigration will be raised in the coming years, because the number of rich people in China is rapidly growing,' she said.

While 32 per cent of the interviewees said they have invested overseas with a view to immigrate, half of them said they did so mainly for the sake of their children's education.

'A growing number of parents in China have realised that children growing up in the examination-oriented education system in China will find it hard to compete in an increasingly globalised world,' Mr Zhang said.

Chinese immigrants are also getting younger, with the largest group aged between 25 and 30, compared to the 40-45 age group in the past, Mr Zhang said.

Source: The Straits Times – 4 November 2011

Vista Park put up for collective sale again

Vista Park at South Buona Vista Road is back on the market. This time the asking price for the collective sale site is the $323 million reserve price set by the majority owners - lower than the $338 million asking price when the leasehold site was put on the market in May.
 
Vista Park is on a sprawling 319,248 square foot site with a remaining lease term of about 66 years.
The $323 million reserve price would translate to a land price of $824 per square foot per plot ratio inclusive of an estimated $45.3 million payable for topping up the site's lease to 99 years.
 
This calculation is based on a maximum gross floor area of 446,947 square feet, reflecting a 1.4 gross plot ratio as stipulated for the site under Master Plan 2008.
 
No development charge is payable as the site has a high historical safeguarded development baseline.
The unit land price based on the $323 million reserve price could be lowered to $792 psf ppr if the developer builds an additional 10 per cent gross floor area allowed for balcony area, which would take the potential gross floor area to 491,641 sq ft.
 
The breakeven cost for a new project is expected to be $1,250 psf.
 
Source: Business Times – 10 November 2011

Two more sites up for en bloc

The en bloc market is showing no signs of slowing, with two more residential developments being put up for collective sale.

Thomson View condominium has an indicative asking price of S$595 million to S$635 million, translating to between S$694 and S$732 per sq ft per plot ratio (psfppr) for the site located along Upper Thomson Road.

The 540,314 sq ft site has a gross plot ratio of 2.1 and gross floor area of about 1.27 million sq ft as well as a 24-storey height limit. The price includes a differential premium of about S$158 million to top up the lease tenure by 34 years to 99 years and an upgrading premium of about S$130 million to enhance the value of the land. 

It said a new development could yield 1,012 units of apartments averaging 1,100 sq ft per unit and 33 strata landed houses averaging 2,500 sq ft. The tender closes on Jan 12. 

Separately, Chateau Eliza, a freehold development at Mount Elizabeth, has been put up for sale with a guide price of S$111 million to S$115 million. The site is almost 18,000 sq ft in size and has a plot ratio of 2.8, although the current development has a plot ratio of 2.939.

This works to a land price of between S$2,099 to S$2,174 psf ppr based on the proposed gross floor area of 52,887 sq ft. The tender closes on Dec 15.

Source: Today – 15 November 2011

CDL unveils The Palette condo in Pasir Ris

City Developments (CDL) and its joint venture partners, Hong Leong Holdings and Hong Realty have unveiled plans for their latest residential development, The Palette.

The 99-year leasehold condominium, located at Pasir Ris Grove / Pasir Ris Drive 1, has an area of about 461,315 sq ft and is expected to yield 892 apartments across 12 towers when completed in 2016.

Prices are expected to range from S$570,000 for a one-bedroom unit to S$2.2 million for a penthouse.

The development will be launched in phases and the consortium will begin private previews within the next two weeks, CDL said.

The site, located within walking distance of the Pasir Ris MRT Station, is close to The Japanese School, United World College of South-east Asia and Changi Business Park.

Source: Today - 11 November 2011