Saturday, August 7, 2010
Thursday, August 5, 2010
British Land NAV growth slows
(LONDON) British Land reported slowing growth in first quarter net asset value yesterday, amid fresh worry for the economy and fears that banks could choke a property market revival with tough lending restrictions.
The biggest office landlord in the City of London booked 2.2 per cent growth in net asset value to 515 pence (S$11) a share for the quarter to end-June, compared with 15.1 per cent growth in the previous quarter, as more investors cite the continued lack of finance for a slowdown in UK commercial property price growth.
The value of its portfolio rose 1.4 per cent to £8.68 billion.
Average commercial property values have risen by just 1.8 per cent in the second quarter, after gaining 3.9 per cent in the first three months of this year, data from Investment Property Databank shows. 'Overall, risks to the global economy seem to have increased in recent months and we remain alert to the potential impact of the fiscal measures needed to address budget deficits not only in the UK, but across Europe,' chief executive Chris Grigg said.
Despite caution about the near-term outlook, British Land said that its overall occupancy increased to 97.8 per cent in the period, reflecting strong London office leasing activity and demand for space in its prime retail real estate.
A Europe-wide health check on European banks on July 23 showed lenders had largely rehabilitated their battered balance sheets but few analysts expect a surge in commercial property lending soon, even though just seven of 91 banks were shown to have inadequate capital to withstand new financial market shocks.
Net mortgage lending growth - a key barometer for the future stability of the UK property market - contracted to £665 million pounds from £838 million in May, Bank of England data showed. -- Reuters
Source: Business Times, 5 Aug 2010
The biggest office landlord in the City of London booked 2.2 per cent growth in net asset value to 515 pence (S$11) a share for the quarter to end-June, compared with 15.1 per cent growth in the previous quarter, as more investors cite the continued lack of finance for a slowdown in UK commercial property price growth.
The value of its portfolio rose 1.4 per cent to £8.68 billion.
Average commercial property values have risen by just 1.8 per cent in the second quarter, after gaining 3.9 per cent in the first three months of this year, data from Investment Property Databank shows. 'Overall, risks to the global economy seem to have increased in recent months and we remain alert to the potential impact of the fiscal measures needed to address budget deficits not only in the UK, but across Europe,' chief executive Chris Grigg said.
Despite caution about the near-term outlook, British Land said that its overall occupancy increased to 97.8 per cent in the period, reflecting strong London office leasing activity and demand for space in its prime retail real estate.
A Europe-wide health check on European banks on July 23 showed lenders had largely rehabilitated their battered balance sheets but few analysts expect a surge in commercial property lending soon, even though just seven of 91 banks were shown to have inadequate capital to withstand new financial market shocks.
Net mortgage lending growth - a key barometer for the future stability of the UK property market - contracted to £665 million pounds from £838 million in May, Bank of England data showed. -- Reuters
Source: Business Times, 5 Aug 2010
British home prices edge up in July
(LONDON) British house prices moved higher in July, but the market remains flat so far this year, data from top home-loans provider Halifax showed yesterday.
'House prices increased by 0.6 per cent in July, reversing the fall in June,' said Martin Ellis at Halifax. 'Overall, there has been little change in prices during 2010 so far,' he added. 'The mixed pattern of monthly rises and falls over the first seven months of the year is consistent with a slowing market. It is also in line with our view that house prices will be broadly unchanged over 2010 as a whole.'
Halifax, part of state-controlled Lloyds Banking Group (LBG), also revealed that the average house price in Britain stood at £167,425 (S$358,850).
In a separate statement, LBG said it bounced back into profit in the first half. Pre-tax profit stood at £1.6 billion in the six months to the end of June, which compared with a loss of about £4 billion in the same period of 2009. -- AFP
Source: Business Times, 5 Aug 2010
'House prices increased by 0.6 per cent in July, reversing the fall in June,' said Martin Ellis at Halifax. 'Overall, there has been little change in prices during 2010 so far,' he added. 'The mixed pattern of monthly rises and falls over the first seven months of the year is consistent with a slowing market. It is also in line with our view that house prices will be broadly unchanged over 2010 as a whole.'
Halifax, part of state-controlled Lloyds Banking Group (LBG), also revealed that the average house price in Britain stood at £167,425 (S$358,850).
In a separate statement, LBG said it bounced back into profit in the first half. Pre-tax profit stood at £1.6 billion in the six months to the end of June, which compared with a loss of about £4 billion in the same period of 2009. -- AFP
Source: Business Times, 5 Aug 2010
Nine Chow family properties sold for $175m
NINE properties owned by the companies of three feuding brothers have been sold for more than $175 million.
Chow House, the most prominent of the nine assets, went for more than $100 million and could be redeveloped into a residential project.
The nine assets were owned by Associated Development Pte Ltd, Chow Cho Poon (Pte) Ltd and Lee Tung Company (Pte) Ltd. Property investor Chow Cho Poon set up these firms and his three sons became directors and shareholders.
Mr Chow owed debts to the companies when he died in 1997. The debts could not be paid off as his estate's assets were mainly tied up as shares in the companies.
In 2007, eldest son Chow Kwok Chi asked the High Court to wind up the companies so the brothers could go their separate ways.
Deloitte & Touche's head of financial advisory services Tam Chee Chong was appointed liquidator to sell the companies' assets and distribute the proceeds among shareholders. DTZ handled the public tender for the nine properties.
According to DTZ, there were 'overwhelming responses from both local and foreign interested parties'.
The freehold Chow House drew nine bidders and was sold for just over $100 million. BT reported earlier that the buyer could be a group whose shareholders include WyWy Group founder YY Wong.
DTZ said the authorities have granted outline permission for the site to be developed into a new residential project with commercial space on the ground floor.
The other eight properties - at Lorong Telok, North Canal Road, Jalan Besar, Upper Serangoon Road and Lavender Street - went to various other investors.
Source: Business Times, 5 Aug 2010
Chow House, the most prominent of the nine assets, went for more than $100 million and could be redeveloped into a residential project.
The nine assets were owned by Associated Development Pte Ltd, Chow Cho Poon (Pte) Ltd and Lee Tung Company (Pte) Ltd. Property investor Chow Cho Poon set up these firms and his three sons became directors and shareholders.
Mr Chow owed debts to the companies when he died in 1997. The debts could not be paid off as his estate's assets were mainly tied up as shares in the companies.
In 2007, eldest son Chow Kwok Chi asked the High Court to wind up the companies so the brothers could go their separate ways.
Deloitte & Touche's head of financial advisory services Tam Chee Chong was appointed liquidator to sell the companies' assets and distribute the proceeds among shareholders. DTZ handled the public tender for the nine properties.
According to DTZ, there were 'overwhelming responses from both local and foreign interested parties'.
The freehold Chow House drew nine bidders and was sold for just over $100 million. BT reported earlier that the buyer could be a group whose shareholders include WyWy Group founder YY Wong.
DTZ said the authorities have granted outline permission for the site to be developed into a new residential project with commercial space on the ground floor.
The other eight properties - at Lorong Telok, North Canal Road, Jalan Besar, Upper Serangoon Road and Lavender Street - went to various other investors.
Source: Business Times, 5 Aug 2010
Ayala Land pumping US$220m into China eco-city
Total foreign investment in Sino-S'pore project hits 28b yuan
(TIANJIN) The Philippines' largest property company, Ayala Land, has become the fourth foreign real estate developer to join an 'eco-city' development project in north China's Tianjin Municipality.
The company signed an agreement to invest US$220 million in the project on Tuesday, taking total foreign investment in the 'eco-city' to 28 billion yuan (S$5.6 billion).
Other foreign property developers involved include Mitsui Fudosan Group and Sunway Real Estate Investment Trust, said Wu Caiwen, president of the Sino-Singapore Tianjin Eco-City Investment and Development.
The Tianjin 'eco-city' development is the second of its kind between the Chinese and Singapore governments, following on from the China-Singapore Suzhou Industry Park.
Both projects feature cooperation in advanced technology and personnel exchange.
Located in the Tianjin Binhai New Area, the 30 square kilometre Tianjin Eco-City lies 150 km east of Beijing. It is hoped that the city would become a harmonious and sustainable community that meets the needs of China as it urbanises.
'The Tianjin Eco-city aims to be a model for the cities of China's future, as well as being a real international eco-city,' Mr Wu said.
The 'eco-city' is 50 km away from downtown Tianjin. It is designed to be a modern metropolis where 350,000 residents can live, work and play by the time it is completed in 2020.
Ayala Land has agreed to develop a 9.78 hectare residential complex in the city designed to accommodate 1,100 households by 2013.
Mr Wu said that all buildings in the eco-city conform with environmentally friendly standards in design, technology, construction and management. 'The foreign developers' experience in building environmentally friendly properties will help push forward the project and allow it to meet its eco-targets.' - Xinhua
Source: Business Times, 5 Aug 2010
(TIANJIN) The Philippines' largest property company, Ayala Land, has become the fourth foreign real estate developer to join an 'eco-city' development project in north China's Tianjin Municipality.
The company signed an agreement to invest US$220 million in the project on Tuesday, taking total foreign investment in the 'eco-city' to 28 billion yuan (S$5.6 billion).
Other foreign property developers involved include Mitsui Fudosan Group and Sunway Real Estate Investment Trust, said Wu Caiwen, president of the Sino-Singapore Tianjin Eco-City Investment and Development.
The Tianjin 'eco-city' development is the second of its kind between the Chinese and Singapore governments, following on from the China-Singapore Suzhou Industry Park.
Both projects feature cooperation in advanced technology and personnel exchange.
Located in the Tianjin Binhai New Area, the 30 square kilometre Tianjin Eco-City lies 150 km east of Beijing. It is hoped that the city would become a harmonious and sustainable community that meets the needs of China as it urbanises.
'The Tianjin Eco-city aims to be a model for the cities of China's future, as well as being a real international eco-city,' Mr Wu said.
The 'eco-city' is 50 km away from downtown Tianjin. It is designed to be a modern metropolis where 350,000 residents can live, work and play by the time it is completed in 2020.
Ayala Land has agreed to develop a 9.78 hectare residential complex in the city designed to accommodate 1,100 households by 2013.
Mr Wu said that all buildings in the eco-city conform with environmentally friendly standards in design, technology, construction and management. 'The foreign developers' experience in building environmentally friendly properties will help push forward the project and allow it to meet its eco-targets.' - Xinhua
Source: Business Times, 5 Aug 2010
Bullish condo sentiment in KL despite oversupply
AN OVERSUPPLY of high-end condominiums in Kuala Lumpur's most popular residential spots notwithstanding, developers are taking heart from strong uptake in recent launches and new benchmark prices.
While prices for landed residential property in the Klang Valley have remained robust, the interest in luxury condos, or rather those with a unique selling point, has been a surprise.
In June, Malaysia recorded what is believed to be its biggest condo transaction - that of a super penthouse in The Binjai On The Park for RM38 million (S$16 million). One of only two, the 14,300 sq ft triplex was sold at about the equivalent of RM2,660 psf to an unidentified corporate chieftain who owns properties worldwide, yet loved the unobstructed views of the Kuala Lumpur Convention Centre (KLCC) skyline afforded by the penthouse.
In nearby Mont Kiara, private developer Bukit Kiara Properties (BKP) has also been creating waves. Last month, it sold about four-fifths of the 200 plus units of its fourth and final block in the development called Verve Suites, at an average RM1,200 psf. Although the apartments come with fittings and furnishings, the cost per sq ft of the 'designer units' is close to prices in many developments in the Kuala Lumpur city centre.
Interestingly, secondary transactions have been much slower, a point that realtors attribute to BKP's easy financing scheme. A buyer need only pay 2.5 per cent in down-payment - or as little as RM20,000 - because of the developer's 5 per cent rebate and bank financing of up to 92.5 per cent. The developer also absorbs interest charges during the construction period as well as the legal fees for the sales and purchase and loan agreements.
Easy terms are a factor, but Verve Suites is very different from others in the market, BKP maintains. As with its previous blocks, the company 'sacrificed' the highest floor, which commands a premium, to build a common area for the use and enjoyment of residents. In its latest called the Vox Tower, the main pull is a sky beach, 37 storeys above ground 'with the magnificent view of the Kuala Lumpur skyline as the backdrop'.
Could buyers be planning to flip the property in three years when it is completed? BKP sales manager Jenny Phui tells BT with a shrug: 'I have a customer - just retired - who bought a unit in all four blocks. That's why he said he doesn't want to come here - because he will get tempted.'
The loyal customer would have purchased a unit in the first block at an average RM560 psf in 2006, rising to RM750 for the second block and to RM950 for the third.
Most of the purchasers, however, are yuppies aged 30-45 years keen on the lifestyle concept.
With liquidity swirling and yields on fixed deposits a mere 2.6-3.6 per cent, many prefer to invest in property despite supply outstripping demand in areas such as Mont Kiara, in which average occupancy has been pegged at about 75 per cent.
Increasing land scarcity notwithstanding, developers continue to maximise space by building more condominiums, perhaps buoyed by such sentiment.
Over the next few months, developer Mah Sing Properties will officially launch Icon Residence Mont Kiara, a 260-unit development whose modular design the company says is inspired by the Greek island of Santorini.
Despite indicative prices of RM1,100-RM1,200 psf, some 6,000 applicants - and counting - have registered their interest, drawn perhaps to the landscape and water features which hint of a 'Mediterranean feel'.
Source: Business Times, 5 Aug 2010
While prices for landed residential property in the Klang Valley have remained robust, the interest in luxury condos, or rather those with a unique selling point, has been a surprise.
In June, Malaysia recorded what is believed to be its biggest condo transaction - that of a super penthouse in The Binjai On The Park for RM38 million (S$16 million). One of only two, the 14,300 sq ft triplex was sold at about the equivalent of RM2,660 psf to an unidentified corporate chieftain who owns properties worldwide, yet loved the unobstructed views of the Kuala Lumpur Convention Centre (KLCC) skyline afforded by the penthouse.
In nearby Mont Kiara, private developer Bukit Kiara Properties (BKP) has also been creating waves. Last month, it sold about four-fifths of the 200 plus units of its fourth and final block in the development called Verve Suites, at an average RM1,200 psf. Although the apartments come with fittings and furnishings, the cost per sq ft of the 'designer units' is close to prices in many developments in the Kuala Lumpur city centre.
Interestingly, secondary transactions have been much slower, a point that realtors attribute to BKP's easy financing scheme. A buyer need only pay 2.5 per cent in down-payment - or as little as RM20,000 - because of the developer's 5 per cent rebate and bank financing of up to 92.5 per cent. The developer also absorbs interest charges during the construction period as well as the legal fees for the sales and purchase and loan agreements.
Easy terms are a factor, but Verve Suites is very different from others in the market, BKP maintains. As with its previous blocks, the company 'sacrificed' the highest floor, which commands a premium, to build a common area for the use and enjoyment of residents. In its latest called the Vox Tower, the main pull is a sky beach, 37 storeys above ground 'with the magnificent view of the Kuala Lumpur skyline as the backdrop'.
Could buyers be planning to flip the property in three years when it is completed? BKP sales manager Jenny Phui tells BT with a shrug: 'I have a customer - just retired - who bought a unit in all four blocks. That's why he said he doesn't want to come here - because he will get tempted.'
The loyal customer would have purchased a unit in the first block at an average RM560 psf in 2006, rising to RM750 for the second block and to RM950 for the third.
Most of the purchasers, however, are yuppies aged 30-45 years keen on the lifestyle concept.
With liquidity swirling and yields on fixed deposits a mere 2.6-3.6 per cent, many prefer to invest in property despite supply outstripping demand in areas such as Mont Kiara, in which average occupancy has been pegged at about 75 per cent.
Increasing land scarcity notwithstanding, developers continue to maximise space by building more condominiums, perhaps buoyed by such sentiment.
Over the next few months, developer Mah Sing Properties will officially launch Icon Residence Mont Kiara, a 260-unit development whose modular design the company says is inspired by the Greek island of Santorini.
Despite indicative prices of RM1,100-RM1,200 psf, some 6,000 applicants - and counting - have registered their interest, drawn perhaps to the landscape and water features which hint of a 'Mediterranean feel'.
Source: Business Times, 5 Aug 2010
Global Orion makes first foray in residential market
Eyeing the mid-end segment, it will redevelop Balestier site for $80 million
(SINGAPORE) Industrial property developer Global Orion is making its first foray into the local private residential market with a freehold project at Balestier.
It is eyeing the mid-end segment, and hopes to establish itself by offering 'affordable luxury'.
Global Orion's director Satia Narjadin shared these plans with BT. The firm sealed the first collective sale of the year when it bought an industrial building at 6 Jalan Ampas in February, and it will be redeveloping the site into a new condominium.
The firm expects to invest a total of around $80 million in the yet unnamed project, which could have about 100 units. The launch is expected to take place in the first quarter of next year, and prices will be in line with those of new projects in the area.
According to caveats lodged with the authorities in June, units of upcoming developments nearby changed hands at $1,029-$1,506 psf.
Global Orion 'wants to be here for the long haul' and it is designing its first residential project in Singapore carefully, Mr Narjadin said. For starters, it is not keen to offer shoebox units - the smallest one at this development will measure at least 500 sq ft.
The firm also wants its projects to be both functional and aesthetically pleasing. 'I don't want to have to shield my eyes when I go past some of my projects,' he quipped.
Global Orion was incorporated in 2006 and is a family business. Mr Narjadin's father started out in the building materials industry more than 40 years ago, and the family has been developing residential and commercial projects as and when opportunities arose, in a few markets such as Indonesia and Australia.
It was on entering the Singapore market that the family decided to set up a vehicle to focus on property development.
Global Orion chose to get its feet wet in the industrial property sector. Compared with residential projects, industrial ones tend to involve fewer regulatory issues, and there are fewer details to take care of, Mr Narjadin said.
Entering the industrial sector was a way to 'get to know how things work, before we can confidently say ok, we're ready to do a residential project the right way,' he explained.
Global Orion has four industrial developments under its belt - the latest being Meissa at Pasir Panjang. It will launch the freehold 58-unit project in the third quarter.
The seven-storey building will be suitable for light industrial firms, and units range from 969-3,595 sq ft in size. Prices are likely to be around $700 per sq ft.
While Global Orion is using the industrial sector as a stepping stone to the residential sector, it will not be neglecting the former. The firm aims to have a balanced portfolio of projects, Mr Narjadin said.
Source: Business Times, 5 Aug 2010
(SINGAPORE) Industrial property developer Global Orion is making its first foray into the local private residential market with a freehold project at Balestier.
It is eyeing the mid-end segment, and hopes to establish itself by offering 'affordable luxury'.
Global Orion's director Satia Narjadin shared these plans with BT. The firm sealed the first collective sale of the year when it bought an industrial building at 6 Jalan Ampas in February, and it will be redeveloping the site into a new condominium.
The firm expects to invest a total of around $80 million in the yet unnamed project, which could have about 100 units. The launch is expected to take place in the first quarter of next year, and prices will be in line with those of new projects in the area.
According to caveats lodged with the authorities in June, units of upcoming developments nearby changed hands at $1,029-$1,506 psf.
Global Orion 'wants to be here for the long haul' and it is designing its first residential project in Singapore carefully, Mr Narjadin said. For starters, it is not keen to offer shoebox units - the smallest one at this development will measure at least 500 sq ft.
The firm also wants its projects to be both functional and aesthetically pleasing. 'I don't want to have to shield my eyes when I go past some of my projects,' he quipped.
Global Orion was incorporated in 2006 and is a family business. Mr Narjadin's father started out in the building materials industry more than 40 years ago, and the family has been developing residential and commercial projects as and when opportunities arose, in a few markets such as Indonesia and Australia.
It was on entering the Singapore market that the family decided to set up a vehicle to focus on property development.
Global Orion chose to get its feet wet in the industrial property sector. Compared with residential projects, industrial ones tend to involve fewer regulatory issues, and there are fewer details to take care of, Mr Narjadin said.
Entering the industrial sector was a way to 'get to know how things work, before we can confidently say ok, we're ready to do a residential project the right way,' he explained.
Global Orion has four industrial developments under its belt - the latest being Meissa at Pasir Panjang. It will launch the freehold 58-unit project in the third quarter.
The seven-storey building will be suitable for light industrial firms, and units range from 969-3,595 sq ft in size. Prices are likely to be around $700 per sq ft.
While Global Orion is using the industrial sector as a stepping stone to the residential sector, it will not be neglecting the former. The firm aims to have a balanced portfolio of projects, Mr Narjadin said.
Source: Business Times, 5 Aug 2010
Singapore still 3rd priciest office location in Asia-Pacific
SINGAPORE remains the third most expensive office location in the Asia-Pacific region after top-placed Tokyo and second-placed Hong Kong, says Colliers International.
Sydney, Mumbai, Perth, Brisbane, Ho Chi Minh City, Delhi and Shanghai round out the list of the 10 most expensive office locations in the region in the second quarter of 2010.
In the latest Colliers International Asia-Pacific office market overview, the real estate firm says overall office leasing demand in the region showed no sign of abating in Q2, despite the shadow of a sovereign debt crisis in Europe.
Led by financial services firms, leasing demand during the quarter was particularly strong in cities with high financial services components, such as Hong Kong and Singapore.
In Singapore, official statistics show the net absorption of island-wide office space was 398,000 square feet in Q2 - a 68 per cent quarter-on-quarter increase from 237,000 sq ft in Q1.
On the back of this, office rents here rebounded 6.1 per cent quarter-on- quarter in Q2 - the third fastest rate of growth in the region. Hong Kong registered the fastest quarter-on-quarter rebound of 8.4 per cent, followed by Wellington at 6.8 per cent.
At end-June, Grade A office space in Singapore's central business district was estimated to command an average monthly gross rent of $6.77 per sq ft.
Besides a flight to quality, the increase in office rents here can be attributed to companies taking advantage of competitive rates and adding space to meet an anticipated rise in headcount, Colliers says.
It expects Singapore's office rents to strengthen a further 10 per cent in the current second half.
Financial institutions looking to hire, companies expanding their operations and new set-ups are expected to back-fill vacant space from tenants relocating to newer buildings.
Source: Business Times, 5 Aug 2010
Sydney, Mumbai, Perth, Brisbane, Ho Chi Minh City, Delhi and Shanghai round out the list of the 10 most expensive office locations in the region in the second quarter of 2010.
In the latest Colliers International Asia-Pacific office market overview, the real estate firm says overall office leasing demand in the region showed no sign of abating in Q2, despite the shadow of a sovereign debt crisis in Europe.
Led by financial services firms, leasing demand during the quarter was particularly strong in cities with high financial services components, such as Hong Kong and Singapore.
In Singapore, official statistics show the net absorption of island-wide office space was 398,000 square feet in Q2 - a 68 per cent quarter-on-quarter increase from 237,000 sq ft in Q1.
On the back of this, office rents here rebounded 6.1 per cent quarter-on- quarter in Q2 - the third fastest rate of growth in the region. Hong Kong registered the fastest quarter-on-quarter rebound of 8.4 per cent, followed by Wellington at 6.8 per cent.
At end-June, Grade A office space in Singapore's central business district was estimated to command an average monthly gross rent of $6.77 per sq ft.
Besides a flight to quality, the increase in office rents here can be attributed to companies taking advantage of competitive rates and adding space to meet an anticipated rise in headcount, Colliers says.
It expects Singapore's office rents to strengthen a further 10 per cent in the current second half.
Financial institutions looking to hire, companies expanding their operations and new set-ups are expected to back-fill vacant space from tenants relocating to newer buildings.
Source: Business Times, 5 Aug 2010
Time to finish project on state land shortened
Project completion period cut to 5 years to make supply keep up with demand
THE government is cutting the amount of time that developers have to build private residential projects on state land by a year, to ensure that there would be enough homes to meet demand.
It announced this yesterday evening, as it put up three more sites from the confirmed list for tender. They can potentially yield 1,260 units.
All government land sale sites come with a project completion period (PCP) to make sure that developers finish work within a reasonable period of time. The PCP is measured from the date the site is awarded to the date the project obtains Temporary Occupation Permit.
The authorities are reducing the PCP for private residential sale sites to five years from six years, 'to further ensure more timely supply of private housing to meet demand'. The shorter PCP will apply to sites released for sale from today.
The PCP for executive condominium (EC) sale sites will remain at four years. The Urban Redevelopment Authority (URA) told BT that projects might meet unexpected delays in construction and there will not be sufficient buffer if the PCP for EC sites is cut further.
Market watchers supported the move, although they did not think there would be a significant impact on the market.
DTZ executive director (consulting) Ong Choon Fah said that most developers do want to build their projects as soon as possible to avoid holding costs and unknown market risks ahead. It would also be disadvantageous for them to hold on to 99-year leasehold sites for too long.
Nevertheless, the shorter PCP 'will give developers an additional impetus' to complete their projects, she said.
Cushman & Wakefield managing director Donald Han felt that the government made a prudent move. It is sending a signal to developers, that they should make their projects available quickly to help maintain stability in the property market, he said.
Going by information from URA, the shorter PCP is unlikely to affect most developers. URA said that based on development trends in the last eight years, the completion period for private residential sale sites was about four years on average. Also, none of the private residential projects on sale sites exceeded their stipulated PCP last year.
The shorter PCP will apply to two of the three latest sites up for sale starting today. One is a land parcel at Hougang Avenue 7. The 1.56 hectare site has a maximum permissable gross floor area (GFA) of 471,083 sq ft and can be developed into a 395-unit condominium project. Its tender will close on Sept 17.
The second is a 2-ha plot at the junction of Pasir Ris Drive 3 and 4. It has a maximum permissable GFA of 452,086 sq ft and can yield about 380 condominium units. Its tender will close on Sept 30.
The new PCP rule will not apply to an EC site at Punggol Drive/Punggol East up for sale. It is near the Kadaloor LRT station, and has a site area of 1.57 ha and a maximum allowable GFA of 574,577 sq ft. The site can accommodate about 485 units, and its tender will close on Sept 23.
More sites will be rolled out this month. URA will launch another plot from the confirmed list at Petir Road for sale; four sites from the reserve list will be made available for application.
Source: Business Times, 5 Aug 2010
THE government is cutting the amount of time that developers have to build private residential projects on state land by a year, to ensure that there would be enough homes to meet demand.
It announced this yesterday evening, as it put up three more sites from the confirmed list for tender. They can potentially yield 1,260 units.
All government land sale sites come with a project completion period (PCP) to make sure that developers finish work within a reasonable period of time. The PCP is measured from the date the site is awarded to the date the project obtains Temporary Occupation Permit.
The authorities are reducing the PCP for private residential sale sites to five years from six years, 'to further ensure more timely supply of private housing to meet demand'. The shorter PCP will apply to sites released for sale from today.
The PCP for executive condominium (EC) sale sites will remain at four years. The Urban Redevelopment Authority (URA) told BT that projects might meet unexpected delays in construction and there will not be sufficient buffer if the PCP for EC sites is cut further.
Market watchers supported the move, although they did not think there would be a significant impact on the market.
DTZ executive director (consulting) Ong Choon Fah said that most developers do want to build their projects as soon as possible to avoid holding costs and unknown market risks ahead. It would also be disadvantageous for them to hold on to 99-year leasehold sites for too long.
Nevertheless, the shorter PCP 'will give developers an additional impetus' to complete their projects, she said.
Cushman & Wakefield managing director Donald Han felt that the government made a prudent move. It is sending a signal to developers, that they should make their projects available quickly to help maintain stability in the property market, he said.
Going by information from URA, the shorter PCP is unlikely to affect most developers. URA said that based on development trends in the last eight years, the completion period for private residential sale sites was about four years on average. Also, none of the private residential projects on sale sites exceeded their stipulated PCP last year.
The shorter PCP will apply to two of the three latest sites up for sale starting today. One is a land parcel at Hougang Avenue 7. The 1.56 hectare site has a maximum permissable gross floor area (GFA) of 471,083 sq ft and can be developed into a 395-unit condominium project. Its tender will close on Sept 17.
The second is a 2-ha plot at the junction of Pasir Ris Drive 3 and 4. It has a maximum permissable GFA of 452,086 sq ft and can yield about 380 condominium units. Its tender will close on Sept 30.
The new PCP rule will not apply to an EC site at Punggol Drive/Punggol East up for sale. It is near the Kadaloor LRT station, and has a site area of 1.57 ha and a maximum allowable GFA of 574,577 sq ft. The site can accommodate about 485 units, and its tender will close on Sept 23.
More sites will be rolled out this month. URA will launch another plot from the confirmed list at Petir Road for sale; four sites from the reserve list will be made available for application.
Source: Business Times, 5 Aug 2010
CityDev's KL site may set new price benchmark
Land for high-end condo project could top RM3,000 psf
(KUALA LUMPUR) Singapore property tycoon Kwek Leng Beng is in talks to sell a parcel of land in Jalan Bukit Bintang, Kuala Lumpur, which could possibly fetch a record price for a land deal, says a report in Malaysia's Business Times.
It is understood that the selling price for the land, owned by Mr Kwek's City Developments Ltd (CDL), is being negotiated for more than RM3,000 (S$1,282) per sq ft.
To date, the most expensive land deal reported has been Sunrise Bhd's acquisition of Wisma Angkasa Raya in Jalan Ampang, Kuala Lumpur, for RM2,588 per sq ft. In May this year, FFM Bhd and Kuok Brothers Sdn Bhd sold a piece of land in Jalan Perak, Kuala Lumpur, for RM2,200 per sq ft.
CDL's land in Jalan Bukit Bintang is about 32,000 sq ft. At RM3,000 per sq ft, the deal could fetch RM96 million.
The land sits between the Grand Millennium Kuala Lumpur hotel and the Pavilion Kuala Lumpur shopping centre. CDL, which is part of Singapore's Hong Leong Group, also owns the Grand Millennium hotel.
Contenders for the land are believed to be the owner of Pavilion Kuala Lumpur and the YTL group, both of which have sizeable assets along Jalan Bukit Bintang.
Sources told Malaysia's Business Times that the RM500 million Millennium Residences project originally planned for the site and launched in 2007 had been aborted and that the land was being negotiated for sale.
A quick check at the site revealed that the project signage and hoarding had been removed. Some work on the 42-storey high-end condominium with an additional 15-storey crown started in 2008, but has since stalled.
In late March, a spokesperson for Singapore's Hong Leong said that the Millennium Residences would be launched later this year.
However, replying to a follow-up question from MBT last week, the spokesperson said: 'There are no details on the Millennium Residences available at this point.'
When asked if the project had been scrapped and the land was being negotiated for sale, the spokesperson said: 'We have no comment at this stage.'
Pavilion Kuala Lumpur is wholly owned by Urusharta Cemerlang Sdn Bhd, which in turn is 51 per cent owned by Urusharta Cemerlang Development Sdn Bhd and 49 per cent by the Qatar Investment Authority (QIA).
Pavilion Kuala Lumpur will be managing the new Fahrenheit 88 shopping centre, previously known as KL Plaza. It belongs to Makna Mujur Sdn Bhd, which is owned by Pavilion International Development Fund Ltd, of which the principal is the QIA.
YTL owns the Starhill Gallery and Lot 10 shopping centres and the JW Marriott hotel in the vicinity.
Source: Business Times, 5 Aug 2010
(KUALA LUMPUR) Singapore property tycoon Kwek Leng Beng is in talks to sell a parcel of land in Jalan Bukit Bintang, Kuala Lumpur, which could possibly fetch a record price for a land deal, says a report in Malaysia's Business Times.
It is understood that the selling price for the land, owned by Mr Kwek's City Developments Ltd (CDL), is being negotiated for more than RM3,000 (S$1,282) per sq ft.
To date, the most expensive land deal reported has been Sunrise Bhd's acquisition of Wisma Angkasa Raya in Jalan Ampang, Kuala Lumpur, for RM2,588 per sq ft. In May this year, FFM Bhd and Kuok Brothers Sdn Bhd sold a piece of land in Jalan Perak, Kuala Lumpur, for RM2,200 per sq ft.
CDL's land in Jalan Bukit Bintang is about 32,000 sq ft. At RM3,000 per sq ft, the deal could fetch RM96 million.
The land sits between the Grand Millennium Kuala Lumpur hotel and the Pavilion Kuala Lumpur shopping centre. CDL, which is part of Singapore's Hong Leong Group, also owns the Grand Millennium hotel.
Contenders for the land are believed to be the owner of Pavilion Kuala Lumpur and the YTL group, both of which have sizeable assets along Jalan Bukit Bintang.
Sources told Malaysia's Business Times that the RM500 million Millennium Residences project originally planned for the site and launched in 2007 had been aborted and that the land was being negotiated for sale.
A quick check at the site revealed that the project signage and hoarding had been removed. Some work on the 42-storey high-end condominium with an additional 15-storey crown started in 2008, but has since stalled.
In late March, a spokesperson for Singapore's Hong Leong said that the Millennium Residences would be launched later this year.
However, replying to a follow-up question from MBT last week, the spokesperson said: 'There are no details on the Millennium Residences available at this point.'
When asked if the project had been scrapped and the land was being negotiated for sale, the spokesperson said: 'We have no comment at this stage.'
Pavilion Kuala Lumpur is wholly owned by Urusharta Cemerlang Sdn Bhd, which in turn is 51 per cent owned by Urusharta Cemerlang Development Sdn Bhd and 49 per cent by the Qatar Investment Authority (QIA).
Pavilion Kuala Lumpur will be managing the new Fahrenheit 88 shopping centre, previously known as KL Plaza. It belongs to Makna Mujur Sdn Bhd, which is owned by Pavilion International Development Fund Ltd, of which the principal is the QIA.
YTL owns the Starhill Gallery and Lot 10 shopping centres and the JW Marriott hotel in the vicinity.
Source: Business Times, 5 Aug 2010
S'pore office rents still region's third most costly
SINGAPORE has recorded the third fastest office rental growth in the Asia-Pacific region, with rents up 6.1 per cent in the second quarter, said the latest report from Colliers International.
The Republic is still the region's third most expensive office location, after Tokyo and Hong Kong, the property consultancy said.
Across the region, office rentals posted 1.4 per cent growth on average in the second quarter from the first.
Office leasing demand showed no signs of abating despite the looming sovereign debt crisis in Europe, Colliers said in a statement.
'Led by occupiers engaged in the financial service sector, leasing demand was particularly strong in certain cities with a high financial service component, such as Hong Kong and Singapore,' it said.
Indeed, Hong Kong saw the fastest growth in office rentals at 8.4 per cent quarter-on-quarter, followed by Wellington, New Zealand, which registered a 6.8 per cent rise in office rents.
Singapore's No. 3 spot came despite concerns over the impact of plenty of new office space coming on stream.
At the end of June, average Grade A gross office rents in Singapore's Central Business District were up 6.1 per cent to $6.77 per sq ft a month from the first quarter. Colliers expects office rentals in Singapore to increase by another 10 per cent in the second half.
It said that some companies are taking the chance to flock to better quality offices, while others are taking advantage of competitive rental rates to take up more space in anticipation of hiring extra staff as the economy rebounds.
The office market recovery here has been stronger than expected, though rents for old buildings lacking modern infrastructure will lag behind those for newer ones, said Collier's director of research and advisory Tay Huey Ying.
Source: Straits Times, 5 Aug 2010
The Republic is still the region's third most expensive office location, after Tokyo and Hong Kong, the property consultancy said.
Across the region, office rentals posted 1.4 per cent growth on average in the second quarter from the first.
Office leasing demand showed no signs of abating despite the looming sovereign debt crisis in Europe, Colliers said in a statement.
'Led by occupiers engaged in the financial service sector, leasing demand was particularly strong in certain cities with a high financial service component, such as Hong Kong and Singapore,' it said.
Indeed, Hong Kong saw the fastest growth in office rentals at 8.4 per cent quarter-on-quarter, followed by Wellington, New Zealand, which registered a 6.8 per cent rise in office rents.
Singapore's No. 3 spot came despite concerns over the impact of plenty of new office space coming on stream.
At the end of June, average Grade A gross office rents in Singapore's Central Business District were up 6.1 per cent to $6.77 per sq ft a month from the first quarter. Colliers expects office rentals in Singapore to increase by another 10 per cent in the second half.
It said that some companies are taking the chance to flock to better quality offices, while others are taking advantage of competitive rental rates to take up more space in anticipation of hiring extra staff as the economy rebounds.
The office market recovery here has been stronger than expected, though rents for old buildings lacking modern infrastructure will lag behind those for newer ones, said Collier's director of research and advisory Tay Huey Ying.
Source: Straits Times, 5 Aug 2010
Govt launches 3 sites, cuts time for project completion
THE Government yesterday launched three mass market residential sites for sale and cut from six to five years the time developers have to complete a housing project.
The sites - in Hougang Avenue 7, at the corner of Punggol Drive and Punggol East, and the junction of Pasir Ris Drive 3 and Pasir Ris Drive 4 - are expected to yield about 1,260 units. Their tenders close separately next month.
The three 99-year leasehold plots are the first to have the new five-year project completion period for private residential sale sites applied to them.
From today, all such sites released for sale will have to conform to the new rule, which is to 'further ensure more timely supply of private housing to meet demand', said the Housing Board in a statement yesterday.
Experts believe the change - it does not apply to executive condominium (EC) sites which have to be built in four years - will not have a major impact on the market.
Cushman & Wakefield managing director Donald Han said: 'In a peak market like now, it's not a problem at all. Developers usually take three to four years to build a mass market condo.
'It's just a precautionary measure. The Government just wants to ensure that what has been tendered out will be completed in five years, so that supply can meet demand.'
Experts note that few developers want to take too long to build on leasehold sites.
'Based on development trends in the last eight years, we found that the actual completion period for sale sites for private residential developments was generally about four years on average,' said the Urban Redevelopment Authority (URA). Only about 13 per cent of these projects took longer than five years to complete, it said.
Prior to 1997, the project completion period for government residential sites was four to five years. It was extended to eight years in late 1997 due to the then economic crisis, said the URA.
This was cut to six years in 1999 and has remained so, although the Government in last year's Budget allowed developers to apply to extend completion periods by up to one year with applications having to be made by Jan 21 this year.
Of the sites launched yesterday, the Hougang plot is 15,630 sq m in size with a maximum gross floor area of 43,765 sq m.
The Punggol site is 15,700 sq m in size with an allowable gross floor area of 53,380 sq m. It is earmarked for executive condos and is near Kadaloor LRT station.
The Pasir Ris plot is a short distance from NTUC Downtown East, has a site area of some 20,000 sq m and an allowable gross floor area of 42,000 sq m.
Ngee Ann Polytechnic lecturer Nicholas Mak predicted that the sites would attract less aggressive bids given that they are not near MRT stations.
The Hougang site may attract bids of $320-$370 per sq ft per plot ratio (psf ppr), while the one at Pasir Ris may garner bids of $350-$390 psf ppr, he said. The Punggol EC plot, being in a new estate, may draw bids of $250-$290 psf ppr, added Mr Mak.
Source: Straits Times, 5 Aug 2010
The sites - in Hougang Avenue 7, at the corner of Punggol Drive and Punggol East, and the junction of Pasir Ris Drive 3 and Pasir Ris Drive 4 - are expected to yield about 1,260 units. Their tenders close separately next month.
The three 99-year leasehold plots are the first to have the new five-year project completion period for private residential sale sites applied to them.
From today, all such sites released for sale will have to conform to the new rule, which is to 'further ensure more timely supply of private housing to meet demand', said the Housing Board in a statement yesterday.
Experts believe the change - it does not apply to executive condominium (EC) sites which have to be built in four years - will not have a major impact on the market.
Cushman & Wakefield managing director Donald Han said: 'In a peak market like now, it's not a problem at all. Developers usually take three to four years to build a mass market condo.
'It's just a precautionary measure. The Government just wants to ensure that what has been tendered out will be completed in five years, so that supply can meet demand.'
Experts note that few developers want to take too long to build on leasehold sites.
'Based on development trends in the last eight years, we found that the actual completion period for sale sites for private residential developments was generally about four years on average,' said the Urban Redevelopment Authority (URA). Only about 13 per cent of these projects took longer than five years to complete, it said.
Prior to 1997, the project completion period for government residential sites was four to five years. It was extended to eight years in late 1997 due to the then economic crisis, said the URA.
This was cut to six years in 1999 and has remained so, although the Government in last year's Budget allowed developers to apply to extend completion periods by up to one year with applications having to be made by Jan 21 this year.
Of the sites launched yesterday, the Hougang plot is 15,630 sq m in size with a maximum gross floor area of 43,765 sq m.
The Punggol site is 15,700 sq m in size with an allowable gross floor area of 53,380 sq m. It is earmarked for executive condos and is near Kadaloor LRT station.
The Pasir Ris plot is a short distance from NTUC Downtown East, has a site area of some 20,000 sq m and an allowable gross floor area of 42,000 sq m.
Ngee Ann Polytechnic lecturer Nicholas Mak predicted that the sites would attract less aggressive bids given that they are not near MRT stations.
The Hougang site may attract bids of $320-$370 per sq ft per plot ratio (psf ppr), while the one at Pasir Ris may garner bids of $350-$390 psf ppr, he said. The Punggol EC plot, being in a new estate, may draw bids of $250-$290 psf ppr, added Mr Mak.
Source: Straits Times, 5 Aug 2010
Wednesday, August 4, 2010
Double-dip recession unlikely
DESPITE the global economic recovery since the second half of 2009, a minority of observers continue to forecast a double-dip recession, at least in the United States. These include respected economists such as Paul Krugman of Princeton and Robert Shiller of Yale. Theirs is, however, not the mainstream view - which holds that while a slowdown in the second half of 2010 is likely, a recession is not on the cards.
What does the evidence suggest so far? Certainly, there are grounds for concern. US unemployment is stubbornly stuck at close to 10 per cent. The effects of the 2009 economic stimulus programme are now waning. The housing market - a key forward-looking indicator - has yet to turn around.
In a recent speech to a banking conference, US Federal Reserve chairman Ben Bernanke served a sobering reminder. Despite the fact that the economy is expanding, 'we have a considerable way to go to achieve a full recovery', he said. The most recent estimates of retail sales and consumer confidence have also not been good. Tellingly, the pace of the recovery has slowed from an annualised rate of 3.7 per cent in the first quarter to 2.4 per cent in the second quarter.
Over in Europe, there has been much bad news this year, particularly relating to the sovereign debt crisis in the eurozone. This has led to austerity programmes being put in place in several countries, the effects of which we have yet to see.
However, the picture is not all dire. Some of the latest data out of the US, from the Institute of Supply Management, suggests that manufacturing activity expanded for the 12th consecutive month in July. Second-quarter GDP rose 2.4 per cent quarter-on-quarter, beating many analysts' expectations. And on the corporate front, more than 75 per cent of the over 300 companies in the S&P 500 have reported results that have also beaten the average estimates of analysts.
Even Europe has shown some upside surprises. Thanks partly to the weaker euro, the German economy is enjoying an export-led revival. The country's central bank, the Bundesbank, expects 1.9 per cent growth this year, which again is better than earlier anticipated. Germany's growth will vitally help at least cushion the downturn in the eurozone.
The brightest spot of the global economy is Asia, particularly China and India, where growth forecasts remain rosy for this year: close to 10 per cent for China and 8.5 per cent for India.
For the global economy as a whole, last month the International Monetary Fund (IMF) revised up its growth forecast to 4.6 per cent in 2010 from 4.2 per cent in April - although it did note that 'downside risks have risen sharply amid renewed financial turbulence'.
Given what we have witnessed over the last two years, it would be imprudent to rule out unpleasant surprises, including a double-dip recession. But on the weight of the evidence, and with loose monetary policies still in place, this looks unlikely - at least for now.
Source: Business Times, 4 Aug 2010
What does the evidence suggest so far? Certainly, there are grounds for concern. US unemployment is stubbornly stuck at close to 10 per cent. The effects of the 2009 economic stimulus programme are now waning. The housing market - a key forward-looking indicator - has yet to turn around.
In a recent speech to a banking conference, US Federal Reserve chairman Ben Bernanke served a sobering reminder. Despite the fact that the economy is expanding, 'we have a considerable way to go to achieve a full recovery', he said. The most recent estimates of retail sales and consumer confidence have also not been good. Tellingly, the pace of the recovery has slowed from an annualised rate of 3.7 per cent in the first quarter to 2.4 per cent in the second quarter.
Over in Europe, there has been much bad news this year, particularly relating to the sovereign debt crisis in the eurozone. This has led to austerity programmes being put in place in several countries, the effects of which we have yet to see.
However, the picture is not all dire. Some of the latest data out of the US, from the Institute of Supply Management, suggests that manufacturing activity expanded for the 12th consecutive month in July. Second-quarter GDP rose 2.4 per cent quarter-on-quarter, beating many analysts' expectations. And on the corporate front, more than 75 per cent of the over 300 companies in the S&P 500 have reported results that have also beaten the average estimates of analysts.
Even Europe has shown some upside surprises. Thanks partly to the weaker euro, the German economy is enjoying an export-led revival. The country's central bank, the Bundesbank, expects 1.9 per cent growth this year, which again is better than earlier anticipated. Germany's growth will vitally help at least cushion the downturn in the eurozone.
The brightest spot of the global economy is Asia, particularly China and India, where growth forecasts remain rosy for this year: close to 10 per cent for China and 8.5 per cent for India.
For the global economy as a whole, last month the International Monetary Fund (IMF) revised up its growth forecast to 4.6 per cent in 2010 from 4.2 per cent in April - although it did note that 'downside risks have risen sharply amid renewed financial turbulence'.
Given what we have witnessed over the last two years, it would be imprudent to rule out unpleasant surprises, including a double-dip recession. But on the weight of the evidence, and with loose monetary policies still in place, this looks unlikely - at least for now.
Source: Business Times, 4 Aug 2010
Sim Lian tops bids for DBSS site in Tampines
It plans 680-unit project: 60% 4-room flats; 25% 3-room; the rest 5-room
SIM Lian Land, which emerged as the highest bidder for a site in Tampines designated for public housing under the Design, Build and Sell Scheme (DBSS), plans to build about 680 flats on the plot if awarded the site.
'About 60 per cent of the units will be four-room flats, another 25 per cent will be three-room flats and the remaining 15 per cent will comprise five-room flats,' Sim Lian Group executive director Diana Kuik told BT yesterday.
Sim Lian's top bid of about $178.2 million works out to about $261 per square foot of potential gross floor area. The tender drew five bids.
Sim Lian's price was about 22 per cent higher than the next highest offer of $213.62 per square foot per plot ratio (psf ppr) by Qingdao Construction (Singapore). A joint venture between Hoi Hup Realty and Sunway Developments offered about $205 psf ppr. Realty Consortium (a unit of Koh Brothers) bid $200.91 psf ppr.
The lowest offer of $110 million or $161.20 psf ppr was from Ho Lee Group.
The site will be sold on 103-year leasehold tenure inclusive of a four-year construction period.
DBSS gives developers an opportunity to design, develop, price and sell HDB flats to buyers who have to meet criteria set by the Housing & Development Board, including a monthly household income ceiling of $8,000.
The plot is next to Singapore's first DBSS project, The Premiere@Tampines, which was also developed by Sim Lian. That is fully sold.
As for the latest DBSS plot, Sim Lian hopes to launch the project around the third quarter of next year, says Ms Kuik.
In March this year, the group clinched a 99-year leasehold condo site at Tampines Ave 1/Ave 10, facing Bedok Reservoir, at a state tender.
It plans to build a 696-unit project to be named Waterview on this plot, with the majority of units being two and three-bedroom apartments. 'We'll probably launch the project around Q4 this year,' said Ms Kuik. Sim Lian paid $302 million or $421 psf ppr for the site.
Sim Lian also has available 62 units at its Clover By the Park condo in Bishan, which is still under construction. Most of these units are three and four-bedders and are priced in the high-$900 to $1,000 psf range. The 39-storey, 99-year leasehold project has a total of 616 units. It was released in June 2008.
Source: Business Times, 4 Aug 2010
SIM Lian Land, which emerged as the highest bidder for a site in Tampines designated for public housing under the Design, Build and Sell Scheme (DBSS), plans to build about 680 flats on the plot if awarded the site.
'About 60 per cent of the units will be four-room flats, another 25 per cent will be three-room flats and the remaining 15 per cent will comprise five-room flats,' Sim Lian Group executive director Diana Kuik told BT yesterday.
Sim Lian's top bid of about $178.2 million works out to about $261 per square foot of potential gross floor area. The tender drew five bids.
Sim Lian's price was about 22 per cent higher than the next highest offer of $213.62 per square foot per plot ratio (psf ppr) by Qingdao Construction (Singapore). A joint venture between Hoi Hup Realty and Sunway Developments offered about $205 psf ppr. Realty Consortium (a unit of Koh Brothers) bid $200.91 psf ppr.
The lowest offer of $110 million or $161.20 psf ppr was from Ho Lee Group.
The site will be sold on 103-year leasehold tenure inclusive of a four-year construction period.
DBSS gives developers an opportunity to design, develop, price and sell HDB flats to buyers who have to meet criteria set by the Housing & Development Board, including a monthly household income ceiling of $8,000.
The plot is next to Singapore's first DBSS project, The Premiere@Tampines, which was also developed by Sim Lian. That is fully sold.
As for the latest DBSS plot, Sim Lian hopes to launch the project around the third quarter of next year, says Ms Kuik.
In March this year, the group clinched a 99-year leasehold condo site at Tampines Ave 1/Ave 10, facing Bedok Reservoir, at a state tender.
It plans to build a 696-unit project to be named Waterview on this plot, with the majority of units being two and three-bedroom apartments. 'We'll probably launch the project around Q4 this year,' said Ms Kuik. Sim Lian paid $302 million or $421 psf ppr for the site.
Sim Lian also has available 62 units at its Clover By the Park condo in Bishan, which is still under construction. Most of these units are three and four-bedders and are priced in the high-$900 to $1,000 psf range. The 39-storey, 99-year leasehold project has a total of 616 units. It was released in June 2008.
Source: Business Times, 4 Aug 2010
Singapore is priciest Asian country to build in: report
Republic is 10th most expensive country to build in worldwide
(SINGAPORE) Singapore is the most expensive Asian country to build in except Japan and one of the 10 most expensive worldwide, according to a new report from EC Harris.
The consultancy's international construction cost report, which covers 50 countries, found Singapore is the 10th most expensive country to build in worldwide, on a list topped by Switzerland. Hong Kong, the second most expensive Asian country to build in, is ranked 21st globally.
The report does not include values for Japan, as EC Harris did not have any projects there in the past two years. Generally, tender prices in Tokyo are around 20-30 per cent higher than in Singapore and Hong Kong.
Richard Warburton, EC Harris's regional head of cost and commercial management in Asia, said Singapore continues to be the most expensive Asian country except Japan to build in despite a drop in tender prices of 5-8 per cent last year.
'The Singapore market appears to be recovering on the back of sustained demand and strong economic growth,' he said. 'We are also seeing localised 'hot' markets, such as the substantial amount of new office building fit-out activity that is under way.'
This may create supply chain pressures and lift tender prices further. Mr Warburton expects 3-5 per cent growth in general tender prices over the coming year, although a key factor determining this will be how much commodity prices rise, he noted.
Another property and construction consultancy, Rider Levett Bucknall, predicted in April that building tender prices in Singapore could climb 3 per cent this year.
Analysts have said recent hikes in iron ore prices are likely to lead to higher steel prices. Increases in the foreign worker levy and cut in man-year entitlements will also cause construction costs to rise.
According to EC Harris's survey, which benchmarks the cost of building in each country against the UK, the price of construction in Singapore is almost 7 per cent higher than in the UK, where it fell almost 20 per cent from its peak in the previous year.
Hong Kong is Singapore's closest Asian counterpart on the expensive list. It ranks second in Asia, at 7 per cent below the UK benchmark.
China ranks fifth among Asian countries, behind South Korea and Thailand. At the other end of the scale, Sri Lanka is the cheapest Asian country to build in, at 27 per cent of the cost of UK construction.
According to Mr Warburton, the greatest uncertainty in tender price inflation in Asia exists in Hong Kong.
Construction workloads and tender prices in Hong Kong rose steadily throughout 2009, driven largely by government spending on infrastructure. Now there is a sense that a period of readjustment is on the way, Mr Warburton added.
EC Harris calculated the figures through a survey of construction costs in 50 countries. The survey was conducted across the consultancy's offices worldwide, with data collected in cost per square metre format for a wide range of buildings, including industrial, offices, retail, residential and hotels.
Source: Business Times, 4 Aug 2010
(SINGAPORE) Singapore is the most expensive Asian country to build in except Japan and one of the 10 most expensive worldwide, according to a new report from EC Harris.
The consultancy's international construction cost report, which covers 50 countries, found Singapore is the 10th most expensive country to build in worldwide, on a list topped by Switzerland. Hong Kong, the second most expensive Asian country to build in, is ranked 21st globally.
The report does not include values for Japan, as EC Harris did not have any projects there in the past two years. Generally, tender prices in Tokyo are around 20-30 per cent higher than in Singapore and Hong Kong.
Richard Warburton, EC Harris's regional head of cost and commercial management in Asia, said Singapore continues to be the most expensive Asian country except Japan to build in despite a drop in tender prices of 5-8 per cent last year.
'The Singapore market appears to be recovering on the back of sustained demand and strong economic growth,' he said. 'We are also seeing localised 'hot' markets, such as the substantial amount of new office building fit-out activity that is under way.'
This may create supply chain pressures and lift tender prices further. Mr Warburton expects 3-5 per cent growth in general tender prices over the coming year, although a key factor determining this will be how much commodity prices rise, he noted.
Another property and construction consultancy, Rider Levett Bucknall, predicted in April that building tender prices in Singapore could climb 3 per cent this year.
Analysts have said recent hikes in iron ore prices are likely to lead to higher steel prices. Increases in the foreign worker levy and cut in man-year entitlements will also cause construction costs to rise.
According to EC Harris's survey, which benchmarks the cost of building in each country against the UK, the price of construction in Singapore is almost 7 per cent higher than in the UK, where it fell almost 20 per cent from its peak in the previous year.
Hong Kong is Singapore's closest Asian counterpart on the expensive list. It ranks second in Asia, at 7 per cent below the UK benchmark.
China ranks fifth among Asian countries, behind South Korea and Thailand. At the other end of the scale, Sri Lanka is the cheapest Asian country to build in, at 27 per cent of the cost of UK construction.
According to Mr Warburton, the greatest uncertainty in tender price inflation in Asia exists in Hong Kong.
Construction workloads and tender prices in Hong Kong rose steadily throughout 2009, driven largely by government spending on infrastructure. Now there is a sense that a period of readjustment is on the way, Mr Warburton added.
EC Harris calculated the figures through a survey of construction costs in 50 countries. The survey was conducted across the consultancy's offices worldwide, with data collected in cost per square metre format for a wide range of buildings, including industrial, offices, retail, residential and hotels.
Source: Business Times, 4 Aug 2010
Buying within your means
IN THE rush to secure a home amid escalating property prices, first-time homebuyers, especially young adults, may inadvertently commit themselves to properties beyond their means.
Since mortgage payments and other home bills take priority over other basic necessities, rising mortgage rates may push some homebuyers to suffer a housing-induced fall in their standards of living. It is important, thus, to take a long-term perspective on housing affordability.
Affordability is usually measured by the ratio of monthly mortgage payment to current monthly household income. In the United States, if this ratio is less than 30 per cent it is assumed that the property is affordable. In Singapore, a cut-off ratio of 40 per cent is one of the criteria banks use to decide on home loans.
However, this is not a good measure of affordability for two reasons. First, by extending the amortisation period, monthly mortgage payment can be reduced. This can give the impression that affordability has improved, although the total interest burden has gone up. Second, the measure essentially focuses on short-run housing affordability by using current income instead of an estimate of permanent income. Undue reliance on short-run housing affordability measurements was one of the triggers in the US sub-prime mortgage crisis.
A much better indicator of housing affordability is the ratio of house price to lifetime income - house price being the discounted present value of future mortgage payments. Lifetime income can also be worked out as a discounted present value of the future income stream, using the same mortgage rate.
(For example, if the annual interest rate is 5 per cent, the discounted present value of $105 one will receive next year is $100. Alternatively, if one saves $100 today at the 5 per cent interest rate, one will receive $105 next year.)
Under some conditions, the two ratios - mortgage payment to permanent income, and house price to lifetime income - are the same. We can thus use a cut-off ratio like 30 per cent to define an affordability limit. We have not worked out an optimal cut-off value for Singapore yet.
Homebuyers know the prices of the houses they want and the transaction costs involved. What they need is an estimate of their lifetime income - that is, their accumulated savings plus the discounted present value (DPV) of their earnings, over their remaining working life.
Using survey data collected by the Department of Statistics, we can decipher predicted income profiles by birth cohorts for different income groups over the working ages of 20-64. We now have data only for three income levels: lower (25th), middle (50th) and upper (75th ) percentiles.
Since our focus is on young homebuyers, the accompanying table presents estimates of the DPV of household income for households headed by 30-year-olds. By adding their own accumulated savings to the income figures, young homebuyers can obtain an estimate of their lifetime income. They can then divide the price (including the transaction cost) of the home they are buying by their estimated lifetime income to see what percentage of their lifetime income will be consumed by the property.
The rest of the table provides illustrative computations of housing affordability for the three income group references. Accumulated savings (including interest earnings) were estimated from household expenditure survey data, and transaction costs were estimated using current rates on stamp duties and other fees and charges. Property taxes and costs of home insurance and maintenance were not included.
Some general observations that emerge from this table are worth highlighting:
# First, when the mortgage rate goes up, homebuyers have to spend a higher percentage of their lifetime income on housing, and affordability goes down.
# Second, given that current mortgage rates are above 5 per cent, and if we use the 30 per cent cut-off rule, HDB resale flats of four rooms and above are not that affordable for low-income groups.
# Third, at current mortgage rates, HDB resale flats are well within the affordable range for middle- and upper-income groups.
# Fourth, private properties are obviously for high-income groups. Still, even for those in the 75th income percentile, private residential properties at median prices are not within the affordable range at current mortgage rates.
Tilak Abeysinghe is deputy director of the Singapore Centre for Applied and Policy Economics, National University of Singapore. Gu Jiaying is pursuing a PhD at the University of Illinois at Urbana-Champaign.
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A much better indicator of housing affordability is the ratio of 'house price' to 'lifetime income'.
For a 30-year-old earning $5,520 a month with savings of $118,900, affordable homes would be an HDB executive flat or lower, using a cut-off ratio of about 30%.
Source: Straits Times, 4 Aug 2010
Since mortgage payments and other home bills take priority over other basic necessities, rising mortgage rates may push some homebuyers to suffer a housing-induced fall in their standards of living. It is important, thus, to take a long-term perspective on housing affordability.
Affordability is usually measured by the ratio of monthly mortgage payment to current monthly household income. In the United States, if this ratio is less than 30 per cent it is assumed that the property is affordable. In Singapore, a cut-off ratio of 40 per cent is one of the criteria banks use to decide on home loans.
However, this is not a good measure of affordability for two reasons. First, by extending the amortisation period, monthly mortgage payment can be reduced. This can give the impression that affordability has improved, although the total interest burden has gone up. Second, the measure essentially focuses on short-run housing affordability by using current income instead of an estimate of permanent income. Undue reliance on short-run housing affordability measurements was one of the triggers in the US sub-prime mortgage crisis.
A much better indicator of housing affordability is the ratio of house price to lifetime income - house price being the discounted present value of future mortgage payments. Lifetime income can also be worked out as a discounted present value of the future income stream, using the same mortgage rate.
(For example, if the annual interest rate is 5 per cent, the discounted present value of $105 one will receive next year is $100. Alternatively, if one saves $100 today at the 5 per cent interest rate, one will receive $105 next year.)
Under some conditions, the two ratios - mortgage payment to permanent income, and house price to lifetime income - are the same. We can thus use a cut-off ratio like 30 per cent to define an affordability limit. We have not worked out an optimal cut-off value for Singapore yet.
Homebuyers know the prices of the houses they want and the transaction costs involved. What they need is an estimate of their lifetime income - that is, their accumulated savings plus the discounted present value (DPV) of their earnings, over their remaining working life.
Using survey data collected by the Department of Statistics, we can decipher predicted income profiles by birth cohorts for different income groups over the working ages of 20-64. We now have data only for three income levels: lower (25th), middle (50th) and upper (75th ) percentiles.
Since our focus is on young homebuyers, the accompanying table presents estimates of the DPV of household income for households headed by 30-year-olds. By adding their own accumulated savings to the income figures, young homebuyers can obtain an estimate of their lifetime income. They can then divide the price (including the transaction cost) of the home they are buying by their estimated lifetime income to see what percentage of their lifetime income will be consumed by the property.
The rest of the table provides illustrative computations of housing affordability for the three income group references. Accumulated savings (including interest earnings) were estimated from household expenditure survey data, and transaction costs were estimated using current rates on stamp duties and other fees and charges. Property taxes and costs of home insurance and maintenance were not included.
Some general observations that emerge from this table are worth highlighting:
# First, when the mortgage rate goes up, homebuyers have to spend a higher percentage of their lifetime income on housing, and affordability goes down.
# Second, given that current mortgage rates are above 5 per cent, and if we use the 30 per cent cut-off rule, HDB resale flats of four rooms and above are not that affordable for low-income groups.
# Third, at current mortgage rates, HDB resale flats are well within the affordable range for middle- and upper-income groups.
# Fourth, private properties are obviously for high-income groups. Still, even for those in the 75th income percentile, private residential properties at median prices are not within the affordable range at current mortgage rates.
Tilak Abeysinghe is deputy director of the Singapore Centre for Applied and Policy Economics, National University of Singapore. Gu Jiaying is pursuing a PhD at the University of Illinois at Urbana-Champaign.
--------------------------------------------------------------
A much better indicator of housing affordability is the ratio of 'house price' to 'lifetime income'.
For a 30-year-old earning $5,520 a month with savings of $118,900, affordable homes would be an HDB executive flat or lower, using a cut-off ratio of about 30%.
Source: Straits Times, 4 Aug 2010
Buyers snap up 80 units at preview of The Greenwich
THE Greenwich condominium caused a rare traffic jam in the quiet Seletar Hills estate on Monday when potential buyers flocked to its showflat to get the first bite of the cherry in a special preview.
Developer Far East Organization said yesterday that it has sold 80 out of 96 units released at the 319-unit The Greenwich on Monday. The showflat closed at 2am the following morning, in order to cope with the demand.
Prices ranged from $650,000 to $1.25 million, with the price per sq ft (psf) at $980 on average. The psf price is a record for the area, said Ngee Ann Polytechnic real estate lecturer Nicholas Mak.
'The buyers are those who really like this corner of Singapore,' he said.
Singaporeans accounted for almost all of the buyers at the preview, Far East said in a statement yesterday. Most are from the Seletar estate area, it added.
More than 80 per cent of the one- and two-bedroom units released were snapped up, and all 10 of the three-bedroom units released were sold, it said.
The Greenwich, at the junction of Seletar and Yio Chu Kang roads, has residential units and retail shops. Of the 319 residential units, 160 are one-bedroom units that Far East describes as Soho-type (small office, home office) units.
Ranging in size from 603 sq ft to 721 sq ft, they offer users the flexibility to combine an efficient work environment with the comfort and privacy of a home, Far East said. It has since sold 32 out of 40 such units released in the preview. The two- to three-bedroom units go up to 1,485 sq ft in size.
The retail shops will be in a 45,000 sq ft two-storey mall called Greenwich V, which is close to 60 per cent committed.
Far East's executive director and chief operating officer of property sales, Mr Chia Boon Kuah, said The Greenwich is 'quite unlike the typical suburban condominium'.
'It differentiates itself as a new 'trans-urban' development, set to transform the suburban enclave into a vibrant live-work-and-play urban environment,' he said.
Recently, another new 99-year leasehold project, The Scala near Lorong Chuan MRT station, also attracted hordes of eager buyers.
It has since sold 90 per cent of the 468 units, said developer Hong Leong Holdings yesterday. The Scala was priced at $1,150 psf on average.
Source: Straits Times, 4 Aug 2010
Developer Far East Organization said yesterday that it has sold 80 out of 96 units released at the 319-unit The Greenwich on Monday. The showflat closed at 2am the following morning, in order to cope with the demand.
Prices ranged from $650,000 to $1.25 million, with the price per sq ft (psf) at $980 on average. The psf price is a record for the area, said Ngee Ann Polytechnic real estate lecturer Nicholas Mak.
'The buyers are those who really like this corner of Singapore,' he said.
Singaporeans accounted for almost all of the buyers at the preview, Far East said in a statement yesterday. Most are from the Seletar estate area, it added.
More than 80 per cent of the one- and two-bedroom units released were snapped up, and all 10 of the three-bedroom units released were sold, it said.
The Greenwich, at the junction of Seletar and Yio Chu Kang roads, has residential units and retail shops. Of the 319 residential units, 160 are one-bedroom units that Far East describes as Soho-type (small office, home office) units.
Ranging in size from 603 sq ft to 721 sq ft, they offer users the flexibility to combine an efficient work environment with the comfort and privacy of a home, Far East said. It has since sold 32 out of 40 such units released in the preview. The two- to three-bedroom units go up to 1,485 sq ft in size.
The retail shops will be in a 45,000 sq ft two-storey mall called Greenwich V, which is close to 60 per cent committed.
Far East's executive director and chief operating officer of property sales, Mr Chia Boon Kuah, said The Greenwich is 'quite unlike the typical suburban condominium'.
'It differentiates itself as a new 'trans-urban' development, set to transform the suburban enclave into a vibrant live-work-and-play urban environment,' he said.
Recently, another new 99-year leasehold project, The Scala near Lorong Chuan MRT station, also attracted hordes of eager buyers.
It has since sold 90 per cent of the 468 units, said developer Hong Leong Holdings yesterday. The Scala was priced at $1,150 psf on average.
Source: Straits Times, 4 Aug 2010
Sim Lian puts in record bid for DBSS site
Developer's $178m offer for Tampines plot tops 4 others
SIM Lian Land has put in what is likely to be a record bid for a design, build and sell scheme (DBSS) plot amid buoyant prices in the Housing Board market.
It topped the tender for a Tampines Avenue 5 site, released under HDB's DBSS, with a higher-than-expected bid of $178.13 million, or $261 per sq ft per plot ratio (psf ppr).
The offer was 22 per cent ahead of the second highest bid of $145.77 million, or $213.6 psf ppr, from China-based Qingdao Construction (Singapore).
In third place was joint venture Hoi Hup Realty and Sunway Developments' $139.9 million, or $205 psf ppr.
The plot attracted five offers, and construction firm Ho Lee Group came last with its offer of $110 million, or $161 psf ppr.
According to Ngee Ann Polytechnic real estate lecturer Nicholas Mak, Sim Lian's bid sets a new land price record for a DBSS site and breaks the previous high of $237 psf ppr set in February 2008 for a Bishan site. He had expected the tender to draw up to seven bidders with offers of between $160 and $200 psf ppr.
At $261 psf ppr, Sim Lian will have to sell three-room flats for $380,000 to $400,000, and four-room flats for $530,000 to $550,000, said Mr Mak.
Five-room units would have to be pitched at between $640,000 and $670,000.
Sim Lian executive director Diana Kuik said the developer planned to build 680 homes on the Tampines site. She said the bulk of the units - 60 per cent - will be four-room flats. Three-room flats will account for 25 per cent of the total, while five-room units will make up the remaining 15 per cent.
'Tampines is an extremely mature estate and demand is very strong for new flats,' said Ms Kuik.
The Tampines site has a maximum allowable gross floor area of 63,395 sq m, including 1,060 sq m for social and commercial facilities. It is adjacent to Singapore's first DBSS project, The Premiere@Tampines, also developed by Sim Lian, which placed a bid of $82.22 million, or $113.67 psf ppr, in January 2006.
Response then was overwhelming and saw the pilot project almost five times oversubscribed. The five-room flats eventually went for $308,000 to $450,000.
Market watchers suggest Sim Lian's aggressive bid may also be because it is better able to control costs as it has its own construction arm.
Under DBSS, private developers can design, build and sell HDB flats directly to buyers, but they have to set aside 95 per cent of the flats for first-time buyers.
Source: Straits Times, 4 Aug 2010
SIM Lian Land has put in what is likely to be a record bid for a design, build and sell scheme (DBSS) plot amid buoyant prices in the Housing Board market.
It topped the tender for a Tampines Avenue 5 site, released under HDB's DBSS, with a higher-than-expected bid of $178.13 million, or $261 per sq ft per plot ratio (psf ppr).
The offer was 22 per cent ahead of the second highest bid of $145.77 million, or $213.6 psf ppr, from China-based Qingdao Construction (Singapore).
In third place was joint venture Hoi Hup Realty and Sunway Developments' $139.9 million, or $205 psf ppr.
The plot attracted five offers, and construction firm Ho Lee Group came last with its offer of $110 million, or $161 psf ppr.
According to Ngee Ann Polytechnic real estate lecturer Nicholas Mak, Sim Lian's bid sets a new land price record for a DBSS site and breaks the previous high of $237 psf ppr set in February 2008 for a Bishan site. He had expected the tender to draw up to seven bidders with offers of between $160 and $200 psf ppr.
At $261 psf ppr, Sim Lian will have to sell three-room flats for $380,000 to $400,000, and four-room flats for $530,000 to $550,000, said Mr Mak.
Five-room units would have to be pitched at between $640,000 and $670,000.
Sim Lian executive director Diana Kuik said the developer planned to build 680 homes on the Tampines site. She said the bulk of the units - 60 per cent - will be four-room flats. Three-room flats will account for 25 per cent of the total, while five-room units will make up the remaining 15 per cent.
'Tampines is an extremely mature estate and demand is very strong for new flats,' said Ms Kuik.
The Tampines site has a maximum allowable gross floor area of 63,395 sq m, including 1,060 sq m for social and commercial facilities. It is adjacent to Singapore's first DBSS project, The Premiere@Tampines, also developed by Sim Lian, which placed a bid of $82.22 million, or $113.67 psf ppr, in January 2006.
Response then was overwhelming and saw the pilot project almost five times oversubscribed. The five-room flats eventually went for $308,000 to $450,000.
Market watchers suggest Sim Lian's aggressive bid may also be because it is better able to control costs as it has its own construction arm.
Under DBSS, private developers can design, build and sell HDB flats directly to buyers, but they have to set aside 95 per cent of the flats for first-time buyers.
Source: Straits Times, 4 Aug 2010
Fewer default on HDB loan repayments
Downsizing, refinancing and loan deferments help households in need
FOR seven years, receptionist L. Boey, 63, had been struggling to make the monthly $1,450 loan repayment to the Housing Board (HDB) for her four-room Choa Chu Kang flat.
Earlier this year, she had a lifeline thrown to her. The HDB found her a studio apartment in Bishan which was big enough for her and her 90-year-old mother, and affordable enough for her to buy using her Central Provident Fund (CPF) savings. She sold her flat in May this year, cleared her debt and moved in.
Financially relieved flat buyers like her have helped to halve the number of those with loan arrears (owing three months' instalments or more) from the peak of 55,700 cases in December 2003.
'I guess I didn't have a choice, but I also felt I was getting old and didn't need such a big apartment,' said Miss Boey.
She was among 2,000 home owners whom HDB helped to 'right-size' their flats between August 2008 and June this year, as a long-term solution to their debt problems.
Another measure the HDB instituted to help households falling behind on payment: allowing them to take an extra loan from the HDB to help them downgrade, even though they had already enjoyed two concessionary loans.
Between January 2008 and June this year, the HDB approved about 2,700 such loans.
These measures, along with others introduced in recent years, and the recovering economy have cut down the number of households who are in hock over HDB loan payments.
There are now about 26,000 HDB households who owe the HDB payments, making up 6.6 per cent of 393,000 accounts with an HDB loan as at June this year. This is down from 33,670 cases forming 7.9 per cent in September 2008.
The HDB team which helped to tackle HDB arrears cases will receive an award for its efforts at the Ministry of National Development's National Day Observance Ceremony on Friday.
An HDB spokesman told The Straits Times it has helped close to 20,000 cases since January 2008.
Short-term measures include reducing loan payments for up to six months, deferring loan instalments for up to six months, and instalment plans to clear arrears.
If the home owner still has difficulty paying the instalments, long-term solutions, such as flat downsizing, would be suggested.
In Miss Boey's case, she had sold off her first Choa Chu Kang flat for a profit and bought another four-room Choa Chu Kang flat for $335,000 on the open market in 1996.
She had a job then as a purchaser, and was granted an HDB loan of $224,000 at a concessionary rate. But in 2003, she lost her job. The money from her earlier sale was also depleted. Even after she found another job in 2008, and rented out a room, she was unable to make the payments.
Her HDB counsellor, who had been working on her case since 2006, suggested that she sell her flat and downgrade. In May this year, she sold her flat for $310,000 and bought the Bishan studio apartment for $83,000 using her CPF savings.
Miss Boey is all praise for the HDB and her MP Zaqy Mohamad. 'If the HDB didn't help me, I guess I would still have to sell my flat, but I may not have been able to find another place within my budget.'
The HDB spokesman said compulsory acquisitions are 'very rare' - slightly more than 1,480 since January 2008 - and usually happen only after a household does not take proactive steps to pay up.
Some households, the HDB said, would include working family members as joint owners to help pay for the flat, or try to enhance household income by sub-letting a room.
Mr Dennis Ng, founder of mortgage consultancy web portal housingloansg.com, said loan repayment problems arise when people do not budget for crises.
Some people, he said, use up to 50 per cent of their monthly income to service their housing loan, when the maximum should be 35 per cent.
'If you use half your income to pay for your house, you might be in trouble in bad times, when you face job loss or a pay cut...people must budget first if they don't want problems paying in the future,' he said.
Source: Straits Times, 4 Aug 2010
FOR seven years, receptionist L. Boey, 63, had been struggling to make the monthly $1,450 loan repayment to the Housing Board (HDB) for her four-room Choa Chu Kang flat.
Earlier this year, she had a lifeline thrown to her. The HDB found her a studio apartment in Bishan which was big enough for her and her 90-year-old mother, and affordable enough for her to buy using her Central Provident Fund (CPF) savings. She sold her flat in May this year, cleared her debt and moved in.
Financially relieved flat buyers like her have helped to halve the number of those with loan arrears (owing three months' instalments or more) from the peak of 55,700 cases in December 2003.
'I guess I didn't have a choice, but I also felt I was getting old and didn't need such a big apartment,' said Miss Boey.
She was among 2,000 home owners whom HDB helped to 'right-size' their flats between August 2008 and June this year, as a long-term solution to their debt problems.
Another measure the HDB instituted to help households falling behind on payment: allowing them to take an extra loan from the HDB to help them downgrade, even though they had already enjoyed two concessionary loans.
Between January 2008 and June this year, the HDB approved about 2,700 such loans.
These measures, along with others introduced in recent years, and the recovering economy have cut down the number of households who are in hock over HDB loan payments.
There are now about 26,000 HDB households who owe the HDB payments, making up 6.6 per cent of 393,000 accounts with an HDB loan as at June this year. This is down from 33,670 cases forming 7.9 per cent in September 2008.
The HDB team which helped to tackle HDB arrears cases will receive an award for its efforts at the Ministry of National Development's National Day Observance Ceremony on Friday.
An HDB spokesman told The Straits Times it has helped close to 20,000 cases since January 2008.
Short-term measures include reducing loan payments for up to six months, deferring loan instalments for up to six months, and instalment plans to clear arrears.
If the home owner still has difficulty paying the instalments, long-term solutions, such as flat downsizing, would be suggested.
In Miss Boey's case, she had sold off her first Choa Chu Kang flat for a profit and bought another four-room Choa Chu Kang flat for $335,000 on the open market in 1996.
She had a job then as a purchaser, and was granted an HDB loan of $224,000 at a concessionary rate. But in 2003, she lost her job. The money from her earlier sale was also depleted. Even after she found another job in 2008, and rented out a room, she was unable to make the payments.
Her HDB counsellor, who had been working on her case since 2006, suggested that she sell her flat and downgrade. In May this year, she sold her flat for $310,000 and bought the Bishan studio apartment for $83,000 using her CPF savings.
Miss Boey is all praise for the HDB and her MP Zaqy Mohamad. 'If the HDB didn't help me, I guess I would still have to sell my flat, but I may not have been able to find another place within my budget.'
The HDB spokesman said compulsory acquisitions are 'very rare' - slightly more than 1,480 since January 2008 - and usually happen only after a household does not take proactive steps to pay up.
Some households, the HDB said, would include working family members as joint owners to help pay for the flat, or try to enhance household income by sub-letting a room.
Mr Dennis Ng, founder of mortgage consultancy web portal housingloansg.com, said loan repayment problems arise when people do not budget for crises.
Some people, he said, use up to 50 per cent of their monthly income to service their housing loan, when the maximum should be 35 per cent.
'If you use half your income to pay for your house, you might be in trouble in bad times, when you face job loss or a pay cut...people must budget first if they don't want problems paying in the future,' he said.
Source: Straits Times, 4 Aug 2010
Tuesday, August 3, 2010
Prime Balmoral Condo up for sale by tender
It has an indicative price tag of $171m to $175m
BALMORAL Condominium, located in the prime District 10 area, has been put up for sale by tender with an indicative price tag of $171 million to $175 million, or about $1,866 to $1,910 per square foot per plot.
Marketing agent Savills Singapore said over 80 per cent of owners have agreed to the collective sale. A previous unsuccessful attempt at enbloc sale had been made in 2007 at much lower prices.
The 18-year- old redevelopment site sits on about 57,007 square feet (5,296 sq m) of prime residential land located at 16 Balmoral Road.
The site, which has a development baseline of 91,622 sq ft, already exceeds the permissible plot ratio of 1.6 in the 2008 Master Plan. Hence, no development charge is likely to be payable.
Savills said in its press release yesterday that the sale site can potentially accommodate 65 apartments averaging 1,300 sq ft each, subject to a 12-storey height restriction.
Units on the higher floors can enjoy views of Goodwood Hill.
Balmoral Condominium is located along Balmoral Road - an exclusive and popular address which is minutes' drive to and from the Orchard Road shopping belt, Newton MRT Station, Balmoral Plaza and prestigious clubs such as The Pines and Tanglin Club.
The property is also within a one-kilometre radius of reputable and popular primary schools such as the Anglo-Chinese School (Barker Road) and the Singapore Chinese Girls' Primary School.
'We expect strong interest for Balmoral Condominium due to the lack of choice residential plots in the prime districts,' said Suzie Mok, Savills' director of investment project.
The adjoining Volari development was fully sold at prices surpassing $2,200 psf last year. The tender for Balmoral Condominium will close at 3 pm on Sept 8, 2010.
Source: Business Times, 3 Aug 2010
BALMORAL Condominium, located in the prime District 10 area, has been put up for sale by tender with an indicative price tag of $171 million to $175 million, or about $1,866 to $1,910 per square foot per plot.
Marketing agent Savills Singapore said over 80 per cent of owners have agreed to the collective sale. A previous unsuccessful attempt at enbloc sale had been made in 2007 at much lower prices.
The 18-year- old redevelopment site sits on about 57,007 square feet (5,296 sq m) of prime residential land located at 16 Balmoral Road.
The site, which has a development baseline of 91,622 sq ft, already exceeds the permissible plot ratio of 1.6 in the 2008 Master Plan. Hence, no development charge is likely to be payable.
Savills said in its press release yesterday that the sale site can potentially accommodate 65 apartments averaging 1,300 sq ft each, subject to a 12-storey height restriction.
Units on the higher floors can enjoy views of Goodwood Hill.
Balmoral Condominium is located along Balmoral Road - an exclusive and popular address which is minutes' drive to and from the Orchard Road shopping belt, Newton MRT Station, Balmoral Plaza and prestigious clubs such as The Pines and Tanglin Club.
The property is also within a one-kilometre radius of reputable and popular primary schools such as the Anglo-Chinese School (Barker Road) and the Singapore Chinese Girls' Primary School.
'We expect strong interest for Balmoral Condominium due to the lack of choice residential plots in the prime districts,' said Suzie Mok, Savills' director of investment project.
The adjoining Volari development was fully sold at prices surpassing $2,200 psf last year. The tender for Balmoral Condominium will close at 3 pm on Sept 8, 2010.
Source: Business Times, 3 Aug 2010
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