A slower correction in mainland European property values has turned tens of billions of euros of mortgage-backed bonds into potential time-bombs with a greater risk of defaulting than their UK peers, Fitch Ratings said.
The agency has so far this year downgraded 47.2 billion euros (S$97.7 billion), or 69 per cent, of European commercial mortgage- backed securities (CMBS) notes that it tracks, and maintains either Rating Watch Negative or Negative Outlook on a further 52 billion euros of notes.
It said that refinancing risk for CMBS linked to French, Dutch or German real estate may be even greater than in Britain because so many transactions were completed at the peak of a property boom in 2006 and 2007.
UK real estate prices have rallied after falling almost 45 per cent in the two years to September, but Fitch senior director Euan Gatfield said that continental European markets may be lagging, with further declines likely to collide with a wave of impending maturities over the next five years.
‘There is hope that the worst is over for UK commercial real estate, something that cannot be said for most mainland European markets,’ Mr Gatfield said.
‘With a prolonged wave of maturities arriving in two years time, financing pressures are building in the sector,’ he said.
Negative rating action has been concentrated in European CMBS without UK exposure, despite the fact that few borrowers have yet to deal with a loan maturity in European CMBS.
Although less than 5 per cent of European CMBS loans have suffered a missed payment, Fitch said that the growing number of financial covenants in breach of their terms has foreshadowed the difficulties that even performing borrowers will face when repayment is due.
Fitch said that about five billion euros of CMBS are due to mature in 2010, followed by 61 billion euros between 2011 and 2014, with a third of securities falling due in 2013. Some 13.5 billion euros worth of German CMBS loans are set to mature in 2013, including 10 billion euros from just four multi-family housing mortgages, twice the UK’s peak of 6.6 billion euros projected for 2012.
Source: Business Times, 26 Nov 2009
Thursday, November 26, 2009
Melbourne mansion sale smashes record
A mansion in Melbourne’s inner east has broken the city’s record for a house price, Australian Associated Press reported yesterday.
A Melbourne businessman bought Avon Court in Shakespeare Grove, Hawthorn, on Tuesday night for a sum believed to be between A$21 million and A$25 million (S$27 million-S$32 million).
The property was sold by Melbourne businessman Clinton Casey, the former chairman of the Richmond Football Club and an owner and developer of retirement homes and property.
Neither the seller nor the buyer of Avon Court wanted the price made public, Kay and Burton real estate managing director Michael Gibson said.
‘In terms of Melbourne residential prices it is right at the top of the tree,’ he said.
The house contains a private cinema, gym, ballroom, six kitchens, parking for 10 cars, two pools and lifts to four levels.
Top-end property sales are currently rebounding around Australia following last year’s downturn.
The average price for a house in Melbourne was about A$480,000 at the September quarter, according to the Real Estate Institute of Victoria.
Source: Business Times, 26 Nov 2009
A Melbourne businessman bought Avon Court in Shakespeare Grove, Hawthorn, on Tuesday night for a sum believed to be between A$21 million and A$25 million (S$27 million-S$32 million).
The property was sold by Melbourne businessman Clinton Casey, the former chairman of the Richmond Football Club and an owner and developer of retirement homes and property.
Neither the seller nor the buyer of Avon Court wanted the price made public, Kay and Burton real estate managing director Michael Gibson said.
‘In terms of Melbourne residential prices it is right at the top of the tree,’ he said.
The house contains a private cinema, gym, ballroom, six kitchens, parking for 10 cars, two pools and lifts to four levels.
Top-end property sales are currently rebounding around Australia following last year’s downturn.
The average price for a house in Melbourne was about A$480,000 at the September quarter, according to the Real Estate Institute of Victoria.
Source: Business Times, 26 Nov 2009
Abu Dhabi limits housing construction to avoid glut
Abu Dhabi is limiting construction to avoid the housing glut and price declines that battered the real estate market in neighbouring Dubai, Aldar Properties PJSC chief executive officer John Bullough says.
The emirate has a shortage of 15,000 to 20,000 units and the government will let the ‘rope out on development in a measured way’, Mr Bullough, whose company is the United Arab Emirates’ second-biggest developer, said in an interview. ‘There will be, in our view, a lag between supply and demand.’
Abu Dhabi, the UAE’s capital and holder of 8 per cent of the world’s oil reserves, controls development from homes to offices and transportation links under its ‘Plan 2030′, devised in 2007. The plan foresees the population growing to as much as 5 million by 2030 from an estimated 1.6 million in 2008.
‘There is a short-term question mark, but then there is a medium- to long-term suitability,’ Aldar CFO Shafqat Malik said in an interview last week at the company’s Abu Dhabi headquarters.
‘What we saw over here is the doubling of rents and prices. Is this a sustainable way for any economy to grow? The answer is probably no.’
Aldar said it plans to deliver 3,500 homes and 140,000 square metres of commercial space over the next 18-24 months.
Abu Dhabi’s government owns 18.9 per cent of Aldar through Mubadala Development Co and 7.2 per cent through state fund manager Abu Dhabi Investment Co, according to the emirate’s exchange.
Limiting supply ‘brings up the cost of housing and can be seen as an additional tax on companies’, Jesse Downs, director of research and advisory services at Dubai-based Landmark Advisory, said in a phone interview. ‘So it could potentially curb job growth, which has a residual effect on the real estate market.’
Abu Dhabi home prices have dropped an average of 33 per cent from their peak in the third quarter of 2008, according to Matthew Green, head of UAE research at CB Richard Ellis (CBRE) Group Inc.
Dubai’s residential property values have fallen more than 50 per cent and UBS AG said last week that they may decline as much as 30 per cent more.
‘We are not in the business of releasing and withholding units or regulating prices,’ Fouad Kassem, public affairs officer for Abu Dhabi’s Urban Planning Council said in a phone interview. ‘Our role is focused on planning, and proposed projects that don’t fit with the master plan are not allowed.’
Slowing down construction was easier in Abu Dhabi than Dubai because more projects were at the planning stage when the financial crisis hit and therefore easier to postpone, Mr Downs said.
Dubai is moving to tighten control of its own property supply through a planned merger of Emaar Properties PJSC, the country’s biggest developer, with state-controlled Dubai Properties LLC, Sama Dubai LLC and Tatweer LLC.
A housing shortage in Abu Dhabi won’t help lift prices because residents can commute from Dubai, which has an oversupply, Deutsche Bank AG said in note in June. The highway linking the two cities makes ‘both markets highly interconnected’, it said.
Dubai opened its property market to foreign investors in 2002, followed by Abu Dhabi three years later, fuelling a boom bolstered by low interest rates. Prices slumped at the onset of the global financial crisis as banks clamped down on mortgages, and speculators left the market.
‘We suffered from the same thing here as the rest of the world in terms of speculation and flipping,’ Mr Bullough said. ‘Those days are gone and there is a much more pragmatic focus to purchases. The dealers, it’s fair to say, have left the market.’
Property speculation in Abu Dhabi and Dubai caused institutional investors such as ING Groep NV’s US$150 billion real estate fund to shun the markets and prompted governments in both emirates to cap annual rent increases.
‘There has been a significant reprioritisation across the whole of the development community,’ Mr Bullough said. It ‘delayed delivery of a lot of what was in the pipeline, and that bodes well for the future because it means we will be able to maintain a more effective balance between supply and demand.’
Aldar postponed its Al Dana development, originally designed as a luxury project, and asked for a redesign to suit the needs of low-income buyers, Aldar’s chief operating officer Sami Asad said in February.
‘We see greater demand at the smaller scale, more affordable end of the market,’ Mr Bullough said. ‘That’s perfectly normal for any market. You have a much higher proportion of people who can afford a medium-sized place.’
Source: Business Times, 26 Nov 2009
The emirate has a shortage of 15,000 to 20,000 units and the government will let the ‘rope out on development in a measured way’, Mr Bullough, whose company is the United Arab Emirates’ second-biggest developer, said in an interview. ‘There will be, in our view, a lag between supply and demand.’
Abu Dhabi, the UAE’s capital and holder of 8 per cent of the world’s oil reserves, controls development from homes to offices and transportation links under its ‘Plan 2030′, devised in 2007. The plan foresees the population growing to as much as 5 million by 2030 from an estimated 1.6 million in 2008.
‘There is a short-term question mark, but then there is a medium- to long-term suitability,’ Aldar CFO Shafqat Malik said in an interview last week at the company’s Abu Dhabi headquarters.
‘What we saw over here is the doubling of rents and prices. Is this a sustainable way for any economy to grow? The answer is probably no.’
Aldar said it plans to deliver 3,500 homes and 140,000 square metres of commercial space over the next 18-24 months.
Abu Dhabi’s government owns 18.9 per cent of Aldar through Mubadala Development Co and 7.2 per cent through state fund manager Abu Dhabi Investment Co, according to the emirate’s exchange.
Limiting supply ‘brings up the cost of housing and can be seen as an additional tax on companies’, Jesse Downs, director of research and advisory services at Dubai-based Landmark Advisory, said in a phone interview. ‘So it could potentially curb job growth, which has a residual effect on the real estate market.’
Abu Dhabi home prices have dropped an average of 33 per cent from their peak in the third quarter of 2008, according to Matthew Green, head of UAE research at CB Richard Ellis (CBRE) Group Inc.
Dubai’s residential property values have fallen more than 50 per cent and UBS AG said last week that they may decline as much as 30 per cent more.
‘We are not in the business of releasing and withholding units or regulating prices,’ Fouad Kassem, public affairs officer for Abu Dhabi’s Urban Planning Council said in a phone interview. ‘Our role is focused on planning, and proposed projects that don’t fit with the master plan are not allowed.’
Slowing down construction was easier in Abu Dhabi than Dubai because more projects were at the planning stage when the financial crisis hit and therefore easier to postpone, Mr Downs said.
Dubai is moving to tighten control of its own property supply through a planned merger of Emaar Properties PJSC, the country’s biggest developer, with state-controlled Dubai Properties LLC, Sama Dubai LLC and Tatweer LLC.
A housing shortage in Abu Dhabi won’t help lift prices because residents can commute from Dubai, which has an oversupply, Deutsche Bank AG said in note in June. The highway linking the two cities makes ‘both markets highly interconnected’, it said.
Dubai opened its property market to foreign investors in 2002, followed by Abu Dhabi three years later, fuelling a boom bolstered by low interest rates. Prices slumped at the onset of the global financial crisis as banks clamped down on mortgages, and speculators left the market.
‘We suffered from the same thing here as the rest of the world in terms of speculation and flipping,’ Mr Bullough said. ‘Those days are gone and there is a much more pragmatic focus to purchases. The dealers, it’s fair to say, have left the market.’
Property speculation in Abu Dhabi and Dubai caused institutional investors such as ING Groep NV’s US$150 billion real estate fund to shun the markets and prompted governments in both emirates to cap annual rent increases.
‘There has been a significant reprioritisation across the whole of the development community,’ Mr Bullough said. It ‘delayed delivery of a lot of what was in the pipeline, and that bodes well for the future because it means we will be able to maintain a more effective balance between supply and demand.’
Aldar postponed its Al Dana development, originally designed as a luxury project, and asked for a redesign to suit the needs of low-income buyers, Aldar’s chief operating officer Sami Asad said in February.
‘We see greater demand at the smaller scale, more affordable end of the market,’ Mr Bullough said. ‘That’s perfectly normal for any market. You have a much higher proportion of people who can afford a medium-sized place.’
Source: Business Times, 26 Nov 2009
BOA sells top exec’s home at 44% discount
Bank of America Corp (BOA), the biggest US home lender, sold a home for its top housing executive for 44 per cent less than its initial asking price set last year, property records show.
Barbara Desoer, head of the bank’s home-loan and insurance unit, put her 4,500-square-foot house in Charlotte on the market on Aug 1, 2008 for US$1.675 million. The home sold on Nov 22 for US$930,500, according to a Multiple Listing Service report.
Ms Desoer, who bought the home with her husband in 2000 for US$1.15 million, moved from Charlotte after being named head of Calabasas, California-based Countrywide Financial Corp, which the bank acquired in July 2008. Her Charlotte home was sold to BOA in December 2008 through a relocation company. The property went on the market at about US$1.3 million.
The US real estate market is showing signs of improvement although demand for luxury homes remains sluggish because of increasing job losses and tighter lending standards.
Home prices in 20 US cities, including Charlotte, rose for a fourth straight month in September, according to the S&P/Case-Shiller home-price index, while sales of existing US homes in October reached their highest level since February 2007, the National Association of Realtors said.
BOA, based in Charlotte, will cover costs associated with the sale of the house, including a possible loss, plus US$1.5 million for Ms Desoer’s new home in California and US$1.1 million related to taxes, according to the bank’s March 2009 proxy.
BOA officials in September cited Ms Desoer as one of six potential internal candidates to succeed chief executive officer Kenneth Lewis, who is retiring on Dec 31.
Chief risk officer Gregory Curl and retail banking head Brian Moynihan are the most likely insider candidates to win the post, according to people familiar with the situation.
Source: Business Times, 26 Nov 2009
Barbara Desoer, head of the bank’s home-loan and insurance unit, put her 4,500-square-foot house in Charlotte on the market on Aug 1, 2008 for US$1.675 million. The home sold on Nov 22 for US$930,500, according to a Multiple Listing Service report.
Ms Desoer, who bought the home with her husband in 2000 for US$1.15 million, moved from Charlotte after being named head of Calabasas, California-based Countrywide Financial Corp, which the bank acquired in July 2008. Her Charlotte home was sold to BOA in December 2008 through a relocation company. The property went on the market at about US$1.3 million.
The US real estate market is showing signs of improvement although demand for luxury homes remains sluggish because of increasing job losses and tighter lending standards.
Home prices in 20 US cities, including Charlotte, rose for a fourth straight month in September, according to the S&P/Case-Shiller home-price index, while sales of existing US homes in October reached their highest level since February 2007, the National Association of Realtors said.
BOA, based in Charlotte, will cover costs associated with the sale of the house, including a possible loss, plus US$1.5 million for Ms Desoer’s new home in California and US$1.1 million related to taxes, according to the bank’s March 2009 proxy.
BOA officials in September cited Ms Desoer as one of six potential internal candidates to succeed chief executive officer Kenneth Lewis, who is retiring on Dec 31.
Chief risk officer Gregory Curl and retail banking head Brian Moynihan are the most likely insider candidates to win the post, according to people familiar with the situation.
Source: Business Times, 26 Nov 2009
Two properties on tap for investment players
Big industrial plot put on reserve list; Boon Building up for grabs for $12-13m
PLAYERS in the property investment sales market have just been offered two properties – an industrial plot at Kaki Bukit Avenue 4, made available for application through the government’s reserve list, and Boon Building, a six-storey commercial property at 61 South Bridge Road.
The Kaki Bukit site is 323,133 sq ft and has a 2.5 plot ratio, which means the maximum gross floor area works out to a whopping 807,833 sq ft. It is zoned Business 2 – suitable for a range of uses such as clean/light industry, general industry and warehousing – and offered with a 60-year lease.
Under the reserve list system, the site will be launched for tender by the state only if a developer makes an application with a minimum bid price acceptable to the government.
Colliers International director (industrial) Tan Boon Leong reckons top bids for the plot – assuming a tender takes place now – could come in at $70-80 per sq ft per plot ratio (psf ppr). This works out to a land cost of about $56.5 million to $64.6 million.
According to Mr Tan, the plot is in a lesser location than an earlier plot in Kaki Bukit Road 2 that was sold in August this year after attracting a total 18 bids. ‘The latest plot is farther away from the main mature industrial estate in the Kaki Bukit/Eunos area,’ he said.
The earlier plot was awarded to KNG Development for $12.1 million or about $105 psf per plot ratio. It is about 1.07 hectares with a 1.0 plot ratio and is also zoned for Business 2 use, but came with a 30-year lease.
The latest plot, in Kaki Bukit Ave 4, is likely to appeal to developers, who may then build landed terrace factories to sell to end-user industrialists, as well as flatted factories, Mr Tan suggests.
‘Perhaps some of the unsuccessful bidders at the earlier tender may bid for the latest plot,’ he said. ‘However, as the latest site is much larger in terms of land area as well as gross floor area, developing it will entail a bigger investment. Hence, it will likely fetch a lower psf ppr unit land price.’
In October last year, Sim Lian clinched a 1.15-ha, 60-year leasehold site in Ubi Ave 4 for Business 1 use for $26.3 million or $85.05 psf ppr. It has a 2.5 plot ratio.
Boon Building, a 999-year leasehold property, is being sold by Raffles Point Holdings, controlled by property investor Kishore Buxani and his family. The indicative guide price is $12-13 million, which works out to $1,165 to $1,262 psf based on the estimated net lettable area of 10,299 sq ft.
According to caveats records, the property was last transacted for about $9.5 million in August 2007. It will be sold with vacant possession and is being marketed by DTZ through a tender exercise that closes on Dec 17.
DTZ senior director for investment advisory services Shaun Poh said: ‘The property’s appeal lies in the building’s excellent location and investment quantum. The availability of naming rights also offers the opportunity to carve out a flagship building with its own corporate identity.’
Mr Buxani and his partners also own 108 Robinson Road and six floors of Samsung Hub.
Source: Business Times, 26 Nov 2009
PLAYERS in the property investment sales market have just been offered two properties – an industrial plot at Kaki Bukit Avenue 4, made available for application through the government’s reserve list, and Boon Building, a six-storey commercial property at 61 South Bridge Road.
The Kaki Bukit site is 323,133 sq ft and has a 2.5 plot ratio, which means the maximum gross floor area works out to a whopping 807,833 sq ft. It is zoned Business 2 – suitable for a range of uses such as clean/light industry, general industry and warehousing – and offered with a 60-year lease.
Under the reserve list system, the site will be launched for tender by the state only if a developer makes an application with a minimum bid price acceptable to the government.
Colliers International director (industrial) Tan Boon Leong reckons top bids for the plot – assuming a tender takes place now – could come in at $70-80 per sq ft per plot ratio (psf ppr). This works out to a land cost of about $56.5 million to $64.6 million.
According to Mr Tan, the plot is in a lesser location than an earlier plot in Kaki Bukit Road 2 that was sold in August this year after attracting a total 18 bids. ‘The latest plot is farther away from the main mature industrial estate in the Kaki Bukit/Eunos area,’ he said.
The earlier plot was awarded to KNG Development for $12.1 million or about $105 psf per plot ratio. It is about 1.07 hectares with a 1.0 plot ratio and is also zoned for Business 2 use, but came with a 30-year lease.
The latest plot, in Kaki Bukit Ave 4, is likely to appeal to developers, who may then build landed terrace factories to sell to end-user industrialists, as well as flatted factories, Mr Tan suggests.
‘Perhaps some of the unsuccessful bidders at the earlier tender may bid for the latest plot,’ he said. ‘However, as the latest site is much larger in terms of land area as well as gross floor area, developing it will entail a bigger investment. Hence, it will likely fetch a lower psf ppr unit land price.’
In October last year, Sim Lian clinched a 1.15-ha, 60-year leasehold site in Ubi Ave 4 for Business 1 use for $26.3 million or $85.05 psf ppr. It has a 2.5 plot ratio.
Boon Building, a 999-year leasehold property, is being sold by Raffles Point Holdings, controlled by property investor Kishore Buxani and his family. The indicative guide price is $12-13 million, which works out to $1,165 to $1,262 psf based on the estimated net lettable area of 10,299 sq ft.
According to caveats records, the property was last transacted for about $9.5 million in August 2007. It will be sold with vacant possession and is being marketed by DTZ through a tender exercise that closes on Dec 17.
DTZ senior director for investment advisory services Shaun Poh said: ‘The property’s appeal lies in the building’s excellent location and investment quantum. The availability of naming rights also offers the opportunity to carve out a flagship building with its own corporate identity.’
Mr Buxani and his partners also own 108 Robinson Road and six floors of Samsung Hub.
Source: Business Times, 26 Nov 2009
CMA shares climb 8.5% on debut
Shares of CapitaMalls Asia (CMA), Singapore’s largest public offering in 16 years, debuted 8.5 per cent above the IPO price yesterday.
The pan-Asian shopping mall developer and manager, which was spun off from property giant CapitaLand, started trading at $2.30 before losing some ground to fall as low as $2.23. It ended at $2.30, comfortably above the IPO price of $2.12.
Elsewhere, there were also strong debuts by Chinese property developer Fantasia and coal mining equipment maker Sany, which rose as much as 10 per cent and 45 per cent respectively in Hong Kong.
The new listings are the latest in a string of share sales across Asia as companies take advantage of the ongoing market rally. Funds are also flocking back to Asia in search of higher growth and large IPOs such as CMA’s are proving to be popular, analysts said.
In particular, CMA is seen to be attractive for its China exposure. CMA has a portfolio of 86 malls in Singapore, China, Malaysia, Japan and India worth some $20.3 billion in all. Fifty of these malls are in China.
‘CMA’s ownership and management interests in 50 retail malls (of which 18 are under development) in 33 cities in China make it a formidable player there, and also gives investors exposure to China’s growth from rising urbanisation and consumer demand,’ said CIMB Research analyst Donald Chua.
‘Recurring income from its more mature malls in Singapore, Malaysia and Japan provides additional support.’
CIMB yesterday initiated coverage on CMA with an ‘outperform’ call and a target price of $2.77.
CapitaLand, which now owns 65.5 per cent of CMA, said on Tuesday that the IPO saw strong response from international institutional investors, particularly from the United States and Europe.
There was demand of about 2.5 times for the placement tranche of 1.059 billion shares and an additional 174.8 million shares were over-allotted due to strong demand. CapitaLand raised about $2.8 billion from the IPO.
Looking ahead, CIMB’s Mr Chua said that he estimates CMA to consistently report earnings before income tax (EBIT) of $100-120 million a year, which should help take care of working capital and expansion needs in emerging markets.
Separately, CapitaLand announced that Lim Beng Chee, who is the chief executive of the newly minted CMA, has relinquished his role as chief executive of CapitaMall Trust (CMT).
The property trust, which runs 14 malls in Singapore, will now be helmed by Simon Ho Chee Hwee, who was previously the deputy chief executive officer. Mr Ho has also been appointed a director of CMT. Goh Hwee Peng, who was previously CMT’s head of investment and asset management, will now be the trust’s deputy chief executive.
CMA has a 29.8 per cent stake in CMT.
Source: Business Times, 26 Nov 2009
The pan-Asian shopping mall developer and manager, which was spun off from property giant CapitaLand, started trading at $2.30 before losing some ground to fall as low as $2.23. It ended at $2.30, comfortably above the IPO price of $2.12.
Elsewhere, there were also strong debuts by Chinese property developer Fantasia and coal mining equipment maker Sany, which rose as much as 10 per cent and 45 per cent respectively in Hong Kong.
The new listings are the latest in a string of share sales across Asia as companies take advantage of the ongoing market rally. Funds are also flocking back to Asia in search of higher growth and large IPOs such as CMA’s are proving to be popular, analysts said.
In particular, CMA is seen to be attractive for its China exposure. CMA has a portfolio of 86 malls in Singapore, China, Malaysia, Japan and India worth some $20.3 billion in all. Fifty of these malls are in China.
‘CMA’s ownership and management interests in 50 retail malls (of which 18 are under development) in 33 cities in China make it a formidable player there, and also gives investors exposure to China’s growth from rising urbanisation and consumer demand,’ said CIMB Research analyst Donald Chua.
‘Recurring income from its more mature malls in Singapore, Malaysia and Japan provides additional support.’
CIMB yesterday initiated coverage on CMA with an ‘outperform’ call and a target price of $2.77.
CapitaLand, which now owns 65.5 per cent of CMA, said on Tuesday that the IPO saw strong response from international institutional investors, particularly from the United States and Europe.
There was demand of about 2.5 times for the placement tranche of 1.059 billion shares and an additional 174.8 million shares were over-allotted due to strong demand. CapitaLand raised about $2.8 billion from the IPO.
Looking ahead, CIMB’s Mr Chua said that he estimates CMA to consistently report earnings before income tax (EBIT) of $100-120 million a year, which should help take care of working capital and expansion needs in emerging markets.
Separately, CapitaLand announced that Lim Beng Chee, who is the chief executive of the newly minted CMA, has relinquished his role as chief executive of CapitaMall Trust (CMT).
The property trust, which runs 14 malls in Singapore, will now be helmed by Simon Ho Chee Hwee, who was previously the deputy chief executive officer. Mr Ho has also been appointed a director of CMT. Goh Hwee Peng, who was previously CMT’s head of investment and asset management, will now be the trust’s deputy chief executive.
CMA has a 29.8 per cent stake in CMT.
Source: Business Times, 26 Nov 2009
Public welcomes move to regulate property agents
THE Ministry of National Development (MND) has received more than 200 independent comments and suggestions on its proposed regulatory framework for property agents.
The vast majority of respondents in a recent public consultation exercise welcomed stronger regulation of the real estate industry, MND said yesterday.
The suggestions were generally supportive of key features proposed under the new regulatory framework – such as mandatory accreditation for property agencies and agents; setting up a public central registry for agents, and an independent tribunal to deal with disputes; and introducing a demerit points system.
Public consultation took place from Oct 13 to Nov 17.
MND said that because complaints often arose from alleged unethical practices or misconduct, respondents felt it was important that agents pass a standard industry entrance examination covering not only practical knowledge but also ethics, before they are allowed to practise.
They also agreed with a proposal that an agent should represent only one party in a transaction to avoid conflict of interest.
MND said: ‘These views were generally consistent with feedback gathered during industry consultations conducted from Sept 10 to Oct 1, when MND consulted stakeholders including industry associations, real estate agency directors, individual agents, Case (the Consumers Association of Singapore) and Redas (the Real Estate Developers’ Association of Singapore).’
Views received from various parties will be consolidated and taken into consideration for refining the new regulatory framework, MND said.
Key elements are expected to be ready for announcement by early 2010.
Source: Business Times, 26 Nov 2009
The vast majority of respondents in a recent public consultation exercise welcomed stronger regulation of the real estate industry, MND said yesterday.
The suggestions were generally supportive of key features proposed under the new regulatory framework – such as mandatory accreditation for property agencies and agents; setting up a public central registry for agents, and an independent tribunal to deal with disputes; and introducing a demerit points system.
Public consultation took place from Oct 13 to Nov 17.
MND said that because complaints often arose from alleged unethical practices or misconduct, respondents felt it was important that agents pass a standard industry entrance examination covering not only practical knowledge but also ethics, before they are allowed to practise.
They also agreed with a proposal that an agent should represent only one party in a transaction to avoid conflict of interest.
MND said: ‘These views were generally consistent with feedback gathered during industry consultations conducted from Sept 10 to Oct 1, when MND consulted stakeholders including industry associations, real estate agency directors, individual agents, Case (the Consumers Association of Singapore) and Redas (the Real Estate Developers’ Association of Singapore).’
Views received from various parties will be consolidated and taken into consideration for refining the new regulatory framework, MND said.
Key elements are expected to be ready for announcement by early 2010.
Source: Business Times, 26 Nov 2009
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