by Mah Bow Tan
05:55 AM Oct 29, 2010

The prices of HDB flats are always a subject of much public interest. In my conversations with young couples, a common question I hear is: "Why are HDB flats so expensive? Prices today seem much higher than what our parents paid in the 1970s and 1980s!"

I can understand these concerns, especially from those looking to buy their first homes. Yes, flat prices have increased over the years. But, in this article, I will explain why this has happened and, more importantly, why rising flat prices, if supported by economic fundamentals, is in the overall interest of everyone - homeowners and homebuyers.



PROVIDING A HOME AND ASSET

Home ownership versus rental: Governing is about making choices and tradeoffs. Which policy will bring greater benefit to the people? What are the implications and costs to taxpayers? In public housing, governments have to make a fundamental choice between home ownership and rental. Most countries have chosen the rental model. Tenants pay subsidised rents, but own nothing.

Singapore decided early on to promote home ownership. We subsidise public housing so that each family can own, rather than rent, its home. The flat becomes a store of value that can appreciate over time as the country develops. We are the only country in the world that has made affordable home ownership a major pillar of its public housing policy.



Resale at market versus cost - Unlocking value: Having chosen home ownership, we must then allow the true value of the flats to be recognised and realised.

Again, we have a choice: Do we require the flat to be sold back to HDB at a fixed price, or do we allow it to be sold on the open market? We have chosen the latter. We let the market determine prices but keep a close watch to temper excessive exuberance, where necessary.

Today, every HDB flat has an open market value which its owner can realise, after staying in it for a minimum period. The values of HDB flats today reflect Singapore's growth and prosperity since the 1970s and 1980s.

While owners may be happy that the value of their flats has gone up, what about first-time buyers? How do we fulfil our commitment to provide an affordable home for them? We do so in two ways: One, by giving them housing grants to buy resale flats; and two, by building new flats which are sold at subsidised prices - within the reach of various income groups.

Hundreds of millions are spent each year to subsidise first-time buyers. That is why the home ownership rate among young Singaporeans is so high, unlike many other cities in the world.



ENSURING FAIR PRICING OF NEW FLATS

For resale flats, we have allowed the market to determine their prices based on value. How do we set the prices for new flats? Broadly, there are two options: Price according to market value or price according to cost.



Fairness for all buyers: In the early years, HDB adopted a zonal pricing system, where the price of each new flat was fixed according to geographical zones. Pricing largely took into account the cost incurred in building the flats and the same price was charged for a given flat type within the zone, regardless of its actual location and attributes. A flat on the 10th floor was priced exactly the same as one on the second floor. Back then, there was practically no open resale market.

However, as we allowed the resale market to develop in the 1980s, buyers showed that they clearly valued different flats differently, depending on factors like location, view, and design.

They were willing to pay much more for a top-floor flat commanding the best view, compared to a lower-floor one facing the bin centre. HDB could no longer price a top-floor unit the same as one lower down.

To do so would be most unfair to the lower floor buyers. Therefore, HDB started moving towards market-based pricing.

New flats are now priced based on what professional valuers assess similar flats would fetch in the open market, but discounted with a substantial subsidy. This is fairer for two reasons. First, all buyers would get the same public subsidy that they can encash, if the flat were sold in the resale market. Second, buyers would pay for what they get, in terms of location, direction, view, etc.



Fairness across generations: Some have argued that land specifically should not be valued at market levels, since some plots had been compulsorily acquired in the past at low cost.

If we follow this logic, we should price a flat built on reclaimed land in, say, Punggol much higher than a flat in Tanjong Pagar built on land acquired by the state. Surely, this is not fair for the Punggol flat buyer, when the Tanjong Pagar flat clearly has a higher resale value? More importantly, we need to recognise the true market value of land, so that the precious limited land we have is used prudently and optimally. If land is undervalued, we will use up more land now at the expense of future generations.



Affordability to buyers: If market-based pricing is fairer, why do some people argue for cost-based pricing? Perhaps they believe that cost-based pricing means cheaper flats. But this is not true. To ensure affordability, HDB gives extensive subsidies below market value. As a result, market-based prices can be below cost. For example, for Punggol Spectra and Fernvale Crest - two recent Build-To-Order (BTO) projects - the average development cost per flat was $220,000 to $240,000, while the average selling price was $160,000 to $200,000, or $40,000 to $60,000 below cost.

HDB flats are generally priced below their development costs. Over the last three years, the average annual loss on the sale and development of HDB flats was around $600 million. If we include other housing subsidies, such as the Additional Housing Grant and the CPF Housing Grant, HDB's total annual deficit would be about $1 billion.

Housing affordability can be achieved under any pricing system. It all depends on the level of subsidy given. I know some first-timers worry that market-based pricing leaves them entirely at the mercy of market forces. Let me assure them that HDB reviews its subsidies regularly to ensure affordability for first time homebuyers. I will discuss this issue in greater detail in my next article.



RECOGNISING VALUE IN PRICING

Today, we have built a unique public housing system that is based on home ownership. It offers Singaporeans not only shelter but also a store of value. Singaporeans generally understand and are prepared to pay for value. This is why some of the higher-priced, premium HDB flats attract more buyers than the more affordable, standard flats. For example, there were 13 applicants per flat for the Punggol Waterway Terraces, compared to four to seven applicants per flat for standard BTO projects launched there this year.

We must price new HDB flats such that the public subsidies that can be realised on resale are fairly distributed across buyers. As the custodian of public wealth, the Government must also use its resources wisely, including land, regardless of how they were acquired, so that the needs of current and future generations of homebuyers can be met.

Recognising the value of the flat in its pricing is a key part of this.



The writer is the Minister for National Development.

Source: http://www.todayonline.com

by Travis Teo
05:55 AM Oct 29, 2010

SINGAPORE - The private landed-property sector shows no sign of cooling, with nearly a hundred developers vying for a piece of the Sembawang Greenvale site.

Held by the Urban Redevelopment Authority yesterday (URA), the auction saw fierce bidding for the 14 land parcels at the site.

Winning bids fetched between $2.25 million and $26.15 million at URA's first landed-property land-sales auction in more than two years.

The land parcels range from 417 sq m to nearly 3,800 sq m and can potentially yield about 115 landed housing units.

On average each parcel received about 50 bids, with each bid adding between $20,000 and $50,000 to the price.

Analysts said that winning prices were higher then they had expected.

They said this is due to strong pent-up demand from developers in the landed-property segment.

"From today's auction's results we can see that some of the small developers are very confident of the landed housing market in the months ahead," said Mr Nicholas Mak, executive director of research and consultancy at SLP International.

"Going forward, this segment of the market will be quite resilient, even with the recent government cooling measures," he added.

The winners were mostly smaller developers and construction firms.

They were drawn to the sites as they have the flexibility to pre-design and manufacture the homes off-site and put them together on-site.

"We are going to use a pre-cast concept, so that we can come up with the building in a very short period," said Mr Vincent Chua, managing director of Techcom Construction & Trading, adding that he aimed to complete the project in six to nine months.

Analysts said developers will build terrace houses that will likely fetch up to $2.2 million, while bungalows will fetch up to $4 million each.

Industry watchers expect private home prices to rise by 32 to 38 per cent this year.

In light of the highly favourable response, analysts expect the URA to organise more private land-sales auctions, if more land becomes available.

Source: http://www.todayonline.com

05:55 AM Oct 29, 2010

SINGAPORE - Property developers and other industry players are less upbeat on overall real-estate sentiment than before.

They also expect more uncertain market conditions over the next six months.

The Current Real-Estate Sentiment Index fell to 4.8 in the third quarter, down from 5.8 in the second quarter, according to a survey by the Real Estate Developers' Association of Singapore and the National University of Singapore's Department of Real Estate.

Among the developers surveyed, only 44 per cent expect more new residential units to be launched over the next six months.

This is down from the 68 per cent in the previous quarter.

Survey respondents said they expect the Government's measures to cool the red-hot property market to have the most impact on the Housing Board-resale and the mass-private residential segments.

The measures are expected to have the least effect on the high-end and luxury segments, the survey showed.

More than half of those surveyed foresee prices to remain unchanged over the next six months.

Source: http://www.todayonline.com/

by Ku Swee Yong
05:55 AM Oct 29, 2010

We need good data and solid reference points to navigate towards investment decisions. A good source of raw data, with solid data integrity and consistency of reporting, layered with reasonable assumptions, deep experience and objectively interpreted and analysed will mean the difference between a mediocre investment versus a wildly profitable one.

With several rounds of policy changes imposed on the residential sector within the last 12 months, more investors are asking "What new policies next?", "Should we divest now?" and "Should we wait a year or two before investing?"

The market is directionless, with indicators pointing in opposing directions: Low holding costs versus low rental yields against a backdrop of prices for mass market residential setting records in Yio Chu Kang, Ang Mo Kio, Pasir Panjang, Pasir Ris, Serangoon, etc, where demand remains strong.

So, what numbers can guide us to a decision?

IPA's work and discussions involve high-net-worth investors (who may be buyers or sellers at any one time), mortgage lenders, developers, construction firms, institutional funds, private equity players, funds who lend for project financing, equities analysts, etc. Our basis of discussions for the residential market relies heavily on data provided by several sources.

In Singapore, the bulk of raw data comes from official sources. Databases we rely on are: URA Realis, SISV-Realink (whose main data source is caveats filed with SLA), HDB's announcements and SingStat for population growth, household formation and income.

In the private residential sector, market watchers are very focused on a few key data points:

1. Number of units sold by developers monthly and quarterly, by project

2. Monthly lowest, highest and median prices of each project sold by developers

3. Number of units sold in the primary, sub-sales and resale markets

4. Number of units launched and sold, number of units launched but unsold



Perhaps this is because the equities analysts require these data sets to gauge the financial health of the listed developers whose stocks they cover - and these analysts are the voices most often heard by financial investors.

The larger listed developers have "investor relations" personnel to liaise with analysts and fund managers. Healthy share-price performances are important for the market's short term confidence in the developers' financial strength and perhaps also allow the developers access to more favourable credit terms.

In fact, the same mentality applies to data for public housing: Analysts are focused on selling prices, COVs, BTOs, DBSSs, launch prices, how many units launched and sold, over-subscribed or not, etc. Few enquire about the net new supply of HDB flats, which is the new supply minus the demolitions due to the Selective En Bloc Redevelopment Scheme (Sers) and other upgrading programmes.

So, which are the data sets that would form a solid basis and reference for a direct real estate investor's decision making?

None of the above data sets matters as much as rentals, vacancies and real physical demand and supply. Forecasting future rentals and vacancies depends on our view of future demand - physical demand from home users, as opposed to demand based on buy-sell transactions.

Projecting future demand is about as easy as reading tea leaves and cloud patterns. However, we have a lot more certainty when it comes to predicting supply. We can be especially confident about supply that is coming in the next three years as many of the "under construction" condominiums can be completed within 36 months.



LESSONS FROM THE RECENT PAST

When vacancies are dropping and rentals are climbing fast, we can safely predict that property prices will move up. This was the case in 2006-2008, when tenants were at the mercy of landlords when it was time to renew their leases.

With hindsight, we see that the population increase over the two years of 2005-2006 was about 235,000 (see table).

Assuming the new population growth is based on households of four, we would require about 59,000 residential units. The net new supply in 2005 and 2006 was 17,000 residential units. Therefore, we can safely assume that a portion of the new population moved in to take up the vacant units (which at that time was about 7-8 per cent) while others moved in with friends and relatives or sought accommodation in hostels and serviced apartments.

The story continued through 2007 into 2008, when the physical demand for residential units skyrocketed due to the inflow of 438,000 into our population in 2007 and 2008. That period also saw many en bloc sales and HDB SERS projects, followed by demolitions such that the net new supply of residential units was only about 13,000 units.

Now, squeezing 438,000 newcomers into 13,000 new private residential and HDB units is not simple. Vacancies have dropped to around 5 per cent (there is a structural persistent vacancy of around 1 per cent which are apartments or houses which are not in usable condition or are intended for demolition).

Therefore, lesson here is: We need to keep a close tab on physical supply completions.



The writer is the founder of real estate agency International Property Advisor, which provides services to high-net-worth individuals.

Source: http://www.todayonline.com

by Colin Tan
05:55 AM Oct 29, 2010

As expected, private housing prices in Singapore rose by only 2.9 per cent in the third quarter, slower than the 5.3 per cent in Q2.

However, what caught many off-guard was that prices of high-rise apartments rose by a mere 1.6 per cent compared to 5.0 per cent previously while the 7.7 per cent rise for landed homes was much better than the 6.2 per cent a quarter earlier.

And despite more properties being put up for lease, housing rentals continued their rise albeit at a slower 3.6 per cent pace compared with 5.9 per cent the previous quarter.

Notwithstanding the harsher measures on the public housing front, resale prices continued to rise while median COV remained unchanged.

Both sales in the public and private housing sector dipped by about 10 per cent.

What a mixed bag of results.

The same inconsistency runs throughout the gamut of data. While launches and sales have dropped in the private sector, the take-up-rate actually improved.

A total of 3,561 uncompleted private residential units were sold by developers, more than the 3,501 launched for sale.

Compare this with Q2. Launched 4,180 units; sold 3,955 units. A take up rate of 94.6 per cent.

If you have been following launch prices for high-rise properties, the small 1.6 per cent rise comes as a surprise.

The only explanation I can think of is: Because there were fewer launches, the impact came mainly from completed properties.

Although similarly quiet, there were a few panic sales. However, because of the much-reduced sales volume for the entire market, their impact was magnified.

At the same time, if you have been monitoring the ads, you will have noticed that there have been a lot more condominiums being put up for lease over the past few months. Why has there not been a more forceful impact on rentals?

Speaking to some housing agents, you begin to realise that some owners - as happened in the HDB resale market - are gambling with their homes.

Rightly or wrongly, these people are convinced that a price correction will come soon. They have sold off their homes at high prices, taken to rental homes and are awaiting to re-enter the market when the drop takes place.

I would advise owners not to gamble with their homes as no one cannot predict the future even if the analysis appears spot on.

Markets worldwide, not just in Singapore, are reacting more to government policies and less to market forces.

Can anyone guess with certainty what governments will do?

In any case, do note that a price correction rarely happens when the economy is still growing even if it is just modest growth. At best, prices stay flat unless one is expecting an economic downturn.

By now, everyone knowledgeable about property knows that the entire housing market now is underpinned by low interest rates.

Minimal holding costs allows investors to get away with low rents or even keep units vacant. Low financing cost allows more buyers to purchase an investment home notwithstanding cooling measures.

Any windfall from one investor is transmitted back to the market as the beneficiary almost always re-invest most of it.

This is where foreign buyers - especially those paying high premiums - have the most impact even if their numbers are not overwhelming.

As for the landed sector, the cooling measures appear to send some of the hot monies into this segment. They are seen as less risky given their relative scarcity and predominantly owner-occupier profile.

On a quantum basis, prices are much higher. For anyone stretching themselves to buy such properties, do make sure you can hold them over a downturn, even if bought for owner occupation. The tragedy is when credit becomes tight, some may be forced to give them up because of cash flow problems.

Finally, why has there been seemingly no impact on HDB resale prices even though cooling measures for this segment appear harsher.

Cooling measures deal only with the demand side of the housing equation. For sure, investment buying is down to zero.

However, as in the rental market situation, it does not stop people in the private sector seeking refuge in public housing as they await a price correction.

It is also a supply-side problem. Here, everything is cast in stone, with fresh supply of resale flats fixed some 5 to 6 years ago.

The only other way to raise supply is to encourage those holding resale flats as investment properties to give them up via a higher property tax on rental income from resale flats or even a capital gains tax.

This will then lessen the incentives to hold onto them.



The writer is head, research and onsultancy, at Chesterton Suntec International.

Source: http://www.todayonline.com

HSR founder reveals tips on investing in property in the current market

by Callie Liew
05:55 AM Oct 29, 2010

In my recent talks to property investors, I would conduct a straw poll with the question: "How many of you believe property prices will increase, go flat or decrease within the next twelve months?" Inevitably, I would get three different groups of respondents.

My follow-up question would be: "In the worst-case scenario, would prices decrease at the same time across all property sectors, including all segments of the residential, commercial, industrial and overseas properties?"

Even the most pessimistic of investors would disagree. Herein lies the truth about property investments.

It is wrong to think prices across all sectors will march to the same tune up and down the property cycle. The cycles of any two properties are never the same.

There will always be properties - during good or bad times - that are more attractive than the others and have more upsurge potential for profit. There will be good investments at any point in the economic and property cycles.

In fact, many of these property gems can be found during times of major change and uncertainty - which could be the situation now.

How, then, should you invest? May I suggest three possible target segments.



OUTLIER PROPERTIES

Outliers are properties that are available or transacted at prices that are much higher or lower than their respective market prices.

As up-to-date information about property prices and terms and conditions for the transactions are not readily available, the resulting imperfect market may cause sellers to sell low.

There are also other reasons, ranging from ignorance and apathy, negative property outlook, need for cashflow, to sudden migration. One night at any of the two casinos can also produce such sellers.

On the other hand, there will be some buyers who will offer high prices to acquire a property. There are many reasons why they do it, including emotional attachment to the property, need to stay near a relative, and desire to move into the property fast.

As the longest-established mega-agency since 1980, we have come across many reasons for such property outliers.

They can be strangely irrational and even absurd - many of which reasons make property investments more appealing. Suffice to say, you should reward the right agent to source for these property outliers and transact them at a higher profit.



GAP PROPERTIES

Gap properties refer to properties that have the potential to increase in price due to the impact of current or future factors.

Unlike the stock market, which is supported by comprehensive information and is more closely monitored, the property market has comparatively fewer investors and fewer of them are investing on a full-time basis.

Many investors rely mainly on hear-say and will not conduct due research to find out how various factors will support property prices and respond to it.

There is a longer lag time for the market to respond to major changes, especially in the resale market.

For example, proximity to major facilities such as MRT stations, business hubs and good schools can help properties to appreciate higher and faster in value.

However, when plans are being made known to build such facilities, the prices might not increase immediately. Property investors who diligently do their homework and make quick decision can capitalise on these gap properties.



UNPOLISHED GEMS

Unpolished gems are properties you can add value to, the end result of which is they can be sold at a higher price.

Most residential property buyers are owner-occupiers and will probably transact about five properties in their lifetime. They are usually not educated or experienced in property investment.

However, this trend may change because, in recent times, we are seeing more astute investors signing up for real estate agent courses to sharpen their skills in negotiation and investment.

Many buyers follow the crowd to invest in properties that have mainstream appeal, without due consideration for how they can market and profit from them in future. They evaluate properties based on what they see rather than what these properties can become. They are inclined to prefer convenience rather than, for example, carry out additions and alterations to enhance the value of the property.

The advantage of property investment, unlike other instruments of investment, is that there are an infinite number of ways to add value to properties. You can add on or remove parts or all of the property; destroy or rebuild the property; change the theme, use and tenancy mix; improve the design and decor; enhance the furnishings and fixtures ... the list goes on and it is only limited by the creativity of your mind.

A simple coat of paint or installation of new lighting to brighten up the place can also increase the appeal and profit potential of a property. The question you need to ask yourself is: "How can I add value to the property so as to sell it at a higher price?"

During challenging times, there are more of these three types of property gems and lesser people to compete with to capitalise on them.

From wisdom of hindsight, do you wish you had bought a reasonable property shortly after the Lehman Brothers crash? You would have done well, wouldn't you?

After reading this article, mark today's date in your diary. In the near future, you will wish you had taken your cheque book, mine the market, and profit from the property gems in the current market.



The writer is the founder and COO of the HSR Property Group. She won the Asia Pacific Entrepreneurship Award 2009 and the Entrepreneur Of The Year Award 2010 for social contribution.

Source: http://www.todayonline.com

October 26, 2010, 12.00 pm (Singapore time)

By BERNICE BONG

SINGAPORE - Another two private housing sites - which could yield a total of 1,080 private homes - have been released for sale by the Urban Redevelopment Authority (URA) on Tuesday.

The two land parcels at Punggol Central/Punggol Walk and Seletar Road are launched for sale under the Government's Confirmed List.

Click here for URA press release

The 2.7 ha site at Punggol Central/Punggol Walk can potentially yield about 810 housing units. The land parcel has a maximum permissible gross floor area (GFA) of 888,904 sq ft, with an additional GFA of about 4,489 sq ft allowed for the existing conservation building, Matilda House, located within the site.

The tender for the site will close at noon on Dec 7.

The 1.7 ha land parcel at Seletar Road has a maximum permissible GFA of 263,059 sq ft and can potentially yield about 270 housing units.

The tender for the site will close at noon on Dec 14.

The government has made available sites that can yield about 13,905 private housing units in its land sales programme for the second half of the year, the highest potential supply quantum inthe history of such a programme.

Sources: http://www.businesstimes.com.sg

Published October 30, 2010

By FELDA CHAY

NATIONAL industrial infrastructure developer JTC Corporation has called a public tender for a site between Old Toh Tuck Road and Toh Tuck Avenue.

The 108,533 sq ft parcel has a gross plot ratio of 1.6 and a 30-year lease. It is slated for logistics use - which includes storage, development packaging, containerisation and general warehousing. It comes with a project completion period of 96 months. The tender opened yesterday and closes on Dec 10.

The site is in Toh Tuck Logistics Park, which is home to firms like Agility Logistics Holdings (Singapore), Sanyo Singapore and World Scientific Publishing Company - a publisher of medical journals and books. The location is close to the Pan Island Expressway and upcoming Jurong Gateway - touted as the biggest commercial hub outside the city centre.

The parcel is one of three industrial sites to be launched for tender under the Confirmed List of the government's industrial land sale programme for the second half of this year. It is also the last of the three to be put on sale. In August, JTC released a site in Yishun Street 23 under the programme. The Yishun plot has an area of 500,522 sq ft, has a 60-year lease and is to be developed as a ramp-up factory with direct vehicle access to all units.

In July, the Urban Redevelopment Authority announced that a 322,917 sq ft industrial site at Kaki Bukit Avenue 4 was up for sale by public tender. Wee Hur Holdings subsidiary Wee Hur Development won the tender with a bid of $76.8 million for a 60-year lease.

Sources: http://www.businesstimes.com.sg

Published October 30, 2010

New condo at Copthorne Orchid Hotel site

By KALPANA RASHIWALA

THE Copthorne Orchid Hotel Singapore along Dunearn Road will close at the end of March 2011 for redevelopment of the site into a 150-unit freehold condo, which was previewed yesterday.

Sixty units were released for the first phase at an average price of $2,050 per square foot.

In absolute terms, prices range from $1.59 million for a 689 square foot one-bedroom unit with study to $7.15 million for a five-bedroom penthouse of 3,563 sq ft, said City Developments Ltd (CDL). The site is owned by its London-listed unit, Millennium & Copthorne Hotels.

The condo, named Glyndebourne, comprises eight blocks of five-storey apartments with a basement car park. It is a stone's throw away from the Singapore Chinese Girls' School.

Sales began yesterday morning for CDL staff, directors and invitees. In the afternoon, the preview was opened to clients of the two appointed marketing agents, DTZ and Huttons.

CDL declined to provide a sales update yesterday, saying that it was just the first day of sales.

Instead, in its release yesterday, it took pains to explain how the project's name, Glyndebourne, is to be read - Gline-born. It also elaborated on the name's origin - the famous historical Glyndebourne opera theatre in East Sussex, England.

The development will have five one-bedroom-with-study units, 32 two bedders, 54 three bedders, four apartments that comprise three bedrooms and a study, and 32 four-bedders. There are 23 penthouses, which will offer either four bedrooms and a study, or five bedrooms.

Source: http://www.businesstimes.com.sg

Analysts expect keen interest in the 1.8 ha 'white' site which is being made available for sale through the Reserve List

By UMA SHANKARI

THE government yesterday released a 1.8-hectare mixed-use site in the Jurong Lake District for sale - the second such site to be offered to developers since plans to transform the area into an attractive destination for business and leisure were unveiled in April 2008.

The 99-year leasehold site is being made available for sale through the Reserve List. Sites on this list are only put up for tender if a developer has offered to bid a minimum bid price deemed acceptable by the government.

The new parcel is in Boon Lay Way, next to Jurong East MRT station. A sizable mixed-use project with potential gross floor area (GFA) of 957,800 sq ft can be built on the site.

It is classified as a 'white' site, which means it can be put to commercial, residential or hotel use. But the Urban Redevelopment Authority (URA) requires that a minimum 40 per cent of maximum permissible GFA be set aside for office use.

URA also said the design of the proposed development will be reviewed by an advisory panel, chaired by URA, to 'ensure the development on this strategic site is well designed with good urban design and architectural quality'. The panel will work with and guide the development team in the design of the development after the tender has been awarded.

Analysts expect keen interest in the site, which is right next to a similar 1.9-hectare white site sold in June 2010.

'I think it should be well sought after,' said Cushman & Wakefield managing director Donald Han. 'There were quite a few strong bidders who missed out on the earlier site and so might want to try again for this. It's only a matter of time before the site is triggered.'

In June, Australian developer Lend Lease beat five other offers with its top bid of $748.9 million, or $650 per sq ft per plot ratio (psf ppr), for the earlier white site.

The developer edged out CapitaLand's retail unit CapitaMalls Asia, which made the second-highest offer of $728.8 million or $632 psf ppr. Lend Lease's bid was just 3 per cent higher.

The other bids came from a consortium made up of Far East Organization, Frasers Centrepoint and Japan's Sekisui House; another consortium comprising Keppel Land, Guthrie International and Max Platinum; Sim Lian Land; and China's Qingdao Construction.

Source: Analysts expect keen interest in the 1.8 ha 'white' site which is being made available for sale through the Reserve List

By UMA SHANKARI

THE government yesterday released a 1.8-hectare mixed-use site in the Jurong Lake District for sale - the second such site to be offered to developers since plans to transform the area into an attractive destination for business and leisure were unveiled in April 2008.

The 99-year leasehold site is being made available for sale through the Reserve List. Sites on this list are only put up for tender if a developer has offered to bid a minimum bid price deemed acceptable by the government.

The new parcel is in Boon Lay Way, next to Jurong East MRT station. A sizable mixed-use project with potential gross floor area (GFA) of 957,800 sq ft can be built on the site.

It is classified as a 'white' site, which means it can be put to commercial, residential or hotel use. But the Urban Redevelopment Authority (URA) requires that a minimum 40 per cent of maximum permissible GFA be set aside for office use.

URA also said the design of the proposed development will be reviewed by an advisory panel, chaired by URA, to 'ensure the development on this strategic site is well designed with good urban design and architectural quality'. The panel will work with and guide the development team in the design of the development after the tender has been awarded.

Analysts expect keen interest in the site, which is right next to a similar 1.9-hectare white site sold in June 2010.

'I think it should be well sought after,' said Cushman & Wakefield managing director Donald Han. 'There were quite a few strong bidders who missed out on the earlier site and so might want to try again for this. It's only a matter of time before the site is triggered.'

In June, Australian developer Lend Lease beat five other offers with its top bid of $748.9 million, or $650 per sq ft per plot ratio (psf ppr), for the earlier white site.

The developer edged out CapitaLand's retail unit CapitaMalls Asia, which made the second-highest offer of $728.8 million or $632 psf ppr. Lend Lease's bid was just 3 per cent higher.

The other bids came from a consortium made up of Far East Organization, Frasers Centrepoint and Japan's Sekisui House; another consortium comprising Keppel Land, Guthrie International and Max Platinum; Sim Lian Land; and China's Qingdao Construction.

Published October 29, 2010


Bullish bids for Sembawang landed plots
Most winning offers for the 99-year leasehold sites range from $500-$600 psf


By UMA SHANKARI


A GOVERNMENT land auction of 14 landed housing plots in Sembawang drew fierce bidding and bullish top offers as developers demonstrated their confidence in the landed housing market.


Most of the winning bids for the 99-year leasehold sites fell within the range of $500-$600 per square foot (psf), more than double the price that adjacent sites went for in two previous rounds of land auctions held in October 2007 and April 2008.

Yesterday, 11 out of the 14 sites that went under the hammer sold for more than $500 psf, with two sites even selling for $620 psf and $640 psf each. The sites sold yesterday were offered as phase three of Sembawang Greenvale at Sembawang Road and Wak Hassan Drive.

By contrast, data compiled for BT by Savills Singapore showed that in the last two rounds of public auctions, 22 out of the 23 sites offered under phases one and two of Sembawang Greenvale sold for $150-$300 psf. The remaining site was sold for $327 psf.

The Urban Redevelopment Authority (URA) also said there were 97 registered bidders yesterday, compared to just 16 at the last auction in April 2008.

Nicholas Mak, executive director of SLP International Property Consultants, noted that since April 2008, the average price of landed properties has increased by some 25 per cent while the average price of non-landed houses rose by only about one-tenth of that amount. And in the past one and a half years, the demand for landed houses had also increased strongly. 'The pent-up demand coupled with the limited supply contributed to the strong bidding in today's auction,' Mr Mak said.

The new envelop control development guideline for landed housing, which allows developers greater flexibility in the design and development of projects - and possibly some cost savings as well - could have also attracted more interest to the sites, he added.

All of the sites that went under the hammer yesterday were hotly contested with each plot drawing 50 bids on average. One site even drew 159 bids.

A large number of would-be bidders walked out of the packed auditorium at URA Centre after the first two sites were sold, citing the high prices. But most developers were good natured and often applauded the winning offers.

JBE Holdings, which won five of the 14 sites on offer, was one of the most competitive bidders. The company, which is owned by Christina Sui Fong Fong, has built Luxe Ville at Pasir Panjang Road, The Luxe at Handy Road and terrace houses in Sembawang.

Other successful bidders included Fragrance Group. The listed property group won two sites, including the most expensive - it paid $26.15 million for a 40,860 sq ft plot on which a potential 20 landed homes can be built.

Analysts expect prices of landed homes to climb more than that of non-landed housing next year on the back of limited supply. Noted one market watcher: 'We can be sure that prices in that part of Sembawang, at least, will climb after today's bids.' Presently, 99-year leasehold landed homes near Sembawang Greenvale are selling for around $700-$900 psf.

Source: http://www.businesstimes.com.sg

Published October 29, 2010


Jittery developers go low-rise on confidence
34% expect prices of new launches to fall; some fear more cooling measures

By KALPANA RASHIWALA

(SINGAPORE) The worst- kept secret in the property market is out in the open. Not only are developers less upbeat about the future but a third of them actually expect prices of new homes to decline. And market performance for the suburban residential sector may be the worst hit.

This dose of pessimism was reflected in the latest readings of Real Estate Sentiment Index (RESI) put out by the developers body and NUS.

In the wake of the Aug 30 cooling measures, some 34 per cent of developers polled for Q3 expect prices for new residential launches to decline, albeit by less than 10 per cent, over the next six months. None of the developers surveyed in Q1 and Q2 had predicted price drops.

Just 44 per cent expect more new residential units to be launched over the next half year, down from 68 per cent in the previous quarter.

The sentiment indices slipped below the psychologically significant mark of 5 in Q3, indicating respondents were less upbeat in the quarter and expect more uncertain market conditions over the next six months.

The consensus as indicated by net balances is generally weaker.

Polled on how the suburban residential sector would perform, the net balance in Q3 was -43 per cent. This means that most expect the sector to perform worse over the next six months. In Q2, this net balance was +27 per cent, hinting at better future performance.

'The strong historical price growth in the sector is not likely to be sustained moving forward. Downward adjustment to the price growth, if it occurs in the next few months, will ease some pressure on the affordability level of mass-market residential properties in suburban areas,' said Associate Professor Sing Tien Foo of NUS.

The net balance for the future market performance of the prime residential sector, while still in positive territory, has also been declining significantly, from +54 per cent in Q1 to +32 per cent in Q2 and +3 per cent in Q3.

About 70 per cent of the developer respondents in the latest survey were concerned that the government could intervene to dampen the property market further.

They also cited other factors that could hurt sentiment over the next six months. The concerns included a slowdown in the global economy (cited by 60 per cent), an increase in the supply of development land (53 per cent), too many new property launches (49 per cent), rising interest rates (47 per cent) and tightening financing/liquidity in the debt market (40 per cent).

Eighty-four per cent of all survey respondents consider it likely and very likely that there will be a further increase in the supply of development land over the next six months. An even higher proportion, 90 per cent, of respondents expect the government to further boost the supply of Build-to-Order and Design, Build and Sell Scheme public housing flats as well as executive condo (EC) units.

Recent government steps to cool the market are expected to have most impact on the HDB resale and mass private housing market segments. About 76 and 64 per cent respectively of survey respondents rated their impact on these two market segments over the next six months as significant. Conversely, the measures are expected to have the least impact on the high-end/luxury segment with 64 per cent predicting minimal impact. For the mid-end private housing segment, 79 per cent foresee only moderate impact.

Real Estate Developers' Association of Singapore and NUS' Department of Real Estate polled slightly over 70 respondents for their latest Q3 survey, similar to the size for the Q1 and Q2 surveys.

The Current Sentiment Index, where respondents are asked to rate overall Singapore real estate market conditions now compared with six months ago, fell from 5.8 in Q2 to 4.8 in Q3.

The Future Sentiment Index, where respondents rate overall property market conditions over the next six months, also slipped from 5.9 in Q2 to 4.8 in Q3. As a result, the Composite Sentiment Index (the average of the two indices), also declined to 4.8. The index ranges from 0 to 10 with a score below 5 indicating deteriorating market conditions.

Redas CEO Steven Choo said: 'The RESI was able to track closely the immediate impact the cooling measures has on sentiments in the property sector.'

Agreeing, Knight Frank chairman Tan Tiong Cheng said: 'The findings are not surprising. Just look at the amount of land government has been releasing and the supply of new HDB flats and ECs they're planning, plus the demand-side measures. People have put on their thinking caps to figure out how they'll be affected, whether they are HDB upgraders, buying a second/investment property, or even downgrading.

'The latest survey results are a clear signal to government that the measures are having an impact,' he added.

Separately, the NUS' Institute of Real Estate Studies yesterday released its monthly Singapore Residential Price Index tracking prices of completed non-landed private homes. The overall index rose one per cent month on month in September, slightly slower than the 1.1 per cent increase in August.

NUS' sub-index for Central region, which covers a basket of properties in districts 1-4 and 9-11, increased 0.6 per cent in September, the same pace as in August. The sub-index for Non-Central region appreciated 1.4 per cent in September, slightly slower than the 1.6 per cent gain posted in August.

Source: http://www.businesstimes.com.sg

Published October 28, 2010


Over 80% of Hougang Green mall up for sale

MORE than 80 per cent of the total strata floor area of Hougang Green Shopping Mall is being sold by developer Hiap Hoe Holdings.

Hiap Hoe, which built the mixed residential and commercial development near the junction of Hougang Street 51 and Buangkok Green in 1997, still owns 57 shops in the retail component.

It is looking to sell the units for $78 million to $84 million, which works out to an average of $1,174 to $1,264 per sq ft of strata floor area.

Hougang Green is a two-storey complex with 78 strata-titled retail units and a total strata area of more than 82,600 sq ft.

Hiap Hoe's 57 units have a combined strata floor area of 66,435 sq ft and represent more than 80 per cent of the total strata floor area of the retail complex. By share value, the portfolio accounts for more than 57 per cent of the entire mixed development.

The units are all occupied, with tenants such as Shop N Save, Watsons, Guardian, 7-Eleven and Pizza Hut.

'Opportunities to acquire a large cluster of shops of this scale are few and far between. It's an attractive investment for investors looking for higher returns than from residential properties,' said Karamjit Singh, managing director of Credo Real Estate. Credo is conducting an expression-of-interest exercise to sell the shops.

Mr Singh said investors could also acquire the units with a view to selling them individually for a profit later. One of the first-floor units in the retail complex changed hands in December last year at $2,600 psf, he said.

The expression-of-interest exercise closes on Nov 25 at 2.30 pm.

http://www.businesstimes.com.sg

Published October 28, 2010

Another shot at glory for Capitol site


Winning group plans to build iconic hotel, theatre, retail and residential development at landmark site

By KALPANA RASHIWALA

(SINGAPORE) The landmark site that includes Capitol Theatre, Capitol Building and Stamford House is ready for a makeover. It has been awarded to a partnership comprising a syndicate of investors arranged by Pua Seck Guan's Perennial Real Estate, Kwee Liong Seen's Chesham Properties, and Sukmawati Widjaja's Top Global group for $250 million or $460.93 per square foot per plot ratio.


The winning bid was the highest price offered among three tenderers whose concept proposals were shortlisted from the initial list of 14 submitted to the Urban Redevelopment Authority on Aug 18.

The group that won the tender is expected to invest about $700 million in total (including land price) to transform the site into an iconic hotel, theatre, retail and residential development. The group is allocating about half of the 542,382 sq ft maximum gross floor area to retail and entertainment use, with 25 per cent each for hotel and residential use.

'The project, including the hotel, will retain the name Capitol, as it has a lot of history and can rival The Raffles Hotel,' said Perennial CEO Mr Pua. 'We intend to restore the glory of Capitol - a brand name familiar to many Singaporeans. Historically, the location was famous for Capitol Theatre; but there was also a vibrant retail trade along High Street and there were city apartments.'

US-based architectural firm Richard Meier & Partners will work with Architects 61 of Singapore to design the project.

Capitol Theatre, Capitol Building and Stamford House will be conserved and restored while Capitol Centre will be torn down to make way for a new 15-storey building that will also have four basements. Basements 3 and 4 will be for car parking while Basements 2 to Level 2 will be for retail. Above that will be about 80 apartments of about 1,066 sq ft to 2,368 sq ft, which will be sold to help part finance the development.

A five-star hotel with over 200 rooms will be housed on the second to fourth levels of the four-storey Capitol Building and Stamford House.

Capitol Theatre will be transformed into a single-screen cinema with the largest seating capacity in Singapore (some 800 to 1,000 seats) to be operated by Golden Village for most of the year. The building will also alternate as a performance venue for in-residence theatre groups for the rest of the time.

It will be a choice venue for red carpet movie premiers and film festivals.

There will be concept retail stores for international brands on the ground level of Capitol Building while the ground level of Stamford House will feature signature restaurants related to the hotel operator.

The existing street between Capitol Theatre and Stamford House/Capitol Building will be transformed into a pedestrianised, glass-covered galleria lined with F&B outlets. The galleria and the sheltered civic plaza will provide pedestrian connectivity throughout the Capitol site and with the surroundings. There will be an underground link to City Hall MRT Station

'We've some names in mind for the hotel operator. Our partners also own hotels managed by external parties,' Mr Pua said, referring to Mr Kwee, who is one of the four brothers who control the Pontiac Group in Singapore, which owns luxury hotels such as The Ritz-Carlton, Millenia Singapore, and The Regent Singapore.

Ms Widjaja, sister of tycoon Oei Hong Leong, also owns hotels in Indonesia and China.

'We intend to complete the project in about three to four years,' Mr Pua said. URA has given the group up to eight years to complete the project.

URA said that the concept proposal from the successful tenderer offers a high quality development with an attractive mix of uses and 'befitting of its prominent location within the Civic District and its rich architectural heritage'.

Under the dual-envelope tender system for the sale of this site, the 14 tenderers were required to submit their concept proposals and tender prices in two separate envelopes. At the first stage, only the concept proposals were evaluated against a set of pre-stated criteria. Those who met the mark proceeded to the second stage, where the price envelopes of the short-listed bidders were opened and the site awarded to the tenderer with the highest bid price among them.

The other two short-listed tenderers were CapitaMalls Asia and its parent CapitaLand (with a bid of $238.2 million) and a consortium that included private equity group GAW Capital Partners ($130.1 million).

BT understands that the winning bid of $250 million was not the highest price among the 14 submissions.

The top price offer is believed to have crossed the $400 million mark and market watchers say the scheme would probably have involved a more substantial residential component for sale.


Published October 28, 2010

Another shot at glory for Capitol site
Winning group plans to build iconic hotel, theatre, retail and residential development at landmark site


By KALPANA RASHIWALA


(SINGAPORE) The landmark site that includes Capitol Theatre, Capitol Building and Stamford House is ready for a makeover. It has been awarded to a partnership comprising a syndicate of investors arranged by Pua Seck Guan's Perennial Real Estate, Kwee Liong Seen's Chesham Properties, and Sukmawati Widjaja's Top Global group for $250 million or $460.93 per square foot per plot ratio.

The winning bid was the highest price offered among three tenderers whose concept proposals were shortlisted from the initial list of 14 submitted to the Urban Redevelopment Authority on Aug 18.

The group that won the tender is expected to invest about $700 million in total (including land price) to transform the site into an iconic hotel, theatre, retail and residential development. The group is allocating about half of the 542,382 sq ft maximum gross floor area to retail and entertainment use, with 25 per cent each for hotel and residential use.

'The project, including the hotel, will retain the name Capitol, as it has a lot of history and can rival The Raffles Hotel,' said Perennial CEO Mr Pua. 'We intend to restore the glory of Capitol - a brand name familiar to many Singaporeans. Historically, the location was famous for Capitol Theatre; but there was also a vibrant retail trade along High Street and there were city apartments.'

US-based architectural firm Richard Meier & Partners will work with Architects 61 of Singapore to design the project.

Capitol Theatre, Capitol Building and Stamford House will be conserved and restored while Capitol Centre will be torn down to make way for a new 15-storey building that will also have four basements. Basements 3 and 4 will be for car parking while Basements 2 to Level 2 will be for retail. Above that will be about 80 apartments of about 1,066 sq ft to 2,368 sq ft, which will be sold to help part finance the development.

A five-star hotel with over 200 rooms will be housed on the second to fourth levels of the four-storey Capitol Building and Stamford House.

Capitol Theatre will be transformed into a single-screen cinema with the largest seating capacity in Singapore (some 800 to 1,000 seats) to be operated by Golden Village for most of the year. The building will also alternate as a performance venue for in-residence theatre groups for the rest of the time.

It will be a choice venue for red carpet movie premiers and film festivals.

There will be concept retail stores for international brands on the ground level of Capitol Building while the ground level of Stamford House will feature signature restaurants related to the hotel operator.

The existing street between Capitol Theatre and Stamford House/Capitol Building will be transformed into a pedestrianised, glass-covered galleria lined with F&B outlets. The galleria and the sheltered civic plaza will provide pedestrian connectivity throughout the Capitol site and with the surroundings. There will be an underground link to City Hall MRT Station

'We've some names in mind for the hotel operator. Our partners also own hotels managed by external parties,' Mr Pua said, referring to Mr Kwee, who is one of the four brothers who control the Pontiac Group in Singapore, which owns luxury hotels such as The Ritz-Carlton, Millenia Singapore, and The Regent Singapore.

Ms Widjaja, sister of tycoon Oei Hong Leong, also owns hotels in Indonesia and China.

'We intend to complete the project in about three to four years,' Mr Pua said. URA has given the group up to eight years to complete the project.

URA said that the concept proposal from the successful tenderer offers a high quality development with an attractive mix of uses and 'befitting of its prominent location within the Civic District and its rich architectural heritage'.

Under the dual-envelope tender system for the sale of this site, the 14 tenderers were required to submit their concept proposals and tender prices in two separate envelopes. At the first stage, only the concept proposals were evaluated against a set of pre-stated criteria. Those who met the mark proceeded to the second stage, where the price envelopes of the short-listed bidders were opened and the site awarded to the tenderer with the highest bid price among them.

The other two short-listed tenderers were CapitaMalls Asia and its parent CapitaLand (with a bid of $238.2 million) and a consortium that included private equity group GAW Capital Partners ($130.1 million).

BT understands that the winning bid of $250 million was not the highest price among the 14 submissions.

The top price offer is believed to have crossed the $400 million mark and market watchers say the scheme would probably have involved a more substantial residential component for sale.


http://www.businesstimes.com.sg

Published October 27, 2010

HDB launches BTO projects in Bukit Panjang and Sengkang

A total of 1,322 units will be offered in the two projects

By UMA SHANKARI

THE Housing & Development Board has launched two more build-to-order (BTO) projects - Senja Parc View at Bukit Panjang and Anchorvale Horizon at Sengkang.

A total of 1,322 units - comprising 240 studio apartments, 112 two-room flats, 112 three-room flats, 710 four-room flats and 148 five-room flats - will be offered.

Including these, HDB has now offered 15,527 new flats for sale under the BTO and sale of balance flat exercise this year.

And in the first quarter of next year, it will launch about 5,000 BTO flats as part of the supply of 22,000 new flats planned for 2011.

The upcoming BTO projects will have a good geographic spread, in towns such as Bukit Panjang, Jurong West, Sengkang and Yishun, HDB said yesterday.

Apartments at the 577-unit Senja Parc View, which is bounded by Senja Road and Kranji Expressway, are priced at $86,000 to $119,000 for a two-room flat; $149,000 to $191,000 for a three-room flat; and $242,000 to $312,000 for a four-room flat.

Flats at the 745-unit Anchorvale Horizon, located at the junction of Anchorvale Road and Sengkang East Way, are pricier as they are 'premium' flats.

Units there will sell for $75,000 to $104,000 for a studio apartment; $277,000 to $344,000 for a four-room flat; and $344,000 to $426,000 for a five-room flat.

HDB estimates that first-time flat buyers will use 17 to 27 per cent of their monthly household income to meet their monthly loan payments for flats in Senja Parc View and Anchorvale Horizon.

Market watchers expect Anchorvale Horizon to be more popular.

'The immediate area around Anchorvale Horizon is more developed than the immediate area around Senja Parc View,' said PropNex corporate communications manager Adam Tan.

He pointed to various sports facilities that will appeal to the younger generation and the connectivity offered by the nearby expressway and LRT stations.

At Senja Parc View, the main attraction is expected to be the low cost of the flats.

http://www.businesstimes.com.sg

by Millet Enriquez
05:55 AM Oct 22, 2010

SINGAPORE - An executive condominium (EC) site put up for sale by the Housing and Development Board last month has attracted six bids.

The land parcel located at Pasir Ris Drive 1 / Elias Road received a top bid of $89.89 million from joint bidders ChoiceHomes Investments and CEL Development.

This is slightly higher than the second bid of $89.33 million submitted by EL Development. The lowest bid of $61 million came from Ecco Development.

"This is the second-smallest difference between the top bid and second highest bid in the history of EC land tenders," observed Mr Nicholas Mak, executive director of research and consultancy at SLP International, on the 0.6 per cent gap in the top two bids.

It was back in May 1997 when the top bid of $139 million from a consortium led by Lum Chang Building Construction for an EC site at Boon Lay Way was only 0.5 per cent higher than the second-highest bid, Mr Mak added. That site was developed as Summerdale Executive Condominium.

Meanwhile, Mr Joseph Tan, executive director at CBRE Research, said the bids showed that developers were fairly confident about the site. The top bid of $89.89 million works out to $263 psf/plot ratio and translates to a breakeven cost of $560 to $600 psf.

The 15,142 sq m Pasir Ris site, with a lease term of 99 years, is estimated to yield some 320 units.

There will be a market for the new EC project if it is priced about 20 to 25 per cent lower than NV Residences, which sold around 400 units at the median price of $869 psf since early September, Mr Tan said.

"Demand is likely to come from the first-timers and potential upgraders currently living in Pasir Ris and Tampines new towns," he said.

http://www.todayonline.com/

The stigma of being called a real estate "agent" has led to many renaming themselves as "marketing directors, sales consultants, etc" to avoid being associated with some of the agents who demonstrate questionable knowledge and dubious sales propositions.

I shared many of these perceptions prior to joining OrangeTee. However, after having worked at close quarters with some agents in the past months, I am beginning to re-evaluate my perception. The headline-grabbing superagents show that, if you are good at the job, you can get rich, very rich. While the payback is good, how many of us are willing to spend our weekends and evenings running from apartment to apartment, rain or shine, to stand at showflats for weeks and repeating your sales pitch five to six times a day, to bring a buyer to 20 apartments, only to see him or her buy from another agent?

Many are trying to make a decent living by selling a product and, as with every sales job, there is a reasonable boundary that any good salesperson will not cross and many do not. However, the unethical and unprofessional practices by a small minority have tainted the whole industry.

As such, the introduction of the new regulatory framework with the formation of the Council of Estate Agents is welcomed by many in the agency with open arms. Under the new framework, the entry requirements to be a salesperson (agent) will be raised. To ensure continued ethical and professional standards, the estate agency now has more teeth to weed out unethical agents, who will find it extremely difficult to switch agencies when faced with disciplinary action among many other requirements.

With the new regulations, expectations of better practices have probably been raised and rightly so. The next step will be how to handle such expectations. Getting higher educated and better trained people is no guarantee of ethical practices - just look at what unravelled during the last global financial crisis. Even locally, black sheep have managed to sneak into professions which have been regulated for years. Thus, the best protection remains with the buyers, who should expect themselves to play a role in helping to police the salespersons, as the agents will be referred to under the new regime.

Firstly, buyers need to realise that it is not reasonable to expect "good" advice from a seller's salesperson because that salesperson is contracted to sell by his client, the seller, to get the highest possible price. It is just like any profession with a client-agent relationship; lawyers, accountants, investment bankers - which is to take care of the interests of the client.

Thus, as long as there is no misrepresentation or provision of false information, buyers should be expecting the seller's salesperson to highlight all the good points about a property and downplaying the bad, and evaluate the proposition themselves. It is no different from buying anything.

Secondly, no amount of regulation can help buyers who choose not to do their homework and find out the correct questions to ask. There are many websites that provide excellent content to help buyers in this. Comprehensive data are widely available, least of which from the Urban Redevelopment Authority's website. Why quibble over paying $80 to get access to the vast information in the URA, including detailed past transaction records when buying a $1 million property?

Better-off buyers who get a headache from doing their own research might want to consider hiring a "buyer" salesperson to help them source for a property. This practice, which has caught on in some of the more developed countries, offers many benefits.

Firstly, it establishes a clear client-agent relationship which ensures that the salesperson takes care of the buyer's interest and the buyer can expect and demand good advice.

Secondly, it removes the motivation for the salesperson to "sell" one house over another and to be able to show all properties that are available for sale, not just properties which will provide a co-broking fee.

Lastly, these agents could help secure a better price, being better versed in the negotiation process. Having a middleman can help to remove the emotive aspect of buying a house and this could be important in preventing the buyer from over-paying.

The bottomline is that, while the industry has been shaken up for the better, the buyer's role in the transformation is also important. Buyers need to get better informed or be willing to pay for information and advice, as the property is probably their single largest investment of a lifetime.

by Tan Kok Keong

05:55 AM Oct 22, 2010

The writer is head of the Research and Consultancy Department at Orange Tee.


http://www.todayonline.com

A total of 1,322 units will be offered in the two projects

By UMA SHANKARI

THE Housing & Development Board has launched two more build-to-order (BTO) projects - Senja Parc View at Bukit Panjang and Anchorvale Horizon at Sengkang.


A total of 1,322 units - comprising 240 studio apartments, 112 two-room flats, 112 three-room flats, 710 four-room flats and 148 five-room flats - will be offered.

Including these, HDB has now offered 15,527 new flats for sale under the BTO and sale of balance flat exercise this year.

And in the first quarter of next year, it will launch about 5,000 BTO flats as part of the supply of 22,000 new flats planned for 2011.

The upcoming BTO projects will have a good geographic spread, in towns such as Bukit Panjang, Jurong West, Sengkang and Yishun, HDB said yesterday.

Apartments at the 577-unit Senja Parc View, which is bounded by Senja Road and Kranji Expressway, are priced at $86,000 to $119,000 for a two-room flat; $149,000 to $191,000 for a three-room flat; and $242,000 to $312,000 for a four-room flat.

Flats at the 745-unit Anchorvale Horizon, located at the junction of Anchorvale Road and Sengkang East Way, are pricier as they are 'premium' flats.

Units there will sell for $75,000 to $104,000 for a studio apartment; $277,000 to $344,000 for a four-room flat; and $344,000 to $426,000 for a five-room flat.

HDB estimates that first-time flat buyers will use 17 to 27 per cent of their monthly household income to meet their monthly loan payments for flats in Senja Parc View and Anchorvale Horizon.

Market watchers expect Anchorvale Horizon to be more popular.

'The immediate area around Anchorvale Horizon is more developed than the immediate area around Senja Parc View,' said PropNex corporate communications manager Adam Tan.

He pointed to various sports facilities that will appeal to the younger generation and the connectivity offered by the nearby expressway and LRT stations.

At Senja Parc View, the main attraction is expected to be the low cost of the flats.

Published October 27, 2010

http://www.businesstimes.com.sg

URA also launches another 99-year leasehold plot at Seletar Road


By KALPANA RASHIWALA


A HOUSE in Punggol built in 1902 by the father of the late legal eagle Howard Cashin has been put up for sale as part of a 99-year leasehold private residential site launched for tender by the Urban Redevelopment Authority yesterday.

The single-storey house will have to be conserved and restored for use as a clubhouse or private residential use within the new proposed development on the site. Matilda House was acquired by the government under the Land Acquisition Act in the mid-1980s and gazetted as a conservation building on Feb 21, 2000.

The house was built in 1902 by Alexander Cashin, the father of Howard Cashin and son of Joseph Cashin, who arrived in Singapore in the 1840s. Starting out as a lawyer's clerk, Joseph Cashin made his fortune investing in legal opium farms in the 1880s and later, in real estate. Cashin Street, next to Bras Basah Complex, was named after him.

The Cashin family was one of the oldest Irish families to have settled in Singapore and owned several other houses as well as about 400 shophouses here.

Matilda House is named after Mr Joseph Cashin's wife. Mr Alexander Cashin built it as a present for his wife, according to an article in October 2002 in The New Paper. The Punggol seaside bungalow served as a weekend retreat for the family. Sited on the Punggol seafront, it was surrounded by orchards on all sides. The Cashin family also owned about 350 hectares of land in the area on which there were also rubber and coconut plantations.

The house today is in pretty rundown condition sparking some talk about it being spooked.

URA said that Matilda House is an example of an early-style tropical bungalow. Its distinctive features include entrances on both sides of the main building, raised floors, timber lattice and louvred windows and transoms to allow cross-ventilation. It is the only remaining historic bungalow in Punggol Town.

The single-storey Matilda House has an existing gross floor area of about 4,488 sq ft. In addition to this, the successful bidder of the 2.7 hectare site (which includes Matilda House) can develop a total 888,904 sq ft gross floor area of new buildings. This can generate a condominium with about 810 units.

Credo Real Estate executive director Ong Teck Hui describes the plot as a 'plum suburban site with many things in its favour - proximity to Punggol MRT Station, the bus interchange and the proposed town centre, with Matilda House thrown in for uniqueness'.

Based on current sentiment, the site could draw six to 10 bidders with top bids of around $400 to $450 psf per plot ratio (psf ppr), or $355-400 million in absolute quantum.

SLP International Property Consultants executive director Nicholas Mak predicts bids of about $380-420 psf ppr, with five to nine bids expected.

The tender for this site closes on Dec 7.

URA yesterday also launched for tender another 99-year leasehold plot at Seletar Road, slated for development into condominium/flats (up to five storeys) or landed housing/strata landed housing (up to two storeys). If developed into a condo, the 1.7 hectare plot can generate about 270 units.

The site is next to a plot awarded to Far East Organization at a state tender that closed in September last year at $376 psf ppr. Far East is developing Greenwich V (comprising 35 shop units) and The Greenwich, a 319-unit condo, on the site. It released the condo in early August and to date has sold 233 units.

Credo's Mr Ong notes that caveats for The Greenwich have been lodged at about $1,300-1,400 psf for smallish units and $1,000-1,100 psf for more normal-sized apartments.

Mr Ong observed that while the latest site also enjoys a good location in the Seletar Hills area, which is in good demand and which will benefit further from the aerospace hub, 'it is in a way 'landlocked', sandwiched by landed estates, the Greenwich development and a SingTel telephone exchange'.

He predicts four to eight bidders going by current sentiments, with top bids in the $550-600 psf ppr range (or about $145-158 million).

Mr Mak says the site may attract four to seven bids with top bids coming in at $320-360 psf ppr. 'Some of the bidders could be medium-size developers as the absolute land cost is not excessive,' he added.

The tender for this site closes on Dec 14.

Published October 27, 2010

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05:55 AM Oct 22, 2010

SINGAPORE - Allgreen's latest residential property, Suites @ Orchard, was launched last week.

The 10-storey condominium comprises 118 units, from one-bedroom apartments to three-bedroom penthouses. The smallest unit is a one-bedroom-with-study unit of 548 sq ft, while the largest is a two-bedroom unit with attached study and private enclosed space, altogether at 2,551 sq ft.

Facilities at Suites @ Orchard include a gym, a swimming pool, a barbecue deck, jacuzzis and a children's playground.

About 65 units were sold at the launch last week. Prices range from $2,000 to $2,200 per square foot.

Located at Handy Road, the 99-year leasehold condominium is a short walk from transport and recreational amenities. These include Dhoby Ghaut MRT Station, Plaza Singapura, Fort Canning Park and The Cathay. The Singapore Management University and the new School of the Arts are a stone's throw from the condominium.

The project is expected to receive its Temporary Occupancy Permit in more than two years.

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Buyer is said to be a property fund managed by Alpha Investment Partners


By KALPANA RASHIWALA


A JOINT venture involving Chip Eng Seng has sold the last 30 units at CityVista Residences for about $147 million, BT understands. The 20-storey freehold project of 70 units at Peck Hay Road in the Cairnhill area received Temporary Occupation Permit (TOP) recently.

The buyer is said to be a property fund managed by Alpha Investment Partners. Alpha is a unit of Keppel Land.

The transaction involves 28 apartments (three and four-bedders) and two penthouses. The price for the apartments is thought to be about $1,850 per square foot (psf). The psf price for the two penthouses is said to be much lower as they come with substantial roof terrace areas, making up about half of their saleable area.

Each duplex penthouse, which has five bedrooms and a private pool, has an area exceeding 9,000 square feet.

Last month, four units in the project were sold at $1,900-1,980 psf, according to developers' monthly sales data released by the Urban Redevelopment Authority. The Chip Eng Seng-Lehman venture began selling the project in June 2007, with 21 units sold at prices ranging from $2,397 psf to $2,828 psf.

Market watchers suggest that with the project receiving TOP, it made sense for the partners to give a bulk discount and offload the remaining units so that they can clear this portfolio, repay bank loans and move on to other things.

Chip Eng Seng has been successful at state land tenders of late. This year alone, it has clinched 99-year-leasehold executive condominium development sites in Pasir Ris and Punggol in partnership with NTUC Choice Homes. On its own, too, Chip Eng Seng was awarded a 99-year private condo site in Simei.

Savills is understood to have been involved in the deal for the last 30 units at CityVista Residences.

Meanwhile, billionaire Peter Lim is said to have been the buyer of 20 units sold last month at Sui Generis, a freehold condo at Balmoral Crescent which received TOP a few months ago.

The former 'remisier king' paid around $95 million or $1,935 psf in the secondary market deal.

Published October 26, 2010

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Another auction raises $4.61m for two offices in The Central


By KALPANA RASHIWALA


A FEW relatively big-ticket items were sold at property auctions last week. These include a freehold bungalow in the Chestnut Avenue Good Class Bungalow Area which went for $5.24 million, and a couple of adjoining office units at The Central which fetched $4.61 million.

Bidding for the bungalow at 5 Chestnut Close started at $4.5 million and the property received 16 bids in total. It was sold to a Singaporean buyer. The sale price works out to about $874 per square foot based on a land area of 5,998 square feet. The new owner of the part one/part two storey bungalow is expected to tear down the existing property and redevelop it.

It was sold at a Colliers International auction on Oct 20 by the trustee of an estate. The same party had earlier divested two other freehold bungalows at a Colliers auction last month. No 4 Margoliouth Road (off Stevens Road) fetched $13.6 million or $1,304 psf based on its land area of 10,433 sq ft, while 53 Sixth Avenue was sold for $12 million or $1,145 psf based on a land area of 10,476 sq ft.

A DTZ auction on Oct 19 saw two adjoining office units on the 19th floor of The Central, above Clarke Quay MRT Station, being sold for $4.61 million or $1,815 psf based on their total strata area of about 2,540 sq ft.

The Central is built on a site with 99-year leasehold tenure starting Jan 2, 2001.

The buyer is a Singaporean company that is expected to occupy the premises. The office units were sold by a liquidator. The company being liquidated is understood to have been the mortgagor of five other office units on the same floor of The Central that were the subject of a mortgagee sale at a DTZ auction in July. That transaction was for $9.98 million, translating to a higher unit price of $1,991 psf. Those five units enjoy a superior view, facing Marina Bay Sands, whereas the latest two units have views of Swissotel Merchant Court and a partial view of the Singapore River.

The five units are understood to have been bought by a Singaporean investor. Bidding for both sets of properties at their respective auctions was very competitive, reflecting the strong interest in the strata office market on the back of rising office rents, DTZ said.

The Central, developed by Far East Organization, comprises a retail podium, two small office-home office towers, a 25-storey office tower, a sky garden and recreational facilities. The project has clinched the international Fiabci Prix d'Excellence Award 2010 (office category) as well as Singapore's Building and Construction Authority's Construction Excellence Award 2010.

Published October 26, 2010

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by Jo-ann Huang

05:55 AM Oct 22, 2010

SINGAPORE - Investment sales for residential property in Singapore have fallen 30.8 per cent in a single quarter, with analysts attributing the dive to the slew of cooling measures introduced by the Government in August.

According to a report issued yesterday by property consultancy Colliers International, the third quarter saw a total value of $3.74 billion in residential investment sales, well below the $5.4 billion recorded in the previous quarter.

This was mainly due to lower prices submitted by developers in tenders for state residential land sites, analysts said. Compared to the second quarter's $1.85 billion, third-quarter figures for state land sales came in at $897.08 million or a 51.5-per-cent drop, according to the report.

The policy measures, coupled with the ample land supply through the Government Land Sales (GLS) programme, have "resulted in developers' cautiously optimistic stance in state land tenders that closed in September", observed Ms Tay Huey Ying, director of research and advisory at Colliers International and author of the report.

Ms Tay noted that only four to nine parties typically bid for any land site in the third quarter, compared to between 10 and 18 in the second quarter.

Mr Eugene Lim, associate director of ERA Asia Pacific, believes the focus on public housing and mass market housing had contributed to the fall in residential investment sales.

"The types of land that are being launched are not for high-end residential properties. More land sites for executive condominiums (ECs) and mass market housing have gone on sale in the quarter," he said.

"The value of tenders is also not that high because the land sites are not in prime locations," he noted.

Among the measures announced in August was the reduction of the loan-to-value ratio from 80 to 70 per cent for buyers with one or more outstanding mortgage loans at the time of their new purchase. The measures seem to have taken effect, as the number of homes sold last month numbered only 911 units. This is a drop from 1,259 units in August and the peak of 1,553 units in July.

Market watchers foresee property prices dipping 3 to 5 per cent by year-end and they expect this trend to continue into next year.

And they forecast more property launches by the end of this year as developers try to offload inventory before the downtrend deepens.

"Developers who have bought land from GLS in the last few months will want to rush out their launches in the last quarter. However, monthly sales will be slow and my estimate is around 500 to 600 units," said KPC Properties managing director Koh Poh Chew.

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Private home prices up just 2.9 per cent in Q3 from Q2's 5.3 per cent; number of new home sales and HDB resale transactions also fall

By UMA SHANKARI

(Singapore)

PRIVATE home prices in Singapore rose just 2.9 per cent in the third quarter - slightly lower than the previous estimate of 3.1 per cent in early October - as the impact of new cooling measures were felt. Private home prices climbed 5.3 per cent in Q2.


The number of new homes sold by developers also fell in Q3, together with the number of resale and sub-sale transactions, data released by the the Urban Redevelopment Authority (URA) yesterday showed.

The slowdown was also noticeable in the public housing market. The number of the Housing & Development Board (HDB) resale transactions fell by about 10 per cent quarter-on-quarter, from 9,114 cases in Q2 this year to 8,205 cases in Q3. This was largely due to the 25 per cent drop in monthly resale volume from August to September - after the cooling measures were introduced on Aug 30.

HDB resale prices, however, continued to grow at a steady clip. HDB's resale price index rose by 4 per cent in Q3 - slightly lower than the 4.1 per cent recorded in the second quarter but still higher than the 2.8 per cent growth seen in Q1 this year.

HDB resale prices kept climbing as cash-over-valuation (COV) levels continued to inch upwards.

PropNex chief executive Mohamed Ismail pointed out that while the overall median COV remained at $30,000 in Q3, a closer examination of the figures revealed that median COVs for individual flat types rose by about $2,000 to $3,000 across three-room, four-room, five-room and executive flats in Q3 as compared to Q2.

However, Mr Ismail cautioned that market watchers should not conclude that the government's cooling measures had not worked as HDB's Q3 data is largely based on July and August figures.

Echoed Eugene Lim, associate director of ERA Asia-Pacific: 'HDB's resale price index show that resale prices continued increase by 4 per cent in Q3 because most of the transactions were submitted before the Aug 30 announcement of property measures. As such, the impact of these measures on resale prices would probably be reflected in the Q4 numbers.'

But in the private housing market, the slowdown was already apparent in the Q3 data.

The 2.9 per cent gain in private home prices in Q3 is much slower than the gains of 5.3 per cent in Q2 and 5.6 per cent in Q1 this year.

URA's data showed that prices rose more slowly across all regions of Singapore. Non-landed home prices in Core Central Region (which includes the prime districts, Marina Bay and Sentosa Cove) climbed 1.6 per cent in Q3, lower than the 5.4 per cent per cent growth in Q2.

Likewise, the price index for Rest of Central Region rose by 2.3 per cent in Q3, down from 4.6 per cent in Q2. And in the Outside Central Region (where suburban condos are located), prices climbed 2.2 per cent in Q3 after increasing 5.7 per cent in Q2.

In addition to the slowing price growth, the number of property transactions also dipped.

Developers sold 3,638 new homes in Q3 this year, down from 4,033 in Q2 and 4,380 in Q1.

The momentum of sales in the secondary market also slowed down in tandem with the primary market.

A total of 4,172 resale transactions were registered in Q3, 20 per cent lower than the 5,233 transactions in the previous quarter. Sub-sales numbered 703, also 20 per cent lower than the 880 deals done in the second quarter.

CBRE Research executive director Li Hiaw Ho noted that the 703 sub-sales represent 8.3 per cent of the total sales volume in the third quarter of this year.

'This is the third consecutive quarter where sub-sales made up less than 10 per cent of total sales, showing that the government measures have effectively capped speculative activity to a more acceptable level,' Mr Li said.

Rents of private residential properties rose 3.6 per cent in the third quarter, lower than the 5.9 per cent increase in the April-June period.

But Ong Teck Hui, Credo Real Estate's executive director of research and consultancy, noted that one sector of the private residential market - landed homes - was still buoyant.

While the rate of price increase for non-landed homes slowed from 5 per cent in Q2 this year to 1.6 per cent in Q3, landed home price growth rose from 6.2 per cent in Q2 to 7.7 per cent in Q3.

'The trend of landed prices increasing more rapidly is due to strong demand for landed homes while supply remains limited,' Mr Ong said. 'Buyers of landed homes also have higher affordability and are therefore better able to cope with price increases.'

Looking ahead, analysts expect sentiment in the private residential property market to remain subdued over the last three months of the year as the latest round of cooling measures continue their work.

Developers' sales of new units are expected to fall further to just 1,500-3,000 units in Q4 while the island-wide residential price index is forecast to increase by at most 2 per cent in the final quarter of the year.

And in the HDB market, the number of resale transactions is expected to dip by another 20 per cent in Q4 from Q3, analysts said. They also expect HDB resale price growth of just 0-2 per cent over the fourth quarter. In fact, resale prices may even adjust downwards by 5-8 per cent over the next six months, said ERA's Mr Lim.

Published October 23, 2010

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Published October 22, 2010

By UMA SHANKARI


PROPERTY firms have begun the process of registering their agents as the new statutory board set up to regulate real estate agents here, the Council for Estate Agencies (CEA), begins operations today.


With CEA up and running, new and existing real estate firms can apply to the council for new licences from Nov 1.

The firms are also required to register their agents under the new regulatory framework, which states that anyone doing estate agency work must be registered as a salesperson before he/she can practise.

Under a transitional arrangement provided by CEA, firms have until today to submit a list of existing agents who have passed an industry examination or have completed at least three property deals over the last two years.

After this, agents will have to apply as a new salesperson and satisfy the full registration criteria - which includes passing a new CEA examination - to practise.

BT understands that as of yesterday, a few hundred small property firms have submitted lists of their agents who meet the transitional criteria.

But most of the larger property firms have yet to make their submissions ahead of today's deadline.

Agency bosses here have estimated that the current pool of more than 30,000 agents will shrink by a third to about 20,000 once the new rules kick in.

They also hope that the government's move to set up CEA will ensure that property firms and agents have the knowledge to provide professional service while working ethically.

Minister for National Development Mah Bow Tan said yesterday that the establishment of CEA is a major milestone to raise professionalism in the real estate agency industry and protect consumer interest.

Added CEA: 'The immediate focus for CEA is to prepare the estate agents (property firms) and salespersons to meet the higher standards of the enhanced licensing and new registration framework.'

The council will be headed by executive director Chionh Chye Khye, who was previously executive director (designate) with the Ministry of National Development.

The Business Times had earlier in December 2009 reported that he had been picked to helm the new statutory board.

Greg Seow, chairman of AMP Capital Investors (Singapore), has been appointed as CEA's president.

Other council members include representatives from the Urban Redevelopment Authority, the Housing and Development Board, the Consumers Association of Singapore, and the National University of Singapore's real estate department.


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