What’s NEW in the REAL ESTATE Market From 1 August to 1 September

What’s NEW in the REAL ESTATE Market From 1 August to 1 September

(A) Home market rises in oblivion to US market woes

URA statistics showed 1,378 new homes were sold last month. The feat was achieved despite the US sub-prime market woes and the sale volume was actually 20% better than the 1,150 new homes sold in June.

A total of 72 new homes with higher than $4,000 psf price tag were sold in July compared with just 16 in June. Another 145 homes were sold for $3,000 psf to $4,000 psf. 755 units were sold within the price range of between $1,000 and $3,000. The rest of the 406 or 30% were in the sub-$1,000 psf range.

The top selling condominium projects last month were The Rochester and Reflections at Keppel Bay where an Islamic fund snapped two tower blocks. The Parc at West coast area, Soleil@Sinaran at Novena area were sold out within 2 weeks of their public launch in mid-August.

According to statistics released by HDB, resale transactions had increased by 38% from 6,258 last quarter to 8,700 this quarter. In total, the first half transactions of resale HDB flats were 14,966.

(B) Government hands out more Housing Grant to more households

The income ceiling for AHG eligibility has been raised from $3,000 to $4,000. This means that about 50% of the households in Singapore would qualify for the scheme. The AHG can be used to buy a new or resale flat.

The grant amount has also been raised from $20,000 to $30,000. The maximum grant of $30,000 is for household whose income is $1,500 or below; and a household with combined gross income of $4,000 will qualify for an additional $5,000 grant under the AHG – over and above the normal CPF Housing Grant of $30,000 or $40,000.

This means that the total grant a person from the lowest income group can receive is $70,000 on condition that at least one of the flat owners must be gainfully employed continuously for a minimum of two years when they apply to buy the flat.

(C) First $60,000 in CPF Ordinary Account earn additional 1%

The Government will now pay 3.5% interest on Ordinary Account (OA) balances and 5% on the Special, Medisave and Retirement Account (SMRA) balances. Currently, the interest on OA balances is 2.5% and SMRA balances is 4%.

The higher rate is applicable to the first $20,000 of a member’s OA balance, and the first $60,000 in all his CPF accounts combined. The housing withdrawal rule does not change with the additional 1% increase in CPF interest. But from now on, CPF members will not be allowed to withdrawal this $60,000 for investment in stocks, unit trusts and other investments under the CPF Investment Scheme (CPFIS). The concessionary HDB loan rate of 2.6% remains unchanged.

(D) Buy-back-and-lease scheme for 2-room and 3-room flats

The government will buy back smaller flats from elderly HDB flat owners who are 62 years or older. HDB will buy back the remaining lease period after leaving 30 years intact. The flat owner will be paid a lump sum and then an annuity which is monthly instalments for the remainder of his life.

For example, if a person bought a HDB flat at the age of 30, and when he turns 62 after 32 years, the flat will have 67 years remaining in lease and HDB will ‘buy back’ 37 years, leaving 30 years’ lease intact. Going by the current market price the retiree will get around $50,000. The money will then fund his retirement.

(E) En bloc law to change in early October

The current statute that governs en bloc sale will be made more transparent and fairer for the various stakeholders. Among the proposed changes to take place in early October include:

Sale Committees: Sales committees must be properly formed and elected at an Extraordinary General Meeting. The signing of Collective sales agreements (CSAs) will be witnessed by lawyers who can clarify doubts and explain terms and liabilities.

Majority consent to include area of development : The definition of majority consent has been changed to mean 80% of share value as well as 80% of the areas of the development. Currently majority consent means 80% or 90% of the project’s share value, depending on whether it is more than 10 years old or less. In the new rule, the first condition still applies but now a second condition is required which include 80% or 90% of the area of the development, again depending on whether the project is more than 10 years old or less.

Requirement of tender or auction
Every launch for sale must be through a public tender or auction which means that the sale committee cannot call for ‘expression of interest’ as the majority consent would have to be obtained prior to that.

(F) Development Charge rate rose sharply in September review

The development charge (DC) rates have received the largest rise in decade, raising an average of 58% for non-landed residential land and 42% for commercial uses.

Non-landed residential DC rate for Orchard Road/ Nassim Road / Napier Road / Cairnhill areas has gone up by 54% to $11,900 psm.

Non-landed residential DC rate for Keppel Road area has gone up by 33.33% from $2,100 psm to $2,800 psm in September 2007.

Non-landed residential DC rate for Anson Road area has gone up by 66.66% from $2,940 psm to $4,900 psm.

The reason for the sharp rise in DC rate this time round is due to the substantial appreciation in land values over the past six months. DC rates are adjusted twice yearly in March and September.

Changes already made this year:

- No more Stamp duty deferment – it must be paid within 14 days of real estate contract.
- Additional 2% more on Goods and Services Tax – affecting real estate agent’s commission
- Employer’s CPF contribution increased to 14.5%; employee’s own contribution 20% - total 34.5%
- Development Charge percentage to market value raised from 50% to 70%.

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Buy, sell and rent Singapore real estate: private property, residential apartments, commercial and industrial properties. HDB flats for sale and rental. Foreign investors, buyers, tenants or relocating expats can easily find their ideal landed house, bungalow, semi-d, terrace, condominium, townhouse, private apartment, HDB, HUDC, office, shop, factory, warehouse ; land right here.

MINDY YONG
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Of reality check and market health

Singapore Property Review In August

Of reality check and market health

A direct consequence of the meltdown of the US sub-prime market is the abrupt halt of speculative activities in the Singapore property market.

Speculators, sub-sellers or flippers, whatever they are called, have pulled the MIA trick and the red-hot flame of the property market was doused in the second half of August.

In fact, the market quietness has followed an earlier fear that the Government might reintroduce some demand-side measures against property speculations earlier. Coupled with the subsequent share market turmoil, the property bull was booby-trapped and dealt a double-jeopardy.

Investors are exiting the stock market for fear of more bad news from the US. There are still plenty of unanswered questions on the extent of the damage. However, physical property market is strongly rooted on sound fundamentals such as the upcoming casinos, new jobs, rising rents and uplifting GDP figures.

Some foreign funds may have toned down their exposure here for a while fearing liquidity crunch; and some offshore funds may have faced difficulty getting financing, others are still funding property investments, though more cautiously than before.

However, genuine home buyers are not affected by the market uncertainties. Moreover, the temporary lull can be partly attributed to the traditional Hungry Ghost month and not just the stock market. Many developers are not launching new projects in a big way because of superstition.

Risk awareness that has risen generally with all that has happened around the world is a good thing to have. Many are now aware that, if the problem persists, it could lead to higher interest rates and thus higher borrowing costs which would in turn hit every investor’s pocket and affect asset value.

To put it in proper perspective, the property market is not being unravelled; it is just getting a reality check. The underlying economic fundamentals are still very sound – to say the least. Remember the investment maxim – buy on weakness and sell on strength.

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Singapore Real Estate - Buy , Sell , Rent ,invest Singapore Property
Buy, sell and rent Singapore real estate: private property, residential apartments, commercial and industrial properties. HDB flats for sale and rental. Foreign investors, buyers, tenants or relocating expats can easily find their ideal landed house, bungalow, semi-d, terrace, condominium, townhouse, private apartment, HDB, HUDC, office, shop, factory, warehouse & land right here.

MINDY YONG
( +65 ) 91002985
mindy@hotvictory.com ( email me )

http://www.hotvictory.com

Market crisis not over yet

Singapore Property Review In August

Market crisis not over yet

The financial market turmoil caused by the US sub-prime market woes will definitely act as a dampener on the property boom in Singapore, though unlikely to derail it altogether. But it is still too soon to conclude anything as it is quite clear that some dirt may still surface sooner or later.

A top International Monetary Fund (IMF) official has said on the last day of August 2007 that ‘the market turbulence has not fully receded’. So, buyers in general may buy into the theory that ‘it may be three feet high, don’t jump – there will still be a lot of blood on the floor’.

The United States Federal Reserve and European Central Bank have already injected billions of dollars and euros into the world’s financial system to stabilise it and allay fears of a contagion from the US sub-prime mortgage market.

Here in Singapore, the Monetary Authority of Singapore (MAS) is likewise keeping a close tab on the situation but it is a matter of how well different parties cushion the falls. The banks have come clean with some figures that they claim were just a trifle compared to their overall capitals. However, it is the pervasiveness of the problems that scares the daylight out of investors. It may take awhile before fears subside, and in the interim, property sellers will do well picking up a tip or two on the virtue of patience.

When you recommend a deal to me, you get 10% of the commission I earn.

Singapore Real Estate - Buy , Sell , Rent ,invest Singapore Property
Buy, sell and rent Singapore real estate: private property, residential apartments, commercial and industrial properties. HDB flats for sale and rental. Foreign investors, buyers, tenants or relocating expats can easily find their ideal landed house, bungalow, semi-d, terrace, condominium, townhouse, private apartment, HDB, HUDC, office, shop, factory, warehouse & land right here.

MINDY YONG
( +65 ) 91002985
mindy@hotvictory.com ( email me )

http://www.hotvictory.com

Downtown residential site put on Confirmed List

Downtown residential site put on Confirmed List

By ARTHUR SIM
THE Urban Redevelopment Authority (URA) has put a residential site at Enggor Street on the Confirmed List of the Government Land Sales Programme for the second half of 2007.
Previously on the Reserve List, the site - Enggor Street (Land Parcel A) - is now almost certainly assured of a faster sale as it no longer requires a committed minimum bid before being put up for public tender.

The site has an area of about 0.30 ha and can generate a maximum permissible gross floor area of about 25,504 sq m (274,522.5 sq ft), and is zoned for residential use with commercial use on the first storey.

CBRE Research executive director Li Hiaw Ho notes that transactions in June and July showed that prices for units at the neighbouring Icon ranged from $1,150 psf to $1,700 psf while those at The Clift ranged from $1,400 psf and $2,100 psf.

‘The subject site can be developed into 260-300 apartments and assuming that it will take up the commercial option for the first storey, we expect that the site could fetch a price of $180 million to $200 million or $655 per square foot per plot ratio (psf ppr) to $715 psf ppr,’ said Mr Li.

‘At this level, the residential units could be launched at around $1,300 psf to $1,400 psf,’ he added.
In May, the URA announced that it would temporarily disallow the conversion of office use in the Central Area, which includes the CBD, to other uses like residential apartments until Dec 31, 2009, to curb further depletion of the existing stock of office space.

The move put on hold the strategy to revitalise the CBD by encouraging owners to redevelop their old office buildings.

Mr Li notes that the core CBD area has traditionally been a place for business and as such, human activities tend to be confined to business hours on weekdays.

But revitalisation of the CBD could continue regardless of the temporary halt on office conversions. Already being built are Icon, Lumiere, The Clift, and One Shenton.

‘With the live-in population of the core CBD areas increasing in the foreseeable future due to the influx of residential developments, more complementary uses of retail, food and beverage and entertainment might prove to be sustainable on weekends and after hours,’ he added.
Source : Business Times - 05 sept 2007

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Mindy Yong
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InCity Lofts offered for sale at $70m

InCity Lofts offered for sale at $70m

By KALPANA RASHIWALA
INCITY Lofts, an eight-storey block of small office, home office (Soho) units at Beach Road completed about three years ago, is being offered for sale at a minimum price of $70 million or $1,149 per square foot (psf) of strata area.

InCity Lofts: The eight-storey building has a ground-floor retail unit and 54 Soho units
The land lease tenure of the site has been extended to a full 99-year term starting April 2004, after the building was completed.

InCity Lofts, at 700 Beach Road, is being sold by its developer, In-Space Pte Ltd, whose shareholders are said to include Wee Chwee Heng of Kumpulan Akitek.

InCity Lofts comprises a ground-floor retail unit as well as 54 Soho units - ranging from studio units to maisonette penthouses - spread across the second to eighth levels of the building, which has a roof-top pool. There are also 24 surface and covered carpark lots on the ground level of the development.

‘The majority of the units in the development are leased; and leases are mostly short-term, hence the new investor can reposition or re-let the building and ride on the strong office rental market,’ said Cushman & Wakefield managing director Donald Han, whose firm is marketing the InCity Lofts en bloc sale through an expression of interest exercise that closes on Sept 28.

Nearby commercial buildings like The Concourse are operating near full occupancy with asking rents for office units in the region of $10 psf a month, Mr Han said.

Assuming InCity Lofts units are rented out conservatively at $6 psf a month and based on a minimum price of $70 million, the net yield for an investor works out to over 5 per cent a year, he added.

‘This is a top-end yield play for investors looking for an aggressive rental with capital appreciation growth,’ Mr Han said.

InCity Lofts has a land area of 18,401 sq ft and a fully built up plot ratio (ratio of maximum potential gross floor area to land area) of 4.15.

Source : Business Times - 05 sept 2007

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Mindy Yong
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mindy@mindyyong.com

Property loans: local banks turn cautious

Property loans: local banks turn cautious

By SIOW LI SEN
(SINGAPORE) Banks are tightening up on the way they lend money for buying homes while the property market is coming off the boil, housing agents report.
With the world’s financial markets in turmoil, following a crisis in US mortgage lending to people with bad credit records, bankers in Singapore say that when it comes to assessing home loan applications, the ability of borrowers to pay is paramount.

The trouble in the financial markets, coupled with the ‘ghost month’ here which makes the third quarter traditionally a slower period for home sales, has led to asking prices easing, especially in the secondary market, agents say.

Citigroup economist Chua Hak Bin says: ‘Banks have definitely become more cautious.

‘Just look at The Straits Times classifieds - they’re flooded with speculators trying to offload.’

Dr Chua reckons that property prices have cooled about 5-10 per cent.

Knight Frank managing director Tan Tiong Cheng has a different take on the situation; he says prices from actual deals that he has seen have not slipped. ‘That impression may have come from those ridiculous (asking) prices,’ he said.

He said the apparent increased wariness of bankers was a reaction to the volatility in the stock market which was affected by the US sub-prime mortgage crisis. And bankers’ ‘natural instinct’ is also to be more prudent, said Mr Tan.

Generally, banks continue to finance a maximum of around 80 per cent of the value of a property, despite rules allowing up to 90 per cent funding. And some housing agents say banks have become stricter in valuations and are lending less than 80 per cent of the value of the property.

‘Banks control the valuations,’ said one agent.

The agent said feedback from buyers is that banks can’t match the valuations and they have to cough up more cash for the purchase.

Especially at times of rapidly changing prices, the notional value of a property as set by expert valuers can be adrift from what buyers are actually called on to pay.

Banks say they rely on their panel of experts appointed from property consultant firms for valuations. Some also have in-house valuers to provide a view of the overall market.

‘In general, we will take the valuations by the appointed valuer as fair value,’ said Gregory Chan, OCBC Bank head of consumer secured lending.

‘However, where new benchmark pricing is concerned, we will take the average. Although valuation is a key component, a borrower’s creditworthiness remains the primary consideration in determining loan eligibility and some factors taken into account include income level, credit history and repayment ability.’

Helen Neo, Maybank Singapore head of consumer banking, said the bank does not discriminate against high-end properties, especially where purchase price is supported by valuation.

‘However, we would take a more conservative stance in terms of loan quantum should the purchase price exceed valuation significantly,’ she said. ‘However, for loans amount of $2 million and below, we require the borrower to use our in-house valuer.’

A DBS spokeswoman said: ‘In assessing loan applications, we accept valuations professionally done by reputable certified valuers who are on the DBS panel. In addition, we consider the buyer’s ability to repay and the purpose of the purchase.’

At DBS’s second-quarter results briefing in July, chief executive Jackson Tai said the bank had been taking a ’stringent view’ on credit quality and had ‘avoided any concentration’ in a single development or district.

At the very high end, foreigners make up a significant portion of buyers - and banks have been seeing more of such borrowers.

Edmund Koh, DBS’s head of regional consumer banking, said there had been an increase in foreigners taking up loans, from 5.6 per cent of the total new loans book last year to 7.8 per cent for the year to date.

United Overseas Bank executive vice-president Eddie Khoo disclosed last month at the bank’s second-quarter results that foreigners account for about 10 per cent of home loans. Overall, too, the bank was being cautious, given the market conditions.

‘As you know, property prices are moving up quite rapidly,’ said Mr Khoo. ‘But what’s good is that we are seeing less than 10 per cent of loans being booked (with) more than 80 per cent financing. We have a good portion of customers putting in more cash and equity in the purchase of property.’

Dr Chua said that banks were becoming more cautious in extending property loans to foreigners, especially in cases where prices were sizzling and people were buying for investment.

Anecdotally, he was aware of several cases where people could not get valuations to match their purchase prices.

For the mid-tier segment and if it is for owner occupation, banks are still more relaxed in their loan criteria, Dr Chua said.

Latest official data show that borrowing by homebuyers was up 8.1 per cent in July, accelerating from 6.9 per cent in June.

Mortgage growth had been sluggish for several months despite the Singapore property boom.

In the 11 months to March, mortgage growth in Singapore remained under 3 per cent even though home sales surged.

A key factor for this is the popularity of deferred payment schemes offered by developers, and many of these projects are approaching completion.

Dr Chua expects mortgage growth to reach double digits by the end of the year.

UOB and DBS said their Singapore mortgage book grew at 15 and 14 per cent respectively in the first half of this year.

There is little similarity between US lending practices and those in Singapore, where the banks have a good buffer in their exposure to mortgages. Although the Monetary Authority of Singapore eased financing limits from 80 per cent to 90 per cent two years ago, most banks said the bulk of their loans are booked at not more than 80 per cent financing.

They also said that investment properties do not account for more than 20 per cent of total loans.

Source : Business Times - 05 sept 2007

Singapore Property - Buy , Sell , Rent , Invest
Mindy Yong
(+65)91002985
mindy@mindyyong.com

S’pore condo wins major award for architecture

S’pore condo wins major award for architecture

1 Moulmein Rise honoured for its tropic-friendly high-rise design
By Tay Suan Chiang, DESIGN CORRESPONDENT
WINNING LOOK: The front fa�ade of 1 Moulmein Rise presents an elegant play of shadow and shifting screens. — PHOTO: WOHA ARCHITECTS

ARCHITECTS Wong Mun Summ and Richard Hassell have reason to shout Woha.
Their homegrown firm, Woha Architects, received the prestigious Aga Khan Award for Architecture yesterday in Kuala Lumpur for its residential project 1 Moulmein Rise.

This is the first winning project from Singapore.

The award was established by the Aga Khan, spiritual leader of the Shia Imami Ismaili Muslims, in 1977.

Attention is given to buildings that use local resources and technology in an innovative way and to projects likely to inspire similar efforts elsewhere.

The 28-storey 1 Moulmein Rise for property firm UOL Development, which was completed in 2003, boasts solutions to deal with high-rise living in the tropics.

One example is the use of monsoon windows, which are special horizontal windows in each apartment to let in the breeze but keep out the rain.

Other tropic-friendly features include designing the condominium to have a north-south facing (to avoid direct sunlight) and overhangs to provide shade.

Of the win, which is 13-year-old Woha’s top international award to date, Mr Wong said it is meaningful because ‘it looks at what the building does for the end-user, rather than just on how the building looks’.

UOL chief operating officer Liam Wee Sin said the award is international recognition for the company’s commitment to design excellence in the homes it builds.

The award has a triennial prize fund of US$500,000 (S$760,000), making it the largest architectural prize. The prize money is split among the nine winners this year.

This is not the first time a homegrown company has won such recognition though.

In 2001, Singapore-based architect Kerry Hill won the award for designing The Datai resort in Langkawi.

The awards are handed out every three years. This year, 343 projects were presented for consideration and 27 were reviewed on site by international experts.

The award is governed by a steering committee chaired by the Aga Khan. Members include German architect Omar Akbar, Swiss architect Jacques Herzog and American art historian Glenn Lowry.

The steering committee selects the master jury for each award cycle.

This year’s nine winners include the Royal Netherlands Embassy in Ethiopia, a school in Rudrapur, Bangladesh and the University of Technology Petronas in Malaysia.

The award ceremonies have been held in settings selected for their architectural and cultural importance to the Muslim world, such as Istanbul’s Topkapi Place in 1983 and the Alhambra in Granada, Spain in 1998.

This year’s ceremony was held in Kuala Lumpur’s Petronas Twin Towers, a 2004 award-winner.

The awards were handed out by Malaysian Prime Minister Abdullah Badawi and the Aga Khan.

Of Woha’s winning design, Ms Brigitte Shim, an architecture professor from the University of Toronto and a master jury member, said: ‘Woha’s way of handling the residential units and the site is sophisticated and elegant.’

Asked how they will celebrate, Mr Wong said: ‘By working harder.’

Mr Hassell said they do not know exactly how much of the prize money they will get but it will be used to fund research or set up a research grant.

Source : Straits Times - 05 sept 2007

Singapore Property - Buy , Sell , Rent , Invest
Mindy Yong
(+65)91002985
mindy@mindyyong.com