‘Old money’ props rise in Singapore luxury home sales

‘Old money’ props rise in Singapore luxury home sales

Prices hold firm surprisingly; investment climate may have stabilised, analysts say
By ARTHUR SIM

(SINGAPORE) Developer sales of new homes jumped to 441 units in May from 284 units in April, with some property consultants already calling it a ’sharp rebound’.
 
Strong take-up: At UOL’s 100-unit Nassim Park Residences, 39 of 70 units launched were sold in May at a median price of $2,929 per square foot, URA data show 
While May sales were still relatively low compared to 2007 levels, several launches in prime and city-fringe locations did well.

According to Urban Redevelopment Authority (URA) data, at UOL’s 100-unit Nassim Park Residences, 39 of 70 units launched were sold at a median price of $2,929 per square foot (psf). Sources also told BT that most of these units were sold to Singapore’s ‘old money’.

Savills Singapore director (marketing and business development) Ku Swee Yong said: ‘Based on what we have seen in the past few months, high net worth individuals (HNWIs) have not been affected by the slowdown in the global economy.’

While these buyers may be more ‘picky’ now, ‘they don’t want to wait for prices to fall just to save 5 per cent’, he said. And with banks generally offering low interest rate returns, these HNWIs are looking to ‘park’ their money in real estate instead.

A check with UOL revealed that since last week, Nassim Park Residences has been marketed overseas and more than 50 units have now been sold. UOL Group’s general manager of marketing, Dolly Lian said that as things stand, more than 30 per cent of the buyers are foreigners and the average selling price is $3,300 psf. This is higher than $3,000-$3,200 psf average selling price that some market watchers expected.

It is understood that most of the foreign buyers are from Indonesia.

Another popular development in May was Macly Group’s 102-unit Vutton, with 72 units sold at a median price of $1,225 psf. A market watcher said this is in the same price range as UOL’s Pavilion 11, also off Moulmein Road, which was sold in 2007.

Also selling well in May was Ascend Land’s 106-unit The Verve, off Balestier Road. During the month, 42 units were transacted at a median price of $985 psf. According to URA data, 84 units have been sold so far. In April, eight units were sold at a median price of $1,055, while in March the median price was $1,187 psf.

Collier’s International’s director for research and advisory Tay Huey Ying said that while the rebound in sales activity could be ‘just a monthly fluctuation, it may also be a sign that most genuine buyers have come to accept that the current price levels have reached a fair level’.

Ms Tay noted that the number of new launches increased 74 per cent in May from April. ‘This encouraging response could be just what is needed to trigger more of such launches in the coming months,’ she said.

She added, however, that developers will remain cautious with regard to pricing, ‘as buyers in today’s market tend to be price-sensitive’.

CB Richard Ellis executive director (residential) Joseph Tan said: ‘Based on the transactions in May, contrary to market expectations, there was no downward adjustment of prices.’

Luxury prices in particular ’seemed to hold firm’ as projects like Boulevard Vue, Scotts Square and Nassim Park Residences maintained $3,000-psf levels, he said. And in the eastern and western parts of Singapore, prices held at $800-$900 psf at projects including Breeze by the East, Blu Coral, The Ambrosia, The Lakeshore and Crystal Heights.

Still, not everyone was as sanguine about the state of the property market.

Knight Frank director (research and consultancy) Nicholas Mak said that while total new sales in the Core Central Region (CCR), Rest of Central Region (RCR) and Outside Central Region (OCR) rose 60.9 per cent month on month, the OCR saw a 14.6 per cent drop in sales volume month on month.

According to Mr Mak: ‘Essentially, the slight rise in sales volume can be attributed to some stability in investment sentiment. However, it should be noted that this escalation is still 32 per cent below the 12-month average figure.’

Looking at take-up rates (new sales versus new launches) in the three regions, Jones Lang LaSalle local director and head of research (South-east Asia) Chua Yang Liang said these were 87 per cent for CCR, 84 per cent for RCR and 146 per cent for OCR.

He said the strong take-up rates in CCR and RCR were a result of ‘latent demand spurred on by softening prices’, while the take-up rate in OCR was ‘the result of low supply of new launches over what appears to be a minimum demand threshold - an average of 113 units over the past six months - in the region’.

Source : Business Times - 17 jun 2008

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Job market churns as vacancies, layoffs rise - Singapore

Job market churns as vacancies, layoffs rise - Singapore

Most openings in services sector, most retrenchments in manufacturing
By CHUANG PECK MING

(SINGAPORE) There is a big churn in the job market. Even as record numbers of jobs are being created, more people are being retrenched and more are seeking jobs. At the same time, the number of vacancies is shooting up. But while most layoffs are in manufacturing, most vacancies are in the services sector. The market appears to be searching for equilibrium.
 
 
Retrenchment jumped in the January-March quarter to cross 2,000 for the first time in over a year, the latest job figures released yesterday by the Ministry of Manpower (MOM) showed. Some 2,274 people were axed in the first quarter of this year, up from 1,966 in Q4 2007.

With even more job seekers knocking on employers’ doors amid more job openings, the unemployment rate edged up to a seasonally adjusted 2 per cent in March, from 1.7 per cent in December 2007.
 
 
At the same time, a still tight labour market pushed nominal earnings in Q1 up 11 per cent over the year - much higher than the 4.3 per cent in the preceding quarter and 5 per cent in Q1 2007.

But after adjusting for inflation (the consumer price index rose 6.6 per cent in Q1), earnings were up 3.6 per cent in real terms - lower than the 5 per cent real increase in Q1 2007.

Still, with labour productivity down 2.8 per cent over the year, following a 3.7 per cent fall in the preceding quarter, the overall unit labour cost increased for the eighth straight quarter in the first quarter - rising 8.8 per cent, after a 6 per cent jump in Q4 2007.

Three in four of those laid off in Q1 were manufacturing workers.

Services accounted for almost a quarter of workers axed in Q1, led by wholesale trade and financial houses. Over two-thirds of the workers affected were in their 30s and 40s.

The annual retrenchment figure rose from 10,294 in 2005 to 12,606 in 2006, before dropping significantly to 7,675 last year.

The number of layoffs declined in the first three quarters of 2007 but began to climb in Q4, when the number of workers axed increased to 1,966, from 1,827 in Q3.

Total employment in Q1 this year expanded a record 73,200, against 62,500 in Q4 2007 and 49,400 in Q1 2007.

Preliminary figures released in end-April put the job gains at 68,400. ‘Services led (jobs growth in Q1) with employment gains of 46,500,’ MOM said in a statement.

Driven by growth in building activity, construction added 14,500 workers, continuing the rapid increase of the earlier quarters. Manufacturing posted a gain of 11,800.

‘Employment continued to expand strongly in a healthy economy, although an uncertain outlook and more cautious sentiment resulted in a higher unemployment rate,’ MOM said.

Job vacancies jumped from 37,400 in December last year to 38,200 in March this year, with 71 per cent of the openings in the services sector - mainly community, social and personal services, wholesale & retail trade, professional services, and transport and storage.

But with the rise in job seekers, MOM said the seasonally adjusted ratio of job openings to jobless people dropped from 134 per 100 last December to 115 per 100 in March.

Source : Business Times - 17 jun 2008

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Analysts trim full-year Singapore growth forecasts

Analysts trim full-year Singapore growth forecasts

By CHUANG PECK MING

(SINGAPORE) Forecasters in the latest poll by Singapore’s central bank have adjusted their second-quarter growth forecasts for the economy to an average of 4.7 per cent, up from their earlier projection of 4.4 per cent.
 
But the outlook is less cheery for the full year as the economy crosses the halfway mark of 2008, according to the June survey of economists and analysts by the Monetary Authority of Singapore.

The 21 forecasters polled have further trimmed their full-year 2008 GDP growth projection to an average 5.5 - a downgrade from the 6.3 per cent projection in December last year and 5.6 per cent in March this year.

 
And the downgrade came despite GDP growth of 6.7 per cent in the first three months of this year - higher than the forecasters’ 5.7 per cent number.

The Ministry of Trade and Industry is maintaining the official full-year growth forecast of 4-6 per cent for the economy.

In the eyes of the forecasters, things are also not looking better down the road on the employment and inflation fronts. They have adjusted their outlook for the consumer price index increase to 6 per cent this year, up a percentage point from the March forecast.

‘More than half of the respondents’ projections fell within the 6.0-6.5 per cent range,’ MAS says.

MTI last month raised its projection for 2008 consumer price inflation by half a point to 5-6 per cent, following a spike in the rate to 7.5 per cent in April - a 26-year high.

As for employment, the June survey shows forecasters tipping a jobless rate of 2.2 per cent for 2008, up slightly from the 2 per cent they projected in March.

Figures released yesterday by the Ministry of Manpower indicate that the unemployment rate rose from a seasonally adjusted 1.7 per cent in December 2007 to 2 per cent in March - and the outlook ahead is uncertain.

Except for manufacturing, the forecasters trimmed their 2008 GDP growth projections for all economic sectors in the latest poll. The deepest cut was for construction - they slashed their growth forecast for the sector from 15.9 per cent to 11.7 per cent.

The growth forecast for financial services was trimmed from 9.5 to 9 per cent, wholesale & retail trade from 6.3 to 5.2 per cent and hotels and restaurants from 5 to 4 per cent.

The manufacturing sector is now tipped to grow 5.5 per cent this year, instead of 5 per cent as thought earlier.

The forecasters also cut their growth forecast for private consumption this year, from 4 to 3.9 per cent. Non-oil domestic exports are expected to expand even slower - at 3 per cent, against the March forecast of 5 per cent.

Source : Business Times - 17 jun 2008

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MP Reit raises rent by 19.75% at Singapore Ngee Ann City

MP Reit raises rent by 19.75% at Singapore Ngee Ann City

Rent hike for 226,000 sq ft prompts DBS Vickers to raise DPU estimates
By JAMIE LEE

MACQUARIE Prime Real Estate Investment Trust (MP Reit) said yesterday that it has raised rent by 19.75 per cent for about 226,000 square feet of retail space in Ngee Ann City.
 
Ngee Ann City: The rental increase for a period of three years starting on June 8 came after a review with Toshin, which is wholly owned by departmental store operator Takashimaya 
The Orchard Road space, of which Toshin Development is master lessee, is occupied by luxury retailers such as Louis Vuitton and Chanel, as well as brand name retailers.

MP Reit - formerly known as Macquarie MEAG Prime Reit (MMP Reit) - said that this is expected to push annualised DPU (distribution per unit) up by 7.2 per cent, based on an annualised DPU of 7.08 cents for the first quarter of 2008.

The rental increase for a period of three years starting on June 8 came after a review with Toshin, which is wholly owned by departmental store operator Takashimaya.

‘The announcement is above our estimates of 15 per cent and is largely positive for the Reit given its positive impact on earnings,’ DBS Vickers said in a research note.

The broking house raised its DPU estimates to 7.54 cents for the financial year 2008, translating to a DPU yield of about 6.7 per cent based on yesterday’s closing price of $1.13.

DBS Vickers also upped its DPU estimates for financial year 2009 to 7.81 cents.

The lease under Toshin contributed to a quarter of the Reit’s portfolio gross rent, as at end-March this year.

But the broking house lowered its target price to $1.61 from $1.63 to account for ‘a higher risk-free rate of 3.9 per cent against (its) previous estimate of 3 per cent’.

MP Reit holds a 27.23 per cent strata title interest in Ngee Ann City, comprising 256,000 sq ft in retail net lettable area and 141,000 sq ft in office net lettable space.

The 30,000 square feet of retail area that is not covered by the Toshin master lease is directly rented out and managed by the Reit.

MP Reit’s portfolio consists of 10 properties that are worth more than $2 billion.

Source : Business Times - 17 jun 2008

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Overcoming interest rates, inflation risks with the right to swap

Overcoming interest rates, inflation risks with the right to swap

By Mohit SINGH
During recent months, companies have faced rising costs in almost all aspects of their activities. Some have managed to pass these costs to consumers, but most try to find ways to reduce other costs (a term that we have become accustomed) or risk their profit margins being eroded.
Although we can discuss global trends in inflation, consumer demand and activities of the Central Bank, which should be a commentary of their own, domestic interest rates will take centrestage in this room.

We saw the CPI number Available in March 2008 to 6.7 percent over one year, in line with expectations. Since May ’s three months offered rate swap (ROS) is 1.5 percent, real interest rates in Singapore are close to a negative 5 per cent. Although this concern for the fate May average of applicants who is seeing his savings earn less than the inflation rate, which has the effect of eroding its capital, it is a setback for borrowers. There has been much talk of making cheaper mortgage rates, so that the average household balance sheet is not too badly off.

The story is similar for companies that borrow from banks. However, resets tend to be every three months, while if they can benefit from lower rates for the next three months, the objective should be to freeze current rates for the next two to three years or even five years.
The easiest way to do that is for a company to ask a bank ’s cash and enter into an interest rate swap (IRS), in which the company effectively overlays a series of cash flows which replaces its short-term floating interest rate risk by a fixed rate. According to the IRS, the company receives in terms of liquidity in the short term floating interest rate and pay cash on the basis of a pre-agreed fixed.

The variable cash received on the IRS are then used to pay short-term floating-rate interest on its bank loans, leaving the company at a fixed rate of net cash in the long term. The three-year fixed rate against the three months to May ROS is currently 2.5 per cent and a five-year fixed rate is below 3 percent. The credit facility is also dependent on the degree of solvency of the company.

The locking in

Since Q4 of last year, we witnessed a short-term rates fall to 1.5 per cent. On average, short-term rates since 2006 was closer to 3 percent. Lock to levels last seen during SARS in 2003 should be a good trade in the long term. Although the Monetary Authority of Singapore objectives of exchange rates to manage fiscal policy, which led to higher Sing dollar against the U.S. dollar to combat inflation, I would not exclude interest rate return once we begin the healing process.

Not content to simply pay a relatively low fixed rate, there is cost reduction strategies to reduce interest costs further.

These products have gained immense popularity of the responsibility of managers in the world, especially in countries with higher interest rates. In Singapore, we see a more cautious approach to risk management, strategies for reducing costs tend to be more conservative end of the spectrum of risks.

The most popular strategies tend to be range accrual swaps, which require the company to take a view on interest rates or exchange rate of trade between certain levels. An example would be where a customer pays a flat rate of subsidy under 2.2 per cent for three years as long as three months ROS remains between zero and 4 per cent. Hence, the customer will receive a grant of 0.3 per cent for as long as its point of view is correct and pay a penalty if it falls outside the range.

The range in this case is very conservative, that three months ROS remained in this range over the past 10 years. The subsidy may be increased, but so that the range should be reduced. The current environment is ideal for businesses such as implied volatility of commodity prices are at recent and provide the customer a compelling risk / reward earnings.

From the hedge against inflation

There are some interest rate management structures that can be used as a quasi-hedge against inflation. In the absence of an inflation bond market, companies have little choice but to use an instrument that reflects the best parts of their cost base.

Such an instrument is the Standard & Poor ’s trends Indicator (S & P CTI). The S & P CTI follows the performance of a basket of 16 products in six sectors, including energy, base metals, precious metals, foodstuffs, livestock and grain. As the price increases have contributed much to fuel inflation, management of commodity prices, directly and indirectly, can help a company l ‘cost base.

A type interest rate swap linked to the S & P Index CTI is one in which the company pays a fixed rate of 2.5 per cent for three years under performance of the index, which is if the index increases the interest cost decreases and vice versa. So, if prices continue to go besides, its interest costs to move lower.

However, if prices move lower interest costs will increase, but the company to benefit from lower prices of raw materials for his business. This is an example of a hedge interest rate combined with an economic hedge risk of the overall balance.

In conclusion, if there are challenges for the CFO in the current context, there are opportunities as well. Then choose the product that suits your business, keep it simple and enjoy the visit, and if you plan well it shouldn ‘t matter if ’s up or down.

The author is the head of company sales, global markets, HSBC Singapore

Source : Business Times - 17 jun 2008

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Elements of marketing

Elements of marketing

The brand image is crucial for SMEs to stand out, especially in the current context ’s highly competitive market, write WEE JUN KAI and OH BOON PING

As markets across the globe become more saturated, the importance of marketing to businesses in maintaining profit margins has undoubtedly become more important.

Lawrence Leow, president of the Association of Small and Medium Enterprises, said: ‘In l ‘highly competitive market, companies that do often do not compete on price or distribution channels, but they made a lot of effort on brand image.

“The successful brands are able to command premium prices because they have been able to position their products and services differently than their competitors, and they are able to continuously engage their customers and keep them. ‘

Similarly, Hooi Den Huan Nanyang Business School (NBS) said that ‘in this era of abundance of choice, consumers have several options and they can easily switch from one brand to another.

“A functional build a quality product that offers functional utility for customers. Such a service usually relates directly to the functions performed by the product or service for customers. For a car, functional benefits could include sustainability, security or comfort of conduct for a foodstuff, May they be taste, nutritional value or freshness.

“An emotional pull a quality product that provides emotional utility such as sense of security and comfort to Singapore Airlines flight, or feeling trend when using the iPod. Spending money is the price paid by the customer to obtain products and services while the non-monetary costs are other non-price costs for the customer during use and consumption of a product or service.

‘In most cases, the differences between brands in terms of technical performance are not so important. There are many more opportunities for businesses to attract, retain and expand its clientele, creating a differentiation in terms of emotional benefit. ‘

Brand building

And this is especially critical for SMEs as it is difficult for these companies to develop and expand the region without a strong brand image, according to brand consultant David Aaker.

Dr Aaker, who is an adviser to Dentsu, said earlier that BT ‘get the right brand strategy begins with understanding your customers, competitors strengths, market trends, and your business strategy ‘.

And ‘with this backdrop, you must decide what your brand, what associations you want your brand identity. This vision should be multi-dimensional brand, differentiation and forcing ‘.

As companies often have several different brands, he explained, it is also important to create a brand portfolio strategy that has a defined role for each brand and ensures synergy, clarity and leverage of them.

Mr. Leow suggested that a clear business direction, a well-defined strategy, an integrated management system, and a holistic approach to the delivery of the brand promise and experience are essential ingredients in building sustainable brands.

He explained: ‘this requires more than just a coherent approach to the application of a brand ’s name and logo for the product / service. It is essential that the philosophy of branding and brand are the values and instilled in the company ’s employees who are the ambassadors of the brand. Only then will the brand promise to be known by the consumer and thus win the hearts and minds and win their loyalty. ‘

Chio Kian Huat, CEO of RSM Chio Lim said that small businesses ‘can take many small steps that Don ‘t cost much money to create a brand image, against expenditure on a big bang that people can easily forget because they do not know you in the first place ‘.

“To give two suggestions, you can work with partners who believe in you and reciprocate. You can also share your knowledge or expertise in speaking or writing for the right platforms. Initially, you will find May even give you more than you receive. When you n ‘have not much money to spend, you just have to have great patience to keep at it. ‘

According to Professor Hooi, there are nine basic elements in developing a successful marketing strategy.

“First of all, bearing in mind that not all consumers are similar in their needs and desires, we must explore the market to identify market segments - groups of customers whose needs, desires and preferences are homogeneous. Segmentation, which we call a strategy mapping, must be the starting point for all - and not the four Ps of product, price, place and promotion.

In addition, companies need to target certain segments - No society can effectively serve the entire market. We can target one, two, several or all market segments, depending on our market size, growth, our competitive advantage and competitive.

“And we must position our company in the customer ‘mind: positioning is how you want your brand to be perceived in the minds of customers, compared to their needs and positions of competing products / services . Any position must be supported by a strong differentiation. When the positioning is not supported by differentiation, you May “over-promise and under-deliver ‘to your customers.

“For example, Changi airport has positioned itself as the ‘easier to use airport in the world ‘. This initiative is supported by strong differences such as easy access to the airport, signs of information, comfortable lounges, convenient access to the Internet, and so forth. With good quality and affordable prices, Giordano has positioned itself as offering ‘value for money ‘dress.

“Then, differentiation can be ‘translated ‘in our marketing mix (4 P - product, price, place and promotion). And then we develop sales tactics ‘capture the value ‘rear market.

“The value of the mark must be strengthened continuously through the service strategy. The service is not just a question of after-sales service, pre-sale or for-sale. It should be written with a capital ’s ‘, Which means that each company is a service company, since each company must continually improve the value offers, on the basis of particular value formula.

“And last but not least, comes process. No matter how good you are in the eight other elements, they will be ineffective unless you have a good process so you can deliver your products / services at the best cost - effectiveness. ‘

According to Dr. Aaker, a misconception is that the construction of brand covers only advertising when, in fact, other vehicles such as sponsorship and the Internet, are increasingly important.

In particular importance to the mark is to ensure that its values are displayed when service staff interact with customers, because each client ‘point of contact ‘affects the mark, he said.

In addition to providing good quality and timely delivery, companies can also instill brand loyalty by connecting to their best customers through programs that affect them with the brand. Some products such as motorcycles, beer and cars have brands that create intense loyalty through various programmes and functions.

With investment in the formulation of a marketing strategy, both in hours and working capital, companies often wish to measure the effectiveness of their marketing strategies, for which different methods and tools exist.

Here, one of the most common approaches is to use a so-called ‘return on investment marketing ‘(Romi) method.

This is calculated by deducting the excess cash flow divided on marketing investment as a percentage of commercial investments.

“If we all know the numbers, then we can assess whether our marketing program is effective or not. A greater number Romi, a higher return,” said Professor Hooi.

Often, repeat purchases by loyal customers would be the ultimate goal of enterprises ‘marketing strategies, but Professor Hooi warned that failure to renew purchases is not necessarily correlated with poor customer loyalty .

For example, a mother who buys diapers for her baby will certainly not buy diapers again when the child grows. Using the definition of customer loyalty, an error May assume that the absence of repeat purchase indicates non-fidelity.

A better indicator would be willing to recommend or what traders call May, word of mouth advertising.

Source: Business Times - June 17, 2008

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Singapore New CPF minimum sum at $106,000

Singapore New CPF minimum sum at $106,000

By JAMIE LEE

THE Central Provident Fund Board yesterday said that the new minimum sum would be $106,000. The latest amount will apply to CPF members who turn 55 between July 1, 2008 and June 30, 2009.
‘Members who set aside the $106,000 cash savings in their retirement account will receive a monthly payout of $910 from age 64 for about 20 years,’ the board said.
 
 
The announcement follows the government’s plan in 2003 to raise the CPF minimum sum to $120,000 by 2013, through an annual increase of $4,000 from 2004. The $120,000 figure did not include inflation over the past five years.

The new increase in the minimum sum requirement was to ensure that Singaporeans will have more savings to tide them over retirement, as people were expected to live longer.

 
The minimum sum was adjusted to $106,000 from the $100,000 based on 2003 dollars.

This was calculated from the consumer price index published by the Department of Statistics, of 0.5 per cent, 1.7 per cent, 0.5 per cent, one per cent and 2.1 per cent respectively for the years 2003 to 2007.

The CPF board has also raised the lower and upper limits for members’ Medisave accounts by $1,000.

This means that from July, members must set aside at least $29,500 in their Medisave accounts when they withdraw their CPF at or after the age of 55.

Their contributions must also be capped at $34,500. Excess funds will be channelled to the Special Account if the contributor is below 55 or to the Retirement account if the person is over 55 and the latter account has less than $106,000.

The interest rate for the Special, Medisave and Retirement accounts will continue to be pegged to the 12-month average yield of the 10-year Singapore Government Security, plus one per cent. The rate stands at 3.65 per cent for the period June 1, 2007 to May 31, 2008.

The government has said that it will maintain a floor rate of 4 per cent for two years if the pegged rate falls below 4 per cent. It will apply a 2.5 per cent rate for all CPF accounts after two years.

Source : Business Times - 17 jun 2008

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Singapore New private home sales up 55%

Singapore New private home sales up 55% 

Highest monthly figure so far this year follows softening of prices, surge in total units launched

By Joyce Teo, Property Correspondent 
 
SINGAPORE’S private residential property market has started showing some signs of life after several months in the doldrums, thanks in part to an easing of prices.
Last month, developers sold 441 new homes, excluding executive condominiums, a sharp 55 per cent jump on the figure for April - albeit a low base - of 284 home sales.

That made May the best month so far this year, according to the monthly sales figures released by the Urban Redevelopment Authority yesterday.

The improved sales came on the back of 474 new homes launched by developers - a 75 per cent surge over April - though many of the units sold were from earlier launches.

Still, consultants caution against reading too much into the latest figures. They say the market is generally still taking a breather, as many buyers prefer to stay on the sidelines.

Sales have improved from a very low base but they remained 32 per cent below the 12-month average, said Knight Frank’s director of research and consultancy, Mr Nicholas Mak.
The figures ‘do not necessarily imply that the private residential market has overcome the protracted lull sparked off by global economic woes’, he said.

‘The market is still at a plateau. Going forward, we will still see range- bound prices and volume of between 300 and 600 units a month. Sentiment is still very cautious,’ he said.

Jones Lang LaSalle’s head of research for South-east Asia, Dr Chua Yang Liang, said median prices have eased.

The chief executive of PropNex, Mr Mohamed Ismail, said that most May sales were done at a median price of below $1,000 per sq ft (psf), a stark contrast to the end of last year when the median price of almost two-thirds of all sales was over $1,000 psf.

‘Upon closer scrutiny, we can see that less than 50 per cent of the units launched were actually sold.’

Also, slightly over half the sales were from earlier launches, he said.

Still, there are a few bright spots. While some are struggling to sell, developer Macly Group sold 72 out of 102 units of Vutton in the Novena area at $1,057 psf to $1,416 psf.

In the luxury market, the 100-unit Nassim Park Residences is the star performer, logging in sales of over 50 units since its soft launch at end-May.

As these are large apartments, prices range from about $10 million to a whopping $19.5 million, sources said.

The prime Nassim Road project - being developed by UOL Group, Kheng Leong and Orix Corp - has already hit a high of $3,800 psf - far better than its low of $2,318 psf.

One buyer is Mr Wee Ee Cheong, son of UOL chairman Wee Cho Yaw, who bought a penthouse for $18.33 million.

Just over 30 per cent of the buyers are foreigners. The project has already been launched in Jakarta and Hong Kong, said UOL.

Another luxury development Scotts Square in the Orchard area registered sales of four units at a median price of $3,818 psf last month.

The relatively strong sales in central Singapore were the result of ‘latent demand spurred on by softening prices’, said Dr Chua.

‘Going forward, we reckon that developers are likely to keep prices competitive to keep the market demand stable,’ he said. As long as prices remain affordable, price-sensitive buyers will return, he added.

Savills Singapore’s director of business development and marketing, Mr Ku Swee Yong, said the level of transactions and price levels seen last month are sustainable.

Source : Straits Times - 17 jun 2008

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Singapore Strong home sales lift demand for property issues

Singapore Strong home sales lift demand for property issues
 
PROPERTY counters rebounded yesterday following the positive news about private home sales - and took warrants on the shares along in their wake.
Sales hit 441 units last month, up 55 per cent from the 284 in April, as buyers took advantage of easing prices.

Last Friday, CapitaLand was down about 8 per cent for the week compared to a fall of about 5.3 per cent for the Straits Times Index. City Developments (CDL) was down about 6.7 per cent for the week.

But yesterday, the positive news on home sales sent property counters bouncing back.

CapitaLand rose 10 cents to $5.90 on a volume of 7.2 million shares while CDL was up 10 cents at $10.52 on a volume of 2.25 million shares. Keppel Land was up four cents at $5.16 with 1.35 million shares changing hands.

‘The sales momentum in May has continued in June such that the number of new homes sold is likely to be better,’ said Mr Joseph Tan, an executive director of residential property at CB Richard Ellis.

The activity among the mother shares was reflected in the warrants market.

A warrant issued on CapitaLand by Macquarie Securities rose one cent to 18 cents on a volume of 9.6 million units. Its exercise price is $5.84.

Another warrant with an exercise price of $6.83 and a conversion ratio of 1000 shares to 2,970 warrants rose half a cent to 6.5 cents with 1.2 million units traded.

But a call warrant on CDL with an exercise price of $12 fell half a cent to 11 cents with 1.2 million units traded.

The Urban Redevelopment Authority said in April that Singapore home prices climbed 3.7 per cent in the first quarter, the smallest increase in more than a year.

Jones Lang LaSalle said yesterday that developers are likely to keep prices competitive, by offering discounts, to keep the market demand stable.

Its head of research, Dr Chua Yang Liang, said: ‘The market will continue to see the return of these price-sensitive buyers as long as prices remain affordable.’

LEE SU SHYAN

 
Source : Straits Times - 17 jun 2008

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Economists’ growth forecast for full year dips to 5.5%

Economists’ growth forecast for full year dips to 5.5% 

Latest MAS poll also finds that projections for most sectors have eased slightly

By Nicholas Fang 

 
THE economic outlook for the year is looking a bit like a ride on a roller coaster - a lot of ups and downs with the view changing all the time.
This is partly reflected in a new Monetary Authority of Singapore (MAS) poll, which has tipped the economy to move along at a reduced pace compared with last year but pick up towards Christmas.

The optimism is due partly to the belief that the spillover from the boom in India and China will offset a slowdown in the United States and partly to a view that inflation will be easing.

Dr Chua Hak Bin, chief Asian strategist at Deutsche Bank Private Wealth Management, said a visible slowdown in the second and third quarters seems to be on the cards, with an improvement by the end of the year.

‘I am forecasting about 5.1 per cent growth for the second quarter, 4.8 per cent for the third and 5.6 per cent in the fourth.

‘The latest survey suggests that Singapore’s economy remains resilient despite a US downturn. Strong growth in emerging economies like China and India is partly compensating for slower growth in the US.’
United Overseas Bank economist Ng Shing Yi said inflation should have peaked last month or this month, and is likely to moderate in the second half due to stabilising oil prices.

MAS polled 21 economists and analysts for its June survey released yesterday. The key finding was that economic growth for the year has been forecast to come in at 5.5 per cent, down a touch from the 5.6 per cent forecast in the March survey.

The experts expect lower- than-expected growth in construction, financial services and wholesale and retail trade to hinder expansion.

In particular, expectations for the construction sector were dialled down from March’s projection of 15.9 per cent to 11.7 per cent, while wholesale and retail trade is forecast to slow to 5.2 per cent from 6.3 per cent.

But while inflation risks continue to escalate, the experts said strong growth in China and India will help cushion the impact of a flagging US economy.

The amended forecast of 5.5 per cent is within the 4 to 6 per cent range of growth that the Government predicted earlier.

The MAS said the most likely outcome is for growth of between 5 per cent and 5.9 per cent this year, based on mean probability distribution of the survey.

What yesterday’s figures also reveal is how difficult it is to get a handle on things in this year of sub-prime crisis, credit crunch, oil shocks and periods of near financial market panic.

This is evident in the first-quarter growth number. The experts had tipped in March that it would be 5.7 per cent but the MAS said yesterday the economy actually expanded by 6.7 per cent in the period.

That healthy number prompted analysts in the June poll to adjust their forecast for second- quarter growth to 4.7 per cent, up from 4.4 per cent in the March survey.

HSBC Bank economist Robert Prior-Wandesforde said the upward revision in second-quarter forecasts reflects the unexpected strength of first-quarter data.

He believed that there remained potential upside surprises for both growth and inflation; he tips 6 per cent annual growth and at least 6.3 per cent inflation.

‘If I’m right, then the pressure will remain on the MAS to keep a tight currency stance at its October meeting,’ he said.

Inflation is a key concern. The MAS said the median forecast rose to 6 per cent from 5 per cent in March. Inflation in the second quarter is tipped at 7.5 per cent.

Source : Straits Times - 17 jun 2008

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com