Laguna Park residents confident of reaching S$1.2b target

Laguna Park residents confident of reaching S$1.2b target

By Desmond Wong,

SINGAPORE: While the en bloc market may have slowed, the residents of Laguna Park are optimistic their prime location will help them get their asking price of S$1.2 billion.

The en bloc sale of the 30-year-old condominium crossed the 80 per cent threshold on Friday allowing the process to proceed to the marketing stage.

This is despite the property market softening from the economic slowdown.

With schools like Victoria Junior College nearby plus the sea view, residents feel they’ll get a fair deal for their 99-year leasehold property which occupies a total land area of some 667,000 square feet.

But some are hoping to wait till the third quarter of 2009 to enter the market.

Lee Kok Leong, a Laguna Park resident, said: “Now the market is soft and when you go in, you won’t get a good price. So we hope that it recovers then it will be okay. All these are condominiums, so it may fetch a higher price because the land is big.”

The move to sell started in early 2007 but hit a snag as some residents held back hoping the bull market would last.

Residents currently expect S$1.8 million to S$2.3 million for their units, down from the over S$3 million some were hoping for last year.

Most of the development’s 528 units are between 1,500 and 1,700 square feet.

Last year, Singapore saw 104 successful en bloc sales but in 2008 this has slowed to just seven.

There remains a five-day cooling-off period for the residents to change their minds but many expect the sale to go through. - CNA/vm

Source : Channel NewsAsia - 15 Dec 2008

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com

Laguna Park clears hurdle

Laguna Park clears hurdle

APPROVAL for an enbloc sale by owners of Laguna Park apartments crossed the 80 per cent threshold on Friday, Channel News Asia reported yesterday. This allows the owners of the 30-year-old condominium to proceed to market the site, which has a total land area of about 667,000 sq ft.

The asking price is $1.2 billion - or $1.8 million to $2.3 million per unit, down from the more than $3 million some owners were hoping for last year.

The move to sell started in early 2007 but hit a snag as some residents held back in the hope that the bull market would last, CNA reported. Most of the development’s 528 units are between 1,500 and 1,700 square feet.

Figures from property consultancy group CB Richard Ellis released last week show that only seven collective sales worth a total $371 million have been sealed this year, against the record $12.4 billion from 111 transactions in 2007. The collective sales market was dormant this year as developers remained mindful of the lukewarm response to new residential launches, rising construction costs and tighter credit measures, CBRE observed.

Source : Business Times - 15 Dec 2008

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com

Investors should be wary of underestimating risks - again

Investors should be wary of underestimating risks - again

By R SIVANITHY
SENIOR CORRESPONDENT

HOPE, it’s said, springs eternal. In the US, Wall Street hopes that its carmakers will be bailed out by the Bush administration tapping into its US$700 billion fund that was supposed to help unfreeze credit markets. In addition, it also hopes that the US Federal Reserve will continue cutting interest rates after tomorrow’s Open Markets Committee meeting, never mind that all previous rate cuts have not had an effect.

In this part of the world, punters hope for a year-end rally that often involves window-dressing of the major indices which in 2008’s case, will be aimed at hiding poor performance.

Brokers and analysts, in the meantime, hope that after underestimating the risks in 2008, they’ll get it right in 2009 so the majority of recommendations that have been issued over the past week were - surprise, surprise - of the ‘buy’ variety.

The main danger in all of this is the same as it has been throughout this year, which is that everyone seems to be once again underestimating risk.

One reason for this is the use of most recent history as a gauge of the market’s health and drawing comparisons to argue that stocks are cheap. Thus, several recent strategy reports have argued that because the present price/book is roughly the same as during the 2002-3 Sars downturn or during the 1998 regional crisis, then a trough has been reached.

What these analyses have failed to take into account is a tottering and essentially bankrupt US economy which may still plunge into a deep abyss even if its bankrupt government manages to successfully bail out its bankrupt car industry. In other words, there seems to be a disconnect between the economic outlook and the stock market’s discounting process - the former is bad and looks set to get worse while the latter is pinning its hopes on continued government support and rescues.

To illustrate, here is what DBS’s Economics & Market Strategy report last week said of the local economy: ‘Growth outlook for Singapore is pointing south. Uncertainties in the global financial market and consumer pessimism continue to loom overhead. Downside risks to global growth remain high. Many of our key export markets are heading towards a substantially slower growth path or are already in recession.

‘A small, open economy like Singapore is especially susceptible to such weakness in global demand. In addition, while the external environment will continue to remain hostile for the next 12 months, domestic demand will also weaken amidst the softer labour market, delays to several mega construction projects. . .growth outlook for Singapore will worsen. . .’

JP Morgan’s Friday comment on the outlook for the local market was probably the most succinct we’ve seen. ‘Disaster avoidance is probably the best short-term investment philosophy: We expect the next three to six months to be dominated by tactical stock selection driven by how much (or how little) balance sheet quality and earnings resilience has been priced into stocks.’

It also said the FY08 results reporting season in Jan/Feb 2009 will be critical in providing the appropriate signals of corporate operational and financial health as well as assessing how much additional equity capital may be required by those companies with too much leverage.

Finally, Macquarie Research in its Dec 8 Asia Strategy said earnings estimates for Asia ex-Japan as a whole are still too high. ‘Our guess is that the current 2009 earnings growth forecast may turn out to be approximately correct, but it will be from a much lower 2008 base than is currently being forecast (. . .the final 2008 earnings growth outcome could easily be somewhere between -30 and -40 per cent),’ Macquarie said.

In a nutshell, investors should be wary of placing too much faith in their hope to keep markets afloat, at least until the present disconnect between the underlying economy and market expectations converge. In short, be careful of underestimating risk again.

Source : Business Times - 15 Dec 2008

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com

Obama stimulus could balloon to US$1 trillion - NEW YORK

Obama stimulus could balloon to US$1 trillion - NEW YORK

Original US$600b package considered too low now: report

(NEW YORK) President- elect Barack Obama’s team is considering a plan to boost the US economy that could be far larger than previous estimates and might reach US$1 trillion over two years, the Wall Street Journal has reported.

Mr Obama’s aides, who were considering a half-trillion-dollar package two weeks ago, now consider US$600 billion over two years ‘a very low-end estimate,’ the newspaper said on Saturday, citing an unidentified person familiar with the matter.

The final size of the stimulus was expected to be significantly higher, possibly between US$700 billion and US$1 trillion over that period, it said, given the deteriorating state of the US economy.

Officials with Mr Obama’s camp have declined to comment on media reports about the size of the boost his administration might seek to give the economy through increased public spending and tax cuts.

Mr Obama is due to take office on Jan 20.

Battered stock market investors around the world have taken heart from previous indications of how Mr Obama’s administration may seek to kickstart growth in the world’s largest economy.

He has promised he will launch a massive public works programme to help lift the US economy out of recession.

The president-elect is likely to be briefed by his aides on the outline of the stimulus plan this week with a view to getting it passed by Congress by the time he is sworn in next month, the Journal said.

Economists have previously said they expect Mr Obama to quickly sign a multi-year spending package that could be worth up to US$750 billion, or almost 5 per cent of US gross domestic product.

The administration of President George Bush has been given authority by Congress to spend up to US$700 billion in taxpayer money to rescue the nation’s banking system.

The money was originally set aside to buy up toxic mortgage-backed securities but is now being used to recapitalise banks and induce them to lend more freely.

Earlier on Friday, House Speaker Nancy Pelosi said the House is likely to act next month on a US$500 billion to US$600 billion economic-stimulus measure aimed at making long-term investments in renewable energy as well as providing a short-term boost for the economy.

‘Economists told us that the package had to be strong enough, half a trillion, US$600 billion, somewhere near that,’ she said in an interview for Bloomberg Television’s Friday episode of Political Capital with Al Hunt.

The legislation will be geared toward some broader Democratic priorities - such as boosting broadband Internet technology and making environmentally friendly improvements to the nation’s electric-power grid - in addition to more-traditional road-and- bridge projects, she said. Some of the spending will extend beyond 2009, she said. — Reuters, Bloomberg

Source : Business Times - 15 Dec 2008

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com