Home sales still going strong

Home sales still going strong
Far from fizzling out, demand for entry-level homes has spilled over to high-end projects
By Fiona Chan

The Orchard Residences (above), Nassim Park Residences and The Ritz-Carlton Residences all saw units sold above the benchmark price of $3,000 psf last month. Sales of such high-end and luxury homes have gained traction of late.

When private home sales unexpectedly jumped in February, in the thick of Singapore’s worst-ever recession, pundits called it a false dawn and warned that the rally would not last.

Strong demand
Despite prices increasing by 5.2 per cent on average last month, buyers seemed undeterred, said DMG analyst Brandon Lee. ‘We attribute it to the buoyant HDB upgrader demand, pent-up demand, low interest rates and improved macro-economic landscape.’

But now, the market has sustained its rebound for five straight months and is expected to keep growing.

Figures released last Wednesday showed that last month’s new home sales hit a record high of 1,825, while recent news reports indicate that this month’s sales figures will still be strong.

All this has prompted previously sceptical analysts to turn more decidedly positive on the sector.

At least three research houses - UOB Kay Hian, DMG & Partners and DBS Vickers - are now overweight on Singapore property, which means they see property stocks as better valued compared with stocks in other sectors.

Why the change in sentiment? Recent data offers a whole host of reasons, according to the analysts.

One is that the worst of the economic crisis is over, and Singapore in particular looks to have turned the corner. Last Tuesday, the Government said the economy jumped 20.4 per cent between March and June to rise out of recession, pulling up market confidence and the full-year growth forecast along with it.

In the same quarter, developers sold 4,714 brand-new units - already more than the 4,370 they sold for the whole of last year.

The improvement in home sales is also spreading to more segments of the market, said UOB Kay Hian’s property analyst Vikrant Pandey.

While the rally in private home sales started in entry-level homes - a result of pent-up demand from HDB upgraders and genuine owner-occupiers shut out of the last property boom - the positive sentiment has widened to include pricier units.

Sales of high-end and luxury homes have gained traction recently, with ‘a steady increase noted in the number of transactions above $1,500 per sq ft since the beginning of this year’, said Mr Pandey.

Last month, high-end sales were boosted by the 146 units sold in One Devonshire in Somerset, at a median price of $1,771 psf. Three units were also sold above the benchmark price of $3,000 psf: at The Orchard Residences, Nassim Park Residences and The Ritz-Carlton Residences.

Most importantly, the rebound is pushing property prices up in some projects - and buyers are still biting.

Despite prices increasing by 5.2 per cent on average last month, buyers seemed undeterred, said DMG analyst Brandon Lee.

‘We attribute it to the buoyant HDB upgrader demand, pent-up demand, low interest rates and improved macro-economic landscape.’

More pent-up demand may still be on the way, from buyers who sold their previous units en bloc and have yet to buy another home, said DBS Vickers analysts Adrian Chua and Lock Mun Yee in a report published last week.

They also take heart from the fact that long-held fears of an impending surge of new units have failed to deflate the market.

‘We believe we should not see a short-lived spike unless prices rise beyond economic fundamentals,’ they added.

But not all analysts are so upbeat.

OCBC’s Mr Foo Sze Ming has maintained a neutral rating on the property sector because he thinks that there will be no additional impetus for home sales to keep rising.

In fact, he said the number of unsold suburban homes rose last month for the first time in four months - evidence that the pent-up demand from HDB upgraders has been gradually met.

What is now helping to drive demand for new homes is sideline liquidity from investors who see a chance to get in on the action.

But he said it remains uncertain as to how long this can last. Unless wages start rising again or foreign funds start coming in to buy Singapore property - neither of which Mr Foo thinks is likely to happen soon - the recovery may well peter out.

Of the stocks that analysts are now bullish about, City Developments seems one of the most popular due to its relatively large exposure to the Singapore residential market.

UOB Kay Hian and DBS also like Ho Bee, which has both mid-end and high-end projects, and Allgreen, which has at least two mid-tier projects launch-ready.

Source : Straits Times - 19 July 2009

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Push to certify real estate agents

Push to certify real estate agents

Industry body wants at least 1 in 2 agents here accredited by year end

By Fiona Chan

THE real estate industry is stepping up efforts to train and certify property agents in Singapore, after the Government expressed concern over the unscrupulous practices of rogue agents, highlighted in a recent spate of unsavoury incidents.

Singapore Accredited Estate Agencies (SAEA) said yesterday it aims to see at least half of the 30,000 or so agents here accredited by the year-end - a tough goal as the tally to date is only 6,000.

As an incentive, SAEA has persuaded the Workforce Development Agency (WDA) to subsidise most of the course fees for one of the exams till December.

Agents will be tested on property law, ethics and sales processes. The goal is to ensure that property buyers and sellers are able to engage only accredited agents trained in such transactions, said SAEA chief Tan Tee Khoon yesterday.

The Institute of Estate Agents said yesterday it would introduce in September a six-week entrance course for all new property agents. No such course is offered currently, so basic training is left to individual property agencies.

Accreditation is voluntary, as the Government has always said it prefers the sector to be self-regulated. There is no law requiring property agents in Singapore to be licensed or qualified. They are regulated by the agencies they work for.

However, this has led to some instances of buyers and sellers being cheated by unethical rogue agents or misled by ignorant ones. In February, a couple successfully sued estate agency ERA Realty Network because its agents had made a profit out of ‘flipping’ an apartment they were supposed to sell for the couple.

Following this, National Development Minister Mah Bow Tan said the current regulatory regime was not tenable, so the Government was considering tightening the rules governing agents.

In response, SAEA yesterday unveiled several steps to raise industry standards.

The first is to encourage more agents to obtain accreditation. To do so, they must pass an exam and belong to one of the 300 agencies accredited by SAEA.

They can take either the Common Examination for Housing Agents (CEHA) or the lower-level Common Examination for Salespersons (CES).

CEHA, which costs $315 and was introduced in 1996, is recognised by the Inland Revenue Authority of Singapore as a qualification for agents who want to start their own real estate firms.

CES, which costs $200 and consists of multiple-choice questions, was created last year for agents keen on simply buying and selling properties. This group makes up about two-thirds of agents here.

Yesterday, SAEA said WDA will subsidise 80 to 90 per cent of the course fees for CES takers until the end of the year.

Nine of the largest SAEA-accredited agencies - including PropNex, ERA, HSR and Dennis Wee - have pledged to get all their active agents to take the exams by the year-end. These agents do deals regularly and make up about half of all agents here. ERA associate director Eugene Lim, for instance, said the firm will send 50 to 80 agents to take the exams every month.

For agents keen to get further qualifications, SAEA is also tying up with Ngee Ann Polytechnic to introduce a new Certificate in Real Estate Marketing. The six-month course will cost about $1,500 and is slated to start in November.

In addition, SAEA is taking steps to improve its complaint procedures. Buyers and sellers who are unhappy with their accredited agents can lodge complaints with SAEA, which receives about 70 such complaints a year. Previously, the process was not made public, and there was no structured procedure to handle dispute resolution, said Dr Tan. Now, SAEA will provide greater transparency when dealing with complaints.

Dr Tan said these moves are a push by the industry to raise the competence and improve the conduct of real estate agents, but that help from the Government would also be appreciated.

‘I hope that some time next year, we will see an announcement by the Government on making accreditation compulsory for those who want to practise.’

Source : Straits Times - 18 July 2009

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Surprising Serangoon

Surprising Serangoon

Roam Little India and you may find small museums, hip eateries and cool arts spaces

By tay suan chiang

Big changes are happening in Little India.

More than just Mustafa and foreign workers, it is now an enclave of arts spaces, boutique condominiums and hip eateries.

Yes, along the side streets off the main thoroughfare of Serangoon Road there is still the whiff of curry powder and the blare of Hindi music.

But new entrants adding a contemporary urban flavour have been popping up among the rows of terrace shophouses.

And such is the changing vibe with more new buildings coming up, including an 11-storey shopping mall and a hotel.

Buildings making their mark on the area include small condo developments with sleek, geometric designs and plenty of glass and steel, including Soho 188 and Soho@Farrer, both located along Race Course Road, and Residences@Somme in Petain Road.

There are the high-rise developments such as the 481-unit Kerrisdale in Sturdee Road and the 910-unit City Square Residences in Kitchener Road.

Developers spotted a niche opportunity in the area sited close to town and becoming a trendy destination.

Ms Jain Shu, project coordinator with Tania Developments, which is redeveloping three shophouses and building a six-storey extension for residential use in Roberts Lane, says: ‘The company already had the property for some time and we realise the Serangoon Road market is upcoming. We see a lot of potential in the area.’

A spokesman for City Developments, developer of City Square Residences and the upcoming 11-storey City Square Mall, says the shopping centre will redefine the shopping and entertainment experience in the precinct, adding that the two projects ‘along with other upcoming developments, will gentrify the Serangoon Road vicinity’.

Residential property prices here are comparable with those elsewhere. At Studios@Marne in Marne Road, the average apartment is priced at $1,000 per sq ft.

Mr Chris Koh, director at Dennis Wee Properties, says the pricing is reasonable as the apartments are close to Farrer Park MRT station.

‘Its convenient location is an attraction and buyers will not mind that the area is congested,’ he says.

Indeed, a Serangoon Road resident, who wanted to be known only as Mr Saji, 34, says he has seen more people moving into the area in the last three years.

‘People used to think that this area was crowded, but now they realise it is so central,’ he says.

Long-time resident Srikanth Rajah, 33, who owns a printing shop, has been living in an HDB flat in Buffalo Road for 25 years.

He says the demand for flats in the area has been high, even for old ones like his.

‘Property agents have been asking residents if they wish to sell,’ he says, adding that he notices more young couples moving into the area.

Appealing to the young and trendy would be the Little India Arts Belt in Kerbau Road, set up in 2002 by the National Arts Council. It is a row of shophouses rented out to arts groups such as Bhaskar’s Arts Academy and Sri Warisan Som Said.

Art galleries have also popped up in the area, such as Post-Museum in Rowell Road and Your Mother Gallery in Hindoo Road.

Backpacker hostels have opened here, set in old shophouses which give them a unique charm. Among them are The InnCrowd Backpackers Hostel and Prince of Wales Backpackers Pub, both in Dunlop Street.

As for hip eateries, they include Zsofi Tapas Bar in Dunlop Street, which serves Spanish nibbles such as ham-and-cheese potato fritters, a change from the area’s many Indian restaurants.

Expect more new properties in the area over the next year, such as a hotel, at least two low-rise condos, a 20-storey mixed development building and a six-storey extension to Mustafa Centre.

And by year-end, City Square Mall in Kitchener Road will open with more than 250 stores. Anchor tenants include Metro department store, FairPrice supermarket and electronics retailer Best Denki.

With new homes and businesses popping up, just what do residents and regular visitors to Little India think?

Madam Doris Lim, 39, who lives at City Square Residences, says she chose to live here because of the development’s convenient location. ‘It is close to Farrer Park and Little India MRT stations and the main bus routes,’ she says.

As for teacher Wendy Koh, 34, who has been living at Kerrisdale since 2006, she picked the place because she likes the condominium’s design ‘I didn’t really consider the surroundings,’ she says.

Mr Rajakumar Chandra, 50, chairman of the Little India Shopkeepers and Heritage Association, says the new entrants ‘make the area more bustling and not so quiet. There is more vibrancy now’.

The new additions aside, it is still the food that draws trading and operations executive Jayakumar Mannar, 60, to the area twice a week from his home in Eunos.

‘It’s the nasi briyani - I can’t find the same taste anywhere else.’

Dr Kevin Tan, 48, president of the Singapore Heritage Society, says the transformation of Serangoon Road is interesting and exciting.

But he adds: ‘Much of the area is still under conservation so I don’t see the character of the place changing too rapidly or radically.’

Student May Lam, 23, is a fan of Little India. ‘The place is always so alive, regardless of whether it’s day or night,’ she says.

Source : Straits Times - 18 July 2009

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Cambridge Reit drops purchase of property

Cambridge Reit drops purchase of property

(Singapore)

CAMBRIDGE Industrial Trust is not taking up an option to buy and lease back a $55.2 million industrial property at Tai Seng Street.

The vendor, Natural Cool Holdings, announced the termination of the option agreement yesterday.

Cambridge, which was to have secured equity financing for the purchase by June 30, informed Natural Cool that it was not proceeding with the purchase.

Natural Cool secured shareholder approval for the sale back in November 2007. The plan was to sell Lot 6501T at Tai Seng Street/Tai Seng Avenue to Cambridge and to lease back the property at not more than 8 per cent of the purchase price a year. The lot had leasehold interest for 30 years with an option to renew for a further 30 years.

The agreement was later delayed after certain changes in the terms and conditions were agreed.

Source : Business Times - 18 July 2009

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Property agents reach out with Facebook

Property agents reach out with Facebook

Having secured a stronghold in the classifieds, they are now expanding into the virtual arena. By Emilyn Yap

FRIENDLY phone calls or e-mail just do not seem enough these days. Soon, more property agents may ’superpoke’ their clients when previews for the latest launches begin, or when choice units from existing developments surface.

FACE VALUE
Hong Leong Holdings recently set up a Facebook profile (next) for its new project in the Upper Changi area, The Gale (above), and over 330 users have signed up as ‘fans’
Having carved out a stronghold in the classifieds, property agents are now expanding their reach to virtual networking site Facebook. Some set up profiles for upcoming projects, while many others leave their contact numbers on those pages for house hunters.

KF Property Network’s Tony Koe is one agent who has been actively promoting launches on Facebook. The general manager of the Knight Frank subsidiary has created profiles for Soilbuild Group’s Meier Suites off Meyer Road - for which there will be a preview this weekend - as well as for Far East Organization’s Silversea at Amber Road.

‘We have established a group of supporters, be they our fellow agents in the market or regular property purchasers,’ said Mr Koe. One reason is that they can obtain information on the projects quickly from Facebook, he explained.

For instance, visitors to the Silversea page will be able to view artist’s impressions of the development. They can also gauge how response to the launch has been by viewing photographs of the turnout at the showflat. The page boasts 197 ‘fans’, comprising what is likely to be a mix of agents and interested buyers.

Also, a Facebook profile is free, accessible by users from around the world, Mr Koe said. According to him, one of his agents was even asked to fly to Indonesia, at the request of a Facebook user and prospective investor there.

Word-of-mouth is also strong on Facebook and other networking sites, said Michael A Netzley, a corporate communications professor at Singapore Management University’s Lee Kong Chian School of Business. ‘A recommendation from a friend can have a strong impact on how others perceive the product or service.’

Besides property agents, at least one other developer has jumped on the Facebook bandwagon. Hong Leong Holdings recently set up a profile for its new project in the Upper Changi area, The Gale, and over 330 users have signed up as ‘fans’.

The page offers regular updates on sales. For instance, a post on Monday screamed: ‘More than 65 per cent sold in three days of preview!’

A user going by the name Yue HuiHui would also have found the page useful. No, there is no mini golf course at The Gale, said an agent in response to his question. But, there are 18 other facilities such as a bubble pool which he can ‘enjoy’.

A Hong Leong Group spokeswoman said that The Gale’s Facebook page has received ‘very encouraging’ response and there is a constant stream of posts. ‘It is highly probable that Hong Leong Holdings will promote future projects through Facebook and other Web 2.0 applications. Projects in the pipeline include its development at No 1 Balmoral Road and No 76 Shenton Way.’

For every popular Facebook page, however, there can be many others which stay unseen. Some agents attract barely a fan on pages which they create for certain developments.

KF Property Network’s Mr Koe points out that a site’s success also depends on the agent’s influence in the industry. ‘The person who set up the page must be a magnet himself,’ he said, adding that that person would still have to go out and gain contacts. ‘You can set up a very beautiful website, but if you can’t draw people’s eyeballs to you, that will defeat all the purpose.’

Herein lies the drawback of marketing through networking sites such as Facebook. According to Prof Netzley, relying on existing networks to spread the word means that outreach will be limited. ‘In exchange for the smaller reach, we expect a higher response rate,’ he said.

In contrast, messages spread through traditional media such as newspapers or television reach a much wider audience. In turn, the response rate to this mode of marketing is likely to be lower, he said.

For most companies, print advertising is unlikely to go out of style anytime soon. At Singapore Press Holdings’ Cats Classified, for instance, the average number of fresh listings has increased from January to June, reflecting the pick-up in market sentiment.

Many ‘property watchers’, in particular, rely on weekend editions of major newspapers to find out about launches, said the Hong Leong spokeswoman. ‘Perusing the advertisements from developers in the newspapers also allows them to easily compare the benefits of different developments.’

Source : Business Times - 18 July 2009

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Push to get property agents accredited

Push to get property agents accredited

By ZEINAB YUSUF

AN ESTATE agents’ group has launched a push to heighten the professionalism of property agents.

Singapore Accredited Estate Agencies (SAEA) wants all housing agents to have at least an entry-level Common Examination for Salesperson (CES) certificate. SAEA wants ‘to move the estate agency profession to the next lap’, said its recently appointed chief executive officer Tan Tee Khoon.

At present, about 6,000 out of 24,000 property agents at accredited agencies have either first-tier Common Examination for Housing Agents (CEHA) or second-tier CES certification.

Although SAEA wants all agents to be accredited, obtaining a certification will be voluntary and there will be no penalty should an agent choose to not be accredited. But property agencies and SAEA are confident that the agents will choose to be accredited ’since it will benefit them in the long run’, Dr Tan said.

To encourage them to obtain certification, SAEA has obtained funding from the Workforce Development Agency (WDA) for first-tier CES accreditation. The funding will cover up to 80-90 per cent of the course fee, which is about $350, excluding examination charges. Some agencies, such as HSR, will fully subsidise the remaining costs.

Another SAEA initiative will improve the procedure for dealing with complaints and disputes involving estate agencies.

Dr Tan said that the procedure has been enhanced to provide greater transparency for consumers, from the time that a complaint is lodged until when the matter is closed. SAEA will also work with CES external examiner Ngee Ann Polytechnic to introduce a Certificate in Real Estate marketing so that CEHA and CES holders can upgrade to a recognised professional qualification.

The first 120-hour course will run from November this year. SAEA and Ngee Ann Polytechnic are working on the prospect of getting funding from the Skills Development Fund for the course, which will cost $1,500 for six months.

Source : Business Times - 18 July 2009

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MINDY YONG

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mindy@mindyyong.com