Govt move has ‘no impact’ on new launches

Govt move has ‘no impact’ on new launches

No need for price change as few take up absorption scheme, say developers

By Robin Chan

PROPERTY developers were sticking to their prices yesterday following the Government’s announcement of a slew of measures designed to cool the market.

At two of Singapore’s more eagerly anticipated launches, The Interlace and Hundred Trees, developers said they did not foresee any need for price adjustments.

A spokesman for CapitaLand said it was holding prices at between $850 and $1,150 psf for The Interlace at the former Gillman Heights site.

She noted that less than 5 per cent of buyers at the developer’s other new property - The Wharf Residence, launched earlier this year - had opted for the interest absorption scheme (IAS) abolished by the Government on Monday.

The scheme, popular among investors and speculators, allowed buyers to put down a deposit and make no further payments until the property was completed.

City Developments Limited’s spokesman Gerry de Silva played down speculation among property agents that CDL’s upcoming Hundred Trees site would be priced under $950 psf, saying that no price had been set yet.

Mr de Silva said the government measures would ‘have minimal effect on our plans to launch Hundred Trees and other developments’.

He also cited the low take-up rate of IAS among purchasers.

Buyers and analysts hope the measures unveiled by the Government on Monday - which include the removal of the interest-only housing loans (IOL) and a return to a confirmed list for land sales - will help keep out speculators and allow prices to more accurately reflect real demand.

However, analysts such as Citi economist Kit Wei Zheng forecast that even with fewer speculators, demand is likely to remain strong and prices continue to rise, albeit at a slower pace.

He cited recovery in the economy and job market and a shortage of HDB flats as factors keeping up prices.

Prospective homebuyer Clarence Khoo, 36, said he hoped the new measures would help to soften prices, but admitted that it would not affect his decision to buy property as he was buying for the long term.

Another potential buyer, Mr Darien Tan, 32, who works in the marine industry, fears that property developers will continue to keep prices high.

He has been looking for a suitable condominium unit since returning from Australia last year.

ERA Asia Pacific associate director Eugene Lim said there were no hints of buyers opting to let their options on new properties lapse in anticipation of lower prices in the future.

But PropNex chief executive Mohamed Ismail believed that developers would exercise greater caution because overly pricey properties may turn off buyers.

Royal Bank of Scotland analyst Fera Wirawan believed sentiment may be dampened further if buyers anticipate more cooling measures.

She noted that other measures introduced in the past included limiting permanent residents to one property loan, imposing a stamp duty on sellers and introducing a tax on property gains.

Interlace preview: Gillman owners disappointed
OWNERS of the Gillman Heights Condominium that is being knocked down to make way for The Interlace were disappointed with what they saw at a private preview of the new development yesterday.

Their chief complaint was that the units offered to them had bad facings and that prices were too high. Mr S.T. Soh, 68, said: ‘The apartments being offered were either too close to the highway, or were on very low floors facing Depot Road. These are among the worst units in the project.’

Another owner, who wanted to be known only as Madam Koh, had expected lower prices. But even the low-level units were going for a minimum of $1,048 per sq ft (psf), she said.

CapitaLand said the apartments ranged in price from $850 psf to $1,150 psf and represented a full spectrum of unit types from 807 sq ft to 5,877sq ft. Of the 1,040 units at The Interlace, 153 units from five blocks were offered at the private preview. A spokesman said: ‘These units, located on different levels in the development, also offer various facings - towards the pool, towards the sea, and towards the greenery at HortPark.’

The purchase of 607-unit Gillman Heights by Capitaland was completed in May, and the owners received between $870,000 and $950,000 for their units. They were also offered first bite to buy a new home at The Interlace.

JONATHAN KWOK

Source : Straits Times - 16 September 2009

Buy Sell Rent invest In Singapore Property Real Estate

MINDY YONG

( +65 ) 91002985

mindy@mindyyong.com

Pace of new home sales eases in Aug

Pace of new home sales eases in Aug

Figure dips to 1,699 from July’s 2,772 but it’s still robust - it was 325 in Aug 2008
By Joyce Teo

Interest in homes remains high with buyers picking up 203 units at the 235-unit Viva in Suffolk Walk last month. — ST FILE PHOTO

THE buying rush that galvanised home sales in July eased off last month, with 1,699 units of new private homes changing hands.

That is still a robust number - only 325 units were sold in August last year - but well under the record 2,772 shifted at breakneck pace in July.

The slower pace of sales was possibly due to the onset of the Hungry Ghost Month, which prompted some developers to lie low as superstitious buyers stayed away.

Developers launched 1,641 units last month, down from 2,878 in July, according to Urban Redevelopment Authority data yesterday.

Some price resistance also set in last month, with potential buyers thinking twice about putting their cash down in the light of rising prices.

At some projects, people returned units they intended to buy, possibly because they felt the price was too high or they had problems securing loans. They lose 25 per cent of their deposit in such a situation.

This has occurred at some new launches like Centro Residences in Ang Mo Kio. It sold 87 units as of end-July and another 17 units last month at a median price of $1,231 per sq ft (psf). Total sales now are at only 91, indicating that 13 units have been returned.

Also, the supposedly sold-out Optima @ Tanah Merah still has three unsold units, data for last month showed.

Overall, however, August figures were still very strong, particularly given the weak economic climate.

The buying sentiment has also trickled down to the secondary market, where prices have risen, said Jones Lang LaSalle.

Only three projects registered impressive sales last month, a far cry from July, when several developments lodged sales of more than 100 units.

The popular 99-year leasehold Trevista in Toa Payoh sold 413 units at a median price of $943 psf last month. It has since sold 469 units out of 590.

Buyers picked up 203 units at a median price of $1,537 psf at the 235-unit Viva in Suffolk Walk. And the Optima sold 164 units at a median price of $843 psf.

The luxury-end segment stayed quiet, though a Scotts Square unit in Scotts Road was sold at $4,304 psf.

Sales are expected to slow for the rest of the year, though, after the Government introduced measures on Monday to calm the fast-rising market and stop any speculative bubble from forming.

It has axed the interest absorption scheme that allows buyers to defer the bulk of the purchase price until the property is completed. Scheduled land sale tenders are also being reinstated.

‘As the new measures are likely to affect market sentiment in the immediate future, the residential sales momentum is likely to moderate in the fourth quarter and further price increases will be checked,’ said CBRE Research executive director Li Hiaw Ho.

The measures could deflate some of the speculative froth and limit the rate of price growth in the coming months, but they are not expected to derail the property market’s recovery, said Ngee Ann Polytechnic real estate lecturer Nicholas Mak.

Sales are expected to total between 13,000 and 15,000 this year, which will still be one of the highest annual figures in the past 14 years, said Mr Mak.

Some consultants take a more cautious view. Developers are unlikely to delay projects that are already at the advanced stages of launch preparations, said Colliers International director for research and advisory Tay Huey Ying.

It makes sense for them to launch early at current prices instead of at a later date when values may come under pressure from the Government’s cooling measures, she said.

Jones Lang LaSalle’s head of research for South-east Asia, Dr Chua Yang Liang, noted that the Government has sent a strong message to the market that it will intervene if the strong sales performance gets overtly inflated by sentiments and becomes unsustainable.

While monthly demand for new launches is unlikely to fall to the level recorded after the collapse of Lehman Brothers, a ‘more conservative’ volume of possibly between 500 and 550 units a month is likely if price and interest rates - the two key driving forces in today’s market - remain stable, he said.

Source : Straits Times - 16 September 2009

Buy Sell Rent invest In Singapore Property Real Estate

MINDY YONG

( +65 ) 91002985

mindy@mindyyong.com

Changes made to Casino Control Act

Changes made to Casino Control Act

They affect collection of casino tax as well as social safeguards

By Lim Wei Chean

SEVEN local men - deemed problem gamblers by their families - will be barred from the casinos, the House was told yesterday as it approved amendments to regulations governing the operations of casinos here.

And all of them did not object to the casino ban and understood their family’s intentions for doing so, said Minister of Community Development, Youth and Sports Vivian Balakrishnan.

He was updating the House on the family exclusion order, one of three ways to keep someone from entering the casinos.

It was the third time Dr Balakrishnan was speaking on the regulations in Parliament. He said the Government is prepared to review the laws, even after the casinos open, to keep the social ills of gambling in check. The two casinos in the Marina Bay and Sentosa integrated resorts are slated to open next year.

Yesterday, changes to the Casino Control Act were made which affect the collection of casino tax and the implementation of social safeguards.

For instance, penalties for filing incorrect tax returns were raised. Casino operators will have to pay double the underpaid amount, and can be fined up to $25,000 or jailed for up to two years, or both.

The process of seeking casino exclusion orders was made easier. For example, some 29,000 undischarged bankrupts and people under Public Assistance Schemes and Special Grants will be banned automatically.

Six members of the House spoke in support of the amendments.

Nominated MP Calvin Cheng asked for offenders convicted of illegal gambling, loansharking and related offences to also be excluded from the casinos, a suggestion Dr Balakrishnan said the Government will look into.

NMP Paulin Tay Straughan wanted recipients of financial assistance from private charities to be barred as well, while Mr Cheng asked if dependents of those getting government handouts and undischarged bankrupts will also be banned.

Dr Balakrishnan said dependents of those receiving social assistance are excluded, but he preferred to let those getting help from private charities and dependents of undischarged bankrupts consider voluntary self-exclusion.

Madam Ho Geok Choo (West Coast GRC), Mr Christopher de Souza (Holland-Bukit Timah GRC) and NMP Audrey Wong asked if the social measures in place are enough to prevent the negative impact of gaming on society.

Mr de Souza wanted the Casino Regulatory Authority (CRA) to be empowered to play a bigger role in preventing undesirable activities.

Madam Ho asked if the casino operators will be vigilant in their checks to bar those excluded from entry.

Dr Balakrishnan said various agencies will have to work together to contain the ill effects of gaming, and not just the CRA. As for entry checks, he said the casinos will be given current and accurate data on who is to be excluded. But it would be the operator’s responsibility to come up with an efficient system to enforce it.

Ms Wong and Prof Straughan also questioned if the exclusion orders may impinge on civil liberties and take away people’s choices.

The minister’s response was that it was a fine line the Government had to tread ‘to balance between over-regulation and protection of the more vulnerable members of our society’.

Answering Prof Straughan’s question on relatives abusing the exclusion order, he said that stiff penalties are in place for making a false declaration.

Non-Constituency MP Sylvia Lim asked under what circumstances taxes will be returned to casinos. She also questioned the financial viability of the casinos after recent reports by analysts.

Second Minister for Finance Lim Hwee Hua replied that the casinos’ financial viability was not a consideration in proposing this amendment. Instead, it was to bring the Casino Control Act in line with other tax laws.

Exclusion orders: A breakdown

Total number issued by the National Council on Problem Gambling: Seven

2 Applications made by wives against their husbands.

2 Applications made by sisters against their brothers.

3 Applications made by parents against their sons.

Source : Straits Times - 16 September 2009

Buy Sell Rent invest In Singapore Property Real Estate

MINDY YONG

( +65 ) 91002985

mindy@mindyyong.com

Changes made to Casino Control Act

Changes made to Casino Control Act
They affect collection of casino tax as well as social safeguards
By Lim Wei Chean

SEVEN local men - deemed problem gamblers by their families - will be barred from the casinos, the House was told yesterday as it approved amendments to regulations governing the operations of casinos here.

And all of them did not object to the casino ban and understood their family’s intentions for doing so, said Minister of Community Development, Youth and Sports Vivian Balakrishnan.

He was updating the House on the family exclusion order, one of three ways to keep someone from entering the casinos.

It was the third time Dr Balakrishnan was speaking on the regulations in Parliament. He said the Government is prepared to review the laws, even after the casinos open, to keep the social ills of gambling in check. The two casinos in the Marina Bay and Sentosa integrated resorts are slated to open next year.

Yesterday, changes to the Casino Control Act were made which affect the collection of casino tax and the implementation of social safeguards.

For instance, penalties for filing incorrect tax returns were raised. Casino operators will have to pay double the underpaid amount, and can be fined up to $25,000 or jailed for up to two years, or both.

The process of seeking casino exclusion orders was made easier. For example, some 29,000 undischarged bankrupts and people under Public Assistance Schemes and Special Grants will be banned automatically.

Six members of the House spoke in support of the amendments.

Nominated MP Calvin Cheng asked for offenders convicted of illegal gambling, loansharking and related offences to also be excluded from the casinos, a suggestion Dr Balakrishnan said the Government will look into.

NMP Paulin Tay Straughan wanted recipients of financial assistance from private charities to be barred as well, while Mr Cheng asked if dependents of those getting government handouts and undischarged bankrupts will also be banned.

Dr Balakrishnan said dependents of those receiving social assistance are excluded, but he preferred to let those getting help from private charities and dependents of undischarged bankrupts consider voluntary self-exclusion.

Madam Ho Geok Choo (West Coast GRC), Mr Christopher de Souza (Holland-Bukit Timah GRC) and NMP Audrey Wong asked if the social measures in place are enough to prevent the negative impact of gaming on society.

Mr de Souza wanted the Casino Regulatory Authority (CRA) to be empowered to play a bigger role in preventing undesirable activities.

Madam Ho asked if the casino operators will be vigilant in their checks to bar those excluded from entry.

Dr Balakrishnan said various agencies will have to work together to contain the ill effects of gaming, and not just the CRA. As for entry checks, he said the casinos will be given current and accurate data on who is to be excluded. But it would be the operator’s responsibility to come up with an efficient system to enforce it.

Ms Wong and Prof Straughan also questioned if the exclusion orders may impinge on civil liberties and take away people’s choices.

The minister’s response was that it was a fine line the Government had to tread ‘to balance between over-regulation and protection of the more vulnerable members of our society’.

Answering Prof Straughan’s question on relatives abusing the exclusion order, he said that stiff penalties are in place for making a false declaration.

Non-Constituency MP Sylvia Lim asked under what circumstances taxes will be returned to casinos. She also questioned the financial viability of the casinos after recent reports by analysts.

Second Minister for Finance Lim Hwee Hua replied that the casinos’ financial viability was not a consideration in proposing this amendment. Instead, it was to bring the Casino Control Act in line with other tax laws.

Exclusion orders: A breakdown

Total number issued by the National Council on Problem Gambling: Seven

2 Applications made by wives against their husbands.

2 Applications made by sisters against their brothers.

3 Applications made by parents against their sons.

Source : Straits Times - 16 September 2009

Buy Sell Rent invest In Singapore Property Real Estate

MINDY YONG

( +65 ) 91002985

mindy@mindyyong.com

Several top chefs under kickbacks probe

Several top chefs under kickbacks probe

By Carolyn Quek & Teh Joo Lin

TOP chefs from several popular Chinese restaurants - including those from five-star hotels here - have been hauled up in connection with an ongoing corruption probe.

The investigations involve whether the chefs were taking kickbacks to buy seafood products such as shark’s fins from a supplier in Bedok.

Sources told The Straits Times that the Corrupt Practices Investigation Bureau (CPIB) called up more than 20 chefs for interviews earlier this month.

These included chefs from Malaysia and Hong Kong - many of whom are already permanent residents here.

Among those called up was one from Four Seasons Hotel. A hotel spokesman said the chef involved has resigned.

Other hotels declined comment or did not reply by press time.

The former Four Seasons chef said he was in Shanghai when the CPIB rounded up the other chefs on Sept 2.

He returned to Singapore last Saturday and went to the CPIB office for an interview yesterday after they contacted him on Monday.

Industry players said several other chefs had also been asked by their employers to leave in the wake of the CPIB investigations.

Industry sources said the supplier at the heart of the investigations is ‘a relatively small player’ which deals mainly in abalone and sea cucumber.

Those in the food and beverage industry said it is not uncommon for head chefs of restaurants to pocket money from suppliers, especially in Hong Kong and China.

Unlike at some hotel restaurants where buying of supplies is handled by a purchasing department, the head chef of Chinese restaurants can decide where to get his supplies from.

Source : Straits Times - 16 September 2009

Buy Sell Rent invest In Singapore Property Real Estate

MINDY YONG

( +65 ) 91002985

mindy@mindyyong.com

PM signals a slower intake of immigrants

PM signals a slower intake of immigrants

The pace will be a more sustained one, with a clearer distinction in how PRs and citizens are treated

By Sue-Ann Chia, Senior Political Correspondent

PRIME Minister Lee Hsien Loong yesterday sought to soothe Singaporeans’ simmering discontent over the surging numbers of foreigners in Singapore in recent years.

Their rapid influx will slow, he said, as the economy is not expected to grow at the exceptional pace it did for several years until last year.

There will also be ’sharper’ differentiation in the way the Government treats citizens and permanent residents (PRs), he promised.

Mr Lee did not elaborate on the forthcoming changes, but made clear the shift will reflect the responsibilities and privileges that come with citizenship.

But, he added, ‘we cannot make it so onerous for PRs and non-residents that they do not want to come’.

Mr Lee was speaking at a dialogue with 1,500 undergraduates at the Nanyang Technological University (NTU) last night.

His 45-minute speech sought to tackle young people’s concerns on whether Singapore has more room to grow.

The pace of growth lies in their hands, he said, adding that attracting immigrants - especially talented ones - to sink roots here is a key driver of growth.

Indeed, in a competitive and integrated world, a ’sustained, calibrated inflow’ of immigrants is necessary to ’safeguard the long-term interest of Singaporeans’, he stressed.

Mr Lee posed a question to the students: ‘What type of Singapore do you want - a relaxed, quiet kampung, or a buzzing cosmopolitan city?’

Noting that some say Singapore can be more relaxed and does not need to ‘go for Number 1 in everything’, he said: ‘But with that attitude, soon we will be Number 2, then Number 3, and eventually end up a kampung again.’

Singapore, he said, has the potential to do better and become an outstanding city similar to London, New York or Shanghai.

The country also ought to improve, ensuring a high standard of living, health care and education for all.

There are, however, limits to growth. The most obvious constraint is physical space, while the most critical is people.

This is why Singapore continues to open its doors to foreigners - they enlarge the economic pie as they have skills that locals lack and take up jobs that locals shun.

This policy will not change, he said, adding: ‘Singapore will need new immigrants for the indefinite future.’

But the policy is also not cast in stone.

‘What we do depends not just on the Government, but on how open our society is, and how well Singaporeans adjust to and integrate new arrivals,’ he noted.

The Prime Minister made it clear he understood the concerns that locals have - ranging from fears about the competition posed by newcomers, to irritation about the latter’s different habits, accents and weak command of the English language.

‘I understand and empathise with these concerns. Worries have grown because of large inflows in the last few years,’ he said.

Mr Lee made a distinction between two groups of foreigners: transient foreign workers and immigrants who settle here as PRs and citizens.

The former make up more than 55 per cent of foreigners here. Many do jobs or take shifts that locals avoid and act as a buffer during the downturn.

Mr Lee pointed out that foreign workers absorbed most of the job losses in the first half of this year. More than 21,000 of them left, even as more than 7,000 locals gained jobs in the same period.

Despite the contributions of foreign workers, he cautioned: ‘We know we cannot take in unlimited numbers of foreign workers.’

‘We already have almost a million foreigners working here: I cannot imagine simply expanding year after year, and having two million workers here one day,’ Mr Lee said.

This is the third time this year the Prime Minister has expressed his concern about the foreign worker population growing too big.

To prevent their unbridled surge, he said businesses have to improve their productivity so that more can be done with fewer workers.

Singapore, however, has to make a greater effort to integrate immigrants so that they feel at home, he said. But there must also be a clear distinction in how the Government treats citizens and PRs, and PRs and non-residents.

This will give people reason to become citizens, he said.

He recounted how an elderly Malaysian woman who is a PR visited his Meet-the-People session to ask for citizenship.

Asked why she wanted it, she replied in Chinese: ‘Citizens get more benefits.’

Mr Lee’s speech was followed by a lively dialogue with students, with 14 of them posing questions within one hour.

Their concerns ranged from Singapore’s competitive advantage to the prices of HDB flats, to the ban on eating and drinking on MRT trains.

Asked by one student from China about the secret to Singapore’s success, he said: ‘There is no secret. We get people to pull together instead of in different directions.’

Source : Business Times - 16 September 2009

Buy Sell Rent invest In Singapore Property Real Estate

MINDY YONG

( +65 ) 91002985

mindy@mindyyong.com

SMEs unfazed by slump, see expansion in next 12 months

SMEs unfazed by slump, see expansion in next 12 months

Survey finds them keen on growing ops, branding, mktg

By FELDA CHAY

THEY may be called small and medium enterprises, but the economic turmoil has not caused SMEs to stagger backwards when it comes to growing their business, a survey has found.

Branding and retail strategy consultancy AS Louken Group (ASL) said 79.6 per cent of the 152 respondents to its survey expect to grow in the next 12 months.

The telephone survey of senior managers was conducted over five weeks in June and July.

All respondents are members of the Association of Small and Medium Enterprises (ASME), mostly from sectors such as wholesale trading, business services and manufacturing.

Top areas in which companies hope to grow in the next year include the expansion of operations, branding, marketing and advertising and capital.

Asked about areas in which they would like to grow, 25.6 per cent of respondents who expect their companies to grow in the next 12 months want to expand current operations, while 16.5 and 14 per cent want to do more for branding and increase capital, respectively.

With companies realising the importance of differentiating themselves from competitors, about 8 in 10 respondents said branding is important.

Of these, 72.8 per cent said they plan to invest in branding in the near future.

Overseas expansion is also on the cards for a significant number of SMEs surveyed.

Among the 34.9 per cent of SMEs that currently do not have an overseas presence, two in five plan to venture overseas in the next 12 months, mainly spurred by available distributorship.

Training, too, is a priority for most SMEs, with 84.2 per cent of those surveyed saying it is important, and just 2 per cent saying it is not.

Of the types of training that SMEs feel are important, product and technical knowledge came in tops, with 47.7 per cent of respondents viewing this as important.

Some SMEs, however, do not seem to know what their competitive advantage is - a situation that ASL calls ‘worrying’. 13.8 per cent are unsure where their competitive edge lies.

Respondents also provided feedback on how ASME can further assist members, with 38.8 per cent of interviewees hoping it will organise more training, talks, courses and seminars.

Also, 30.9 per cent said they hope to see more networking and business opportunities from ASME.

In response, ASME’s executive director Bryan Teh said: ‘In the current economic environment, more should be done for them to help find new markets and cut the cost of doing business.

‘The survey results are useful for the association in charting our future activities to meet our members’ needs.’

ASL was established in 2001 to provide banking, intellectual property management, design and other advisory services.

Its client list includes BreadTalk Group, Charles & Keith, and Tung Lok Group.

Source : Business Times - 16 September 2009

Buy Sell Rent invest In Singapore Property Real Estate

MINDY YONG

( +65 ) 91002985

mindy@mindyyong.com

Call for caution on risk assets as markets rise

Call for caution on risk assets as markets rise

Valuations are rich and it will be tough to make more gains, reports GENEVIEVE CUA

INVESTORS should take a more cautious stance towards risk assets as markets’ price appreciation over the last few months is raising valuation concerns, says Debashish Duttagupta, Citi Asia Pacific’s head of investments (wealth management).

Mr Duttagupta: Favours bank-issued senior or subordinated debt, particularly those issued by Asian banks
Those who haven’t yet invested and are hoping to benefit from a rising tide may well be disappointed. ‘Valuations for risk assets are pretty rich in many places. The macro trade, which is to buy the S&P500 or Dow Jones index - those trades are over. The easy money has been made.’

In the year-to-date, thanks to global liquidity and relief that financial disaster appears to have been averted, major market indices have risen at a brisk double-digit pace. The MSCI Pacific ex Japan Index, for example, is up nearly 50 per cent. Yield spreads have also tightened considerably across the spectrum, since their trough late last year following the collapse of Lehman Brothers.

Says Mr Duttagupta: ‘We’ve seen a recovery in prices over about four months, that normally takes two to three years to happen post-bottom. While we don’t believe liquidity will go away tomorrow, valuations today reflect normal conditions. From here to make additional gains will be extremely tough. For equities from a price-to-book point of view, we’re at or above historical averages.’

Among equities, his preference is for US equities based on relative valuations.

Interest rates are not expected to rise in the short term. But they could stage a ’serious increase’ over the next three to four years. Hence, investors would do better to keep durations short on fixed income holdings. ‘Chances are, if investors are holding long-duration bonds, the rise in interest rates will cause them to lose more money than what they will gain by a further contraction of credit spreads.’

As for high yield bonds, investors are cautioned to be selective as ‘defaults will continue to happen at a fairly regular pace’. Mr Duttagupta favours bank-issued senior or subordinated debt, particularly those issued by Asian banks.

Initial rate hikes, he adds, are likely to be sharp. ‘We expect a pop, which is classical price action, from a very low bottom. When rates move up, they won’t go from 3.5 to 3.75 per cent, but to 4.5 per cent - very sharply. The concern investors have is their mortgage. You have to move when no one is expecting it. We do recommend that when rates have fallen to a level beyond which any further fall is unlikely, that people should begin to hedge their exposures gradually.’

This means fixing a portion of your mortgage, for instance.

Diversification continues to be key in portfolio construction, even if it did not shield portfolios from losses in the recent bear market, he says. As part of risk management, the bank also helps to stress-test client portfolios by running scenarios. The exercise enables clients to visualise, for instance, the impact of leverage should markets fall.

In an August report, Ned Davis Research, which advocates an overweight equity position, said that a sell-off in the fall season is likely to be ‘nothing more than a healthy correction’. It believes that as global economic conditions continue to improve, ‘global markets can be expected to continue advancing’. It does not expect a big drop in the US dollar, but the US dollar is likely to move in a wide trading range.

NDR adds in a report at end-August that the widely expected correction in September may well be less severe than normal. Historically, September tends to be a dampener for equities with increased stock offerings and slower mutual fund inflows. The firm is watching for signs that ‘the market is at risk of more than a correction within the cyclical bull market’. One poor sign would be if short term rates followed long term rates higher. ‘If we start to see US and global indices diverge to such an extent that our models detect changes in trend, the divergences could warn of broader troubles ahead. Currently, however, the global bull market is broad-based and well intact.’

Source : Business Times - 16 September 2009

Buy Sell Rent invest In Singapore Property Real Estate

MINDY YONG

( +65 ) 91002985

mindy@mindyyong.com

August new home sales slide

August new home sales slide

Analysts expect sales to remain low for rest of this year

By UMA SHANKARI

(SINGAPORE) The number of new private homes sold in August 2009 fell sharply to 1,699 as pent-up demand eased and developers raised the prices of some newly launched projects.

The slowdown, which was largely expected, came on the back of a record month - 2,772 new homes were sold in July, the highest figure since the authorities started releasing monthly numbers in mid-2007.

The falling sales, combined with Government measures to cool the private residential property market announced on Monday, means that analysts are now expecting substantially lower monthly sales for the rest of the year.

Citing signs of increased speculative activity and a ’significant’ rise in private home prices since June 2009, the Government two days ago unveiled a slew of measures including disallowing the interest absorption scheme (IAS) - which helped revive home sales earlier this year after the global financial crash - and the similar interest-only housing loans. The Confirmed List land sales will also be reintroduced from the first half of next year.

‘As the new measures are likely to affect market sentiment in the immediate future, the residential sales momentum is likely to moderate in the fourth quarter and further price increases will be checked,’ said Li Hiaw Ho, executive director of CBRE Research.

However, most analysts are maintaining their forecasts for transaction volume for the whole of 2009 as they had already factored in the expected decline in sales from August onwards following the peak in July 2009.

Most analysts now expect only about 1,000-1,200 new homes to be sold per month from September to December - although some forecasts are as low as 500 units a month.

CBRE, for example, said that new home sales for the full year should exceed 14,000 units - with a good chance of surpassing the market peak of 14,811 units in 2007. To date, 11,845 homes have been sold in 2009, a large jump from the 4,300 units sold in the whole of 2008.

The two main reasons cited by analysts for the coming slowdown are buyer fatigue and resistance to increased asking prices.

‘Sensible pricing and a pent-up demand from the financial crisis led to the astronomical figures in the last few months,’ said PropNex chief executive Mohamed Ismail. ‘That demand is probably waning, resulting in the 39 per cent drop in units transacted from the previous month (in August).’

But with the measures announced on Monday, prices are now likely to stabilise. Citigroup analyst Wendy Koh, for example, thinks that the new measures could moderate future price increases.

While the mass market segment was the star performer in July 2009, the mid-tier RCR (rest of central region) segment garnered the highest launch and sales volume in August 2009, boosted mainly by Trevista which sold 413 units out of the 590 launched at a median price of $943 per square foot (psf).

Some 722 units were sold in the RCR. By contrast, 449 units were sold in the prime Core Central Region, while 528 new private homes were sold in the Outside Central Region, which is a proxy for suburban mass market locations.

Developers launched 919 units in the RCR in August 2009, up 71 per cent from July 2009. This is the highest number of mid-tier units launched since URA started releasing the monthly data in June 2007. Developers are likely to have been motivated by their desire to ride on the buying momentum from the mass-market segment, which is filtering up to the mid-tier segment, noted Colliers’ director for research and advisory Tay Huey Ying. Developers launched 1,641 new units in all in August.

And although interest for luxury properties remained thin, two transactions at above the $4,000 psf level were recorded for August 2009 - Scotts Square ($4,304 psf) and The Orchard Residences ($4,099 psf). The last time the market saw transactions at above the $4,000 psf mark was in May 2008 when four units at Scotts Square were sold at prices ranging from $3,779 to $4,612 psf.

Source : Business Times - 16 September 2009

Buy Sell Rent invest In Singapore Property Real Estate

MINDY YONG

( +65 ) 91002985

mindy@mindyyong.com

‘Unique’ safeguards in place for casinos

‘Unique’ safeguards in place for casinos

‘Third-party exclusion’ process simplified with amended Bill

By CHUANG PECK MING

THE government yesterday assured Parliament that it will put in place social safeguards ‘more stringent than that in other jurisdictions’ when the casinos here open for business.

Dr Balakrishnan: Says the law requires the casino operators ‘to take all appropriate steps…’
‘Besides the common safeguards like minimum age and self-exclusion, we also have safeguards that are uncommon or unique to Singapore, such as the casino entry levy, prohibition of casino advertising in the local mass media and family and third-party exclusions,’ said Community Development, Youth and Sports Minister Vivian Balakrishnan.

Moving to allay the concerns of Members of Parliament on the social fallout from the casinos, Dr Balakrishnan said the law requires the casino operators ‘to take all appropriate steps to ensure that undesirable activities, such as prostitution and illegal money lending do not take place within their premises’.

He was replying to MPs during debate on the Casino Control (Amendment) Bill tabled by Second Minister for Finance Lim Hwee Hua.

The Bill, which was passed and will come into force on Oct 15, seeks to facilitate the collection of casino taxes and beef up social safeguards.

In particular, the Bill simplifies the process for excluding undischarged bankrupts, people on state welfare and individual volunteers from the casinos.

These people, classified under ‘third-party exclusion’, should be automatically excluded - there is no need for the assessors to decide on them, according to the Bill.

Dr Balakrishnan said there are currently about 29,000 undischarged bankrupts and recipients of public assistance and special grants from the government.

‘The objective of third- party exclusion is to protect persons who are already in severe financial hardship, and who can ill-afford to gamble, from getting into further debt,’ he said.

‘The proposed amendments simplify the legal process. For this group of persons, there is no need for any ‘judgement’ or discretionary evaluation to be exercised by the Committee of Assessors since the exclusion criteria is well-defined.’

Automatic exclusion applies to dependants of those on welfare.

But the minister said the case is less clear-cut for dependants of undischarged bankrupts.

‘The dependants of undischarged bankrupts would not be automatically excluded as it may not always be the case that these dependants are financially vulnerable,’ he said.

The mandatory exclusion is also not extended to people receiving help from other charities. But Dr Balakrishnan suggested these people consider voluntary self-exclusion.

‘The benefactors may wish to make this a condition for offering assistance,’ he said.

Source : Business Times - 16 September 2009

Buy Sell Rent invest In Singapore Property Real Estate

MINDY YONG

( +65 ) 91002985

mindy@mindyyong.com