Overwhelming response to Sale of Balance Flats

Overwhelming response to Sale of Balance Flats

By Saifulbahri Ismail

SINGAPORE: The Housing & Development Board (HDB) has said the chances of a first-time flat buyer shortlisted to select a flat under the Sale of Balance Flats exercise is slim, despite the priority given to them.

This is due to the overwhelming response to the exercise which ends at midnight on Wednesday. More than 20,000 applications were received as at 5pm for the 2,132 flats on offer.

About seven in ten applicants are first-time buyers. The rest have bought at least one flat in the past. Demand was high across the board, even in less mature and less centralised locations such as Bukit Batok, Choa Chu Kang and Woodlands.

There were some 1,600 applications for 111 units available at Pinnacle@Duxton in Tanjong Pagar, while 286 applied for three five-room units at Bukit Panjang.

As there is no need to pay for cash-over-valuation, potential buyers say getting these new units under the HDB’s Sale of Balance Flats exercise makes more economic sense than resale flats in the same area.

“The Sale of Balance Flats… the price is cheaper than the resale flats available in the market,” said an applicant.

“We’ve seen new flats. They are not according to our taste. They have small kitchen which is not practical for us,” said another.

Property analysts attributed the strong demand partly to the boom in the housing market.

Jeffrey Hong, executive director of HSR Property Group, said: “The cash above valuation, it has been huge right now. Owners are expecting like S$50,000 above valuation or some may be asking for S$60,000 above valuation.

“So for those first-time flat owners, they cannot fork out this money. So they have basically no choice but to narrow down towards the less popular areas.”

Analysts said the the resale market will be affected by the Sale of Balance Flats scheme till December.

David Poh, senior district director at PropNex, said: “For all the 20,000 applicants that have submitted their application, I don’t think they will buy anything from the resale market until results are known.”

HDB said first-time flat buyers who would like greater certainty in securing a flat should apply for the Build-to-Order (BTO) flats, which are the main mode of supply for flats.

Its records showed that 96 per cent of first-timers have been given a chance to select a BTO flat within two tries.

The HDB will launch two new BTO projects offering more than 1,000 flats in Sengkang and Jurong West on Friday.

This will be followed by six more launches with 4,000 flats in Punggol, Sembawang, Bukit Panjang and Dawson estates in November and December. This will bring the number of new BTO flats the board is launching to 5,000 in three months.

In total, HDB said it will be supplying 9,000 new BTO flats this year. That is far more than the 2,900 balance flats sold under the current and previous sale exercises for this year.

HDB said it will continue to monitor housing demand and ensure that there is sufficient flat supply for first-time buyers.

- 938LIVE/CNA/ir

Source : Channel NewsAsia - 15 October 2009

Buy Sell Rent invest In Singapore Property Real Estate

MINDY YONG

( +65 ) 91002985

mindy@mindyyong.com

Inflation not expected to be a threat for years into recovery

Inflation not expected to be a threat for years into recovery

By Desmond Wong

SINGAPORE: Inflation is unlikely to pose a threat to the budding global recovery as it is expected to remain low for at least the next few years.

And so, some analysts said, interest rates will remain depressed across Western economies.

But they noted that borrowing costs could rise more quickly in Asia, thanks to the stronger growth expected from the region.

Governments and central banks around the world have pumped in trillions of dollars to battle the financial crisis and help pull their economies out of recession.

But there have been concerns that excess liquidity could lead to inflation. Still, there are others who say inflation is unlikely to be a threat for the next year or two.

Charles Burton, director of Oxford Economics, said: “There’s such a shortage of demand in the economy. Production levels are so far below the capacity levels.

“It’s that which normally produces inflation, when you have actual production levels pushing up against capacity limits, there’s no question of that happening in the short run.”

Speaking at a conference in Singapore hosted by the Singapore Management University, Mr Burton also said that interest rates in the West are likely to remain at near zero levels for the foreseeable future.

This is because as the benefits from stimulus measures begin to peter out and the current inventory restocking cycle ends, central banks will be eager to keep liquidity close at hand.

But things could be different in Asia. Mr Burton said: “With growth in the Chinese economy, and the restoration of some growth in Japan, and in particular in the US economy, that will boost growth in the Asian export-led economies…

“… the reality of the beginning of some tightening in monetary policy being quicker and stronger in Asia than in the rest of the world is indeed quite likely.”

He added that continued weakness in the West is likely to overshadow Asian growth, and globally, it will take at least a year or two for full recovery to take place.

- CNA/ir

Source : Channel NewsAsia - 15 October 2009

Buy Sell Rent invest In Singapore Property Real Estate

MINDY YONG

( +65 ) 91002985

mindy@mindyyong.com

HK flat sale sets new record at $12,900 psf

HK flat sale sets new record at $12,900 psf

Govt may free up land for sale to prevent property bubble

The duplex unit on the 68th floor of 39, Conduit Road is located in the posh Mid-Levels district. —

HONG KONG: Henderson Land Development said yesterday it sold a Hong Kong apartment for a record price hours after the island’s Chief Executive Donald Tsang said the government may release more land to deflate a property bubble.

Henderson sold a duplex unit on the 68th floor of 39, Conduit Road in the posh Mid-Levels district for HK$71,280 (S$12,900) per square foot (psf) - setting a world record psf for an apartment and surpassing prices in London.

The five-bedroom duplex suite was sold to an unidentified buyer from mainland China.

The developer said it may ask for HK$100,000 psf for two penthouses on the 88th floor of the project.

Property prices in Hong Kong have surged 26 per cent this year despite the economic downturn as there was strong demand for luxury property from wealthy Chinese and little supply of new homes.

Hong Kong’s government, which controls land supply, has not sold residential land for 1-1/2 years.

‘The relatively small number of residential units completed and the record prices attained in certain transactions this year have caused concern about the supply of flats, difficulty in purchasing a home and the possibility of a property bubble,’ Mr Tsang said in his annual policy address.

He said his administration will monitor ‘market changes’ closely in coming months, and may direct the Urban Renewal Authority and subway operator MTR Corp, both government-controlled, to bring readily available building sites to market.

Hong Kong’s currency peg to a weak US dollar makes property attractive to foreign investors.

The peg forces Hong Kong to track US interest rates - which are expected to stay very low for some time - unlike South Korea, which has threatened to raise rates soon to stave off a property bubble.

Developers have been wooing millionaires from China with a slew of all-expenses paid property-viewing tours.

‘People are paying what I describe as trophy prices which don’t bear any reality with what is happening within the economy,’ said Mr Nicholas Brooke, chairman of real estate consultancy Professional Property Services in Hong Kong.

Money from new stock market listings and easy bank lending also allow Chinese to snap up luxury property, he said.

Mr Thomas Lam, Henderson’s general manager for sales, said the company sold the 39, Conduit Road unit for HK$439 million, or HK$88,000 psf of space inside the apartment, equal to £7,102 (S$15,670) at yesterday’s exchange rate. This breaks the previous record of £6,000 psf set by an apartment in One Hyde Park in London last year, Mr Lam said.

Sun Hung Kai Properties last month raised the asking price of two penthouses in Hong Kong by 50 per cent to a record HK$75,000 psf, including a share of common areas in the building. On that basis, Henderson sold its apartment for HK$71,280 psf.

REUTERS, BLOOMBERG, ASSOCIATED PRESS

Source : Straits Times - 15 October 2009

Buy Sell Rent invest In Singapore Property Real Estate

MINDY YONG

( +65 ) 91002985

mindy@mindyyong.com

20,691 apply for 2,132 ready flats

20,691 apply for 2,132 ready flats

Overwhelming demand for latest batch in popular mature estates

By Jessica Cheam

THE Housing Board (HDB) has been swamped by 20,691 applications for 2,132 completed or near-completed flats - in a sign of red-hot demand for its homes.

Applications for the flats - which are at various locations across the island, including sought-after mature estates - closed yesterday.

The eye-popping figures mean there were almost 10 bids for every available flat - an overwhelming level of demand not seen since the pre-financial crisis property boom, analysts say.

HDB said in a statement yesterday that it had ‘expected strong interest for these flats as they are limited in number, located in the popular mature estates, and are either completed or close to completion’.

About seven out of 10 applicants are first-time flat buyers, said HDB. But despite priority being given to first-timers, the chances of being short-listed to select a flat ‘will not be high due to the overwhelming response’, it said.

Industry observers say this reflects strong demand for readily available flats. These buyers were likely to have been pushed out of the resale flat market, where prices are at historic highs.

Latest estimates showed that HDB resale flat prices rose 3.2 per cent in the third quarter over the second quarter, after an increase of 1.4 per cent in the second quarter over the first three months of the year.

This was on top of a hefty 31.2 per cent price jump in the past two years.

‘The primary attraction of these flats is buyers don’t have to wait - and they don’t need to fork out cash over valuation (COV),’ said ERA Asia-Pacific’s associate director Eugene Lim. COV refers to the cash a buyer must pay a seller above the flat’s valuation - a common practice in the resale market.

The local property market’s revival has led to a steady increase in COV values of late, as sellers factor in future price rises.

The intense demand for the latest batch of flats, launched for sale on Oct 1, extended even to traditionally less popular outlying estates such as Punggol and Sengkang.

For example, 1,022 applications were made for 26 four-room flats in Sengkang - which works out to 39 bids for each flat. Over at Jurong West, there were 905 applications for just 19 four-room flats - 47 times the number of flats offered.

PropNex chief executive Mohamed Ismail said this was because in ‘absolute pricing’, these flats were more attractively priced than their counterparts in mature estates. Four-room flats in Jurong West started from $219,000 and those in Punggol started at $245,000.

Still, even the pricier flats at The Pinnacle @ Duxton - costing up to $553,000 for four-room units and $643,000 for five-room ones - attracted a healthy response.

HDB urged first-time flat buyers who would like greater certainty in securing a flat to apply for its build-to-order (BTO) flats, where 90 per cent of flats are set aside for first-timers.

These flats typically take three to four years to be ready since the HDB builds according to demand.

HDB said its records show that 96 per cent of first-timers get a chance to select a BTO flat within two tries. It also said it will be launching two new BTO projects offering more than 1,000 flats in Sengkang and Jurong West tomorrow.

In the next two months, it will launch a further six BTO projects offering 4,000 flats in Punggol, Sembawang, Bukit Panjang and Dawson.

HDB’s latest sale was under the Sales of Balance Flats scheme, which has replaced the balloting, quarterly sales and half-yearly sales exercises. The HDB will issue one final update on application numbers today at 2pm.

The scheme offers flats left over from earlier BTO exercises, the Selective En-bloc Redevelopment Scheme, and also repurchased flats. Such sales exercises will be launched as and when sufficient flats accumulate, said HDB.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak said the private property boom could also be a factor for the strong demand, as buyers - particularly permanent residents - turn to the resale market. This in turn, pushes first-timers into the flat queues directly to the HDB.

One flat buyer Jeffrey Chua, 30, applied for a four-roomer in Bukit Merah. ‘I know the chances are slim, but no harm trying my luck. It beats buying off the resale market right now.’

Source : Straits Times - 15 October 2009

Buy Sell Rent invest In Singapore Property Real Estate

MINDY YONG

( +65 ) 91002985

mindy@mindyyong.com

Cheaper, better, faster with all playing a part

Cheaper, better, faster with all playing a part

NTUC aims to marshal entire workforce in transforming economy

By Goh Chin Lian

AFTER weathering the downturn, the labour movement is gearing up for a new mission in the next two years.

It wants to help drive Singapore’s next phase of growth, which will focus on transforming the economy to withstand the stiff global competition for investments and jobs.

But in its move to make the economy cheaper, better and faster, the National Trades Union Congress (NTUC) believes the entire workforce, including women, older and low-wage workers, need to ‘re-skill, upskill and multi-skill’. Otherwise, Singapore will face a chronic unemployment problem.

‘One cannot do without the other,’ said labour chief Lim Swee Say on Tuesday when he gave NTUC’s report card for the past two years at a conference to take stock of its achievements and chart its future course.

Mr Lim, whose remarks were released to the media yesterday, highlighted especially NTUC’s achievements in the downturn when he addressed 1,000 union leaders and employers at the three-day Ordinary Delegates’ Conference which ends today.

He said two key performance indicators were met: Avoiding record layoffs and preventing a rapid rise in joblessness. However, saving jobs will no longer take centrestage as Singapore looks ahead, said Mr Lim.

NTUC’s primary concern now is to match, if not outrun, countries facing record-high unemployment.

In trying to overcome their unemployment, some will resort to protectionism while others will try to be cheaper. At the same time, cheaper places like China and India, will also become better.

‘We are being squeezed on both sides,’ said Mr Lim, adding that global competition will intensify in the next two to three years before the world’s employment situation returns to normal.

Hence, NTUC’s recent slogan on the need for the economy to be cheaper, better and faster, or CBF.

But Mr Lim has now added a new element to it, arguing that CBF will not succeed without an all-inclusive workforce, or CAN, which stands for workers of all collars, ages and nationalities.

Hence, for the labour movement, he said, ‘the only option is to make sure we have a CBF economy powered by an all CAN workforce’.

He argued that an inclusive workforce without a growing economy will struggle with unemployment, while a thriving economy without an inclusive workforce will be saddled with structural unemployment or people whose skills do not match the jobs available.

The new emphasis is also to allay fears among union leaders that elderly workers, back-to-work women and low-wage workers would be left behind as companies adopt new processes to boost productivity and create products.

Mr Lim pledged that NTUC would continue to help these workers ‘upskill, reskill and multi-skill’, adding that its Employment and Employability Institute will be beefed up for this purpose.

In his two-hour speech, Mr Lim cited sectors, firms and workers that have already taken to heart its new mission.

One is the wafer fabrication sector, which launched a national framework of skills upgrading in August. This year, 7,000 engineers will receive training, followed by 3,000 technicians and operators next year.

He also cited retrenched factory worker Tan Tiong Tiong, who had not upgraded his skills for 40 years and risked being left behind. After a confidence-building course that improved his job search skills, he landed work as a security guard.

Mr Lim also assured union leaders that being cheaper did not mean lower wages, but higher productivity.

It means making better use of every worker, including foreigners, he added.

Calling on bosses to train foreign workers, he said: ‘Up to now, many employers look at low-wage, unskilled foreign workers just as another pair of hands and legs. As we move to a CBF economy, upgrading and capability enhancement must also apply to foreign manpower.’

Source : Straits Times - 15 October 2009

Buy Sell Rent invest In Singapore Property Real Estate

MINDY YONG

( +65 ) 91002985

mindy@mindyyong.com

Seamless experience for Sentosa IR visitors

Seamless experience for Sentosa IR visitors

MOUNT Faber Leisure Group has forged a partnership with Resorts World Sentosa (RWS) to serve visitors to the integrated resort.

Under the partnership, the two parties will jointly distribute and sell admission and attraction tickets for RWS.

‘We are working towards delivering a wide choice of experiences and providing a high standard of service for guests to RWS through The Jewel Box, Singapore’s Iconic Hilltop Destination gateway,’ said Mount Faber CEO Susan Teh.

RWS and Mount Faber will collaborate in key areas, such as a common ticketing system and partnering in MICE events.

There are also plans to create exclusive daily packages that cover all RWS attractions and provide transport services to give RWS visitors a seamless ride experience.

The resort is slated for a soft opening early next year.

Source : Business Times - 15 October 2009

Buy Sell Rent invest In Singapore Property Real Estate

MINDY YONG

( +65 ) 91002985

mindy@mindyyong.com

Luxury apartment sector feels the rush

Luxury apartment sector feels the rush

More deals clinched as sentiment improves, foreign buyers sniff around

By KALPANA RASHIWALA

(SINGAPORE) Luxury apartment deals picked up in the second and third quarters of this year as a more cheerful mood spread to the upper realms of the private residential market.

The number of apartments priced above $4 million changing hands rose rapidly from just 15 deals in the first quarter of this year to 87 in Q2 and 210 in Q3.

The total of 312 apartments in this price range sold in the first nine months of this year are 11 per cent more than the 280 transacted for the whole of 2008, which was generally a quiet year for the Singapore residential market following the global financial crisis, notes CB Richard Ellis (CBRE). It analysed caveats information from URA’s Realis system up to Oct 12.

During 2007 - the peak year for the luxury housing market - a total 1,740 apartments were sold at over $4 million each.

CBRE studied caveats data for condo and apartment deals in the Core Central Region, which includes the prime districts 9, 10 and 11; the financial district; and the HarbourFront and Sentosa Cove locations. The transactions include both primary and secondary market transactions but exclude collective sales.

Joseph Tan, the firm’s executive director (residential), says that some investors feel this is a good time to buy luxury apartments as they stand to net capital gains before the price surge sweeps this segment.

‘In addition, with the appreciation of foreign currencies against the Sing dollar in recent months, foreign investors could have found prices of luxury apartments here fairly attractive,’ he said.

Looking ahead, he sees an increase in high-value transactions with upcoming new luxury projects such as Marina Bay Suites and Seven Palms Sentosa Cove as there will be investors interested in these projects. ‘Buying interest will be project-driven, based on the uniqueness of each project,’ Mr Tan added.

Developers report a pick-up in sales of luxury apartments to both Singaporeans and foreigners.

Wheelock Properties (Singapore) CEO David Lawrence says: ‘A lot of foreigners talk to us about buying quality property assets in Singapore. They include high-net-worth (HNW) Indians and Chinese who are thinking of becoming Singapore permanent residents and wish to move their families here.’

Savills Singapore managing director Michael Ng also says the Republic has been a beneficiary of wealthy Asians from places like China, Malaysia and India coming out again to buy luxury properties with renewed confidence upon sensing that the worst is over in the overall global economy.

‘A lot of them see Singapore as a safe place to park their family and money,’ he added.

The thinking in property circles is that foreign buying will strengthen further when Singapore’s two integrated resorts (IRs) open next year. And this should translate to stronger demand for luxury apartments.

CBRE’s data showed that about 86 per cent or 268 of the 312 units sold at above $4 million in the first nine months of 2009 were in the ‘above $4 million to $7 million range’.

They included developer sales in projects like Volari at Balmoral Road, Residences@Killiney, One Devonshire, Latitude at Jalan Mutiara, Madison Residences in Bukit Timah, and The Orchard Residences. This segment saw the biggest recovery in transaction volume over full-year 2008.

A total of 35 caveats were lodged for properties that cost between $7 million and $9 million in the first nine months of this year. The transactions, which were mostly in Q3, include The Hamilton Scotts and The Orchard Residences in the primary market (developer sales), and Ardmore Park, St Regis Residences and Scotts Highpark in the secondary market.

There was a caveat lodged for a unit at Nassim Park Residences that cost nearly $13.3 million in July and two in August (at about $9.6 million and $9.8 million), based on URA Realis caveats data as at Oct 12.

However, BT understands that since then, two more units were sold in the development in September, followed by a further two so far this month.

The four units were sold at prices ranging from $9.6 million to $14 million, or from about $2,850 per square foot to $3,480 psf.

BT understands there have been close to a dozen transactions at Nassim Park Residences since mid-year. However, buyers of some units have yet to lodge caveats.

Source : Business Times - 15 October 2009

Buy Sell Rent invest In Singapore Property Real Estate

MINDY YONG

( +65 ) 91002985

mindy@mindyyong.com

‘Shoebox’ units may wilt under URA’s gaze

‘Shoebox’ units may wilt under URA’s gaze

Recent applications for apartments below 300 sq ft understood to have been rejected

By KALPANA RASHIWALA

(SINGAPORE) The new breed of ’shoebox’ private apartments may have caught the imagination, but don’t expect them to invade the housing landscape. Some may not even get the planning authority’s approval, going forward, if recent decisions are any guide.

Earlier this month, Singapore saw its smallest ever apartment unit - at 258 square feet - being put on the market at the Suites@Guillemard project. While this made headlines, BT understands that the Urban Redevelopment Authority (URA) recently turned down some applications involving apartments below 28 square metres (or about 300 sq ft).

Apart from the size, the layout of the proposed micro units may also have been a factor. For instance, if an apartment does not adequately provide for a kitchen, it may resemble a hotel room rather than a residential development.

When contacted, URA said that it does not stipulate that private housing units should be of a minimum size or that a development should have a certain mix of unit sizes. However, it said: ‘We have observed that some developers have been building smaller apartment units.

‘URA will continue to monitor private housing development trends and ensure that our planning guidelines stay relevant in providing a quality living environment for our residents.’

The market has seen a surge in transactions of shoebox units, generally defined as below 500 sq ft, this year. BT understands that one issue that the authorities are grappling with is whether there is a real need for such apartments.

Since February, developers have found it easy to sell smallish apartments as their lumpsum unit price is affordable to a bigger pool of buyers.

This has also made it easier for speculators to jump on the bandwagon. Hence, the concern is that shoebox units fuel property speculation.

Another issue is whether buyers who buy such micro units off-plan realise what they are in for.

Ho Bee Investment chairman and CEO Chua Thian Poh said: ‘When you buy a 200-300 sq ft unit off-plan, you may not realise how small it is. But when you see the finished product, you’ll know how cramped it is. It’s not very liveable. I would rather stay in Housing Board flats. The size is much bigger, and the price quantum is not too far off.’

If ‘normal’ tenants like expatriates, foreign students and Singaporean yuppies do not wish to live in such small units, shoebox unit owners may push their properties to those who prefer shorter-term usage, including those in ‘hourly-rate businesses’, as one analyst put it.

DTZ executive director (consulting) Ong Choon Fah said that there could be a potential supply-demand mismatch if the trend of ‘mickey mouse’ apartments picks up.

‘We could have a situation where there are a lot of apartments but not the type that people would want to live in.’

Some argue that it is too early to rule out leasing interest for such units from single expats on small housing budgets.

However, Ho Bee executive director Ong Chong Hua said: ‘Those who do shoebox apartments will tell you there’s a rental market for such units. But if I’m a single expat, assuming I want to live in this kind of shoebox apartment development, then I must also consider the profile of the people who’ll be my neighbours. I think it is only natural to assume they’ll not be the normal neighbours you would expect in a typical housing development.’

Apart from ’shoebox’ units, other smallish units have surfaced since February. These include two-bedders starting from about 750 sq ft and three bedders from around 900 sq ft.

Developers can try to push for a higher per square foot selling price by having smaller units so long as the overall lumpsum quantum does not cross the typical HDB upgrader’s budget, which could be $1 million.

DTZ’s Mrs Ong also said that the trend of shoebox apartments could also have a social impact, as seen in Hong Kong. ‘People have breakfast, lunch and dinner outside, and spend most of their time out of their homes as they don’t wish to be cooped up within four walls. But this may not be conducive to developing family life, which Singapore is trying to promote.’

Real Estate Developers Association of Singapore CEO Steven Choo said that ‘it is not inconceivable that, in future, 200-300 sq ft apartments could become popular in Singapore as already seen in Central London where 40 per cent of all households are single-person households’.

‘There are districts populated with studio apartments catering to lawyers, financial industry professionals and students,’ he added.

However, CBRE executive director (residential) Joseph Tan said that since most of Singapore’s population live in HDB flats, the size of public housing units set the base.

‘Unlike London and Hong Kong where people may not have much choice but to squeeze into a shoebox unit, in Singapore people have the option of buying or renting a HDB flat.’

Agreeing, ERA associate director Eugene Lim noted that even an expat on a small housing budget can rent an HDB flat on the open market.

‘Of course, there won’t be any swimming pool or gym, whereas a resident of even a shoebox unit in a private apartment development or condo would be entitled to enjoy these facilities,’ he added.

Source : Business Times - 15 October 2009

Buy Sell Rent invest In Singapore Property Real Estate

MINDY YONG

( +65 ) 91002985

mindy@mindyyong.com