Buyers pounce on ‘mickey mouse’ flats

Buyers pounce on ‘mickey mouse’ flats

Affordability of such units - some the size of 21/2 carpark lots - is the main lure

By Joyce Teo, Property Correspondent

What do you call an area equivalent to 21/2 carpark lots?

Such units were among apartments of various sizes put up for sale at the Suites@Guillemard pro-ject in Guillemard recently.

The cost of the small unit? $374,000 or $1,450 psf - and all four such units were snapped up.

They might well be Singapore’s smallest private apartments, beating out a 312 sq ft unit at Kent Residences near Farrer Park, which made the news in June last year.

Indeed, buyers are seeing more so-called ‘mickey mouse’ or ’shoebox’ flats - which are below 500 sq ft - on the market.

The trend took off late last year.

So far this year, nearly 500 ‘mickey mouse’ units have been sold, up from 299 last year and 275 in 2007.

Recent launches with units under 500 sq ft include The Lenox along Changi Road.

Upcoming launches include the 40-unit City Loft in Race Course Road, where the units are around 323 sq ft to 420 sq ft in size and where penthouses go from 743 sq ft to 904 sq ft.

Driving sales is affordability, especially in an uncertain economic climate.

However, according to the Urban Redevelopment Authority’s (URA’s) flash estimate, prices of private residential property rose from 133.3 points in the second quarter to 154.5 in the third quarter - an increase of 15.9 per cent.

Amid rising prices, the cost of a 350 sq ft one-bedder - which can be just $370,000 to $400,000 - seems alluring, even if the price per square foot easily exceeds $1,000.

But do buyers, many of whom are thought to be investors, know what they are getting into?

There is increasing concern in some industry quarters.

‘The small units are more like the size of a hotel room and might be deemed by occupiers as non-conducive as a general apartment kind of living,’ said Cushman & Wakefield managing director Donald Han.

Which means that some buyers may list them on the rental market.

‘If demand is not there for long- term leasing, owners may lease them out on a monthly, weekly or even hourly basis.’

This raises the issue of what sort of tenants would move in.

Mr Han’s view is that there is a bigger social responsibility to make sure the projects ‘are planned correctly and are sustainable as proper residential dwellings’.

Should the Government step in?

The URA said it does not stipulate a minimum size for private residential units. This is to allow developers flexibility to provide different-sized units to cater to various needs and income groups.

‘URA will assess the overall building design, site layout and whether the proposed residential units are able to function effectively as self-contained dwelling units, with basic amenities like living area, bedroom, kitchen and bathroom,’ said its spokesman.

There is no stopping developers from going for small but there could be a limit to how far they can go.

The URA has apparently already rejected some applications for small units.

EL Development’s managing director Lim Yew Soon’s take is that small units will still be popular but they will have to be at least 30 sq m, or 323 sq ft, for them to be more liveable.

Said Frasers Centrepoint’s CEO Lim Ee Seng: ‘We would not build anything smaller, as 400 sq ft is about the optimum size, capable of accommodating a decent-sized living-dining area, toilet, pantry and a bedroom.’

The smallest unit at its recent project 8@Woodleigh is 398 sq ft.

An industry veteran pointed out: ‘Whether such a space standard is healthy is a valid concern. Today, it is hard to imagine living in a 300 sq ft unit but things do evolve over time.

‘Planning standards change along with our social milieu. When you look at it in context, small units could become popular in the heart of town centres for single-person households in the future.’

Source : Channel NewsAsia - 18 October 2009

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Incentives abound for home buyers looking for property loans

Incentives abound for home buyers looking for property loans

By Maggie Chong & Evelyn Choo

SINGAPORE: Some banks are rolling out new services and attractive mortgage packages to increase their market share in the private housing loan sector.

Banks such as Standard Chartered has set up a service counter to offer loan evaluations at show flats.

Said Dennis Khoo, general manager of Wealth Management Consumer Banking at Standard Chartered Bank: “I think it’s even better prudence because before (a buyer) puts down the money, he can quickly - within 15 minutes - check, and then go and put the money down knowing that he’s making a good decision.”

The mortgage war among the banks has seen interest rates being revised downwards.

However, the lowering of rates is not the only weapon. Some banks are also trying to gain a greater market share by providing incentives such as air tickets and dining vouchers.

Said Ang Tang Chor, senior executive vice president of Consumer Business at Hong Leong Finance: “We do not only compete in interest rates, we also have what Singaporeans like… (such as) travel, as well as eating at various outlets in Singapore.”

But despite the incentives, home buyers say low interest rates remain the most important factor.

- CNA/yb

Source : Channel NewsAsia - 18 October 2009

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Google’s Q3 profit surge a sign of economic recovery

Google’s Q3 profit surge a sign of economic recovery

(New York)

IN another sign that the economy may be coming back online, Web search giant Google Inc surprised Wall Street with a 27 per cent jump in third-quarter profit, as Internet advertisers spent more on ads - and buyers spent more time clicking on them.

Computer giant IBM also reported higher-than-expected profit on Thursday, adding to hopes that the vitality of the technology sector might be a bellwether for a larger recovery.

‘We believe the worst of the recession is behind us,’ said Google chief executive Eric Schmidt in a call with investors, pointing to strong performance in all of the company’s operations. ‘We now have the business confidence to invest heavily in the next phase of innovation.’

Google and IBM joined a growing parade of technology companies reporting better-than-expected results this month, including chip makers Intel and Advanced Micro Devices Inc.

Amid signs of an improving economy, networking powerhouse Cisco Systems this week said that it would pay US$2.9 billion for a Massachusetts manufacturer of gear for wireless carriers, Cisco’s second multi-billion-dollar acquisition this month.

The Nasdaq stock exchange, loaded with technology companies, has risen 38 per cent this year.

On Thursday, Google shares shot up more than 3 per cent, or US$17, to US$547, in after-hours trading, surpassing the 52-week high it had reached earlier in the day. In regular trading, Google’s stock fell US$5.41 to US$529.91. The earnings report came after the market closed.

For Google, the number of paid clicks - that is, how often shoppers clicked on online ads - jumped 14 per cent from the third quarter of last year, a sign that consumers may be increasingly logging on to search for bargains.

Similarly, Google’s results may also indicate that wary companies are beginning to increase their advertising budgets again.

But their first stop may be the Web, where electronic tools allow them to closely monitor the cost-effectiveness of their campaigns.

Patrick Pichette, Google’s chief financial officer, also said that in an economic downturn, marketers may funnel more dollars to online advertising, which can be more targeted.

In another indicator that could bode well for market growth, Google also announced a spike in the number of searches performed on mobile phones - up 30 per cent over the last quarter.

As more phones begin to carry Google’s Android operating system, the company wants to capture a bigger piece of the growing mobile search market, where consumer searches more often lead to a purchase.

Google’s revenue beat analyst expectations. It rose 7 per cent to US$5.94 billion from US$5.54 billion during the same period last year.

The company earned US$5.13 a share compared with US$4.06 a year earlier. — LAT-WP

Source : Business Times - 17 October 2009

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HDB launches two new BTO projects

HDB launches two new BTO projects 

1,200 flats planned for Sengkang and Jurong West 

By Esther Teo 

THE Housing Board has launched two build-to-order (BTO) projects - Fernvale Palms in Sengkang and Boon Lay Meadow in Jurong West - that will deliver 1,200 new flats to the market.

The developments form the initial tranche of the supply of 5,000 new units announced by National Development Minister Mah Bow Tan early this month.

Six other BTO projects, comprising 4,000 flats in total, are expected to be launched over the next two months in towns such as Punggol, Bukit Panjang, Sembawang and Dawson in Queenstown estate.

The addition of so many new flats will offer young couples looking for their first homes greater choice and certainty, the HDB said yesterday.

The two projects launched yesterday are made up of 240 two-room, 396 three-room, 512 four-room and 52 five-room units.

Fernvale Palms, with 495 three-, four- and five-room units, will be built on Sengkang West Way, near Fernvale and Thanggam LRT stations and a short drive from the Tampines Expressway.

Boon Lay Meadow, which will be within the established Jurong West estate and near the Pan-Island Expressway, will have 705 units of two-, three- and four-room flats.

The HDB said the new flats are being sold below their equivalent market prices.

Five-room flats of 110 sq m in Fernvale Palms are going for between $282,000 and $340,000, while four-room units of 90 sq m in Boon Lay Meadow are priced between $223,000 and $266,000.

According to the HDB, premium five-room resale flats in the Fernvale Palms area cost between $369,000 and $450,000, while four-room units similar to those at Boon Lay Meadow are selling for between $290,000 and $330,000.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak said buyers should take into account the trade-off between a lower price and the ease of accessibility and location.

He said that HDB prices are lower because buyers have to be compensated for the waiting time. Under the BTO scheme, projects are built when a certain demand is reached, and flats typically take three to four years to be completed.

The HDB said that based on the income of flat applicants in the first half of this year, it is expected that most households will not need to use cash to meet their monthly mortgage payments. Their CPF contributions will be able to fully cover the costs.

Eligible first-timers with an average monthly household income of $5,000 or less can also apply for the Additional CPF Housing Grant (AHG) of up to $40,000. This was introduced in 2006 to provide lower-income earners with extra help to offset the initial downpayment.

Source : Straits Times - 17 October 2009

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