CHINA CITIZENS BET ON S’PORE HOMES

CHINA CITIZENS BET ON S’PORE HOMES

by Jo-Ann Huang Limin

SINGAPORE – More mainland Chinese are buying private homes in Singapore, with a record number doing so in the last quarter of last year, according to data from the Urban Redevelopment Authority (URA). And with the Chinese government rolling out more drastic measures to cool its overheated market – such as higher down payment norms for second home purchases and a property tax in Shanghai and Chongqing – analysts say more Chinese will park their money in property here.

In the final quarter of last year, Chinese nationals accounted for a record 23 per cent of private residential purchases in the Republic by non-Singapore citizens, according to a quarterly report by real-estate consultant DTZ.

They overtook Indonesians to emerge as the second-largest group of foreign property buyers here after Malaysians, traditionally the dominant group among non-Singaporean buyers, DTZ noted in its study which is based on caveats lodged for new-home and secondary-market sales.

In 2007, the Chinese accounted for only 7 per cent of foreigners buying property here; for the fall-year 2010, their share was 19 per cent. Analysts say Chinese nationals are investing for the long term. “There’s a very large pool of Chinese buyers who need properties in Singapore for school, for coming here to work, for immigration purposes,” said Mr Ku Swee Yong, chief executive officer of International Property Advisor. “All these are a natural consequence of the efforts Singapore has put in to promote ourselves in China.”

Some experts are concerned about the impact on the market if foreign buyers make a quick exit. But others say the current level of foreign ownership is not alarming. “Singaporean buyers still make up about 70 per cent of buyers,” said Ms Chua Chor Hoon, head of Southeast Asia research at DTZ. “Even if the foreigners were to pull out, it’s not going to cause a big drop in prices if the Singapore economy is doing well and locals still continue to buy.” But the proportion of local homebuyers is falling. URA data shows they accounted for 72 per cent of all transactions last year, compared with 76 per cent in 2009.

Meanwhile, those who are upgrading from public housing are buying smaller private apartments.

In 2009, only 32 per cent of buyers with HDB addresses had bought apartments smaller than 1,000 sq ft; last year, the ratio climbed to 41 per cent. This is due to high prices. “Small units slightly under S$1 million are the only types most HDB upgraders can afford,” said Ms Chua.

Source : TODAYonline – MediaCorp Press Ltd’s copyright

THREE BTO PROJECTS LAUNCHED »« HDB launches three BTO projects in Sengkang, Bukit Panjang

HDB launches three BTO projects in Sengkang, Bukit Panjang

HDB launches three BTO projects in Sengkang, Bukit Panjang

Posted: 28 February 2011

SINGAPORE: The Housing & Development Board (HDB) has launched three Build-To-Order (BTO) projects comprising 1,593 standard flats.

Two of the projects – Fernvale Flora and Fernvale Gardens – are located in Sengkang.

The third, Segar Vale, is in Bukit Panjang.

Units in Segar Vale cost between S$83,000 and S$354,000 while the units at the two Sengkang BTO projects cost between S$88,000 and S$378,000.

Ninety-five per cent of the flat supply will be set aside for First-Timer households.

First-time flat buyers are estimated to use 16 per cent to 24 per cent of their monthly household income to meet their monthly loan payments for flats in Fernvale Flora, Fernvale Gardens and Segar Vale.

HDB said it has ramped up its new flat supply significantly to meet the demand from first-timer households.

This year, it plans to offer up to 22,000 new flats under BTO, if demand is sustained.

In the first six months of 2011, flat buyers can look forward to about 11,000 new BTO flats.

These projects will have a good geographical spread in towns/estates such as Bukit Panjang, Jurong West, Punggol, Sengkang and Sembawang.

The next BTO launch in March 2011 will offer about 1,500 flats in Jurong West and Sengkang.

- CNA/fa

Source : Channel NewsAsia – MediaCorp Pte Ltd Copyright

CHINA CITIZENS BET ON S’PORE HOMES »« URA launches tender at Hillview Avenue

URA launches tender at Hillview Avenue

URA launches tender at Hillview Avenue

By Ryan Huang | Posted: 28 February 2011

SINGAPORE: A commercial and residential site at Hillview Avenue has been put up for public tender by the Urban Redevelopment Authority.

The land parcel is on the confirmed list under the government land sales programme for the first half of 2011.

The site has an area of about 1.4 hectares, and has a maximum permissible gross floor area of 40,000 square metres.

This could potentially yield about 370 housing units.

Up to 15 per cent of the total gross floor area is allowed for commercial use.

The land parcel is located near the future Cashew and Hillview Stations, which are part of the Downtown Line 2 of the Mass Rapid Transit system.

- CNA/fa

Source : Channel NewsAsia – MediaCorp Pte Ltd Copyright

HDB launches three BTO projects in Sengkang, Bukit Panjang »« URA releases Pioneer Rd sales conditions

URA releases Pioneer Rd sales conditions

URA releases Pioneer Rd sales conditions

Posted: 25 February 2011

SINGAPORE: The Urban Redevelopment Authority (URA) has released on Friday the detailed sales conditions for an industrial site located at Pioneer Road North.

It has a site area of about 1.7 hectares and a maximum permissible gross plot ratio of 2.0 with a lease period of 30 years.

Zoned for Business 2 development, the site can be developed for various uses such as light industry, general industry, warehousing, utilities, or telecommunication uses.

This is the first of the four new industrial sites to be released for sale under the Reserve List of the first half 2011 Industrial Government Land Sales Programme.

The other three industrial sites are at Woodlands Avenue 12, Gambas Avenue and Kaki Bukit Road 4.

They will be released for sale in March and June this year.

-CNA/wk

Source : Channel NewsAsia – MediaCorp Pte Ltd Copyright

URA launches tender at Hillview Avenue »« BUDGET WISHES AND THE PROPERTY MARKET

BUDGET WISHES AND THE PROPERTY MARKET

BUDGET WISHES AND THE PROPERTY MARKET

by Colin Tan

In an online poll of about 400 people that The Straits Times conducted on the eve of the announcement of the Budget, inflation worries ranked as the most urgent issue respondents wanted to be addressed.

This did not come as a surprise but “lower housing prices” was ranked second among nine issues which included providing assistance to the sandwiched class, narrowing the income gap, boosting the birth rate, lowering the cost of education, lowering taxes, boosting productivity and topping up Medisave accounts.

Normally, I would not read too much into the results of such polls as they may not reflect accurately the feelings of the population at large. But if it was a representative sample, did it indicate that many had hoped – if not expected – something to be done about rising home prices, notwithstanding that the latest cooling measures were announced in mid-January.

It had been reasoned before that rising housing prices made many more people happy than sad because most households lived in owner-occupied properties and are sitting presumably on large potential capital gains. Should we now re-examine this notion?

In any case, nothing major with short-term repercussions on prices concerning the real estate market was announced.

Recognising the real problem that rising housing prices posed to lower income groups, a special Central Provident Fund (CPF) Housing Grant was announced to help such families make a first-time purchase of a Build-to-Order flat from the Housing and Development Board (HDB). There was also a S$10 billion plan to rejuvenate the heartlands over the next decade to preserve the value of HDB flats.

Developers were probably relieved that there were no further cooling measures announced in the Budget. Even if more measures had been contemplated, it was probably not the right time to introduce them as they would have hogged the headlines and overshadowed other issues addressed by the Budget, given that the property market has been a hot topic of late.

A post-Budget poll to gauge initial response attracted over 1,700 respondents. It showed that over two-thirds had expected more. Considering the generous handouts, are expectations too high?

When I asked those around me, most said they had no complaints. Would a doubling of benefits change their minds? The surprising answer was no.

A long-time friend explained the strange response this way: A father trying to motivate his son promised him S$500 in cash to buy his favourite mobile phone if he did well in his exams. While he was studying hard, he found out from a classmate that the price of that coveted phone had risen by a further S$100. What do you think is the effect of this new piece of information on the son?

Will he go back to his dad and try and get him to raise his reward to $600 or will he settle for a cheaper, less sophisticated model? Or will he give up the desire of having that gadget altogether? What impact will this have on his morale?

Nobody can really tell. It depends on the individual. There will be a myriad of responses but the most probable outcome is one of mixed feelings. If rising housing prices were indeed a problem to many and I am not saying they are, will this partly explain the strange response?

There were more news reports this week on the effects of inflation. In one report, an investment strategist was quoted as saying that the real rate of interest is minus 4.42 per cent if one takes the 4.6 per cent inflation rate in December and compared it against the average three-month fixed deposit rate of 0.18 per cent.

What this means is that it pays to borrow now and the more you borrow, the more you benefit.

Inflation is forcing the rich to consider more risky investments, but risk aversion remains strong, the strategist said, adding that this is why many have been buying property, which in turn drives up prices. I can understand this as many investors whom I have spoken to consider property as a long-term hedge against inflation even as you advise that this time, it may be different.

With property wired into our Asian DNA, it is no wonder that attempts by governments to prick asset bubbles have so far met with limited success.

Colin Tan is Head, Research & Consultancy at Chesterton Suntec International.

Source : TODAYonline – MediaCorp Press Ltd’s copyright

URA releases Pioneer Rd sales conditions »« Condo site tender in Bishan attracts record 19 bids

Condo site tender in Bishan attracts record 19 bids

Condo site tender in Bishan attracts record 19 bids

By Jo-ann Huang | Posted: 24 February 2011

SINGAPORE: A 99-year leasehold land site for condominium housing in Bishan has attracted a record 19 bids at the close of its tender by the Housing & Development Board (HDB), the highest number of bids in 12 years.

This is just one bid higher than the Simei Street 3 land site tender in May last year. The site has since been developed into the My Manhattan by CEL Development.

The highest bid came from CapitaLand at S$550.1 million or S$869 per square foot per plot ratio (psf ppr) submitted through its wholly-owned subsidiary Bishan Residential Development.

CapitaLand’s bid is 27 per cent higher than the second highest bidder Keppel Land Realty, which submitted a bid of S$432.3 million.

“This indicates the developer’s very bullish outlook for the residential market in Bishan,” said Nicholas Mak, executive director of research at SLP International.

The land parcel is in the reserve list of the government land sales or GLS programme. It is considered one of the GLS programme’s most attractive sites for the first half of this year.

Located at Bishan Street 14, the site is a short walk to Bishan MRT Station and Junction 8 shopping mall. Nearby schools include Catholic High School and Raffles Institution.

The land has a size of 11,997 square metres and a maximum gross floor area of 58,800 square metres with a gross plot ratio of 4.9.

CapitaLand said in a statement that it plans to build a condominium which is at least 36 storeys with 600 units.

“Based on caveats lodged between October 10 to January 11, units in Centro Residences at Ang Mo Kio Central were sold at S$1,200 psf to S$1,400 psf,” said Li Hiaw Ho, executive director of CBRE Research.

“The winning bid for the Bishan site suggests that the developer is looking to sell the units at around S$1,400 psf,” said Mr Li.

Menawhile, Mr Mak added that the break even cost for the project will be about S$1,290 to S$1,320 psf, which is about 30 per cent more than the resale prices of existing condomiums in Bishan.

He added that the high number of bidders indicate that many developers share the same land acquisition strategy – to buy prime development sites near MRT stations or to have an iconic product.

“They do this in the hope to hedge against the risk of oversupply of non-landed units that could be developed from other GLS sites,” said Mr Mak.

-CNA/ac

Source : Channel NewsAsia – MediaCorp Pte Ltd Copyright

BUDGET WISHES AND THE PROPERTY MARKET »« S$3b project to revive fading CBD

S$3b project to revive fading CBD

S$3b project to revive fading CBD

By Jo-ann Huang | Posted: 23 February 2011

SINGAPORE: Property developer Guocoland’s latest Tanjong Pagar project holds a new promise for the fading business district that has been overshadowed by the brand new Marina Bay area, home to the swanky Marina Bay Financial Centre.

The S$3 billion project will have more than 500,000 square feet of residential space.

It will also have more than one million square feet of office space.

Analysts expect keen investment interest in the project once it’s ready in four to five years.

Guocoland chairman Sat Pal Khattar said the project, which features first-class office and residential buildings, hotels, and leisure facilities, has potential.

“People will live here and work here, and be involved with all the other activities,” Mr Khattar said.

World-renowned architects Skidmore, Owings & Merrill and Architect 6 will design the project, which currently does not have a name.

Guocoland’s 78-storey project will be one of the tallest buildings in the CBD.

It will also house one of the biggest apartment complexes in Tanjong Pagar, at 509,000 square feet.

This is second only to United Industrial Corporation’s 927,000 square feet new development, where 60 per cent or 556,000 square feet of space will be allocated for residential units.

Median rentals for housing units in the area increased 10 per cent in 2010.

And they look set to rise now that Tanjong Pagar is becoming a choice destination to work, live and play.

Cushman & Wakefield vice chairman Donald Han said: “(The residential units) will be proper one-, two- or three-bedroom penthouse units; it might mirror the size of the Sail, for instance.

“Any development which is iconic in nature, located (near an) MRT station, (and) offers excellent views especially on the higher floors will be (sold) fairly well, and we will expect the end pricing to exceed the S$2,000 per square foot mark easily”.

If economic growth remains robust at four to six per cent a year, analysts say occupancy for Guocoland’s project could be between 80 and 100 per cent.

Mr Han said: “If you are looking from now till 2015 or 2016, in line with the new sites that will be triggered or developed by commercial developers, we will probably see a consistent two to 2.5 million square feet on a per annum basis.

“And that’s enough to be… absorbed by the market. So we don’t have any major inequilibrium in terms of the potential supply that will be coming into the market place”.

Office rents in the CBD area rose 16.5 per cent last year.

Analysts said with strong demand from financial services firms, office rents in the CBD are expected to increase further.

Guocoland won the tender for the Tanjong Pagar site, which is also a white site, in November last year.

The site sits on Tanjong Pagar MRT station and was bought for S$1.7 billion dollars, and has a site area of 161,703 square feet and a gross floor area of 1,697,892 square feet.

Guocoland is owned by Malaysian tycoon Quek Leng Chan and its Singapore portfolio includes Sophia Residence and Goodwood Residence.

-CNA/wk

Source : Channel NewsAsia – MediaCorp Pte Ltd Copyright

Condo site tender in Bishan attracts record 19 bids »« HDB launches sale of Bendemeer and Tampines condo sites

HDB launches sale of Bendemeer and Tampines condo sites

HDB launches sale of Bendemeer and Tampines condo sites

Posted: 22 February 2011

SINGAPORE: The Housing & Development Board (HDB) will on Wednesday launch two sites at Bendemeer Road/Whampoa East and Tampines Central 7 for sale.

The sites are under the confirmed list of the first half 2011 Government Land Sales (GLS) Programme.

The condominium site at Bendemeer Road/ Whampoa East has a 99-year lease and can accommodate 780 units.

It is within walking distance of the Boon Keng MRT station along the North East Line.

Residents will have various dining, shopping and entertainment options at City Square, Serangoon Plaza and Mustafa Centre, which are near the MRT station.

Schools such as Bendemeer Primary, St Andrew’s Junior and Secondary Schools and St Andrew’s Junior College are also nearby.

The executive condo (EC) site at Tampines Central 7 is in Tampines Town which contains the Tampines Regional Centre, schools, cinemas, sports facilities and the Tampines MRT station.

The site has a 99-year lease and 660 units can be built there.

Another three new sites at Buangkok Drive/ Sengkang East Drive, Sembawang Road/ Jalan Sendudok and Jalan Loyang Besar/ Pasir Ris Drive 4 will be launched by HDB and the Urban Redevelopment Authority, next month.

-CNA/wk

Source : Channel NewsAsia – MediaCorp Pte Ltd Copyright

S$3b project to revive fading CBD »« New Changi Hotel put up for sale

New Changi Hotel put up for sale

New Changi Hotel put up for sale

Posted: 23 February 2011

SINGAPORE : New Changi Hotel, a freehold non-residential redevelopment site along Changi Road, has been put up for sale by public tender.

Situated in an established mix of residential and commercial area, the strata-titled development sits on a land area of about 2,456 square metres (26,433 square feet).

The site is located near Paya Lebar and Eunos MRT stations and is well served by the Pan Island Expressway and the Central Expressway as well as major arterial roads like Changi Road, Geylang Road and Sims Avenue.

It is within close proximity to the future Paya Lebar Central, a commercial hub to be developed outside the city centre as part of the Urban and Redevelopment Authority’s decentralisation strategy to provide alternatives for businesses and jobs closer to homes.

Sole marketing agent, Knight Frank, said the site has a guide price of S$61.8 million and is currently zoned for “hotel” in the 2008 Master Plan.

The site has the potential to be rezoned to “commercial”, 3.0, subject to approval from relevant authorities. Based on the potential gross floor area of 79,299 square feet, the land price translates to S$781 per square foot.

“Over the past 4 months, we have seen a flurry of activities in D14 & 15, with over S$700m worth of deals being concluded. They include Lion City Hotel and Singapura Theatre, brokered by us, as well as Paramount Hotel and Marine Point,” said Ian Loh, associate director of investment for Knight Frank.

“We expect keen interest from developers for this non-residential redevelopment opportunity, which has obtained 100 per cent consent from the owners,” he added.

The tender will close at 3pm on March 30.

- CNA/al

Source : Channel NewsAsia – MediaCorp Pte Ltd Copyright

HDB launches sale of Bendemeer and Tampines condo sites »« HIGHER LEVY FOR GREATER LEVERAGE

HIGHER LEVY FOR GREATER LEVERAGE

HIGHER LEVY FOR GREATER LEVERAGE

by Travis Teo and Joanne Chan

SINGAPORE – Even as property analysts expect the latest foreign workers levy hikes to push up construction costs, Manpower Minister Gan Kim Yong reiterated yesterday the move’s necessity in order to hasten the Republic’s productivity drive.

Speaking to MediaCorp, Mr Gan noted that the higher levies will encourage companies to reduce their reliance on foreign labour and invest in productivity improvements.

Said Mr Gan: “We don’t have a lot of time because the other countries are also improving … If you look at the services sector, for example, we’re roughly about 75 per cent of the service productivity in Hong Kong. So we’re behind but not too far behind.”

He added: “Therefore, we have to step up … and this is a good time to do that because we had strong economic growth last year.”

Acknowledging the concern and anxiety of employers, Mr Gan noted that some companies have taken the productivity drive “seriously” and had implemented relevant measures.

But as for concerns that the higher labour costs will be passed on to consumers, Mr Gan urged companies to rethink their strategies and stay focused on raising productivity.

The construction sector, for instance, has a productivity road map, supported by S$250 million in funding. “But the progress, we believe, can be hastened. It can be speeded up,” he said.

Keen competition will force companies to become more efficient, he added.

The latest changes to foreign worker levy rates will be phased in from next January to July 2013 at six-month intervals.

Meanwhile, analysts told MediaCorp that the hike – which will be felt most keenly by the services and construction sectors – will put a squeeze on the margins for construction firms and developers.

They noted that the increases come at a time when the Government has increased land supply and rolled out cooling measures.

Said Chesterton Suntec International head of research and consultancy Colin Tan: “In a rising market it doesn’t matter… The problem comes when prices are starting to correct.”

The analysts noted that, while it was possible to contain cost increases with improvements in productivity, it would not be easily achieved.

Some companies have shown that one way to counter rising manpower costs in the construction industry is to make the pre-fabrication process more efficient. For example, Tiong Seng Contractors uses lighter materials, such as aluminium, in the production process instead of steel, which is traditionally used.

Another way is to build bigger pre-fabrication components and tap economies of scale.

But improving productivity also requires companies to invest in supervisors and managers. Mr Andrew Khng, president of the Singapore Contractors Association, said: “Productivity is also affected if the middle managers or middle-level supervisors are not trained and if we can’t retain them, then the continuity of your productive journey might take a step back.”

Another strategy to keep costs in check is to move the pre-fabrication process to nearby countries where labour is cheaper.

For instance, industry insiders point out that the underground tunnels that MRT trains run through are being built in Malaysia.

But gains from productivity improvements may take time to materialise. In the short run, higher construction costs may push developers to set their asking prices higher when launching new properties.

Source : TODAYonline – MediaCorp Press Ltd’s copyright

New Changi Hotel put up for sale »« LUXURY PROPERTY FUND EYES S’PORE APARTMENTS