COV down 9% in Q1

COV down 9% in Q1

Analysts divided if cash over valuation will fall further or hold

by Linette Lim Updated 02:20 AM Apr 26, 2011

SINGAPORE – HDB resale prices went up in the first quarter of this year, but Cash-Over-Valuation (COV) premiums fell during the same period.

COV premiums for HDB resale flats dropped 9 per cent, or a S$2,000 decrease, to S$21,000 for the first quarter of this year, according to data from the Housing and Development Board.

Observers attributed the decrease to the Government’s cooling measures but were divided on whether COV premiums have bottomed out or will continue to drop.

“Currently, the COVs have come to a point where it is not going any much lower,” said PropNex chief executive Mohamed Ismail. “Based on our PropNex data, the COV for the month of April has already gone up to a median at S$23,000, which is where we were starting prior to the first quarter.”

However, Cushman & Wakefield vice-chairman Donald Han reckons COV premiums will continue to fall.

“I think the fact that there’s going to be 22,000 new HDB dwellings going up in the marketplace, and the Government’s ramping up … its development mission to develop more HDB properties … will mean vendors cannot hold on to their COV asking prices,” he said.

The Resale Price Index increased 1.6 per cent in the first quarter, compared with 2.5 per cent in the previous quarter.

While the total number of resale transactions fell by about 4 per cent to 6,228 cases, the proportion of resale cases transacting above valuation remained at 96 per cent.

Meanwhile, median sublet rents during this period remained relatively stable with increases for one-room and five-room flats and decreases for two-room flats.

Subletting transactions rose by 8 per cent to 6,365 cases.

The total number of HDB flats approved for subletting rose to about 36,400 units in the first quarter, compared to about 35,000 units in the previous quarter.

In a separate announcement yesterday, HDB said that it will launch another 3,185 flats for sale under the Build-to-Order (BTO) exercise for this month.

HDB said it will offer 22,000 new BTO flats this year if demand is sustained. Last year, a total of 16,000 BTO flats were offered.

Despite the supply of new flats coming onto the market, Mr Han thinks that there could be a 1- to 2-per-cent uptake in HDB resale prices over the next one or two quarters.

Mr Ismail also thinks that the resale prices will trend up, as the new supply of BTO flats is not a perfect substitute for the resale units.

“Even though there are 22,000 (new) flats, there are many people who will still choose to buy resale because they can’t afford to wait three years to get the keys,” said Mr Ismail. “On that basis, I will see it as two different markets.”

Source : TODAYonline – MediaCorp Press Ltd’s copyright

Osama shot dead »« HDB unveils 3,185 new BTO flats

HDB unveils 3,185 new BTO flats

HDB unveils 3,185 new BTO flats

by Lois Calderon 02:25 AM Apr 26, 2011

SINGAPORE – The Housing and Development Board (HDB) yesterday unveiled a clutch of 3,185 new Build-to-Order (BTO) flats, putting together the largest supply of subsidised housing in a single launch since 2002.

The latest projects are Anchorvale Cove in Sengkang, Hougang Parkview in Hougang, Montreal Ville in Sembawang and Waterway Terraces II in Punggol.

The offer consists of 105 units of two-room flats, 541 units of three-room flats, 1,797 units of four-room flats and 742 units of five-room flats.

The Hougang Parkview and Montreal Ville projects are standard flats with a price tag of at least S$92,000 for two-room flats, S$158,000 for three-room flats, S$248,000 for four-room flats and S$333,000 for five-room units.

Anchorvale Cove and Waterway Terraces II cater to buyers opting for premium flats, which cost from a minimum of S$179,000 for three-room units to S$354,000 for five-room units.

The projects are expected to be completed in the first quarter of 2014 at the earliest. The HDB said at least 95 per cent of the units will be allocated to first-time buyers. Another 6,070 flats will be up for sale next month and in June, it added.

The latest numbers would bring the total HDB flat count to 14,100 units by the end of June, already close to 90 per cent of the 16,000 flats offered for the whole of last year.

Source : TODAYonline – MediaCorp Press Ltd’s copyright

COV down 9% in Q1 »« La Meyer at 66 Meyer Road offered for en-bloc sale

La Meyer at 66 Meyer Road offered for en-bloc sale

La Meyer at 66 Meyer Road offered for en-bloc sale

Posted: 27 April 2011

SINGAPORE: La Meyer at 66 Meyer Road has been for offered for en-bloc sale by tender, property consultants Cushman & Wakefield, handling the sale, said in a statement.

The freehold site in the exclusive Meyer Road vicinity has a land area of 50,560 square feet and is expected to fetch a price above S$98 million.

The statement said developers can build up to a gross floor area of about 78,000 square feet, based on a maximum allowable plot ratio of 1.4.

Cushman and Wakefield said it expects a good reception for the site, especially from mid-sized developers, due to its relative bite-sized and prized location.

The tender exercise will close May 27.

Ms Christina Sim, Director of Investment Sales at Cushman and Wakefield, said; “Sites costing less than S$100 million, provides a comfortable entry level for developers, and there are already a few foreign developers currently evaluating the property.”

She said Meyer Road is the “Nassim Road of the East Coast”, as it typically seen as a pricing benchmark for the whole of District 15.

“The transacted prices of projects like The Cape, Aalto and The View@Meyer have already crossed the S$2,000 per square feet mark. With developers eager to replenish landbank, we are expecting a blast of enquiries,” she said.

- CNA/cc

Source : Channel NewsAsia – MediaCorp Pte Ltd Copyright

HDB unveils 3,185 new BTO flats »« Industrial property market showing signs of recovery

Industrial property market showing signs of recovery

Industrial property market showing signs of recovery

By Stella Lee | Posted: 20 April 2011

SINGAPORE: Industrial property markets worldwide showed signs of recovery in the second half of 2010, led by the Asia Pacific region.

This is according to a report by international property consultant, Colliers International, which tracked the performance of industrial property rents across 150 cities.

Singapore retained its position as the seventh most expensive location for prime warehouse space at US$15.71 per square foot per annum, and climbed two positions to the eighth most expensive location for bulk warehouse space at US$12.08 per square foot per annum.

Hong Kong slipped one spot for both segments. It dropped to fourth spot for prime warehouse and fifth spot for bulk warehouse.

Comparing Singapore to Hong Kong, rents were 8 per cent cheaper for prime warehouse space and 13 per cent more affordable for bulk warehouse space.

Ms Chia Siew Chuin, Director of Research and Advisory of Colliers International said the comparatively higher growth in Singapore came on the back of the increased demand for warehouse space owing to the improved business sentiment and the strengthening of the Singapore dollar against the US greenback.

Prime factory space in Singapore registered average monthly gross rents of S$2.10 dollars per square foot for ground floor space as of March this year.

The corresponding rates for warehouses were at S$2.20 dollars per square foot.

The report said that demand for industrial space in Singapore continues to be on an expansionary mode. Ms Chia expects industrial rents to grow between 5 to 10 per cent for 2011.

Tokyo, London’s Heathrow, Zurich, Geneva, Oslo, Sao Paulo, Helsinki and Moscow complete the ranking of the 10 most expensive warehouse locations in the world.

-CNA/ac

Source : Channel NewsAsia – MediaCorp Pte Ltd Copyright

La Meyer at 66 Meyer Road offered for en-bloc sale »« Pine Grove en bloc tender closes, marketing agent mum

Pine Grove en bloc tender closes, marketing agent mum

Pine Grove en bloc tender closes, marketing agent mum

Apr 20, 2011

The tender for Pine Grove – possibly the most expensive property to go en bloc – closed yesterday.

Its marketing agent Jones Lang LaSalle declined to comment if any bids were received for the tender, or when the results of the tender will be released.

The 893,000 square foot property at Ulu Pandan was put up for sale early last month.

A new development on the property can yield a gross floor area of 1.88 million sq ft, or about 1,500 homes of 1,200 sq ft each in 24-storey towers.

Including the development charge of S$460 million to the S$1.7 billion asking price, the total cost of the property translates to about S$2.2 billion or S$1,152 per square foot per plot ratio.

If sold at the asking price, Pine Grove will beat Farrer Court – which was sold at S$1.3 billion in 2007.

Farrer Court has since been redeveloped into d’Leedon by CapitaLand.

Source : TODAYonline – MediaCorp Press Ltd’s copyright

Industrial property market showing signs of recovery »« HDB OWNERS WITH INSUFFICIENT CPF SEE MORTGAGE INSURANCE LAPSE

HDB OWNERS WITH INSUFFICIENT CPF SEE MORTGAGE INSURANCE LAPSE

HDB OWNERS WITH INSUFFICIENT CPF SEE MORTGAGE INSURANCE LAPSE

by Cheow Xin Yi

SINGAPORE – About 9,000 Housing and Development Board (HDB) flat owners have seen their national mortgage insurance lapse due to insufficient funds in their Central Provident Fund (CPF) accounts to pay the premium.

That amounts to 1.7 per cent of about 556,000 home owners who service their HDB loans with CPF savings – a small percentage, National Development Minister Mah Bow Tan said in a written response to a query from Member of Parliament Irene Ng (Tampines Group Representation Constituency) yesterday.

Called the Home Protection Scheme (HPS), the insurance safeguards HDB households against the loss of their flats should the breadwinner die or become incapacitated before the loan is fully repaid.

A further 8.5 per cent were exempted from HPS, as they have purchased similar insurance, while about 2 per cent were not insured due to medical conditions or other reasons.

Reasons homeowners could not pay include loss of jobs. Where appropriate, the HDB would work with relevant social agencies to assist those in financial difficulty, the written reply stated.

Meanwhile, Senior Minister of State (National Development) Grace Fu shot down a suggestion to allow HDB grants to finance the cash-over-valuation (COV) component of a resale flat.

Doing so may result in flat sellers demanding higher COVs, driving up resale prices, Ms Fu said yesterday in Parliament.

She added that those concerned about high COVs should apply for Build-to-Order (BTO) flats instead. Up to 22,000 BTO flats could be launched this year. Cheow Xin Yi

Source : TODAYonline – MediaCorp Press Ltd’s copyright

Pine Grove en bloc tender closes, marketing agent mum »« How many are covered under Home Protection Scheme?

How many are covered under Home Protection Scheme?

How many are covered under Home Protection Scheme?

By May Wong | Posted: 11 April 2011

SINGAPORE: About 556,000 CPF members use their CPF savings to service the loans for their HDB flats and 88 per cent of them are covered under the Home Protection Scheme (HPS).

In a written reply, National Development Minister Mah Bow Tan said HPS is a mortgage-reducing insurance scheme.

It protects HDB households against the loss of their flats should the breadwinner pass away or become incapacitated before the home loan is fully paid up.

Mr Mah was responding to MP Irene Ng’s question on the number of people covered under the scheme.

The minister added that HPS is compulsory for all HDB flat owners who use their CPF savings to service their monthly home instalments for an HDB or bank loan.

Mr Mah said 8.5 per cent are exempted from the scheme because they have already purchased similar insurance products.

About two per cent are not insured under HPS because of medical conditions or other reasons.

In addition, Mr Mah said less than two per cent of lessees have seen their HPS lapse due to insufficient funds in the CPF Ordinary Account to pay for the HPS premium.

One reason is flat lessees losing their jobs.

Where appropriate, Mr Mah said HDB will work with the relevant social agencies to extend their employment

-CNA/wk

Source : Channel NewsAsia – MediaCorp Pte Ltd Copyright

HDB OWNERS WITH INSUFFICIENT CPF SEE MORTGAGE INSURANCE LAPSE »« Lawyers prohibited from holding conveyancing money in clients’ accounts

Lawyers prohibited from holding conveyancing money in clients’ accounts

Lawyers prohibited from holding conveyancing money in clients’ accounts

By Millet Enriquez | Posted: 11 April 2011

SINGAPORE: Lawyers will now be prohibited from holding conveyancing money in their clients’ account – in the changes made to the Conveyancing and Law of Property Act that were read in parliament Monday by Law Minister K Shanmugam.

The changes are expected to begin in phases from August 1 this year after the bill is passed.

Conveyancing money used for payment of stamp duties, option deposits, and balance of sales proceeds – are usually entrusted to lawyers.

Under the new rules, law firms need to set up a Conveyancing Account with appointed banks and two signatories from the parties are required before funds are withdrawn.

Clients also have the option of engaging the Singapore Academy of Law, to hold such conveyancing monies.

Law firms who breach the new ruling will face a criminal penalty with a fine of up to S$50,000 or imprisonment of up to three months.

“Lawyers currently hold conveyancing money for practical and important reasons as stakeholders or as agents for their clients who may be overseas or otherwise unable to attend to legal completion. They perform a valued service within the conveyancing market: these new measures will help enhance public confidence in their role,” said Mr Shanmugam.

- CNA/cc

Source : Channel NewsAsia – MediaCorp Pte Ltd Copyright

How many are covered under Home Protection Scheme? »« Average rents for hi-tech properties up 3.1% in Q1

Average rents for hi-tech properties up 3.1% in Q1

Average rents for hi-tech properties up 3.1% in Q1

By Jonathan Peeris | Posted: 07 April 2011

SINGAPORE : Rents for hi-tech industrial properties in Singapore grew at a faster rate in the first quarter.

According to DTZ Research, the average rent for hi-tech properties, which include business parks, rose 3.1 per cent quarter-on-quarter to S$3.30 per square foot per month in the first quarter.

It had increased 1.6 per cent in the previous quarter.

Rents for conventional industrial space also continued on its growth momentum.

DTZ said the average monthly gross rent for upper-storey industrial space grew 3 per cent on quarter to S$1.70 per square foot per month.

This follows an increase of 3.1 per cent in the previous quarter.

The average rent is 17.1 per cent below the S$2.05 per square foot achieved during the peak in 2008.

Head of DTZ Southeast Asia Research, Chua Chor Hoon, said the increase in rents for hi-tech industrial properties seems correlated to office rents which have moved up 7.5 per cent to 10 per cent outside the CBD.

DTZ added that industrial rents are anticipated to continue to increase.

That is because the annual average potential supply of 7.5 million square feet between 2011 and 2013 is significantly lower than the historical 10-year average demand of 9.3 million square feet.

- CNA/ms

Source : Channel NewsAsia – MediaCorp Pte Ltd Copyright

Lawyers prohibited from holding conveyancing money in clients’ accounts »« WHY PROPERTY PRICES ARE RISING

WHY PROPERTY PRICES ARE RISING

WHY PROPERTY PRICES ARE RISING

The trust companies are often at the heart of these new kinds of money flows, operating in a murky domain where the official banking system meets the shadow banking system. The trust companies cater largely to two groups of clients: Private companies that need capital and cash-rich families in search of higher returns.

The trust companies and other shadow institutions are particularly active in the politically sensitive real estate market. Informal money flows are a big reason why property prices continue to rise.

Across China, money continues to flow into apartment blocks, gleaming office towers and shopping malls. Since developers cannot borrow money from banks until they own the land, many need to raise funds elsewhere. As they are willing to pay upwards of 10 per cent for the privilege, that sort of return attracts lots of interest from those with a surplus to invest.

So when Banyan Tree, a Singapore-based resort company, was looking to raise a 1.1-billion-yuan fund for China, it turned to established entrepreneurs and high-net-worth individuals whom it tapped through wealth management consultants. “Institutional investors in China are not mature enough to understand the concept and give us their money,” says a Banyan Tree executive. “Wealthy entrepreneurs can make decisions very quickly.”

Virtually everyone has a stake in keeping the game going and turning a blind eye to edicts from Beijing. Since the trust companies are supposed to be simply intermediaries and cannot collect deposits from retail customers, Beijing is not all that bothered about them, bankers say.

Banks themselves take advantage of less-regulated institutions, shifting loans off their balance sheets by selling them to the trust companies, which slice them up and distribute them to their clients. That enables the banks to make more loans. “Innovative tools can make credit simply not appear,” says Ms Helen Qiao, an economist with Goldman Sachs in Beijing.

Meanwhile, local governments rely on land sales to fund their own operations. So they are happy to ensure developers have the capital to bid extravagantly at land auctions. Local governments in many cases own the trust companies that help developers finance their purchase of the land, taking fees in the process. Finally, senior municipal bureaucrats are often among those who have the money and are seeking high returns.

Source : TODAYonline – MediaCorp Press Ltd’s copyright

Average rents for hi-tech properties up 3.1% in Q1 »« HDB TO PUT UP BUANGKOK/SENGKANG EAST SITE FOR SALE