The prompt action seems to have been set in train by a no-nonsense blog post by National Development Minister Khaw Boon Wan last week.

He suggested that sharp practice by developers and their marketing agents could be prompting unwitting investors to buy small industrial units thinking they would be easy to rent.

This belief was fuelled by the taking up of such space by tenants who were technically not meant to be there,and who have been bending the rules to get lower rent than would otherwise apply.

Earlier media reports cited examples such as tuition centres, retail outlets and even churches – adding that the higher demand could drive up rents too.

In response, the Urban Redevelopment Authority (URA) has made changes to ensure that buyers are not misled into buying industrial units without knowing the possible restrictions on their uses.

A URA circular sent to developers and lawyers states that developers selling non-residential properties – shops, offices and industrial units – must from Friday insert, in the option to purchase and the sale-and-purchase agreement, a clause stipulating clearly the approved use of the unit sold.

For instance, an industrial unit’s use could be specified as for a factory or showroom, according to what was stated in the URA’s approval for the project.

Currently, the unit can be loosely stated as for ‘industrial use’, and buyers unfamiliar with the sector may be unclear as to what sort of tenants are allowed.

This clause should be contained in a side letter made known to the buyer before the booking fee is accepted – or at the time the option to purchase is issued.

Experts say that as this will allow buyers to be aware of the approved use of the unit purchased, they cannot subsequently argue that they are unclear about the scope of uses allowed. This will minimise potential disputes, they add.

Mr Lee Liat Yeang, a partner at Rodyk & Davidson’s Real Estate Practice Group, said the change would alert buyers specifically to the fact that they cannot change the approved use without prior approval from the authorities. They will also know the actual approved use of the project as early as possible in the buying process.

‘In the past, very often the buyer is only aware of the approved use… at the time of receipt of the sale agreement from the lawyers. This is after the option has been issued, which means the buyer has already put down a 5 per cent deposit,’ Mr Lee added.

An industry observer, who declined to be named, noted that with the residential measures diverting investors to the industrial segment, more housing agents are streaming into the market. Some of them might push industrial units aggressively to investors even though they are unfamiliar with the rules governing the sector.

Soilbuild managing director Lim Chap Huat said that he has always told his marketing agents to be upfront with buyers of his industrial projects.

He is supportive of the change, as investors need to be aware of what exactly they are purchasing, especially with some artist’s impressions making new industrial projects look just like shopping malls.

A URA spokesman said the changes do not apply to tenancy agreements, as the leasing of completed properties does not fall under the Sale of Commercial Properties Act, which allows for changes to sales agreements of uncompleted industrial properties.

For prospective tenants, URA has been actively working with the Council of Estate Agents and developers to ensure the accuracy of marketing materials for such industrial premises so that end-users, including tenants, are not misled on the approved use,’ the spokesman added.

Mr Khaw put rogue industrial tenants and landlords on notice in his blog entry last Friday, noting that tenants are running some office and non-industrial activities in industrial buildings.

He also noted the emergence of shoebox factories of as small as 50 sq m to 80 sq m, likely too small to accommodate genuine industrial activities.

Still, many investors are attracted by the smaller quantums of typically less than $500,000 for shoebox factory units.

The proper use of industrial space includes manufacturing, warehousing and production. Certain types of e-businesses, such as IT infrastructure and software development, are also allowed.

There are exceptions. For instance, childcare centres and furniture showrooms are allowed, as they support the main industrial activities. Broadly speaking, they may occupy about 40 per cent of the industrial development.

Source: The Straits Times – 20 March 2012

An average rental growth of 2.3 per cent from June to December last year, as compared with just 1 per cent growth in capital values.

Paris overtook London as the most expensive rental market, with prices more than three times of rents in Shanghai and Mumbai, both of which are ranked cheapest on the index.

Singapore is ranked as the city with the sixth highest rental costs.

The higher rental growth over capital rises to a classic case of demand for accommodation outstripping such supply globally.

The rent hikes have been due to a congregation of demand for housing from both local and international tenants in major cities, even amid a global residential real estate market which is increasingly faced with supply constraints.

Take the case of Shanghai, a booming economy is still growing at a very healthy rate.

Foreigners seek acceptable accommodation; supply may be available, but the supply may not be in areas where the expatriates want them.

In Singapore, rental values rose by 4.4 per cent in the first half of last year and a further 5 per cent in the second half.

In contrast, capital values rose 11 per cent and 3.3 per cent in the corresponding periods.

One possible factor, for the rise in rentals in Singapore is a trend for arriving expats to opt to live in smaller units.

There is a trend of expatriates entering Singapore with tighter rental budgets and smaller families. They tend to head for smaller units rather than traditional prime, large apartment sizes, which has the effect of lifting up the rentals when measured on a dollar per sq ft basis.

The recent popularity of shoebox apartments in Singapore, which are residential units with an area of 500 sq ftand less, was another reason for the high rental growth.

It is such a small unit, there will be an effect of lifting the rental on a dollar per sq ft basis. When divided by the small built-in, the rental is pretty high.

While the Urban Redevelopment Authority had recently imposed certain restrictions to discourage the sale of such shoebox apartments, rents will remain high for now as it takes a while before the intended effects kick in.

Shoebox apartments are continually coming onto the market this year and next year. Whatever measures the Government implements will take effect only from 2014 onwards when these stop coming into the market.

The report also noted that the introduction of an additional stamp duty for overseas buyers in December last year was also likely to to drive up rental levels in Singapore.

As for rental yields, which get investors excited, the report stated that mature markets like New York, at 6.9 per cent, tended to record the highest. This was in contrast to Shanghai’s 2.3 per cent, which is the lowest on the list.

An economy’s rental yield was very much dependent on prevailing interest rates.

As long as interest rates continue to decline, the yield would fall in line with the declining interest rates. This will continue until a point when the US starts raising interest rates.

Source: The Straits Times – 20 March 2012

Jarene’s Take:

With high rental growth, capital growth and low interest rates, stable economy and government – these are the main reasons why many foreigners still see Singapore as a very attractive place to invest in, despite the stamp duties imposed on foreigners.

Writing in his blog, Khaw Boon Wan said that shoe-box apartments serve a purpose as many singles do find them adequate for their housing needs. ‘But shoe-box factories? As small as 50-80 sqm (smaller than a typical 7-Eleven shop)? Can a factory truly operate in such a small space?’

He noted that many tenants of shoe-box units in industrial parks are legitimate non-industrial tenants providing relevant support services to the industrial tenants for which the park is built. ‘For example, some are staff canteens and in-house clinics serving the factory workers.

‘However, there are some who appear to be unauthorised non-industrial tenants. They appear to be abusing the lower rentals at industrial land/parks for normal commercial/office activities which should rightly be in commercial land/sites. This is wrong.’

He said that offices and shops are not considered industrial use and are not allowed within industrial developments.

But he added that non-industrial activities such as child-care centres, staff canteens and showrooms are allowed within industrial developments, provided they support the main industrial activities and, together with lift lobbies and other circulation areas, do not occupy more than 40 per cent of the industrial development.

Mr Khaw concluded his blog post by putting the onus on developers and property agents, saying that they must make it clear to prospective buyers that industrial units can only be used for industrial activities.

‘They must not mislead buyers into misusing industrial land/ parks for non-industrial activities,’ he wrote.

Occupation by unauthorised non-industrial tenants stems from, among other things, a lack of affordable commercial space.

It’s really a mixed bag of issues. Unauthorised use of industrial land is not driven by the size of the unit. Unauthorised use in industrial land occurs because it is the cheaper option, and also because of the scarcity of cheap commercial and office space.

The government must exercise caution in the event that it implements measures to curb the misuse of industrial land, stressing that the issue of commercial land shortage cannot be resolved overnight.

There is a pressing need for more commercial space to be built and to cater to the small businesses as they cannot afford the rent at prime locations but all this takes time.

In addition, the government must bear in mind the potential implications that policy changes might have on small and medium-sized enterprises (SMEs).

In order for Singapore to be competitive and provide employment, SMEs are needed, and they are vulnerable to economic changes and rising costs. If the government were to suddenly chase everyone out, where would they go? Some would close down while other may go to Iskandar Malaysia and create jobs there.

Another difficulty is how the government should go about facilitating the process of weeding out these unauthorised non-industrial tenants.

The government cannot discriminate between the industries and industrial buildings as there would be repercussions. It cannot be enforced now and the enforcement cannot be phased. If not, everybody would be pleading to be put at the last phase.

To solve the underlying problem of unauthorised non-industrial tenants thus requires addressing the fundamental shortage of commercial space.

The government can take a cue from the latest Industrial Government Land Sales Programme, where smaller parcels of industrial land were made available. One way is to sell smaller parcels of office space, perhaps in the city fringe area. Some suggestions include Toa Payoh or Braddell.

To ensure consistency between commercial tenants and unauthorised non-industrial tenants who are taking advantage of the lower rental costs, the government could consider imposing a levy, tax or developmental charge.

Refining and expanding the present definition of what constitutes industrial activities could be another alternative. The definition can be widen and redefine what is allowed under industrial use to include product life cycle. As long as the businesses are involved at any point of the product life cycle, they can qualify under this definition.

Source: Business Times – 17 March 2012

Experts say both the resale of finished homes, and the quick resale – or subsale – of homes bought but not built yet, to earn easy profits, have taken a dive.

They feel last December’s property cooling measures played at least some part in causing the slide in what is known as the secondary market.

In addition, the bumper supply of state land led to more new launches and a plethora of choices for home buyers, who flocked to that segment instead.

A check with the Urban Redevelopment Authority found only 376 caveats lodged for secondary transactions in January. Lodging a caveat is common practice when buying a home.

More caveats are likely to stream in over the coming weeks, but early indications suggest that the resale market is increasingly slowing. However, January’s subdued numbers could also be due to the Chinese New Year festivities.

The latest resale figure is sharply down from the 1,012 posted in December – when the segment was hit by cooling measures that introduced an additional buyer’s stamp duty of up to 10 per cent. There were 1,296 resale transactions in November.

Experts say December’s cooling measures are likely to have further dampened the resale market. For instance, foreigners looking to buy a resale flat for immediate occupation might choose to rent instead, to avoid paying the additional buyer’s stamp duty.

In any case, the secondary market has been trending down since April last year, when it peaked at 2,002 caveats.

Agents whom The Straits Times spoke to had noted a drop in secondary market activity. This dip seems unusual because the robust primary market set an all-time record last month – 3,138 new private homes, including executive condominiums, were snapped up by buyers.

ERA Realty key executive officer Eugene Lim said the subdued secondary market could reflect a ‘stalemate’ – a mismatch of price expectations between sellers and buyers.

‘Most sellers are unwilling to drop prices yet because Singapore is not in a recession and holding costs are also relatively cheap… But buyers have a different mentality – they try to bargain, so it takes longer to close a deal,’ he said.

Some buyers might prefer new homes as they can enjoy a progressive payment plan whereby the purchase price of the home is paid in instalments as the developer completes the different stages of construction. Buyers can thus spread out their payments, rather than service a housing loan on the full purchase price of a resale unit.

Prices have come down slightly, but a large margin is not within expectations. The transaction volume is quite low, and it’s not enough to move prices down for the entire secondary market.

Overall prices for non-landed resale homes fell 0.4 per cent in January, after a 1 per cent drop in December, according to the monthly residential price index compiled by the National University of Singapore Institute of Real Estate Studies.

Source: The Straits Times – 16 March 2012

Jarene’s Take:

Investors / Buyers, this is the time to buy, when others are afraid of buying. Call me at (+65) 9431 4139 to arrange for viewings TODAY.

The four plots, including a reserve list site that will be made available for application later this month, can potentially generate an estimated 2,415 homes. This announcement was made on the same day as strong February developer housing sales figures released by Urban Redevelopment Authority (URA).

The government wants to send out the message that there’s enough supply. If there is demand, the government will release more land to support that demand.

Three of the four plots released are in the confirmed list. They include two sites that can generate about 1,300 executive condos (ECs) – a public-private housing hybrid – at Tampines Central 7, next to Tampines Trilliant andnear the future Tampines MRT Station under the Downtown Line; and at Woodlands Avenue 5/Drive 16, next to the completed LaCasa EC development.

Tenders for both sites were launched yesterday by the Housing & Development Board, as a land sales agent for the state.

The third confirmed list plot is a private condo plot at Tampines Avenue 10/1 (next to the Arc at Tampines development and opposite the Waterview condo project). The tender for this will be launched on March 28 by URA. On the same day, URA will make available for application on the reserve list the adjacent plot, which is also for a private condo project.

The government will launch the tender for a reserve list site only if it receives an application from a developer, accompanied by an undertaking of a minimum bid price acceptable to the state, or if it receives sufficient market interest for the site.

Property consultants polled by BT unanimously listed the EC plot in Tampines as the hottest of the four plots. However, their predictions on the winning bid ranged widely, at $280-420 per square foot per plot ratio (psf ppr). As many as 10-13 bids are expected for this plot.

The Tampines Trilliant site next door was sold for about $392 psf ppr in April last year and the project, launched last month, achieved a median price of $803 psf (probably a new high for an EC project) on the 187 units sold in February, according to monthly developer sales data.

End-demand for ECs will continue to remain robust especially after the government recently increased the allocation limit for second-timer buyers from 5 per cent to 30 per cent of units in the first month of an EC project’s launch. He expects the winning bid for the latest Tampines EC site to be $400-420 psf ppr, surpassing that for the next-door site sold last year.

Others suggest a lower price. Economic conditions have moderated compared with a year ago and there will be ample new EC housing supply, one analyst forecasts a top bid of about $320-360 psf ppr.

The Woodlands EC site has been tipped to fetch a winning bid in the $250-330 psf ppr range. Three to five bids are expected for the site.

The site’s pluses include proximity to primary schools, the Singapore Sports School and parks. However, it is also near industrial parks and the Sembawang Airbase, and the possible noise level could make it less attractive. Developers who participate in this tender would not bid aggressively.

There has been no EC tender in Woodlands since the resumption of EC land sales in 2010. So the development could have a good catchment from upgraders within that new town as well as others keen on that location.

As for the confirmed-list private condo plot at Tampines Avenue 10, the winning bid is predicted to be in the $350-465 psf ppr range. Bid levels may be affected by the next-door plot on the reserve list.

Bidders for the confirmed-list site would have to consider the fact that the adjacent land parcel could be triggered for sale eventually, thereby posing competition.

Source: Business Times – 16 March 2012

Urban Redevelopment Authority (URA) figures reflected a total of 2,413 private homes – excluding executive condominiums (ECs) – being sold in the month of February.

This is 29 per cent more than in January (the month that Chinese New Year fell this year) and more than double that sold in the same period last year.

If ECs were added to the mix, the spike was even more impressive, with a total of 3,138 units sold in February – up 51 per cent from January’s 2,077 units.

The robust buying sentiment revived conjecture that the government could act again to puncture any possible property bubble in the making. It has taken several steps of late, including an additional buyer’s stamp duty (ABSD), to cool the market.

A Ministry of National Development (MND) spokesman confirmed that the authorities were keeping a sharp eye on the developments, saying: ‘The government will continue to monitor the market closely and, if necessary, we will introduce further measures to ensure a stable and sustainable property market.’

As a result of this strong market performance, policy risk has been elevated but not to a level where any immediate government intervention is expected. However, should transaction volume continue to rise unabated by March, then the risk of further measures is quite likely.

Several factors contributed to the pick-up in February.

The main demand driver has been low mortgage rates, which are generally below 1.5 per cent. Short of having an interest rate policy of some sort, administrative measures have not been effective in reining in the buying penchant. Unless interest rates rise very significantly, it would have little impact on demand.

Moreover, the creative promotions and sweeteners dangled by developers in various forms to cushion the impact of the ABSD – such as part absorption of the stamp duty, price discounts, early bird or VIP preview prices, as well as furniture and fit-out vouchers – have also encouraged homebuyers to commit.

Sales of ECs (a type of hybrid public-private housing) also soared, with 725 units sold in February, more than treble the 205 units in January and almost six times the volume sold in the year-earlier period, making it the highest monthly figure since the resumption of EC sales in October 2010.

The increased demand for ECs was expected especially after the income ceiling for it was raised last August, resulting in a larger pool of eligible buyers.

Top-selling projects for the month included Parc Rosewood (380 units sold at $994 psf median price), Guillemard Edge in Geylang (275 units sold at $1,215 psf median price) and Watertown at Punggol (182 units sold at $1,341 psf median price).

Notably, Guillemard Edge – which sold all the units that were released – was one of the new launches during the month, together with other developments such as Bartley Residences and Casa Cambio.

Among ECs, Twin Waterfalls at Punggol was the most well received with 257 units sold at a median price of $727 psf.

The most expensive unit sold by a developer for the month was an apartment at Scotts Square, which transacted at $4,661 psf.

However the sales volume of such luxury homes continues to remain low with only 11 units priced above $2,500 psf being sold in February, putting sales in the high- end bracket at a ‘standstill’.

The demand in the city centre is expected to remain subdued as it has a higher proportion of foreign buyers compared with suburban areas.

Much of the action was in the mass-market outside core region (OCR), with 1,830 units being sold in the month compared with 1,761 in the month before. This was despite the fact that the number of OCR units released by developers fell 21 per cent month- on-month to 1,567 in February.

Some 56 units were sold in the core central region (CCR) and 527 in the rest of central region (RCR).

The number of units launched but unsold has also risen steadily since last October – when it stood at 5,922 – to 7,586 in February.

Some consultants feel that with an increasing pipeline of projects rolling out in the months to come, demand could potentially continue to chase supply. This may result in the return of en bloc sales and reignite foreigner purchases.

Upcoming launches include Allgreen’s 928-unit Riversails in Sengkang and MCL Land’s 679-unit Ripple Bay in Pasir Ris.

Source: Business Times – 16 March 2012

Jarene’s Take:

Yes, as I have been telling my buyers, any figures released by URA during January of any year, is just a seasonal pattern. Just disregard any information released during that time. And this pattern is consistent throughout the world.

They will now be given priority in the selection of any Build-To-Order (BTO) flat across the island, instead of just the replacement flats allocated to them near their current homes.

They will also receive concessions which could ease their financial burden in purchasing their new flats.

These include paying a lower resale levy upfront in some cases, or opting to defer payment of the entire sum. Resale levy is payable when an HDB homeowner buys a second subsidised flat from the Government.

Those above 55 will also be able to seek permission to dip into their Central Provident Fund (CPF) Retirement Accounts – a pool of money previously reserved strictly for their retirement needs – should their current finances prove insufficient.

The Selective En Bloc Redevelopment Scheme (Sers) came under the spotlight in recent months after the Government announced it would acquire Rochor Centre in order to lengthen the southern stretch of the North-South Expressway.

The move affects 567 homeowners, some of whom have been living there for decades, as well as 187 shops andeating places.

Some residents have expressed reservations about moving into replacement flats reserved for them in Kallang, saying they are pricey and not an equivalent substitute for their centrally located homes.

Member of Parliament for Moulmein-Kallang GRC Denise Phua has also weighed in on the issue, asking the Government to provide higher compensation.

In a statement to The Straits Times, HDB said it ‘regularly reviews its policies and processes to ensure they remain relevant and meet the needs of residents’.

‘Taking into consideration feedback from our residents, HDB has recently reviewed and enhanced the various concessions to make the Sers package more favourable,’ it added.

Under Sers, selected older buildings are redeveloped to make the best use of land. Owners get market-value compensation and are allocated a new replacement flat in a nearby location.

With the new rule changes, up to 5per cent of all upcoming BTO launches islandwide are reserved for selection by such homeowners before anyone else.

They will get the same discount off the price of these flats as they are getting on the replacement flats, which is 20per cent subject to a cap of $30,000.

Should Sers residents still be unable to get a new BTO flat by the end of the grace period, they can fall back on the replacement flats which have already been set aside for them.

Another key change is that they can opt to defer the payment of any applicable resale levy, which can range from $15,000 to $50,000 depending on flat type, until they sell or transfer their flats.

If they decide to pay the levy upfront, some may get a discount on it because HDB will now cap the upfront payment at $30,000.

Besides Rochor Centre residents, the changes will apply to other announced Sers projects in Clementi Avenue5, East Coast Road, Redhill Close and Boon Lay Drive.

All in, 2,553 households will stand to gain.

An analyst commented that they were a practical approach to minimising the problems felt by affected residents. They could also be a sign of things to come.

Our public housing is ageing. And as the years go by, more and more estates will be subjected to Sers to make the best use of the land. This will lessen the pain felt by Sers residents.

The deferment of the entire resale levy will also be welcome, as not everyone – particularly the elderly – will have the liquidity to pay the resale levy upfront.

Source: The Straits Times – 15 March 2012

The decline in the Q1 2012 investment sales can be attributed to weaker market sentiment on the back of global economic uncertainty, compounded by the impact of recent government measures to stabilise the property market, such as the additional buyer’s stamp duty (ABSD) and rules for industrial developments on Government Land Sales (GLS) sites sold from 2012.

Investment sales reflect the confidence of major property players in the sector’s mid to long-term prospects. Investment sales are deals of at least $10 million but includes sales of GLS sites, acquisitions by real estate investment trusts (Reits) and residential collective sales below that amount.

The investment sales market is expected to remain tepid in the near term as caution reigns amid macroeconomic volatility. Despite ample liquidity and demand in the market, there remains a mismatch between buyers’ and sellers’ expectations. However, a slight improvement in investors’ sentiment and  once macro-concerns begin to fade, there could be a resurgence in transaction.

Investors keen on Asia will not ignore Singapore, given its safe and transparent markets. 2012 could be a tale of two halves – with H1 seeing tepid investment sales dominated mostly by GLS, and H2, if there is an improvement in global macroeconomic stability, may see more private deals as the bid-ask gap closes. The year could end with $20 billion to $23 billion of investment sales, down from $29.5 billion last year and $31.4 billion for 2010. However, this would still be higher than $7.6 billion in 2009.

For the Q1 2012 figure (up to March 12), the public sector accounted for $2.2 billion or nearly 65 per cent of total investment sales.

The residential sector made up about $2.3 billion or 68 per cent of total investment deals. Residential deals emanating from the private sector dropped 71 per cent quarter on quarter to $429 million, while the figure for the public sector dipped just 0.4 per cent to $1.84 billion. Although developer sales of private homes slowed down after the introduction of the ABSD on Dec 8, sales have regained momentum quickly, especially in the mass market. This has spurred developers to remain active at GLS tenders.

However, for high-end apartments and condos, transaction activity has come to a standstill. Thus far this year, only two caveats above $10 million each have been lodged, down from nine in Q4 2011 and 18 in Q1 2011. It appears that the introduction of the ABSD has a greater impact on this sector, where overseas demand has been high. Effective Dec 8, 2011, foreigners have to pay a 10 per cent ABSD rate for any purchases of residential properties.

Market watchers say residential collective sales have also slowed down as developers must now undertake to complete developing projects on any residential sites purchased from Dec 8 and selling all the units within five years from the date of contract or agreement to purchase the site – if they don’t wish to pay the 10 per cent ABSD.

Just three en bloc sales totalling $145 million have been sealed since the start of the year, the biggest of which was $96.2 million for Seletar Garden. This is a marked drop from the nearly $745 million for Q1 last year and$789 million in Q4.

The year may end with about $1.5 billion to $2 billion of en bloc sales, down from $3.2 billion last year. Smaller sites will continue to find buyers given the lower risk.

Given the protracted sale process that comes with a collective sale, the additional duty is substantial and the developer can potentially erase all projected profits, and risks assuming a loss-making position if the market goes south. This year’s successful en bloc sales will be dominated mainly by smaller sites or sites with a commercial redevelopment component.

Total investment sales in the commercial sector (public and private) have amounted to $822 million so far in Q1, down 68 per cent quarter on quarter. The only notable deal this year has been Twenty Anson, at $430 million.

The office investment sales market is expected to be quieter this year as office rentals are expected to be soft in the first half. Rents are expected to stabilise in H2 and capital values and deals to increase.

Industrial investment sales (public and private) have totalled $260 million this quarter up to March 12 – an 8 per cent share of the total investment sales pie. Quarter on quarter, the figure was down 70 per cent due partly to the lack of industrial sites that were launched for sale under the GLS programme in Q1.

Source: Business Times – 14 March 2012

My Take?

I will just quote what Warren Buffet says:

“We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.”

And: 

“You know, people talk about this being an uncertain time. You know, all time is uncertain. I mean, it was uncertain back in – in 2007, we just didn’t know it was uncertain. It was – uncertain on September 10th, 2001. It was uncertain on October 18th, 1987, you just didn’t know it. “

The launches and freebies are already coming thick and fast with loads of new projects lined up. The news is less certain for pricing but few experts expect huge bargains on the horizon.

While some say prices might stay firm because developers have strong holding power, others predict price cuts ranging mostly from 3 to 10 per cent – depending on the segment – although there does not appear to be any industry-wide price reduction yet, apart from the various sweeteners.

Still, the Urban Redevelopment Authority’s price index inched up just 0.2 per cent in the three months to Dec 31, suggesting that a turning point might be around the corner.(Sorry buyers, this is just the seasonal trend. Wait for the next property price index. That will be a proper gauge, a true reflection of the market situation.)

But on the supply side, it’s all guns blazing. At least 10 developments were launched in the first two months of this year, including Bartley Residences, Watertown and Guillemard Edge, as firms rush to meet buyer demand, stoked by rock-bottom interest rates.

Up to 48 new private projects – more than 5,000 landed and non- landed units – may be launched this year. They range from high- end homes in River Valley, Nassim Hill and Newton to mass-market projects in Yishun, Bedok, Choa Chu Kang and Pasir Ris. But they do not include recently sold sites that could be launched by year’s end, so the total number of new projects could be even higher.

Apart from these private residential projects, at least two more executive condominium (EC) projects with another 1,100 units are expected to be launched.

So competitive is the landscape that developers have been pulling out the stops to lure buyers, with incentives like furniture vouchers and the absorption of stamp duty thrown in.

The bumper crop of new launches expected this year stems from the Government’s ramped-up land sales programme (GLS) that began in the second half of 2010 and attracted keen developer interest. It also comes from the roughly 50 collective sale deals sealed last year.

Like last year, the bulk of the new launches is expected to be in suburban areas, catering to first- time buyersand upgraders who have been powering the market over the past few years.

The pipeline supply of sites and projects will provide a variety in terms of location and pricing so buyers will have numerous options to consider, say experts.

With average unit sizes shrinking, the number of units eventually launched on GLS sites might exceed official estimates by 20 per cent or more.

Land parcels that could yield an estimated 7,000 units were placed on the confirmed list of the GLS for the first half of this year.

Mr Lee Liat Yeang, a partner in Rodyk & Davidson’s Real Estate Practice Group, agreed, saying that developers are aware of the importance of keeping homes small and hence, overall prices affordable.

‘Some two-bedroom units are smaller than 500 sq ft. These small two-bedders should appeal to investors of projects within the city or city fringe, who tend to rent out these units.’

Private home prices

Experts say that price trends are likely to be project-specific, with better located projects with strong selling points achieving higher prices.

But while developers will be cautious on pricing, they will push the market for what it will bear if there is an opportunity or when sentiment is good.

Mass-market projects in less well-located areas are expected to be priced at $800 to $900 per sq ft (psf), while better located projects like Sky Habitat in Bishan (Click here to find out more and register your interest!) could be in the $1,400 to $1,500 psf range.

However, another analyst estimates that mass-market home prices will average $1,100 psf in upcoming launches.

Homes in the city centre like Leedon Residences might go for $2,000 psf and up to $4,000 psf for Ardmore 3, he said.

In the high-end market where sales have been lackluster, developers will likely try to rent them out or delay completion as long as they can while some analysts are of the view prices might fall by a single digit.

‘Developers need to sell enough units to finance their construction costs and do not need to sell out their projects within a short period from first launch,’ added Rodyk’s Mr Lee.

‘In short, developers who have done very well in the past few years have strong holding power and should not panic-sell so long as they can clear a reasonable percentage of units in each project.’

Completed projects

Completed projects are an alternative for buyers in urgent need of a new home that’s not from the resale market.

The URA lists 66 projects that are completed but with unsold units as of the fourth quarter of last year. Most of these projects are in the high-end segment where sales have been slow. These include Reflections at Keppel Bay with 290 unsold, Hilltops at Cairnhill Circle with 208 and Newton Imperial with all its 36 units unsold.

Executive condos

ECs are an interesting segment to watch as the Government recently lifted the quota for second-time purchasers. This means that they will now be able to buy 30 per cent of units in an EC project within the first month of sale, up from 5 per cent before.

The Government has also said it is ready to supply sites for up to 5,000 EC units this year if demand remains strong.

Prices for upcoming EC launches in areas such as Pasir Ris and Yishun can be expected to range from $680 to $750 psf. While private property prices remain high, there will be buyers who opt for ECs instead as these are typically cheaper by 20 per cent or more. 

The pool of eligible EC buyers has also increased with the upward revision of the monthly household income ceiling last August from $10,000 to $12,000. (There are still some units in  Twin Waterfalls in Punggol! Call me at 9431 4139 for more details!) 

The main advantage of buying a new EC is the price discount over private homes when they are bought, and the value boost when they can be sold on the open market and fully privatised.

Depending on location, the capital appreciation can be significant. For example, the average launch price of Bishan Loft was $420 psf in 2001 but there are resale units commanding above $1,000 psf recently.

ECs are subject to a minimum occupation period of five years. They can then be sold only to Singaporeans andpermanent residents. They become private property after 10 years and can then be sold to foreigners.

Deal sweeteners

Developers are also increasingly pushing out new and creative promotions, discounts or freebies to beat the stiff competition.

There is very often an early bird or VIP preview price which can be up to 20 per cent lower than the list price. This discount gradually gets scaled back later into the launch, encouraging buyers to commit early. (Do take advantage of these early bird discounts! FOR Sky Habitat discounts, pls register with me EARLY to avoid disappointments! Click here for more information!) Some developers have also started absorbing part of the stamp duty to cushion the impact of the latest cooling measures announced on Dec 8 last year.

Far East Organization offers furniture vouchers, with the amount based on apartment size and usually given when a project attains its Temporary Occupancy Permit. It has also given additional discounts of 1 per cent, labelled Valentine’s Day or Leap Year promotions, for some projects.

Experts say that some of these incentives are an attempt to boost sales without dropping the price as doing so might damage the reputation of the developer and anger earlier buyers.

There is the good feeling when you have received a deep discount whether real or perceived.

Snazzy showflats decked out in posh furnishings can also help sway buyers, and developers are now spending more time and big bucks creating concepts and designs that appeal to different buyer segments.

The 15,000 sq ft Thomson Grand showflat along Upper Thomson Road, for example, cost $8 million to build. Its furnishings include Swarovski crystal chandeliers, Louis Vuitton luggage and Hermes plates – all to project its luxury positioning.

Source: The Straits Times – 11 March 2012

They seem to be getting more worried that private home prices could fall, perhaps by up to 8 per cent this year, according to a new research report.

So they have to factor the potentially lower prices of the homes into their sums when deciding how much to offer for a plot on sale.

The BNP Paribas research report analysed about 100 government land sale bids since 2007 up until last month.

When developers look at how much to bid for a site, they consider the likely ‘break-even’ figure. That is, how much they would have to pay for the project, taking into account the cost of building the condo and various other finance, marketing and administration costs. (Investors should take note of this. Developers will not sell the properties at a loss!)

Then, of course, they add a bit on top to make it worth their while, in terms of profits – which means they would offer less for the land than break-even.

The report said developers were lowering the figure they are willing to pay for land, as they can no longer feel sure that prevailing home prices will hold up by the time they are likely to sell the project.

Starting in mid-2011, the difference between the expected break-even price and current selling prices started to widen to 19.8 per cent, well above the mean of 12.1 per cent, the report said.

The mean of 12.1 per cent would tend to represent the profit margin developers have been achieving, on average.

This difference of about 8 percentage points is likely to represent developers’ efforts to guard against the possibility of future average selling prices heading south.

A similar pattern was also observed in the second quarter of 2008, right before home prices tanked, when margin buffers widened in similar fashion, BNP Paribas property analyst Chong Kang Ho noted.

The wider spread of bids for each site, which indicates differing views among developers, and the shorter turnaround of launches also reflect concerns of an uncertain outlook in the market, he added.

Developers’ nervousness is reflected not just in their bid prices, but also in their haste in pushing out new launches.

The average turnaround time between securing a site and launching a project has been cut to just eight months for sites awarded in the past two years – down from more than 10 months, generally, for sites awarded in 2009.

‘This is despite the trend of bigger land sites being offered, typically associated with longer preparation andapproval times for launch,’ BNP’s Mr Chong said. ‘Shorter turnaround launches reflect developers’ expectations of a narrower window of opportunity to sell their new launches at higher prices. This is especially true in the light of upcoming supply.’

Another likely trend is even more enthusiasm for sites right near MRT stations and retail malls, the report said. 

Developers feel buyers will go for homes built on these plum sites even if times get a little rough.

The Government has ramped up its twice-yearly land sales programme since the second half of 2010 as it sought to stem rising home prices.

This led to a record number of 77,089 uncompleted private homes in the pipeline as at the fourth quarter of last year – the highest figure since data was first available in 1999 – according to the Urban Redevelopment Authority.

But while recent new sales data has been encouraging, longer-term fundamental concerns remain.

The rising number of unsold homes, tighter immigration rules set to dampen demand and more sites on the way have all taken the rosy hue out of the market.

BNP’s Mr Chong expects it to correct by 5 to 7 per cent. He says the ample loans on offer at low mortgage rates help.

But other experts note that lower land prices do not necessarily mean lower home prices as selling prices often depend on market conditions at the time of launch rather than just developers’ costs.

Developers, not surprisingly, price projects based on market values at the time they go on sale.

While developers might price a new project lower than a nearby project to ensure good take-up at its initial launch, prices will not sway far from general market prices even if the land cost was lower.

Source: The Straits Times – 13 March 2012

Most big-gun builders have thousands of units in their landbanks. A landbank comprises unsold units – including executive condominiums – from projects with planning approval and estimated units from sites that have yet to obtain approval.

City Developments and its parent company Hong Leong Group have the biggest stock with 6,053 homes – made up of land parcels in Pasir Ris and projects like Bartley Residences and Hedges Park that are being built. Next is privately held Far East Organization with 2,592 units.

Most other major developers are far behind. Frasers Centrepoint, Allgreen Properties, CapitaLand and Keppel Land have fewer than 2,000 units each in their landbanks while UOL Group, GuocoLand and Wheelock Properties have fewer than 1,000 homes each.

Most of CapitaLand’s stock comes from d’Leedon in Leedon Heights with 1,255 unsold and unbuilt units and its upcoming Sky Habitat in Bishan with 509 units. This project has yet to be launched.

Allgreen acquired a site in Upper Serangoon that can yield about 860 homes last September on top of its upcoming projects RV Residences and Riverbay.

The landbank Top 10 list includes some new foreign players that have moved into the local market on the back of bumper government land sales (GLS).

Chinese firm Qingjian Realty is at No. 9, followed by Malaysian-based IOI Corp at No.10. Another Chinese firm MCC Land is at No. 12.

Some of these foreign developers started out as construction companies and, seeing the good sales and profit margins to be made, it is a natural step for them to become developers. Others are also diversifying out of their own countries.

Those sales have helped prevent landbanks from being depleted despite the record number of more than 32,300 new homes sold in the past two years.

The strong market has also kept competition keen as more developers battle over land. Small to mid-sized local players also made the list. Sim Lian Group is in sixth place with a landbank of 1,550 units, double its level from a similar study two years ago.

The definition of ‘a healthy landbank’ varies according to the size and business model of the developer.

For instance, higher-end developers like Wing Tai and SC Global might not be keen to replenish their landbanks, given that sales in the prime segment are still slow.

Some developers aim to be the top few developers, so they have a larger landbank which they continually build up through (government land sales) and private purchases.

Developers with a smaller team and funds will have a lower landbank so that they can be more focused on one or two projects each time.

Having a large landbank is a double-edged sword. It could be a boon if the market is up but a bane if it turns. Developers like Far East and Frasers have also been turning round their sites very quickly. Despite buying many GLS plots, rapid project launches have meant their landbanks are lower than expected.

Roxy-Pacific executive chairman and chief executive Teo Hong Lim acknowledged that the competition for land has increased in the past two years with more players entering the market.

Home owners also raised their asking prices for collective sales, resulting in higher land costs. ‘We’ve sold quite a lot of units and will have to keep replenishing our landbank… But it’s not just about securing land for the sake of doing so; you have to ensure that it’s at the right price and right timing,’ he said.

Source: The Straits Times – 8 March 2012

The freehold project, developed by KDC (Kovan) Development, comprises 16 units, of which six have been sold.

KDC Development’s director, Chua Lai Seng, is also the managing director and sole owner of KTC Group, according to an ACRA search.

Summer Scent comprises a mix of two-bedroom (between 581 sq ft and 1,711 sq ft) and three-bedroom units (between 1,065 sq ft and 1,905 sq ft).

Prices for two-bedroom units average some $1,200 psf. The two two-bedroom penthouse units (inclusive of family room, roof terrace and jacuzzi) are marketed at $1,088 psf.

Prices for three-bedroom units averaged $1,200 psf, with three-bedroom penthouse units (including study, family room, roof terrace, and jacuzzi) averaging $1,086 psf.

The company said the project should be completed by August this year.

KTC Group Holdings, which has interests in Singapore and Indonesia, has business units in earthworks, civil engineering and infrastructures, building, coal mining, and coal trading.

Separately, marketing agents are beginning to roll out their campaign for Sky Habitat, developed by CapitaLand Residential Singapore and Mitsubishi Estate Asia. (Check out why you should consider this development! Click here for more information!)

The project, which is located at Bishan Central, will probably be launched end-March to early-April, say agents familiar with the launch.

Designed by Moshe Safdie, the 99-year condominium project will have 509 units across two 38-storey towers. Buyers will have a choice of apartment types, namely one-bedroom-plus-study, two-bedroom, two-bedroom- plus-study, three-bedroom and four-bedroom units. Unit sizes range from 680 sq ft to 3,000 sq ft.

Source: Business Times – 8 March 2012

Find out why 182 units of Twin Waterfalls set aside by developer Frasers Centrepoint for second-timers were snapped up in two hours! Click here.

To know more about Twin Waterfalls / Site Plan of Twin Waterfalls, click here!

Pls note that I am only listing the top 3 most popular layouts. For other layouts, pls call me directly for more information at 9431 4139

3 Bedroom Compact: Value-for-Money 3 bedroom Units

Latest Updates for 3 Bedroom Compact – Type A2 (1001sqft / 93sqm) – Most Popular! Click for Layout

• Best Stack:
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• For pool view, near to car park units:
  • Stack 24 – Last 2 units left! High floor units Still available.
• The Most Value-For-Money Units:
  • Last 3 units left, high floor units still available.

Latest Updates for 3 Bedroom Compact – Type A1 (915sqft / 85sqm) – Most Value-For-Money

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  • Stack 21 – Last 3 units left, high floor units still available.
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  • Stack 14 – Last 3 units left, high floor units still available.
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3 Bedroom: The More Spacious 3 bedroom

Latest Updates for 3 Bedrooms – Type B2 (101sqm / 1087sqft) – Most Popular!

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• The most value-for-money with pool view:
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• The 4th and last Value-For-Moneyunits:
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Interested?

Call me @ 9431 4139 TODAY!!!

HURRY!!!

Units are Selling Fast!

Its bid of $243.2 million or $638 per square foot per plot ratio (psf ppr) for the 136,147 sq ft plot with a plot ratio of 2.8 came even as other developers adopted a more cautious stance.

The bid may have been pegged to The Hillier’s land price of $673 psf ppr when the site was tendered in April 2011.

However, The Hillier’s land price takes into account a 15 per cent commercial element in the project, which contributed to its achieving the pricing level of its residential units.

The success of The Hillier, also on Hillview Avenue, could be the reason for the optimistic top bid for the site. A breakeven cost of between $1,000 and $1,050 psf is expected.

The second highest bid of $205.1 million, or $538 psf ppr, put in by Flamegold Pte Ltd, a unit of UOL Group, was more in line with analyst expectations when the site was released for tender in January.

UOL’s bid of $538 psf ppr could have resulted in a breakeven price of $900 to $950 psf, which could provide the developer with some space to manoeuvre in the event of a softer market.

The top bid for this Hillview site could result in a breakeven price of $1,010 to $1,060 psf. To yield a decent profit, the developer would have to sell the units in the development at prices above $1,200 psf.

An ACRA search shows that Kingsford Development has three shareholders, of whom one is based in Shenyang, China.

The third highest bid came from MCL Land, at $190.5 million, or $500 psf ppr. Far East Organization’s Astor Properties and Tannery Holdings also put a joint bid with Sekisui House of $176.3 million, or $463 psf ppr. The lowest bid came from Capital Development and Qinghe, at $148.0 million, or $388 psf ppr.

Although the top bid is 5.1 per cent lower than the previous bid of $672.61 psf ppr submitted by Far East Organization in April 2011, the bid remains optimistic given that it is 18.6 per cent higher than the second bid and the previous site is a mixed use site while this is a pure residential site. All the bids are slightly lower than the previous bids for The Hillier site which means that developers could be adopting a cautious stance.

As evidence that the mass residential market is still buoyant, Bartley Residences, located next to Bartley MRT Station, sold 210 units out of the 240 units released to date

Source: Business Times – 7 Mar 12

The mass market is mainly cushioned because of the healthy demand of properties. Bear in mind, developers are always pricing the market very attractively. Hence, in today’s market, the resale market is very slow right now not because the market is is going to crash as many had hoped, but because the sellers are pricing their properties at a price that is too unattractive to buyers. If you are a seller / buyer of a resale unit – my advice – get a realtor to the job properly! Find a reliable realtor and communicate with her your intentions!

ECs are sold by private developers with condominium-like facilities, but come with conditions set by the Housing Board, such as a five-year minimum occupancy period.

All 182 units of Twin Waterfalls set aside by developer Frasers Centrepoint for second-timers were snapped up in two hours. (Click here to find out why Twin Waterfalls is sold so quickly!)

Its spokesman Elson Poo said the strong demand was a testament to the attractive pricing of the project, which is going for $698 per sq ft (psf).

In all, 460 of the 728 units have been sold. (Click here to find out why Twin Waterfalls is sold so quickly!)

The response for the 670 units in the other executive condominium project being marketed, the Tampines Trilliant, was more muted. (Because Twin Waterfalls is a better location! Click here for more info!)

A Sim Lian group spokesman said that of the 168 units released for second-timers on Saturday, about 110 units were sold within the day.

About 300 units, which go for $766 psf, have been sold.

Ultimately, the demand boils down to price as well as the quota.

The higher the price goes, the more skewed towards second-timers the number will be, because first-timers may not be able to afford the more expensive developments.

Going forward, you might see more ECs being dependent on second-timers or HDB upgraders rather than first-timers, given the glut of affordable Build-To-Order (BTO) flats coming onstream.

The Government has promised to build about 25,000 new flats this year.

The psf prices of ECs when they were launched in 1996 was about $400; EC units now go from about $700 to $750 psf.

Nearby private condominium units are fetching $820 to $950 psf for comparable flat types.

On the other end of the scale, a larger BTO flat will cost $250 to $350 psf, and a resale flat, $380 to $550 psf.

If second-timers continue to go for ECs, it may be feasible to revise the quota even further.

Based on the sales at Twin Waterfalls, the 30 per cent allocated to second-timers have already been taken up. Of the 70 per cent reserved for first-timers, slightly less than half have been taken up. (That is to be expected. 2nd-timers are naturally more able to afford it since they have been working longer and have another property to leverage on.)

The Government has responded to ground sentiment. But it could still be frustrating for the second-time buyer, who may have a stronger financial base but do not have the chance to buy EC units.

Such demand may continue, since second-timers feel they have a real chance at getting a choice unit now. 

As a rule, the ratio of first- and second-timers are observed only within the first month of a project’s launch. After that, any eligible house hunter may buy, although the less-desirable units may be left by then.

The revised quota is not expected to make a big impact on the market due to the small quantities, unless the Government sells more land for ECs.

Source: The Straits Times – 5 March 2012

It will change the rules to significantly boost their chances of successfully balloting for a new Build-to-Order (BTO) flat or executive condominium (EC) unit.

Announcing this in Parliament yesterday, National Development Minister Khaw Boon Wan said that starting this month, BTO launches in non-mature estates will see 15 per cent of flats allocated to second-timers, triple the current quota of 5 per cent. This should help lower the number of applicants who apply for each BTO flat put up for sale. At present, more than 25 of them typically apply for each available flat. Mr Khaw said he hoped the latest move would bring this down to a ‘single digit’. He also hoped to keep the first-timer application rate to below two applicants for each flat on offer.

The allocation for BTO flats in mature estates, however, will remain unchanged, at 5 per cent for second-timers.

HDB upgraders who want to buy EC units will also receive a leg-up. The quota for second-timers will be upped six times from 5 to 30 per cent with immediate effect. The change will mean that second-timers will have a much greater chance of buying an EC unit for the first month after launch.

One recent EC project – the 728-unit Twin Waterfalls in Punggol – saw 570 applications for just 36 units that were allocated for them. This translated to a one in 16 chance of buying a flat. Under the new rules, that ratio is now less than one in three.

The rule changes will also benefit other second-timers, such as divorcees and retirees, who may be forced to move into smaller flats.

Kicking off the Committee of Supply proceedings for the Ministry of National Development yesterday, MPs spoke passionately about the plight of such ‘downgraders’.

Ms Lee Bee Wah, the Government Parliamentary chair for National Development, appealed for a ‘compassionate’ approach to policy making in this area.

In response, Mr Khaw said that his ministry strived to govern with compassion, quoting an ancient Confucian saying – ‘lao zhe an zhi, shao zhe huai zhi’ – which advocates the simultaneous well-being of the old and the young in society.

‘(It) underpins strong families, the marriage institution and filial piety. This is how a strong society is built,’ he explained.

The minister said that worrying trends like rising divorce rates and the abandonment of parents were worrying signs that these values were being diluted.

‘At the minimum, MND policies must not unwittingly facilitate such negative trends. And where possible, MND policies must actively try to support positive trends,’ he added.

Accordingly, he announced a slew of new measures designed to encourage young couples to stay together with their parents in their new flats, or at least near to them.

Looking ahead, Mr Khaw outlined several challenges facing his ministry in the next few years. One of them was to bring back the ‘kampung spirit’ that had characterised community living in the past.

‘As we moved into city living, many things improved. Yet we become more isolated from one another,’ said Mr Khaw.

‘We need to find ways to encourage residents to own their community and care for one another again.’

Source: The Straits Times – 3 March 2012

STRESSING the importance of family ties as the bedrock of a strong society, the Government yesterday rolled out two new initiatives to encourage married children to live with their parents or near them in housing estates.

The first is to strengthen the Married Child Priority Scheme (MCPS) to give higher ballot chances to married children who apply to live with their parents in a new HDB flat.

The second, known as the Multi-Generation Priority Scheme (MGPS), allows married couples and their parents to buy a flat with a nearby studio apartment or two-room flat. This allows both parties to be close together while still according each a measure of privacy. (My experiences with my grandparents convinced me that it will be better to stay under the same roof. I always looked for my grandparents to talk at night, so did my siblings – the older one gets, the lesser one sleeps. Also, my grandfather fell down pretty often at night when he weny to the toilet during the last stage of his life. So, since my room is next to his, I followed him to the toilet every night. How could I have done that, if we had stayed in different houses?!)

Announcing these schemes in Parliament yesterday, National Development Minister Khaw Boon Wan said that many Singaporean families want to live together, or at least near to one another. (I would think that the best solution would be to build more flats with 4 proper bedrooms, with 1 junior master that is specifically for the grandparents. The current EAs do not have 4 proper bedrooms. The last bedroom is very small and impractical. I suspect that many MPs themselves do not stay with their own grandparents. Hence, it took them so long to realize all these.)

‘This forges strong families, besides making a lot of practical sense. Grandparents help to look after their grandchildren… Children set good examples of filial piety. (Yes, I agree with this. Filial piety has to be demonstrated, not just demanded off. My parents set a very good example of that. They demonstrated to me how to be filial. Grandchildren, I think, are gifts to grandparents and vice-versa. Because grandchildren keeps their minds active, and allow them to  live healthy for a few more years. Grandparents are gifts to grandchildren because they impart wisdom – this is strongly lacking in the younger generation – whether it is by their actions or their words. That I think, is the main reason why there is this saying: it takes a village to raise a child. My experiences tells me that there is a whole range of wisdom that grandparents impart to their grandchildren. It allows them to see for themselves what happens when one grows old. It showed them why one needs a family around you when one gets old – because it can get very lonely at night. It allows grandchildren to see for themselves that time flies, nobody stays the same forever, everyone will grow old and forgetful and lastly, what it means to be old. Hence, the grandchildren become more focus on their lives, with the intention to build a family, and have kids. There will be better bonds between siblings because all will know that eventually, they may not remember their own siblings, so they should treasure the times that they are still able to recognize each other. They will also understand that they are setting an example for their children so they will automatically demonstrate filial piety to their children. Of course, all these are based on my personal experiences.)

‘These are strong values which we must inculcate,’ he added. (These values have been deteriorating because most couples are not staying with their parents. Their children, hence they did not see for themselves what happens when one grows old. Hence, they became intolerant, and inconsiderate and generally, have no compassion. The same children who became adults, treat their parents exactly the way their parents treat their grandparents. Many think that they are demonstrating filial piety when they bring their parents out for meals, for holidays and buy branded things for their parents. These are just bonuses. What your parents want is to enjoy a meal at home – preferably cooked by you – with you and your children everyday. They also want to be included in all the family activities. And they want to stay with you and your children. I have observed that most problematic families are from those who do not stay with their parents. The government should have consulted the agents since we are the ones who are really on the ground. I have known these issues during the first year that I joined the real estate market.  And it took the government so long to discover it.)

Under current MCPS rules, a married couple buying a flat for the first time will have four ballot chances, and a second- timer two chances, if they want to reside with, or within 2km of, their parents.

The new rules, which take effect from this month’s launch of new Build-to-Order (BTO) flats, will see the ballot chances for a first-timer couple increase to six chances and a second-timer three chances, if they live with their parents in their new flat.

The new MGPS was introduced in response to MPs’ suggestions that the HDB build more integrated flats to encourage family bonding.

The scheme was piloted at SkyTerrace@Dawson, where a larger flat was paired with an adjoining studio apartment, allowing extended families to live next to each other.

Mr Khaw said HDB will launch 250 pairs of such flats in various estates this year, starting with the Bedok BTO project in March.

It will launch more if the scheme proves to be popular.

Given that the elderly parents of married children tend to live in mature HDB estates, Mr Khaw said his ministry will build more new BTO flats in these locations so that the young and old can more fully take advantage of the new schemes introduced.

‘This year, there will be BTO launches in Bedok, Kallang, Whampoa and Geylang,’ said the minister.

‘Indeed, 30 per cent of BTO flats to be launched this year will be in mature estates.’

HDB is expected to roll out some 25,000 new flats this year.

Flats in mature estates are normally more sought after, as they come with amenities like schools and shops, and good transport links.

Applicants under the MGPS will have priority over others, as they will have the first dibs on choosing a flat nearby.

Straits Times 02 Mar 12

Summary:

• A MP has proposed that the Government sell new flats with shorter leases, as that would mean cheaper flats which would be a boon for young couples. (Sometimes, I look at a young couple, and I wonder if their expectations are too high, they are not planning their lives well, or they are spending too much money on things that they shouldn’t be spending on…)
• Property experts said the proposal is unlikely to fly for now because it would mean overhauling the current housing policy as well as existing financing plans available to homebuyers.
• MP for Pasir Ris-Pungool GRC, Mr Gan Thiam Poh, urged the Government to consider building more affordable 2- and 3-room units with shorter leases, such as 30 or 60 years.
• Rising property prices have caused many couples and upgrading families to worry about buying a home. (I have observed that most young couples are always not ready to get married – esp. the guys – and hence, they didn’t plan for their housing needs. If they had been serious about their relationship in the first place, they would have thought about housing. And they would start to save, knowing that it is not going to happen overnight. It’s couples who are just trying out the relationship and are afraid to talk to each other authentically about their future that get into all these problems. Frankly, it is not that difficult to get a new flat through BTO if you are not in a hurry for the flat. You just need to sit down and plan it all out.)
• With shorter leases, couples can better control their costs.
• “It is about giving them the option and leeway to spread the financial burden and defer the paying of higher prices until they earn more money.
• New HDB flats have 99-yr leases. Older flats in the resale market however, have between about 60 – 80 years left on their leases.
• Mr Nicholas Mak, head of research and consultancy at SLP International, estimated that the price of a 4-room BTO flat in Punggol with a 99-yr lease will fall from $300K to $230K if its lease is shortened to 60 years – or down by about 20%. On a 30-yr lease, the same flat will cost about $140K, about half the original price. He said that while proposal may look good on paper, implementing it will be an adminstrative nightmare. (It looks good on paper, but it is not a logical choice. That in another words, is a BAD idea.)
• “Shorter HDB lease will run up against the brickwall of current financing options offered by CPF and banks,” he added. (Banks are only willing to loan up to 60-year lease. Doesn’t it mean that buyers will have to pay in cash?)
• He noted too that “most of us want to sell our property at a profit… with shorter leases, it will not be profitable and may even be a loss”. (Yes, I agree. Of course! Any serious parents will buy a freehold property, knowing that they can pass on the property to their children. Those who can’t afford a freehold, will be willing to compromise with a 99-yr leasehold property. Why would they spend a fortune and buy such a short lease, knowing that the value will drop?)
• Ms Deon Tan, director of brokerage firm Providence Capital Advisors, said that banks may not be as willing to offer long-term loans for flats with shorter leases. Even if they do, some might place more restrictions like offering lower loan quantums and requiring borrowers to pay back the loan in a shorter time. (Yes, I agree. That is what they will probably do. With the CPF funds and cash all locked up in the property, this idea just backfires.)
• While such flats may be cheaper, in the long run, it may make it harder for those who outlive the leases to buy new flats. (Nobody can predict how long they can live. My grandfather lived till 101 years old! Can you imagine, if he is all alone, how many times will he have to move! And not only that, he stopped working when he was in his 60s! That is another 50 years of life with no income – my siblings and me entertained him for these 50 years since we stayed together.)
• Singaporeans may not yet be ready to accept homes with short leases, like those in Hong Kong and China. (I seriously do not like this statement. Just because THEY accepted this without thinking it through properly, doesn’t mean that it is the RIGHT thing. Come on, in Australia and other Western countries, it is all freehold property. So, why are we not following their method instead?)
• “The aim is ultimately to help everyone to own a roof over their head. Shorter leases cannot solve long-term housing needs,” said Mr Lee Sze Teck, senior manager of DWG Research and Consultancy.

Straits Times – 01 Mar 12

Summary:

• The subdued sentiment has forced CDL to halt marketing its premium project The Residences at W Singapore Sentosa Cove. (Forced? Developers are never forced to stop marketing their developments. They are profit-driven. It just means that it is not that profitable for them to sell this development and they have the holding capacity to stop marketing this development because they do not need to sell it below their ideal price. AND obviously, since they are holding it, it means that their long-term view of the property market is still very positive.)
• CDL director and executive chairman Kwek Leng Beng told a results briefing yesterday that the additional buyer’s stamp duty measure introduced last Dec was aimed at preventing a property bubble and it was not designed to crash the property market. (Yes, I will have to agree with this.)
• He added that the Government will likely review its various property measures if necessary: “The effect of the medicine cannot result in a cure overnight. It has to take time.”
• He also said that he is not worried about the health of the high-end sector because most developers have strong balance sheets and can afford to hold on and sell when better times return. (YES, this is the point that I have always emphasized to my clients. Developers can afford to hold on to their properties i.e. they are NOT SELLING, but they are BUYING. That is why, as an investor, your ability to hold a property is very important. Always invest in a market where you can hold onto the property.)
• “There is also a business model that some of the developers may be starting to think about… we don’t want to sell but keep it and get rental income… One day, the property will appreciate a lot,” noted Mr Kwek. (Take note of this: many developers like Far East are already doing that. My suggestions to investors are: spend a little bit more money to get a good property and keep it for residual income. You might even be able to pass it on to your children if you do it right.)
• CDL is equally optimistic about China. It already has 3 sites there an an additional $500 million has been allocated to CDL China subsidiary for acquisition opportunities. Mr Sherman Kwek, CDL China’s chief executive, noted that property cooling measures in China have enabled the group to find opportunities by tendering for prime sites at reasonable prices. (Noticed that they are buying and not selling at this point of time.)
• CDL reported a 32.2% drop in 4th quarter net profit to $163.2 million due to the absence of several one-off gains made in 2010. (Note: CDL is still making profits. It is just lesser, that’s all.)
• Revenue for the 3 mths to 31 Dec 2011 improved 7.4% to $721.5 million. Profit for the full year rose 1.9% from $784 million to $798.6 million, while revenue was up 5.7% to $3.28 billion. (Profits, profits and a lot of profits.)
• Quarterly earnings per share fell 33.3% to 17.2 cents but full-year earnings per share climbed slightly to 86.4 cents. Net asset value per share rose from $6.89 to $7.51.
• A divident of 13 cents per share, which includes a special final dividend, has been declared.

Straits Times today (01 Mar 12)

Summary:

• Monetary Authority of S’pore (MAS) has mandated that from today, banks will have to provide potential borrowers with a fact sheet when discussing on credit facility.
• Objective: to help potential customers work through the nuts and bolts of the mortgage, with information such as loan quantum and repayment schedule.
• There will be notes to inform the borrower that the bank may have the right to ask for additional payments if the property falls in value.
• Customers will have to be told that monthly repayments can increase if interest rates rise.
• Banks have to provide a fact sheet as and when there are changes to the key features of the proposed credit facility. This can be in written, printed or any electronic form, with a copy retained by the bank.
• The bank also has to obtain a written self-declaration by the borrower that he has received such a fact sheet before the mortgage is signed.

My take on this:

1. Almost 100% of my clients who invests in private properties are financially savvy.
2. Some of my clients do not even take 80% loan, even though they are able to do so.
3. Majority of my clients are fully aware and they monitor the interest rates almost daily. Naturally, they know that if interest rates rise, their monthly payments will increase.
4. 80% of my clients who are investors are investing for long term gain. In fact, they are very prudent and are very careful to plan their finances.

This headline is interesting. It assumes that investors probably cannot afford the property and they should look into their finances first. I beg to differ. In order to invest, one has to be comfortable with parting with at least $200,000. I don’t think anyone will be willing to part with $200,000 without any backup plans, at least, I did not see that happening to the majority of my clients. There will be some who are willing to take the risk, but that represents a minority of investors.

I would think that the intention of the headline is to scare off the faint-hearted who are on the verge of investing or upgrading their property. So, some potential buyers will probably back off from investing a property. This is good news for those who have the holding capacity. The key point here is: you must always have the holding capacity first to invest in a property!

Summary:

• Cogent Land Capital has taken over the former Bukit Timah Turf Club site from Singapore Agro Agricultural (SAA).
• Tenants like Giant hypermarket, Ah Yat Seafood Restaurant and Art Boot Camp are still operating there.
• Renovation work will start next week.
• Revamped Turf City mall will have a range of lifestyle options, with wider food and beverage options that include Spanish, Italian, French and Japanese cruisins. ( I don’t know about you, but I still prefer my mum’s cooking, even though I can cook pretty edible food.)
• It will be fully up and running again by early June (wow, that is fast).
• 2 more restaurant operators have been confirmed – TungLok Group and Ristorante Da Valentino.
• Turf City mall will be the centre of a new “family lifestyle development” brought under one roof and under a new name: The Grandstand.
• The site has received strong interest from established operators in all target segments, including F&B, retail, wellness, sports, enrichment and even art galleries. F&B is expected to make up 40% of the tenant mix, retail 20%, children-related businesses 15%, sports and hypermarket 10% each, with the rest taken up by health and wellness firms.

Jarene’s comments:

• If I can find everything in Orchard in Bukit Timah Turf Club, I am not going!

Summary:

• Charges that developers pay to enhance the use of a plot of land have finally been reduced or left flat for some sectors, as the slowing property market takes its toll (I think it’s more for the luxury prime areas, rather than the rest of Singapore.)
• The new development charges, which are reviewed every 6 mths, were released yesterday and reflect recent land and property values for the varying market segments.
• They take effect today and are applied when the value of a site is increased because of re-zoning or when a taller building can be erected following a change in the plot ration.
• Development charges for residential non-landed sector have been cut by 3% on average on the back of cautions land bids by developers in the past 6 mths.
• This is the first time the charges have come down in more than 2 years.
• The biggest drops – the cut was 14% – for the residential non-landed sector occurred in Punggol town and the Upper Serangoon Road area and the areas of Hougang, Upper Paya Lebar Road, Toa Payoh and Bishan.
• Charges on commercial land have been increased by 6% on average and 15% for hotel and hospital sector.
• But rates for commercial land in Sengkang and Seletar areas have shot up by 52%, likely due to the sale of a retail site in Sengkang West Ave, with a winning bid of $1,155 per sq ft per plot ratio in Jan. This bid is almost 300% more than the land cost implied by the previous development charge rate. (I am hardly surprised by this. More people are now moving to Sengkang and Punggol. And many residents who had previously refused to move there, upon staying there, now realized that it is actually very accessible because of the expressways, North-East Line, and LRT around the estate. In fact, many of my clients, especially the young couple, would rather stay in Punggol / Sengkang and get a car, than to stay in Redhill and not get a car. So, it’s just a different way of looking at life.)
• Rates for residential landed and industrial and warehousing uses were unchanged.
• Experts say that the drop in development-charge rates for non-landed residential use is inline with market expectations.
• “Despite healthy buying momentum in the mass market… factors including ample land supply, concerns of a slowing economy and the possible bearing of the additional buyer’s stamp duty on the market have resulted in developers becoming more cautions in bids,” said Ms Chia Siew Chuin, director of research and advisory at Colliers International.

Summary:

• A sea fronting bungalow at Cove Drive has changed hands at $39 million, a record absolute price for a bungalow in upscale waterfront residential district of Sentosa Cove – $2,448psf on land area of 15,929sqft.
• Surpasses the previous high of $36 million for a bungalow on Paradise Island that was transacted in 2010. That worked out to $2,403psf on land area of 14,983sqft for the waterway-facing property.
• The property is understood to have been sold by a Singaporean to a buyer from India who is said to be involved in the resources sector. The completed bungalow includes 5 bedrooms, a spacious living area, and an entertainment room.
• Residential properties on Sentosa Cove have 99 yr leasehold tenure.
• On mainland Singapore, talk in the market is that another headline-grabbing price may be set in Good Class Bungalow Area (GCBA) involving a vacant plot of at Jervois Hill. The agreed price is said to be $31 million or $2,050psf based on the freehold site’s land area of around 15,120sqft.
• A Singaporean investor is thought to have entered a deal to sell the land to a party who is said to have paid a higher-than-normal option depoisit. The deal also involves a completion period of 1 year – longer than the usual 3 months. Word on the street is that the buyer will be applying to become a Singapore citizen.
• Purchases of landed homes on mainland Singapore by foreigners (including PRs) is restricted. Such buyers have to obtain permission from the Land Dealings Approval Unit (LDAU). Applicants have to fulfil certain criteria before permission is granted, including being a Singapore PR and making significant economic contribution to the country.
• Sentosa Cove is the only place in Singapore where non-PR foreigners may buy a landed home, thought still subject to LDAU approval. A foreigner (including a PR) may own only 1 landed home in Singapore (including Sentosa Cove) and this must be used for own occupation. The land area for the property must not exceed 15,000sqft.
• After an inital knee-jerk reaction to the introduction of the additional buyer’s stamp duty (ABSD) that took effect on 8 Dec, house hunters have started to return to the bungalow market since the Chinese New Year period. (Generally, it has always been like that, with or without the new measures, the period just before Chinese New Year has always been quiet.)
• “Foreign interest returning, with potential buyers from places like China, Indonesia and India. They come from a range of backgrounds, including industrialists, and even developers from China. Some have children studying in Singapore while others find Singapore an interesting global city. They believe there is room for substantial price appreciation in Singapore bunglalow prices.” (Yes, I have informed many of my investors who are thinking of holding back, that foreigners have been quietly buying properties since Chinese New Year.)
• “Although transaction volumes have slipped for GCB, transacted prices are generally holding well.”
• “Some sellers are revisiting their prices now – not because prices are set to fall, but rather they have realized they had overpriced right from the start. In the prime GCB locations such as Nassim, Dalvey or Tanglin, sellers would rather withdraw their properties from the market than lower their prices.” (Owners of these units do not need to sell their property, unless they have an irresistible offer.)
• “However, in the less prime GCB estates where demand is not as strong, some sellers have adjusted their asking prices and usually these are the motivated ones. Those who do not need to sell their GCBs acknowledge that this is not exactly the best time to do it.”

About this development:

• Tenure: 99 yr leasehold
• Developer: Far East
• Site Area: approximately 69,000sqft
• Location: Ang Mo Kio Ave 8 – just beside Ang Mo Kio Hub
• No. of levels: 34 storeys, with 2 towers
• No. of Units: 329

Pros:

• Excellent location – just next to Ang Mo Kio Hub (NTUC and many restaurants are located there).
• Excellent amenities – you will find everything you need: NTUC (there are 2 of them), hawker centre, eateries, banks, library, post office, budget shops, hardware shops (I go there pretty often) etc.
• Mins to Bishan MRT – to change to Circle Line
• 15 Mins to Orchard MRT
• 20-25 mins to Raffles Place MRT / Cityhall MRT to CBD areas or change to East-West Line.
• Many schools located in Ang Mo Kio: Ai Tong, St Nicholas Girls, Anderson Junior College.
• Nanyang Polytechnic is just 1 stop away.
• Many units will have very good view since the car park is located above the ground, around 4-5 storeys high.

Cons:

• Small plot of land.
• Small kitchen – it will only affect you if you prefer to eat home-cooked food like me.

• 28th floor units and 29th floor units are just released for sale.

Jarene’s Comments:

• This will be the first time I said this about Far East developments. But for the first time, the layout of their units is very squarish and practical, with non of the whimsical designs that they always seem to come up with (you can check out Watertown to know what I mean). The layout may be boring, but it works for everyone.
• Rental potential: Chances of it being rented out easily is high due to its location.
• Ease of Sale:  There are not many condominiums in Ang Mo Kio that has such excellent amenities. Also, it is very attractive to stay so close to Ang Mo Kio Hub. Those who have been staying in Ang Mo Kio tend to prefer to reside within Ang Mo Kio. Hence, there will definitely be a pool of buyers for this development.

One of the most exciting developments in the suburban areas is launching soon!

Here are my personal opinions on why investors should consider this development:

1. Excellent connectivity in terms of public transportation.

2. Drivers would love this location due to its accessibility to all expressways e.g. CTE/PIE/KPE/SLE/TPE

3. Excellent Schools located within walking distance: Raffles Institution / Raffles Junior College / Catholic High

4. International Schools are just 1 train ride away at Lor Chuan MRT

5. Excellent amenities at Junction 8.

For more details on why you should seriously consider this development, click here.

Prefer to meet up for a discussion? Call me at (+65) 9431 4139 TODAY.

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Do you know:

On the first day of the launch,

more than 350 units of the 450 units were sold?

98.1% of 1 bedroom + study were sold

within the first day (only 2 units were left!)

The BEST among all 2 bedroom units were all sold!

Even The BEST among all 3 bedrooms

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2 penthouse units were sold on the first day

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(Clue: Location! Location! Location!)

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PM wants a rental property while the Lodge is being renovated

Security demands making the choice more difficult

One in ten Aussies in housing stress

PRIME Minister Julia Gillard is experiencing Australia’s housing crisis first hand in her search for an alternative home while the Lodge is being renovated.

The Sydney Morning Herald reports Ms Gillard’s office has ruled out a purchase to fill the gap, leaving the first couple to rely on the difficult rental market.

But like many Australians, she is struggling to find a suitable property.

And to make things more difficult, the Australian Federal Police have produced a lengthy list of demands for any prospective home.

Ms Gillard and partner Tim Mathieson need to find a home with a secure entry and car access, live-in accommodation for bodyguards and bulletproof glass.

The Lodge – the traditional home of the prime minister – is in urgent need of a new roof, plumbing upgrades and an overhaul of some dodgy wiring.

It is expected to be a huge project that will reportedly cost millions of dollars and take 18 months to complete.

Fairfax reports the couple ruled out moving into the Governor-General’s Yarralumla residence, with Mr Mathieson calling the home “intimidating”.

According to a recent report, one in 10 Australian households is in housing stress and at risk of financial hardship and poverty.

And renters are most at risk, with 26 per cent in housing stress.

Hobart and Sydney put the tightest squeeze on renters.

Hobart has the highest rate of renters in housing stress at 33 per cent, while Sydney has the highest number with more than 100,000 households facing poverty because of the high cost of renting.

Click here to read Jarene’s Notes on Facebook!

Australian residential building approvals fell 13.6 per cent to in September, seasonally adjusted, the Australian Bureau of Statistics (ABS) said on Wednesday.

Economists’ forecasts had centred on a five per cent fall in approvals in September.

Approvals for private sector houses in September rose 1.1 per cent and the volatile “dwelling excluding houses” category fell 20.7 per cent.

Nomura chief economist Stephen Roberts said he expected the housing sector to improve in the coming months, especially after yesterday’s interest rate cut.

The Reserve Bank of Australia cut the cash rate from 4.75 per cent to 4.5 per cent and it was followed by by all four major banks cutting their standard variable interest rate.

“Already, we’ve seen housing finance commitments picking up over the last few months,” Mr Roberts said.

“This pattern with interest rates is only going to accelerate it as we go ahead.

“We’ve seem to have gone through the base as far as housing credit is concerned and that will pick up in the next few months, so some of that will come back to home building approvals.”

Mr Roberts said the rise in building approvals was particularly strong in the larger states.

“The interesting part is that is that the house part of it improved a bit and was relatively strong in both NSW and Victoria,” he said.

“The multi occupancy part is really up and down, particularly the public sector part of it.”

Click here to see Jarene’s Notes on Facebook!

This compares to a downwardly revised 13,758 units in August.

In the year to September, building approvals were down 12 per cent, the Australian Bureau of Statistics (ABS) said on Wednesday.

Economists’ forecasts had centred on a five per cent fall in approvals in September.

Click here to see Jarene’s Notes on Facebook!

About 14 per cent of them have either already migrated from China or have applied for migration.

The three most favoured destinations by the Chinese rich are the United States, Canada and Singapore. The US is the first choice of some 40 per cent of the people interviewed, according to a white paper jointly released by Hurun Report and the Bank of China (BOC) on Saturday.

According to US Citizenship and Immigration Services (USCIS), the number of Chinese applicants for investment immigration has exceeded applications from any other country or region.

‘Among all the destinations in terms of investment immigration, the US always outstands all other options as the country does not impose any quota,’ said Jiao Lingyan, a client executive of the investment immigration department of the Beijing-based GlobeImmi International Education Consultation Co.

‘The minimum amount required for investment immigration to the US is US$500,000 (S$641,130). But it should be noted that this applies to investments in projects recommended by authorities in the US. People considering these projects should take into account that they may not make profits,’ Mr Jiao said.

‘It is worth noting that the minimum amount for investment immigration will be raised in the coming years, because the number of rich people in China is rapidly growing,’ she said.

While 32 per cent of the interviewees said they have invested overseas with a view to immigrate, half of them said they did so mainly for the sake of their children’s education.

‘A growing number of parents in China have realised that children growing up in the examination-oriented education system in China will find it hard to compete in an increasingly globalised world,’ Mr Zhang said.

Chinese immigrants are also getting younger, with the largest group aged between 25 and 30, compared to the 40-45 age group in the past, Mr Zhang said.

The Green Lodge site has an asking price that is above $195 million, or about $866 per square foot per plot ratio (psf ppr). The sale is being conducted through a tender exercise which will close on Dec 8 at 3pm.

The freehold property sits on a land area of about 14,035 square metres (151,075 sq ft). According to the 2008 Master Plan, the site can be redeveloped into a five-storey condominium project at a gross plot ratio of 1.4. Green Lodge currently has an approved density of equivalent plot ratio 1.4896, which means no development charge is payable.

Assuming an average apartment size of 1,000 sq ft and a building efficiency of 90 per cent, the site can accommodate about 210 residential units.

As for the Oxley Rise site, it has a site area of 25,630 sq ft and a gross plot ratio of 4.2 under the 2008 Master Plan.

This means it has the potential to be redeveloped into a new project with a gross floor area of 107,646 sq ft with 20 per cent commercial use and 80 per cent residential use, subject to approval from the relevant authorities.

Click here for Jarene’s Notes on Facebook! You will need a Facebook account!

Chinese firm Qingjian Realty (South Pacific) Group trumped four other developers to put in the top bid for the site, which measures 218,034.6 sq ft and has a maximum permissible gross floor area of 654,103.9 sq ft. It barely edged out the second-highest bid, by Soilbuild Group Holdings, which came in at $203.888 million, or approximately $312 psf ppr.

The lowest bid came in from Opal Star and Lum Chang Building Contractors, at $290 psf ppr.

The narrow spread of bids indicates developers were more measured in bidding for the site. This could be due to the upcoming supply of around 1,500 private apartments and 700 executive condominiums in Punggol New Town, and the potential slowdown in demand for mass-market homes, in view of economic uncertainties.

While a slowing market may have deterred over-optimistic bidding, the top bid of $330 psf ppr is roughly in line with the $323 psf ppr fetched by the Punggol Field Walk site in September. It shows that tender bids in the Punggol location are holding, although there is lower tender participation today, with five bidders compared to eight in the previous one.

Zuo Haibin, managing director, Qingjian Realty Group, said they are planning for around 650 units of two to four bedrooms. The project should be launched within six to eight months, he added. The breakeven cost to should be around $700 psf.

Units at the nearby 882-unit A Treasure Trove have sold for a median price of $915 psf, based on the 750 units sold since its launch in early September.

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Presenting One Lygon…

Price:

AUD$420,000 with car park!

Deposit:

10% at point of purchase

+ 10% upon completion!

You only need to put down approximately AUD$42,000 at point of purchase and another AUD$42,000 at upon completion.

Location:

1 Lygon Road, Brunswick, Victoria

- Just 4km to Melbourne CBD

Long Term Growth Trend:

8%!

Approximate Completion:

Jul 2012

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Reasonable Quantum!

 Project Information

Location: 

District 11!

1 Surrey Road Singapore 307740

Tenure: 

FREEHOLD!!

Expected TOP: 

31 Dec 2016

Type of Development:

1 Block of 19 Storey Apartments (Total: 67 Units)

with Mechancial Car Parking and Surface Car Parking & Swimming Pool at 2nd Storey

Site Area:

1,346.51 sqm (14,493.19 sqft)

Total No. of Units:

~ 67 Units consisting of

1 Bedrms: 484 to 624 sqft – 21 units

2 Bedrms: 603 to 764 sqft – 43 units

2 Bedrms PH: 1302 to 1324 sqft – 3 units

Presenting….

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Educational institutions

located nearby include

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and

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Near medical hub

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Summary:

• The Singapore operations of a Wall Street brokerage that has collapsed as a result of the European debt crisis are to be wound down.
• Accountancy giant KPMG has been appointed as the provisional liquidator to oversee the process, the firm MF Global Singapore said last night.
• Its parent, MF Global, filed for bankdruptcy protection in New York on Monday with debts of US$39.7billion (S$49 billion) – the biggest United States casualty of Europe’s crisis.
• According to the MF Global website, the operation here was the fourth largest derivatives trader on the Singapore Exchange, in terms of trading volume in the year ened Mar 2011.
• It employed between 100 and 200 staff, which makes it an average-sized brokerage in Singapore.
• MF Global Singapore had been operating here since 1996
• Customers could trade in over-the-counter markets in foreign exchange, precious metals and equity derivatives including Contracts for Difference (CFDs). CPDs are a type of financial instrument that allows an investor to bet on the movement of an asset, whether a stock , currency or commodity, without actually having to own the asset itself.
• In the statement, MF Global Singapore said: “The provisional liquidation is intended to safeguard the interests of the customers of the company and ensure that the company does not engage in new trades, as well as the equal treatment of all creditors of the company.”
• Winding down of the firm will not affect customer funds already placed in segregated accounts.
• The troubles at the firm have hit customers of at least one other brokerage in Singapore.
• Kim Eng Securities revealed yesterday that MF Global Singapore was its CFD counterparty. This means that the CFDs Kim Eng offered its customers came from MF Global Singapore and were traded using the US firm’s trading platform.
• When MF Global Singapore halted all trading in CFDs yesterday, it meant Kim Eng and its CFD customers were also unable to access their CFD portfolios and excute trades or close out exisiting positions.
• “KE CFD is, however, confident that it will be able to provide alternative market access for our clients tomorrow to unwind their open positions,” the brokerage said in a statement.

Click here to read Jarene’s notes on this. You will need a Facebook account!

• Strong economy first 9 months but global economic uncertainty to take toll
• Sales of new private homes may come close to last year’s record high, but they are unlikely to surpass the figure with global economic uncertainty affecting demand, experts say.
• Homes sales for the first 9 months of this year came in at a slightly more robust 12,301 units compared with 12,051 units in the same period of last year
• Experts say a slower final quarter is likely to leave the final below last year’s tally.
• Developers sold a record-breaking 16,292 homes last year as rock-bottom interest rates and pent-up demand from first-timers and upgraders drove the property market to a new high.
• Low interest rates and a sound local economy should underpin private home buying demand.
• However, the gloomy economic outlook has dampened market sentiment.
• The ongoing economic turmoil in the West will rein in demand to some extent.
• The year-end festive season and school holidays could also sideline potential buyers.
• Other experts noted that though cooling measures have cut demand from speculators and short-term investors, demand from genuine buyers has persisted.
• The 3,604 units sold in the 3 months to Sept 30 was the lowest quarterly figure since the market recovery in mid-2009.
• 13,076 resale and subsale units sold in the first 9 months of this year was also 26 percent lower than the corresponding period last year.
• This year’s total new sales were spurred along by the 143 units sold as at yesterday evening at SIm Lian Group’s Parc Vera in Hougang Avenue 7.
• Units were priced at an average of $800psf. Singaporeans made up 80% of the buyers.

Click here to read Jarene’s notes on this. You will need a Facebook account!

Together with Henry Park Apartments, which is also up for collective sale at between S$170 million and S$180 million, the total value of properties that have come up for sale in October has hit close to S$5 billion.
Developers are looking at collective sales with some caution now and added that any sale will depend on the attributes of the site and the developer’s risk appetite as well as market sentiment.

Government Land Sales Programme is offering developers many alternative sites.

The 677,493 sq ft Laguna Park site with proximity to the seafront would be a key selling point for any new development. Based on the reserve price, the land price comes to about S$954 per square foot per plot ratio.

Laguna Park was put up for sale earlier this year with a reserve price of S$1.33 billion. But the tender closed without a successful bid.

While the downward revision of the reserve price suggests that sellers might be more motivated to sell now, new requirements for en bloc sales allow a development to be put up for sale for one year only after receiving 80 per cent approval from homeowners. When this lapses, sellers have to seek a new mandate. Within this year, no collective sale has been transacted at over S$200 million yet. Generally, the key will be the land price and quantum.

The 99,000 sq ft Henry Park site, based on its asking price, the land price works out to be S$1,216-S$1,287 per square foot per plot ratio.

Still, analyst does not believe that the slew of collective sale sites will mean land prices will fall. Some sellers may have lowered their asking prices but their reserve price has stayed the same.

Barring the worsening in the global economic situation, the property market here should remain stable.

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• A large supply of mass-market homes is set to enter the market by the end of this year.
• These 99-year leasehold projects are mostly from the flood of suburban state land released by the government over the last year as it attempted to cool robust home-buying demand from first-timers and upgraders.
• At least 5 larger suburban projects are expected to be launched by the end of this year. The total number of units is expected to be approximately 3000 units.
• Far East Organization, CapitaLand, City Developments, UOL Group and Sim Lian Group are just some of the developers that have been gathering interest for their projects recently.
• - Sim Lian’s 452 Par Vara at Hougang Avenue 7 was just launched during the weekend. About 70% of the released units were snapped up by mostly local buyers. They were sold at an average of $800psf – $850psf.
• Experts said developers are eager to quicken their pace of launches over fears of a deteriorating economic outlook.
• They said mass-market projects may also be affected by a fresh batch of sub-urban land supply expected to enter the market.
• The Government Land Sales Programme for the first half of next year is expected to be launched by the end of the year.
• With some recent residential tenders attracting lower bids than sites previously sold in the vicinity, this has also sounded alarm bells for some builders.
• Experts said that pricing will be the key in determining if these slates of mass-market launches do well.
• Although mass-market homes have powered new private home sales since the cooling measures were introduced last January, the question is whether this supply can be absorbed continually.
• New private home sales rose a higher-than-expected 31 percent last month, with buyers snapping up 1,631 units.
• Suburban homes made up 81% of total sales.

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• HDB Resale Prices has increased by 3.8% as compared to the previous quarter
• Resale transactions fell by 10% from 6,581 cases in the second quarter to 5,903 cases in the third quarter.
• Overall increase from Q3 2011 is 11.6%, which is an all-time high, i.e. HDB resale prices has been increasing at an average of almost 3% per quarter.
• Since Q1 this year, the quarterly price increase has accelerated, despite HDB’s largest release of new flats this year and next.
• HDB may have increased the supply of new flats launched and it has attracted many first time buyers who are not in a hurry to buy since there is a waiting time of 3 years.
• Demand in the resale market is strong and continues to be strong because it is coming from first-timers and families that have immediate housing needs, singles, PRs, up-graders and down-graders. These buyers make up almost 80 per cent of the resale market.
• On the supply side, the crunch in the resale market continues to cause prices to go up, and this is worsened by the mindset that sellers add on a cash-over-valuation (COV) component despite increasing valuations. They are able to do this as supply is tight and demand is strong.
• Weakened resale transaction volumes is expected by ERA not solely because more buyers have crossed over to the BTO (build-to-order) market. The lack of supply and high prices have made it more difficult to conclude deals.
• HDB will launch 4,200 BTO flats for sale in various towns such as Bedok, Bukit Panjang, Hougang, Punggol and Yishun next month.
• Including units sold under the Sale of Balance Flats (SBF) Exercise in September 2011, HDB’s total flat supply for 2011 will be 28,000 units.
• For 2012, prospective flat buyers can look forward to another 25,000 BTO flats. HDB said more details on that will be given at the launch.
• One reason that the housing supply is tight is that some of the current policies do not incentivise HDB owners to sell.
• A 2003 rule allowing them to rent out their flat, has prompted upgraders to move to a private apartment while keeping their HDB for rental income. And last August, restrictions on dual home ownership meant that those who already own a private home and a HDB flat, were even more reluctant to sell their unit. High rentals have also encouraged owners to hang on to their flats.

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