30 May 2016

Experts share suggestions for Fresh Start Housing Scheme

Experts hope that the 2016 Budget, which will be announced this Thursday (24 March), will solve some current problems with the Fresh Start Housing Scheme, reported Channel NewsAsia.

This scheme helps HDB tenants purchase their own flat, with a focus on families with young children, and those who previously owned a home.

But a key problem is fine-tuning the eligibility criteria to ensure that the beneficiaries really deserve such assistance, said DTZ’s Research Head Lee Nai Jia.

“I think this is a great scheme. The key problem is how we are going to identify this group and their income ceiling, and (how we are going to define) the type of benefits to give this group.”

According to Saktiandi Supaat, member of the Government Parliamentary Committee for National Development, the scheme provides a second chance to families currently leasing an HDB flat, particularly those who were forced to sell their original unit due to an unavoidable issue.

However, the support given should take into account the different circumstances of each household.

“There could be more support in terms of grants and there could also be some conditions for the grants to be disbursed,” said Saktiandi. For instance, families would first have to show proof that they have the means to pay for the new flats.

Aside from providing grants and the actual house, it is also important to educate families about responsible homeownership, financial management, and activities to keep their children in school, explained the Fei Yue Family Service Centre.

“We don’t want to come to a point where they are on the scheme, and then there is a setback, and they are penalised or thrown out of the scheme,” said the centre’s principal social worker, Lilian Ong.

“We could introduce some sort of readiness or transitional programme to prepare the whole family for this”, and this should run for six months, she said.

The Housing Board and the Ministry of National Development have held public consultations to gather suggestions on implementing the scheme. The feedback includes provision of concessionary loans and more grants, as well as shorter leases.

Picture Source: The Fresh Start Housing Scheme is targeted at families with young children.
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Wealthy Malaysians favour Singapore property

Singapore was ranked the second top choice for wealthy Malaysians who can afford offshore real estate, according to PropertyGuru’s latest market sentiment study.

Of 326 individuals surveyed online, 21 (seven percent) own a high-rise or landed home outside Malaysia. Of this, 20 percent have acquired a house in Singapore.

Meanwhile, Australia took the top spot, with 23 percent having bought a home there, while India and Germany were also among the most popular choices, with a respective 18 percent and eight percent of those surveyed owning homes there.

“According to other studies, many Malaysians choose Australia as their second home as it is located comparatively close to Malaysia at a few hours’ flight (away), and for its better working environment and better education system,” said the report.

Other countries favoured by those surveyed are Hong Kong (seven percent), Japan (six percent), China (five percent), Thailand (five percent) and the UK (four percent).

51 percent of the 23 respondents who own either overseas homes or non-residential properties noted that prices in those markets were cheaper than those in Malaysia, despite the softer ringgit.

The top reasons for buying offshore real estate are capital appreciation (30 percent) and children’s education (29 percent). 27 percent revealed that the overseas properties they have bought are situated in their countries of residence, while a similar percentage were attracted by good funding options.

Other reasons cited include favourable government policies (24 percent), retirement (23 percent), migration (20 percent), and relocation to a better environment (16 percent).

Moving forward, more Malaysians are now keen to purchase overseas properties, particularly in Australia, which continues to be the most popular market for 52 percent of 37 respondents. Other target markets for this group are Singapore (23 percent), Indonesia (15 percent), and the UK (14 percent).

Picture Source: Singapore is a popular property investment destination for wealthy Malaysians. (Photo: William Cho / Wikimedia Commons)
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Thai developers now building more luxury homes

Property firms in Thailand have already launched several residential projects targeted at the high-end market in the first quarter of 2016, reported The Nation. This is due to the high household debt, which continues to create uncertainty in other segments of the property market.

Anant Asavabhokhin, Chairman of Land & Houses’ Executive Board, reckons that the government should stimulate spending in the luxury segment, to help boost the overall economy. Land & Houses recently launched an upscale detached housing project in the Rama II area, and is one of a handful of developers hoping to cash in on the growing demand for high-end condos and detached homes.

And it doesn’t look as though this trend will subside anytime soon. Launching luxury units at this time helps developers to boost pre-sales, as banks are still reluctant to provide mortgages for the lower- and middle-income segments.

Sansiri’s most recent launch is a luxury condominium called 98 Wireless. The project is worth a total of THB 8.5 billion. It is understood that around THB1.2 billion has already been sold. Sansiri’s President Srettha Thavisin said while booking for the project isn’t scheduled to start till later this year, the company has accepted cash offers for two penthouses.

98 Wireless will only have a total of 77 units when completed, with prices starting at THB550,000 psm (S$21,425 psm). Sansiri will host an official grand opening ceremony once the development is ready in the second half of 2016.

Ananda Development is another developer that decided to launch a luxury condominium during the first quarter of this year. Ashton Silom is worth a total of THB5.8 billion, with prices starting from THB7.9 million (S$307,667) for a unit.

Picture Source: The interior of an apartment unit at 98 Wireless.
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Developers confident of disposing units before ABSD deadline

Some developers in Singapore are optimistic they can sell all the remaining units in their private residential projects before the stipulated deadline, even if they don’t offer huge discounts, reported The Business Times.

Under the Additional Buyer’s Stamp Duty (ABSD) rules introduced in December 2011, these companies need to build, complete and sell all units within five years of purchasing the land. If there are any unsold units after that period, they need to pay a 10 percent levy, which was subsequently raised to 15 percent for land parcels purchased as of 12 January 2013.

According to SingLand’s General Manager Michael Ng, they are confident of clearing all units before the deadline, and they don’t intend to slash prices.

Last month, its luxury projects Mon Jervois and Pollen & Bleu in District 10 reported 61 and 94 unsold units respectively, while Alex Residences in Redhill had 173 unsold units. These developments will be penalised with an ABSD of 10 percent if there are any leftover units by February, June and December 2017, respectively.

“For boutique projects, our priority is to hit temporary occupation permit (TOP) quickly, as many interested parties for luxury homes want to see the completed units. For Alex Residences, we will clear all units before TOP,” he said.

Similarly, City Developments Limited (CDL) is bullish that they can offload all unsold units at Jewel@Buangkok and two joint venture projects, Bartley Ridge and The Venue Residences, before their respective ABSD deadlines in 2017. This is because the developments are located in established neighbourhoods, and the number of unsold units is low.

“There are no significant ABSD issues for the three projects which have been selling steadily,” said a CDL spokesperson. As of February 2016, there were three, 31 and 160 unsold units at these three developments respectively.

As of last month, the projects with the most unsold units are Malaysian developer IOI Properties’ The Trilinq (524 units), The Crest (365 units) by a Wing Tai-led consortium, and The Glades (331 units), jointly developed by Keppel Land and China Vanke.

Furthermore, SingLand or CDL could be hit with the heftiest ABSD penalty of approximately $70 million, based on their stakes in projects with leftover units, assuming there are still leftover units after the deadline.

Picture Source: Alex Residences in Redhill has 173 unsold units.
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Chinese nationals still buying Singapore homes for their kids

Despite facing weaker currencies and slowing economies, mainland Chinese and Malaysians remain the top foreign buyers of Singapore property, revealed DTZ.

Together, they bought 1,952 private homes in 2015, or 54 percent of total foreign purchases.

Specifically, sales to Chinese nationals fell slightly by 3.8 percent to 998 units, while Malaysian home purchases remained largely unchanged at 954 units.

“The devaluation of the Chinese yuan in August 2015 meant that mainland Chinese nationals found their purchasing power clipped, as their national currency weakened against the Singapore dollar,” said DTZ.

Still, both groups of foreign buyers posted healthy purchases last year compared to 2008, during the Global Financial Crisis, when mainland Chinese only purchased 362 private homes, while Malaysians bought 626 units.

“Singapore’s political stability, transparent real estate policies and strict rule of law positions the city-state ahead of many other countries as a place where investors enjoy a high level of certainty on returns. Many mainland Chinese also bought homes for their children studying in Singapore,” added DTZ.

Meanwhile, the number of Indonesian home purchases fell by 33.6 percent to 279 units, lower than the 618 homes bought in 2008.

Picture Source: Mainland Chinese and Malaysian buyers formed 54 percent of foreign home purchases in 2015.
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Katong bungalow put up for mortgagee sale

A single-storey bungalow in Katong, one of the few available freehold properties in the area with redevelopment potential, has been put up for mortgagee sale, revealed marketing agent DTZ.

Located at 85 Branksome Road, the house sits on 13,189 sq ft of land and has a gross floor area of around 9,000 sq ft. According to DTZ, the property has an indicative price of $16 million, or $1,200 psf.

Recent transactions of landed homes in the area have ranged from $1,200 psf to $1,400 psf. Last year, a 13,843 sq ft site at Branksome Road was sold for $16.3 million ($1,178 psf).

Under the Urban Redevelopment Authority’s (URA) Master Plan 2014, the site is zoned for residential use and could be redeveloped into a two-storey bungalow.

The plot can also be subdivided into a pair of bungalows or semi-detached houses, subject to the relevant authority’s approval, said the consultancy.

Nearby amenities include established schools and shopping malls. Dakota MRT station and two future MRT stations on the Thomson-East Coast Line are also within the vicinity.

Joy Tan, DTZ’s Head of Auction, expects strong interest for the subject property. “A landed housing redevelopment site of this size in the prestigious District 15 is rarely made available for mortgagee sale. The last known mortgagee sale was at least a decade ago.”

The sale is being conducted through an auction, which takes place on 30 March at The Amara Hotel.

Picture Source: View of the single-storey detached house at 85 Branksome Road. (Photo: DTZ)
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HLH launches phase two of Cambodian project

Singapore-listed HLH Group has launched phase two of its maiden mixed-use development in Cambodia, after the first phase was sold out.

A total of 437 units were released in the latest phase of the D’Seaview project in Sihanoukville, with one- to three-bedroom units on offer.

The waterfront development was first launched in September 2015. All 300 apartments released under phase one were snapped up by local and international buyers, with prices ranging from US$675 psm (S$922 psm) to US$1,943 psm (S$2,653 psm).

“The strong response to our project reflects the pent-up demand for good quality affordable housing in Cambodia. Given the country’s positive GDP growth of about six percent to seven percent annually, the Cambodian economy remains vibrant and attractive to both local and foreign investors,” said HLH Group CEO Dato Dr Johnny Ong.

“In view of this and the rising tourist numbers in Sihanoukville as well as the increasing disposable incomes of consumers in Cambodia, our plans for more developments will add greater vibrancy and activities to the area,” he added.

D’Seaview is a mixed-use development located near the popular Sokha Beach in Sihanoukville, which is expected to become Cambodia’s next hotspot, not only for property investments, but also for tourism. Aside from its potential as a major cruise ship destination, there are also more flights landing at the city’s international airport.

Piling work is currently underway and is expected to be completed by June this year. The apartments are being marketed under the CAMHOMES brand of HLH, which is targeting the mass market.

Looking ahead, the group plans to build more residential projects in other locations, including the capital Phnom Penh.

Picture Source: 437 units of D’Seaview in Sihanoukville have been released for sale.
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Singapore’s housing market among the weakest: Knight Frank

Prices of private residential properties in Singapore continued their downward trend, falling by 3.6 percent in the fourth quarter of 2015 from the previous year, according to Knight Frank’s latest Global House Price Index.

On a quarterly basis, prices slipped by 0.2 percent from Q3 2015. Singapore was ranked 51st out of the 55 housing markets tracked by Knight Frank, which puts it among the weakest performers, Ukraine and Greece.

Between 2009 and 2011, prices of private units surged by 62.2 percent, but have dropped by 8.41 percent since then.

Analysts believe that a number of factors will continue to put pressure on the property market, such as the large pipeline supply of units, weakening demand amid low economic growth, and the market cooling measures which remain in place.

Meanwhile, the world’s housing markets recorded three percent growth on average in 2015. Turkey leads the rankings with prices ending the year 18 percent higher, said Knight Frank.

The consultancy added that its outlook for the year is muted. “We expect the index’s overall rate of growth to be weaker in 2016 than 2015. The global economy is experiencing a potentially dangerous cocktail of low oil prices, a strong dollar and a continued slowdown in China,” said Kate Everett-Allen, Head of International Residential Research at Knight Frank.

Picture Source: Singapore sits close to the Ukraine and Greece as having one of the world’s weakest housing markets.
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South Beach wins top design award

South Beach, Singapore’s biggest mixed-use development, has won the only Platinum SG Mark, presented at this year’s Design Business Chamber Singapore (DBCS) SG Mark awards.

Jointly developed by City Developments Limited (CDL) and Malaysian-based IOI Properties, the new project at Beach Road was built on a 3.5ha plot, and took eight years to complete. It faced design challenges that involved incorporating four conserved buildings with modern structures.

Several of the project’s green features impressed the judges, including a 280-metre long canopy that converts solar energy to electricity and collects rainwater to irrigate South Beach’s landscaping, as well as sky gardens which act as ‘green lungs’.

It is estimated that South Beach can save up to 17 million KWh of energy and 174,000 cubic metres of water annually.

“We believe that many of the principles behind this iconic building can be applied to future buildings to improve urban sustainability and overall aesthetic and practical appeal,” said Tai Lee Siang, President of the DBCS.

Several other local developments picked up SG Mark Gold Awards, namely the JTC Space @ Tuas development and the Singapore University of Technology and Design campus in Changi.

In total, 32 organisations picked up awards this year. Started in 2013, the SG Mark Awards are considered the Oscars of the design industry here. Previous winners include Gardens by the Bay, Botanic Gardens and Changi Airport.

Picture Source: South Beach was the big winner at the SG Mark 2016 awards. (Photo: Christopher Chitty)
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Malaysia’s property market has hit bottom, says developer

Home sales in Malaysia are expected to recover in the second half of 2016, said Mah Sing Group, the country’s third largest property developer by sales.

“We have reached the bottom of the downturn, and it will recover in the medium term,” as Mah Sing is witnessing signs of renewed confidence from home buyers, despite the negative reports on the weak ringgit, and allegations of corruption, said Group Managing Director Leong Hoy Kum.

“The bad news like 1MDB and the ringgit have already been digested; I don’t see anymore bad news coming out. It is back to work for everyone, to focus on economic growth.”

The ringgit has also strengthened 3.8 percent, making it Asia’s third best-performing currency.

Meanwhile, Mah Sing is set to hit its RM2.3 billion sales target for this year. The developer is confident it can sell more “medium range to high-end properties” in 2017, especially in Kuala Lumpur.

Meanwhile, its competitors are also posting strong sales. Earlier this month, Eco World Development Group found buyers for 85 percent of the units at its apartment outside the capital. Moreover, nearly all of the 341 units at a project by Sime Darby were snapped up in one day.

Given the turnaround, Mah Sing is now looking to acquire more land parcels with its record net worth of RM1.4 billion (S$467 million). It wants to replenish its land bank after holding back on such acquisitions in 2015.

“Every weekend is shopping time for me and sometimes, I charter a helicopter to look at land of 500 acres to 1,000 acres,” added Leong.

Picture Source: Mah Sing Group believes that Malaysia’s property sector will recover soon.
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Top property agents earn 66% more than average Singaporean

The median gross monthly commission earned by the top 300 property agents at ERA Realty Network hit $11,686 in 2015, according to latest statistics released by the property agency.

This is 66 percent more than the median gross monthly income of full-time employees in Singapore, which averaged $3,949 last year, based on data from the Ministry of Manpower.

These 300 agents are aged 23 to 65, with four of them above 60 years old, earning more than $133,876 annually despite being of retirement age, noted ERA.

At just 28, property agent Kavin Kuah, who joined ERA in 2012, has earned a median monthly gross commission of $119,873.

“Real estate is a good career path if you are someone who looks forward to no-ceiling income. There are always opportunities around; it’s all about commitment, passion and perseverance,” he said.

Jack Chua, ERA’s CEO, said the company remains resilient, despite the current market downturn and changes in real estate regulations.

“Media channels are reporting that many property agents quit the industry in 2015. However, statistics prove that the performance of (the) property sector is positive.

“Many individuals are lured by factors such as high salaries and work-life balance. However, selling properties has never been a simple sales job. It is a long-term, viable career that requires constant upgrading,” added Chua.

ERA remains the biggest agency in Singapore, even after its agent pool dropped by 6.6 percent to 5,947 agents in the October-to-December licence renewal period.

To further help its agents, ERA has rolled out a series of initiatives and policies, such as more professional development and market-focus programmes, as well as welfare and benefit schemes to encourage greater work motivation.

Picture Source: Real estate agents still command some of the highest-income jobs in Singapore despite challenging market conditions.
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Expats still paying top dollar for historic bungalows

Sales of black-and-white bungalows, a type of good class bungalow (GCB), are few and far between given their limited number, reported The Wall Street Journal.

Designed after the mock-Tudor architectural style, these houses come with whitewashed exteriors that contrast with black-stained timber details. To make them more suitable for the tropics, they feature broad verandas, wide eaves and tall shutters for shade, as well as masonry piers to elevate the structure and alleviate humidity.

According to historian and academic Julian Davison, these homes combine the ‘Tudorbethan’ style of Victorian England and the colonial-bungalow style introduced in Singapore by the British Raj in India.

These properties are favoured by expatriates due to the luxurious lifestyle they offer and their large area, which start from about 2,000 sq ft for one-storey bungalows to around 8,500 sq ft to 11,000 sq ft for the more exclusive villas.

“They are the perfect answer for people looking for a bit of greenery and some space,” said Diana Chua, a Singapore guide.

However, sales are rare as only a few are privately owned, and these include most of the 100 black-and-white bungalows slated for conservation by the Urban Redevelopment Authority (URA).

The majority are currently being rented out by the Singapore government. Over 90 percent of the 500 units managed by the Singapore Land Authority (SLA) are leased as homes, while some are used for commercial purposes. JTC Corporation also oversees around 150 units at the Seletar and Buona Vista industrial parks.

In addition, rents of black-and-white bungalows declined from their peak in 2010 to 2012, following the introduction of property cooling measures. For instance, monthly rents for the 33 bungalows at Mount Pleasant range from $8,600 to $23,500, said Ascott Ltd, the property manager.

Picture Source: Black and white bungalows offer a luxurious lifestyle.
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Colombian city wins LKY prize

Medellín, Colombia’s second largest city, has been named a 2016 recipient of the Lee Kuan Yew World City Prize, said the Urban Redevelopment Authority (URA) on Wednesday, 16 March.

It beat out four other finalists – Auckland, Sydney, Vienna and Toronto, which will be honoured with a special mention.

“Medellín’s transformation has been extraordinary. It has gone from being one of the world’s most dangerous cities into a liveable and innovative city,” said Kishore Mahbubani, Chairman of the Nominating Committee.

“Its success gives hope to many cities in developing countries, where the next wave of massive urbanisation will take place. Medellín can become a Mecca of learning for them. We are therefore proud to award the Lee Kuan Yew World City Prize to Medellín.”

The city is no stranger to this prestigious award. In 2014, it received a special mention for its creative and non-conventional urban solutions, such as the world’s first cable car system for daily commuting, library parks that also serve as social nodes in the city’s poorest districts, and escalators that have greatly improved mobility in one of its most troubled neighbourhoods.

Medellín is the fourth recipient of the accolade, after previous winners Suzhou in China, Spain’s Bilbao and New York City.

A total of 38 cities were nominated for this year’s prize. They were screened through a two-tier selection process by the Nominating Committee and a Prize Council. The finalists were chosen based on levels of leadership, innovation, as well as the impact and durability of initiatives.

The Lee Kuan Yew World City Prize comprises a gold medallion, an award certificate, and a $300,000 sponsorship courtesy of Keppel Corporation.

It will be awarded at the upcoming World Cities Summit, to be held from 10 to 14 July at Marina Bay Sands.

Picture Source: Medellín is the second largest city in Colombia.
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Developer sales down almost 23% from year ago

New private home sales in Singapore fell by 22.8 percent to 301 units in February 2016, from 390 units in the same period last year, according to data released by the Urban Redevelopment Authority (URA) on Tuesday, 15 March.

On a monthly basis, the sales volume fell by 6.8 percent from the 323 units sold in January 2016, even though new launches surged 31.4 percent to 209 units from 159 units previously.

According to JLL, the “slower developer sales were expected due to the Lunar New Year lull and the continuation of the volatility in the stock market from the previous month”.

By location, sales in the Core Central Region (CCR) fell to 25 units in February, just shy of the 26 units sold in the previous month, and the 30 units sold a year ago.

In the Rest of Central Region (RCR), transaction levels edged up to 82 units from 81 units in January 2016. But compared to the 185 units sold a year ago, this area witnessed the largest year-on-year decline of 56 percent.

Meanwhile, developers sold 194 units in the Outside Central Region (OCR). While this translates to a 10 percent drop from the 216 units moved in the month before, it is an 11 percent improvement from the 175 units sold in February 2015.

According to PropNex Realty, properties in the OCR accounted for 64 percent of total sales by developers, while those in the CCR and RCR made up nine percent and 27 percent respectively.

The best-selling private residential projects last month were The Panorama, where 18 units were sold at a median price of $1,211 psf, followed by Kingsford Waterbay and Principal Garden, which moved 18 and 16 units at median prices of $1,127 psf and $1,612 psf, respectively.

Looking ahead, new private home sales could fall by around 10 to 15 percent year-on-year to between 1,000 and 1,200 units in Q1 2016, the lowest level seen for the past three years, said Mohamed Ismail, CEO of PropNex.

Nevertheless, transaction volume could rebound in March due to the fairly good performance of two newly launched developments, Cairnhill Nine and The Wisteria.

For the whole of 2016, private home sales are expected to remain weak at around 8,000 units, as long as the property cooling measures remain.

Picture Source: The best-selling project in February was The Panorama in Ang Mo Kio.
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Economists cut growth forecast for Singapore economy to 1.9%

Economists polled by the Monetary Authority of Singapore (MAS) are cutting down their growth forecast for the economy for 2016 from 2.2 percent to 1.9 percent, the central bank’s latest quarterly survey revealed Wednesday (16 March).

“As reflected by the mean probability distribution, the most likely outcome is for the Singapore economy to grow by between 1.0 to 1.9 percent this year, below the 2.0 to 2.9 percent range reported in the last survey,” the MAS said.

Manufacturing is now expected to shrink by 2.7 percent this year, worse than the previous median forecast of a 1.2 percent contraction compared to the same quarter last year, down from 1.8 percent forecast in the previous survey. In addition, economists also forecast a slower growth in the finance and insurance sector at 3.6 percent, compared to 5.9 percent previously.

The survey also showed that economists expect the country’s gross domestic product (GDP) growth for the first quarter to come in at 1.6 percent.

Singapore’s GDP growth came in at 2 percent last year—the weakest annual growth since 2009—when it shrank 0.6 percent following the global financial crisis.

But analysts expect the GDP to expand by 2.5 percent next year.

“The most likely outcome is for the Singapore economy to grow by 2.0 to 2.9 percent next year,” MAS said.

Meanwhile, in terms of currency, economists expect the Singapore dollar to trade at S$1.45 against the greenback by the end of the year.

The survey conducted by MAS received views from 24 respondents from economists and analysts who closely monitor the Singapore economy.

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21 May 2016

Temasek overtakes GIC as Singapore’s biggest property firm

Temasek Holdings has been named the biggest real estate firm in Singapore, with total assets under management at US$39.9 billion, according to the latest Estates Gazette ranking, which pulled together the world’s top 100 investors.

The state-linked investment firm overtook the sovereign wealth fund GIC, last year’s top performer, for the number one spot. Temasek has stakes in major local and regional players such as CapitaLand, M+S, Mapletree and Pulau Indah Ventures.

CapitaLand took second place with US$33.3 billion of assets, followed by GIC with US$22.4 billion, Global Logistics Properties (US$16.7 billion) and City Developments Limited (US$14.9 billion). All five companies have a combined asset value of a whopping US$127.2 billion.

To make it on the list this year, firms have to own property valued at more than US$12.4 billion, said Estates Gazette.

This year, the top 100 companies owned a total of US$3.6 trillion worth of property, a US$400 billion increase over last year’s value.

Canada-based Brookfield Asset Management, remains the global leader, with almost US$130 billion of assets.

Samantha McClary, Head of Content at Estates Gazette, said: “Our Global 100 list, which is based on real assets rather than property securities and debt, shows how big a business the international real estate market is.

“The list, now in its third year, continues to grow with new firms appearing every year. The appearance of more property owners from new locations shows just how global a playground the real estate industry is.”

Read the full list here.

Picture Source: Singapore’s top real estate investors have been revealed in the latest rankings published by Estates Gazette. (Photo: Someformofhuman/Wikimedia Commons)
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MAS, China central bank renew bilateral currency swap arrangement

The Monetary Authority of Singapore (MAS), and the People’s Bank of China (PBOC) on Tuesday (15 March) announced the renewal of the existing bilateral currency swap arrangement (BCSA) for another three years.

“The BCSA is a key pillar of cooperation between PBOC and MAS to strengthen regional economic resilience and financial stability,” said MAS. The arrangement aims to enhance banks’ confidence in carrying out their business in the two markets and enables both central banks to provide foreign currency liquidity to stabilise financial markets.

First established in 2010, the BCSA was first renewed in 2013, and the new arrangement is effective as of 7 March.

Under the arrangement, up to CNY 300 billion in Chinese Yuan liquidity will be available to eligible financial institutions operating in Singapore.

The renewed BCSA will also supplement the various initiatives announced at the 12th Joint Council for Bilateral Cooperation in October 2015 and the President of the People’s Republic of China, Mr Xi Jinping’s state visit to Singapore in November last year.

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Pinnacle@Duxton prices unlikely to climb much higher

The Pinnacle@Duxton in Tanjong Pagar has recorded three transactions of above $1 million so far this year for its 5-room flats, similar to the four deals seen in the first three months of 2015.

The development has regularly made headlines in recent months. For example, a unit was sold for $1.08 million ($945 psf) in November 2015, the most expensive sale ever for a 5-room flat in Singapore. In January this year, a unit changed hands for approximately $1.07 million.

According to Eugene Lim, Key Executive Officer of ERA Realty, which helped to broker both deals, these flats commanded sky-high prices due to their unblocked, panoramic views of the city, and the Pinnacle’s status as a landmark project.

Aside from its proximity to MRT stations, another key selling point is the scarcity of such units. “Not everyone at the Pinnacle wants to sell. Those who have decided to sell are leveraging to get the maximum premium for their units,” Lim said.

Based on statistics from ERA, the two said transactions were three percent higher than the average transacted price of $977,846 for a 5-room flat at the project. But compared to older flats in the area, such as those at Smith Street and Tanjong Pagar Plaza, this translates to a premium of 25 percent to 46 percent.

The current resale prices are also a far cry from the original selling price range of between $345,100 and $439,000 for the 5-roomers during the project’s launch in 2004.

Nevertheless, Lim noted that these record flat prices are unique to the Pinnacle. “They do not represent the majority of resale HDB transactions, which are trading at around valuation in the current market environment.”

It’s also unlikely that prices of 5-room flats there will rise significantly higher or reach the $2 million mark, as home buyers could easily purchase a private apartment within the area for the same price, he said.

Looking ahead, prices of HDB resale flats are expected to remain stable, while transaction volume is expected to pick up as the reduced focus on cash-over-valuation (COV) premiums would attract buyers in immediate need of housing, or those who do not qualify for Build-To-Order (BTO) flats, added Lim.

Picture Source: Three flats at the landmark project have been sold for over $1 million in 2016.
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900 families got a third HDB loan in 2015

The Housing and Development Board (HDB) granted a third housing loan to around 900 families last year, according to National Development Minister Lawrence Wong during a parliamentary session on Monday (14 March), reported Channel NewsAsia.

Of this, 25 percent are concessionary loans, while about 75 percent consisted of non-concessionary loans, which are based on market rates.

He explained that the agency is willing to help families obtain a third HDB housing loan, but it will only be allowed for exceptional cases, usually for households that cannot acquire mortgages from banks, but are in urgent need of such financing.

However, a requirement is that these families should have ample savings and stable incomes to repay their monthly loan instalments.

“As I said, HDB would want to assist applicants to buy a home. But HDB is also wary of people or families, who overstretch themselves, and end up with more debt. I don’t think we want that to happen just for the pursuit of buying a home,” Mr Wong added.

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JLL remains top in the region, data shows

For the fifth year in a row, JLL has been named the top real estate investment advisory firm in Asia Pacific, based on the total value of sales completed, according to data from Real Capital Analytics (RCA).

RCA is an independent body that monitors global real estate transaction volumes. JLL has been ranked in first place since RCA began releasing data in 2011.

In 2015, the consultancy advised on investment deals worth US$16.6 billion, which corresponds to a 27.8 percent market share in the region.

JLL also took top spot in the hotel sector for the fifth year in a row, with a total of US$2.9 billion in hotel sales last year, representing a regional market share of 57 percent.

“2015 was a stellar year for real estate investment in Asia Pacific thanks to continuing demand from investors wanting to buy into the growth story in the region,” said Stuart Crow, Head of Asia Pacific Capital Markets, JLL.

Picture Source: JLL is the region’s top dealmaker by volume for 2015.
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Solid weekend sales at The Wisteria, Cairnhill Nine

Two newly launched private residential projects reported brisk sales over the weekend, an indication that units within integrated developments remain popular despite the lacklustre housing market.

The Wisteria in Yishun sold more than 80 percent, or 116 of the 138 units released for sale.

Its developer Northern Resi initially launched 108 units on Saturday (12 March), priced from $1,030 psf to $1,050 psf on average. Subsequently, another 30 units were released due to keen interest for the smaller units, leading to more sales.

“Buyers are drawn to this project because of its affordability and its convenience of being above a lifestyle mall,” said Michael Leong, CEO of Keppel Land Retail Management, the project and marketing manager for The Wisteria.

The 99-year leasehold project features 216 condominium units spread across three nine-storey towers, built on top of a two-storey shopping mall. Prospective buyers can choose from one- to four-bedroom apartments, with unit sizes ranging from 441 sq ft to1,173 sq ft.

The Wisteria is expected to be completed by the end of 2018.

Meanwhile, CapitaLand’s 268-unit Cairnhill Nine development in the Orchard area has found buyers for 70 percent, or 134 of the 200 units launched on Saturday.

The 99-year leasehold condominium is part of an integrated development that includes a serviced residence called the Ascott Orchard Singapore.

The units sold include one, two, and four-bedroom units as well as penthouses, measuring between 591 sq ft and 3,864 sq ft. The one-bedroom+guest units have been the most well-received to date, with 80 percent of the 90 apartments sold.

Around 50 percent of the project’s buyers are Singaporeans, while the rest are from Indonesia, Malaysia and China.

Commenting, a spokesman from CapitaLand said: “We are pleased with the strong response to the VIP preview and official launch, and will be stepping up our marketing efforts by having roadshows in cities such as Jakarta, Surabaya, Solo, Shanghai and Hong Kong.”

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218 HDB flats were sold before MOP in 2015

The Housing and Development Board (HDB) allowed 218 flats to be sold last year, even though the owners did not fulfill the required minimum occupation period (MOP) of five years, reported The Straits Times.

But this figure only represents around one percent of the 19,306 flats sold last year, as this practice is only permitted under “exceptional circumstances”, said a HDB spokesperson.

Valid reasons include emigration, wanting to live near a terminally ill family member, and financial problems – like the death of a breadwinner.

ERA Realty agent Ken Lee noted that “others might also need to relocate to be closer to their relatives for childcare or eldercare purposes”.

However, the majority of these special approvals were granted due to divorce.

The HDB spokesperson explained that “some divorcees may not be eligible to retain the flat upon their divorce. Since the breakdown of the marriage is beyond the couple’s control, HDB may consider allowing them to sell the flat so that they can each move on with their lives”.

According to PropNex agent James Lin, the housing board’s consideration is helpful to flat owners facing genuine hardships. “But it’s good that they are strict with these approvals. If they give everyone the green light, people will abuse the system.”

“It shouldn’t be easy to sell one’s flat early. The MOP is there to safeguard the interests of other residents,” added Lee.

Picture Source: Flat owners facing hardships can seek HDB’s approval to sell their units before the five-year MOP. (Photo: Nikki De Guzman)
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Foreigners shying away from US property

The US National Association of Realtors (NAR) has stated that demand from foreign buyers is weakening, with the strong US dollar and rising home prices forcing some investors to look at other countries that offer more value, reported The Wall Street Journal recently.

Many experts had predicted that foreigners would flood the US property market last year, as they seek a safe haven from the volatile global economy. Realtors revealed that the Chinese had surpassed Canadians as the top foreign buyers of US property in June 2015.

However, it looks as though this trend is reversing and more foreign buyers are now avoiding the US market, as prices in preferred cities like New York and San Francisco have increased dramatically. This has been made worse by the strong US dollar.

According to research from the NAR, the median price of existing US homes increased by 14 percent for Chinese buyers in January 2016 compared to a year ago, once currency exchange rates are factored in.

Another reason for the waning interest in US real estate is that China’s government is now cracking down on buyers who try to evade a US$50,000 annual limit on how much money they can transfer out of the country.

Previously, Chinese buyers would transfer money overseas through friends, family members or employees, but the government is now monitoring such activity more closely.

Lawrence Yun, NAR’s chief economist, explained that it remains to be seen just how much Chinese demand for US homes will fall.

The country recently reported growth of more than six percent amid a tough economic climate. In addition, many Chinese residents are looking to diversify their investments, after having lost money in the stock market downturn.

Picture Source: Housing prices in US cities, such as New York, have skyrocketed.
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Wandervale’s sales outperform EC launches in 2015

The 534-unit Wandervale project in Choa Chu Kang, the first executive condominium (EC) to launch in 2016, has beaten market expectations after its developer managed to sell 50 percent of the units last weekend.

“Despite tepid market conditions, it was well received by the market,” said Wong Xian Yang, Senior Manager for Research and Consultancy at OrangeTee.

The good performance is unsurprising, given the lower prices of Wandevale’s units. Prices for a three-bedroom apartment start from $655,000. Based on the percentage of units sold in the first month of sales, Wong noted that it has outperformed all the seven EC launches in 2015.

However, only about 267 units were successfully transacted even though the project was more than 40 percent oversubscribed, receiving a total of 750 e-applications by the end of the application period on 28 February.

But Wong said that “a conversion rate of approximately 30 percent to 40 percent from e-applications to sales is common in the EC segment”.

He added that there could be several reasons for why more sales didn’t materialise, such as buyers changing their minds, their inability to secure an 80 percent loan-to-value (LTV) ratio, and insufficient CPF funds to cover the next 15 percent of progressive payments.

Developed by Sim Lian Group, Wandervale comprises 130 three-bedroom, 322 three-bedroom premium and 82 four-bedroom units, spread across nine residential blocks. Unit sizes range from 958 sq ft to 1,249 sq ft, while prices average between $750 psf and $770 psf.

The 99-year leasehold EC is expected to be completed by 2019.

As to whether Choa Chu Kang will see an oversupply of EC units with three properties being developed there, namely MCL Land’s Sol Acres, Wandervale and the future launch of Qingjian Realty’s EC at Choa Chu Kang Avenue 5, Wong noted that these projects will inject a total of 2,350 units in the area.

“Sol Acres sold 259 units during the first month of launch in August 2015, and at least 10 units have been sold each month since. Likewise, we expect a steady flow of sales (for Wandervale) in the coming months.

“The introduction of another EC project by Qingjian may dilute demand, but we believe that the market should be able to absorb the additional supply, assuming that it is priced right.”

Picture Source: URA,OrangeTee Research
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Home price drop of over 20% unlikely, say experts

Analysts believe that private residential prices will continue to fall this year and into 2017, but the rate of decline is unlikely to exceed 20 percent, reported Singapore Business Review.

“We forecast private residential prices would dip five percent to 15 percent over 2016 to 2017 and that 2016 primary residential sales would remain muted at between 6,000 to 9,000 units,” said Eli Lee, an analyst at OCBC Investment Research.

At the same time, residential rental levels could drop by eight to 15 percent, while the vacancy rate could rise from the current 7.8 percent to around 10 percent by the end of 2017.

Nevertheless, a price correction of over 20 percent is improbable, given that demand rises as properties become more affordable, preventing prices from falling further, added Lee.

Echoing a similar sentiment is Maybank KimEng’s analyst Derrick Heng. He expects private residential prices to hit rock-bottom by the end of next year, decreasing by 13 to 16 percent from their peak.

Heng noted that developers appear to be winding down their construction activity to ease the supply glut. Data from the Urban Redevelopment Authority (URA) shows that home builders completed nearly 19,000 units in 2015, down from the projected 21,359 units for the year.

Picture Source: Private home prices could fall by up to 15 percent over 2016 and 2017.
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PropertyGuru’s Malaysia Property Show still attracting strong interest

Speculation has been rife of late that the Malaysian property market is going to have a quiet year. Analysts anticipate that demand will remain an issue despite property prices in key areas such as Penang, Johor and Klang Valley remaining relatively stable, with house-price indices holding up.

Nonetheless, this presents a good chance for Singaporean investors, as they can still strive to capitalise on existing opportunities in the market. This was evident at PropertyGuru’s most recent Malaysia Property Show (MPS), held last weekend at Marriott Hotel Singapore. The event saw over 430 potential buyers in attendance, eager to listen to what industry leaders had to say, as well as view prime Malaysian properties by renowned developers from across the causeway.

Malaysian exhibitors who participated in the show included UEM Sunrise, Rawhide, WCT, Andaman Property Management, Bina Puri Holdings and Hatten Group.

“Malaysia has always been the top-of-mind favourite for local investors searching for alternative investment options outside of Singapore. The multiple rounds of cooling measures have played a crucial role in boosting the attraction to properties across the causeway,” said Steve Melhuish, co-founder and CEO of PropertyGuru Group.

“Cooling measures have significantly affected the prospects for attractive investments in Singapore property. Moreover, the ringgit has fallen 30 percent against the Singapore dollar, making Malaysian properties even more affordable. Infrastructural developments, such as the upcoming Singapore-Kuala Lumpur High Speed Rail, have also given more reasons to invest, by not only shortening the travelling time between the two countries but also possibly growing the capital appreciation for properties located within its vicinity.”

Now in its sixth year, MPS is part of PropertyGuru’s international events platform, which showcases properties from cities across Asia, leveraging on the popularity of online property searches and actual investments, to enable investors to make quicker yet smarter decisions.

Melhuish said, “The latest edition of PropertyGuru’s Malaysia Property Show has once again proven to be a hit, with immense support seen from the steady number of visitors over the weekend. We are looking to host more investor events in the coming months.”

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Eye on Yishun: Ward of the north

As an HDB estate, Yishun is only 40 years old, but is one of the most popular towns in northern Singapore, thanks to the convenience afforded to residents by its accessibility and many amenities.

And though it is a fully developed residential estate with its own MRT stations (Yishun and Khatib), Yishun is continually being improved. From shopping and dining to education and housing, the estate seems to be in a state of constant development. Unsurprising, perhaps, when one considers the two words synonymous with Singapore’s reputation: growth and progress.

Drawn to the north

Ken Chan, Sales Manager at DTZ Property Network, explains Yishun’s appeal: “Yishun is one of the middle-aged housing estates that are being progressively rejuvenated by the HDB. It is also part of the URA’s Master Plan development for the northern region.

“The ongoing developments will make Yishun more well-connected by transportation. At the same time, they will provide many exciting lifestyle choices for residents.”

But even in light of its recent and current developments, Yishun, which was once a quiet, rural part of Singapore, still has much to offer its residents in terms of nature.

The Lower Seletar Reservoir is a splendid place for a relaxing evening stroll, and the three little-known waterways (the Seletar, Khatib Bongsu and Simpang rivers) are perfect for water sports and trekking on weekends.

Parks include the Lower Seletar Reservoir Park, Yishun Park and Nee Soon East Park; the former has a small water sports rental facility and occasionally sees dragon boat competitions held there.

For those who prefer the indoors, there are plenty of shopping, F&B and entertainment options to enjoy, be it with family or friends. Northpoint Shopping Centre is right next to Yishun MRT station, while Asia’s first multiplex, Golden Village (GV) Yishun, now boasts wheelchair-friendly berths and three 3D digital halls to cater to a wide variety of moviegoers.

Furthermore, Chong Pang City in Neighbourhood 1 has everything one could need: shophouses, a hawker centre, a market, supermarket, department store, drugstores and convenience stores.

Essentially complete

Apart from food, shopping and entertainment, Yishun’s eight neighbourhoods also have schools, community clubs and centres and country clubs, as well as medical and sports facilities. The Khoo Teck Puat Hospital (KTPH), named after the late Khoo Teck Puat after it received a hefty $125 million donation from his family, is located in the Yishun Central Area, next to Yishun Polyclinic. It boasts 590 beds amid comprehensive healthcare and specialist medical services and facilities, as well as a recently added feature that overlooks Yishun Pond.

The latest healthcare facility to have been developed in the area is the Yishun Community Hospital (YCH), which opened in late December last year. With approximately 425 beds, YCH’s primary purpose is to accommodate post-surgery patients from KTPH while they recover.

There are seven community clubs and two country clubs (SAFRA Yishun Country Club and Orchid Country Club) in Yishun, as well as the Yishun Stadium and Sports Hall and Yishun Swimming Complex.

Schools such as Ahmad Ibrahim Primary and Secondary, Chung Cheng High School (Yishun), ITE College Central and Yishun Junior College are also located in the region.

Reputable residences

Yishun has plenty of residential developments, from HDB flats to condominiums and executive condominiums (ECs). The area has been consistently popular amongst buyers, and developments such as The Wisteria and North Park Residences have been attracting a great deal of attention.

Chan says of the two aforementioned 99-year leasehold projects: “The Wisteria and North Park Residences are built by very reputable developers. The latter, for example, is known for its well-planned functional residential design.

“At the same time, both The Wisteria and North Park Residences are two of the newest local projects to feature the latest mixed development concept. Retail shops and restaurants in The Wisteria, for instance, are not sold as strata-titled units, giving the developers good control of the retail tenants’ marketing mix, and enhancing the overall value of the residential and commercial components of the project.”

Furthermore, North Park Residences will also be one of the first private residential developments to be integrated with a community club linked to the Yishun MRT station and bus interchange. Residents will be spoilt for choice when it comes to lifestyle options, as there will be over 500 retail and F&B outlets and healthcare establishments located just below their homes.

Where and how much

Yishun is an ideal place for both home buyers and sellers. It all simply boils down to two things: price and location. The former, when set at a price that takes into consideration the house’s market value, the seller’s asking price range and the buyer’s offered price range, can attract genuine buyers overnight.

Chan says, “We can observe from the well received Wisteria and North Park Residences that the correct pricing of a home really determines its selling power. For homeowners looking to sell, price your home right, and it will literally sell overnight.

“As for homebuyers, it’s always about location. A location generally popular with tenants / residents, either for transport convenience or a close proximity to lifestyle amenities or schools would be a great start. And of course, a website such as will make searching for that dream home so much easier.”

Positive prospects

With all its ever-changing and constantly improving amenities and infrastructure, Yishun’s foreseeable future looks bright. Residents have easy access to food, shopping, entertainment, healthcare, education, recreation, nature and sports, making Yishun highly convenient and therefore, attractive.

Chan is positive about the estate’s prospects: “I think Yishun is progressing towards (becoming) a very liveable suburban region in the north. Transport links are well integrated and lifestyle amenities are abundant. The latest mixed-use commercial and residential projects certainly support the transformation of Yishun into a rejuvenated and choice residential region.

“The residential market in Singapore and Yishun may be undergoing some adjustments in tandem with the global economy at the moment, but in the longer term, the attractiveness of Yishun as a choice home will ensure it will be a shining star in the future.”

Picture Source: Completed in 1986, Lower Seletar Reservoir is located to the east of Yishun New Town. (Photo: Balaji Dutt M V, Wikimedia Commons)/PropertyGuru Analytics,URA
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One of the most affordable homes above a lifestyle mall

Special Advertising Feature

Offering thoughtfully-designed residential spaces, state-of-the art facilities, as well as a good mix of retail and F&B shops under one roof, The Wisteria presents itself as the ideal space for live and play.

In recent years, mixed-use developments, which encompass both commercial and residential units in a single complex, have become increasingly popular, with a growing number of developers starting to roll out mixed-use developments across the island. This comes as no surprise, as the fast growing population in land-scarce Singapore has resulted in a surge in demand for homes and amenities alike.

Those looking to invest in a mixed-use development that offers utmost convenience, easy accessibility, as well as a slew of amenities within one location, should look no further than The Wisteria – a mixed residential and retail development in Yishun.

Jointly developed by Northern Resi Pte Ltd and Northern Retail Pte Ltd, the development comprises 216 residential units, which are built on top of the Wisteria Mall – a unique lifestyle mall comprising F&B and retail shops. There is a good mix of one- to four-bedroom apartment units that range in size from 441 sq ft to 1,171 sq ft. Discerning home buyers and investors will like that most units come fully outfitted with a fine selection of kitchen and sanitary fittings from reputable brands such as Electrolux and Hansgrohe, as well as a well-edited selection of fittings.

The 216 residential apartments will be spread across three blocks and will occupy the 4th to 12th floors, while the retail units will be housed within basement 1 and level 1 of the development. The lifestyle mall, with over 100 units of F&B and retail offerings, are held under one strata-owner, who will operate and manage the entire mall.

Smart living

One of the main highlights of The Wisteria is no doubt the in-built home automation system – ABB-free@home system – that is installed in each residential unit. With this innovative system, residents can intelligently control virtually any device in their home – lighting, air-cons at the dining / living area and master bedroom, and even main door locks via their smart devices.

Spaces to relax and retreat

Residents can expect to be spoilt for choice when it comes to leisure and relaxation pursuits. Equipped with an array of state-of-the-art facilities, fitness enthusiasts can choose to take a refreshing dip in either the 50m free-form lap pool or sweat it out at the aqua gym and gymnasium. For those who prefer to just sit back and lull the afternoon away, there are also plenty of spaces for you to do just that including the wine pod, jaccuzi, water lounge, steam room, sun deck and leisure deck among others. The specially designed BBQ Pavilion is also ideal for intimate parties or even just a spontaneous evening dinner outdoors.

A host of amenities and conveniences

Among the advantages of living in a mixed-use development, convenience ranks high on the list. And when it comes to convenience, The Wisteria – located at the juntion of Yishun Avenue 4 and Yishun Ring Road – is truly unbeatable. The development is situated within close proximity to various transportation links including Khatib MRT station and the Seletar Expressway (SLE), which make travelling to other parts of the island a breeze. The future North-South Expressway (NSE) will also reduce travelling time to and from the city – the NSE will connect the city centre with towns along the north-south corridor – Woodlands, Sembawang, Yishun, Ang Mo Kio, Bishan and Toa Payoh.

The star of this integrated residential and retail development has to be the Wisteria Mall, which offers residents a slew of dining and shopping options at their doorstep. Housing a handful of specialty cafes and restaurants, a FairPrice Finest supermarket, Kopitiam food court and many other lifestyle shops, residents will be able to indulge in an array of gastronomical delights and shop for their daily necessities without even having to set foot out of the development.

For families with school-going children, the development is located within a stone’s throw away of several established educational institutions, such as Chongfu Primary School, Naval Base Primary School and GEMS World Academy.

Great investment potential

The position of The Wisteria is further strengthened by its proximity to nearby commercial clusters such as Woodlands Regional Centre, Seletar Regional Centre and the upcoming Seletar Aerospace Park.

Seletar Aerospace Park, which is envisioned to be a world-class dedicated aerospace regional facility, is expected to create about 10,000 jobs upon its projected completion in 2018, while the Woodlands Regional Centre, which is part of a larger commercial belt called the North Coast Innovation Corridor, will house the first business park cluster in Singapore’s northern area.

In short, residents of The Wisteria can look forward to a wealth of job opportunities near where they live. The 99-year leasehold development is expected to receive its temporary occupation permit (TOP) in the fourth quarter of 2018.

Picture Source: Facade of The Wisteria and Wisteria Mall.
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Strong property potential for northeast Singapore

With the first quarter of 2016 well underway, property seekers were keen to find out about current property market statistics and what these data trends could tell them about the outlook for the local property market. This interest was reflected by the large crowd at the Kingsford Waterbay show suite, where the latest edition of PropertyGuru’s Guru Talk was held.

Guru Talk is a series of property knowledge empowerment seminars aimed at providing a comprehensive Guru View of the property market. The edition held on 27 February 2016 saw Eugene Lim, Key Executive Officer of ERA Realty Network, providing some highly regarded insight to the local property scene, as well his expert predictions for the rest of the year.

Giving attendees a holistic view of Singapore’s property market, Lim covered vast ground, sharing his views on data trends across both the government and private housing sectors.

Broaching the topic of the HDB resale market first, he pointed out that though prices had been on the decline for two consecutive years, this trend stopped in the last quarter of 2015. In fact, prices saw an increase. This, however, does not mean a quick price rebound but rather, price stabilisation.

“Property prices have been trending downwards over the last two years but what is interesting to note is that the price decrease stopped in the last quarter. In the final quarter of 2015, based on HDB statistics, prices have edged up by 0.1 percent.

“Is this going to carry on? Are we expecting a price rebound? As a homeowner, you would most definitely want to see that. However, the government has been ‘balancing’ the market with increased supply. We see that the HDB has been launching a lot more new flats, especially in mature estates. They will not be flooding the newer estates anymore, so on a high level, all this points to the stabilisation of HDB resale prices.”Continuing with his coverage of the local property market, Lim went on to speak about the private residential sector, where he pointed out trends similar to the HDB resale market — the rate of year-on-year price decrease had slowed down, indicating price stabilisation, something reflected in price points from recent months.

Continuing with his coverage of the local property market, Lim went on to speak about the private residential sector, where he pointed out trends similar to the HDB resale market — the rate of year-on-year price decrease had slowed down, indicating price stabilisation, something reflected in price points from recent months.

“Year-on-year, we see very little change (in private residential price points), which means the market has started to stabilise. The rate of decline has actually slowed down and monthly prices are quite stable. Now, with all the moderations in the market, you’ll find that price lines plotted across a monthly chart have stabilised, and the prices in the private property market are expected to maintain a status quo, ” Lim said.

He cautioned: “One thing we need to be aware of is that we are a very small country, and as a small country, we are a ‘price taker’. Any external shock will affect Singapore today, more so than in the past, as we continue to be a very open market.”

When asked to look into his crystal ball Eugene mentioned that the northeast region holds good potential for property investments, citing reasons such as the rise of nearby business and industrial parks, and estates in the region, like Hougang, which is part of the Remaking our Heartlands (ROH) programme. Furthermore, the Cross Island Line, which will cut through the region, will be complete by 2030.

As a bonus, fengshui master Jet Lee, Principal and Founder of Yi-Culture, shared with attendees his views on how fengshui can be involved in a property purchase. He also gave his Singapore property market outlook, while boldly predicting the lifting of certain cooling measures by Q3 2017.

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Small island, big plans

It is often said that a man’s reputation precedes him. In the case of Cui Zhengfeng, owner of Kingsford Development, part of the impression I had of him prior to our first meeting was that he took great pride in his work.

After all, he had decided this interview was to be conducted at the Kingsford Hillview Peak showflat in Bukit Batok, and seemed rather pleased that I had arrived slightly early to view the condominium, which happens to be Kingsford’s first project in Singapore.

Another trait that stood out was his ambitious streak. Though English is still the main challenge for the Chinese national, the language barrier has not stopped him from expanding the company’s operations from China to not only Singapore, but Australia as well. He says he relies on a translator when it comes to doing business with English speakers, and reading English-language documents.

In person, he comes across as friendly and chatty, eager to commence the interview and share his experiences with us. Speaking in Mandarin, his excitement is evident in his hand gestures, rapid speech and tone of voice.

From regiments to residences

A Shenyang native, Cui joined the army at the age of 18, before taking a job as a tax officer at age 30. Not long after, he decided to use his pension fund to invest in factories, venturing into property development in 2000. He eventually came to Singapore and, finding the market favourable, decided to start developing property here. Last year, the business expanded to Australia, though Singapore remains Kingsford’s primary focus, apart from China.

Cui says of his real estate journey so far: “It’s not an easy business. 20 years ago, there was no Kingsford, and you cannot study to become a CEO. In this industry, there are many responsibilities (because) what you sell is not just a product, but a family’s dream.”

Service-oriented strategy

When it comes to Kingsford Development, Cui is happy to talk about its portfolio. The company focuses mainly on China, Singapore and Australia, and its biggest undertaking so far is a 460,000 sq m project in China. After entering the Singapore property market with Kingsford Hillview Peak, it embarked on its second condominium development here, Kingsford Waterbay.

Throughout the interview, Cui emphasises repeatedly that in order to further build Kingsford’s brand, its priority must be to “help aspiring homeowners fulfil their dreams and get their dream homes”.

He says: “I am more concerned with service than with profit. I want Kingsford to have lasting power and a long legacy, and in order to achieve this, I must constantly provide high-quality homes for my customers.

Cui’s ambitions are clear. He says resolutely: “Kingsford is looking at the whole world. From China to Singapore to Australia, we keep up with the goings-on in all countries. Our main operations are in China, while Singapore is our base for overseas operations; Australia is the next country we have decided to explore, and have set up our business there.”

Uniqueness amid commonality

So what sets Cui apart from other prominent names in the real estate business? Well, he believes one must first determine what he shares with his industry peers before he can determine his unique selling point.

“In order to understand the difference between oneself and others in the same industry, we must first find common ground with them. We share the same goals and pursuits: to excel in our work and develop our businesses.

“More time must be focused on the quality of the property and your employees’ performance. We must respect every project and every person. And for us, as a young company, we need to learn from our predecessors and competitors, retaining the positive so we can be more professional and eventually, overtake them in the industry.

“What sets me apart is my dogged determination to succeed. I choose not to give up but to persevere, because the qualities of the head of the company represent the qualities of the company itself. Perhaps this statement is a little dramatic, but there is some truth to it. Once I have set my mind to something, I will do whatever it takes to achieve it. I am also grateful to my staff for their support.

“Kingsford is also unique because instead of being profit-focused, we focus on providing quality homes for our customers.”

Looking to the future

Going forward, Cui certainly has grand ambitions for Kingsford. He has plans for the business to expand into Vietnam and India, largely due to their recent respective GDP growth of over six percent. He is also eyeing Canada and New Zealand as potential candidates for Kingsford’s expansion.

The company still has over 600 units to sell in Brisbane, Australia, after which he will observe the market before making further decisions.

Back home in China, Kingsford is working on a development in Cui’s hometown of Shenyang. It will launch at the end of the year, and with 10,000 units and an area of 800,000 sq m, is purported to be 10 times the size of Kingsford Waterbay.

When asked for his predictions for Singapore’s housing market, he immediately gives an answer with which many Singaporeans are likely to disagree: “Even though home prices in Singapore are high, they should not be reduced. Doing so will hurt the economy and in turn, the people of Singapore.”

However, he does feel the government should relax the cooling measures. He explains, “Like Singapore, the Chinese government has been introducing many of its own measures and policies to cool the market. But because of the long period of government control of the market, even removing the measures now will not encourage more people to buy.

“Now it has to introduce another set of measures to encourage them to enter the market. The same might happen here if the government does not relax or remove some of the measures soon.”

Lessons and challenges

Cui’s foremost challenge is the language barrier he faces outside of his homeland. He says this was particularly trying when he first set up shop in Singapore. While he has not yet learnt the language, he still insists on handling all his research and documents personally, with a translator on hand to help him.

After 15 years in the business, his advice to younger property entrepreneurs is this: “It is most important to maintain the enthusiasm you had at the beginning. It is your career’s driving force. You must always remember why you started the business, and what your beliefs are.”

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Phnom Penh: Asia’s next top city

Cambodia’s real estate market is heating up, especially in its capital Phnom Penh, with foreign developers from China, Singapore, Taiwan and Korea looking to expand their footprint in the fast-growing city.

For Singaporean developers, restrictive cooling measures in the city-state, as well as the passing of legislation some years back allowing foreigners to own Cambodian property, have been the main pull factors for companies such as Oxley Holdings, Teho International and TA Corporation to develop large-scale commercial and residential projects in Phnom Penh.

Under the Foreign Ownership Property Law, foreigners can own upper-floor units, but not ground floor units, and up to 70 percent of a condominium project.

According to property consultancy CBRE, this restriction has little impact on foreign buyers, considering that apartments are usually not built on the ground floor.

Outperforming the neighbours

In its inaugural Cambodia Real Estate Highlights report, Knight Frank said it expects the country’s economy to grow at an average of seven percent year-on-year until 2018, outperforming other economies in the region. Much of the growth will come from the manufacturing, agriculture, tourism and construction sectors, with the latter helping to boost the fledgling property market.

Today the city of Phnom Penh is a hive of building activity, “dotted with mid- to high-rise projects under construction”, says Sofia Perez, Research and Consultancy Manager at Knight Frank Cambodia.

She notes that “11 condominium developments were launched in H2 2015, which will add 1,768 units to the existing stock”, in contrast to the 2009 and 2010 period, when only 732 condo units were put up for sale.

Over the next four years, Knight Frank expects the supply of new residential apartments in the city to surge by a whopping 641 percent. Meanwhile, CBRE believes that Cambodia’s condominium market offers great potential, and expects over 9,000 units to enter the market between 2015 and 2018.

However, with thousands of units expected to be ready in the next few years, some analysts are warning of a possible oversupply.

“There are growing concerns about a potential oversupply in the near future, with many anticipating supply to quickly outpace demand. This can be attributed mainly to limited local market demand coming from high-net-worth individuals and expatriates living in Cambodia, which has forced many developers to target the overseas market,” said Perez.

“Taiwanese, Chinese, Singaporeans, Japanese and Malaysians are some of the main overseas investors buying the majority of the residential units.”

In addition, Knight Frank revealed that many developers are looking to increase sales by offering incentives such as upfront discounts, furniture packages and guaranteed rental returns.

Condo prices up; still much cheaper than in S’pore

The recent launches of a few major projects have pushed prices of condo units upwards, noted Perez. But prices are still significantly lower compared to Singapore. For instance, high-end units in central locations are going for more than US$279 psf (S$386 psf), with some penthouses priced at US$465 psf (S$643 psf), said the consultancy.

As for rentals, high-end condominiums in the city centre can command anywhere between US$1,345 (S$1,859) to US$4,500 (S$6,219) for one- to four-bedroom units, according to figures from the fourth quarter of 2015, added the consultancy.

Meanwhile, property investors have been recording rental returns of between five and seven percent, and capital growth of between five and 7.5 percent per annum.

Foreign property firms move in

As confidence in the property market continues to grow, more real estate agencies are expanding into Cambodia to support marketing efforts. US-based Century 21 opened a representative office in Phnom Penh in 2014, while global firm Savills joined forces with Cambodia’s Keystone Property Consultants last year.

Property developers from Singapore are also recognising Cambodia’s great potential for growth.

“We are of the view that Cambodia’s property market exhibits the right fundamentals for growth: a robust GDP supported by foreign investments, translating into rising demand for office space; and the rising affluence of Cambodia’s young middle class, translating into demand for quality residences,” said TA Corporation’s Executive Director and CEO Neo Tiam Boon.

The group just launched The Gateway, a mixed-use development located in Phnom Penh’s central business district that comprises 299 strata-titled office units and 572 one- to three-bedroom apartments. It also comes with guaranteed rental returns of 12 percent over two years for the residential units, and 16 percent for the office units.

Currently, about 30 percent of the residential apartments and 40 percent of the office units have been sold or reserved. Aside from Singapore, the project will also be marketed elsewhere in Asia, including Taiwan and China.

Oxley Holdings is also seeing strong interest for its two mixed-use developments in Phnom Penh, The Bridge and The Peak.

So far, almost 100 percent of the residential units and more than 70 percent of the Soho apartments at The Bridge have been sold, said Oxley.

The developer also revealed that phase one of The Peak, comprising 507 residential units in Tower 1, is close to 50 percent sold. The 55-storey freehold project features two residential towers with a total of 1,014 units, a 15-floor office tower and a 300-room hotel, all above a five-storey retail podium.

Property buyers of residential units at The Peak are guaranteed a 12 percent net rental return for two years, subject to conditions.

“We have a good mix of local and foreign buyers for both The Bridge and The Peak. Cambodian buyers contribute close to 50 percent of the total sales. Other than Singaporeans, Taiwanese and Malaysians also form part of the foreigners who buy at these two projects,” a spokesperson for Oxley told PropertyGuru.


Population: Approximately 2.2 million

Total area: 678.5 sq km

Currency: Cambodian Riel

GDP per capita (Cambodia): US$1,220 (2015)

GDP growth: 7.5 percent (2016)

Future transport: Public train service by 2020

Home prices: S$255 psf to S$319 psf

Distance from Singapore: Approximately 1,140 km

Summary of major property related issues and taxes associated with real estate investment in Cambodia:


Take a peek at these two Cambodian mixed-use developments bound to entice Singaporean buyers.


The Gateway
Russian Boulevard, Phnom Penh

Type: Mixed-use development
Developer: TA Corporation
Tenure: Freehold
Facilities: Swimming pool, gymnasium, function room, barbecue pavilions
Nearby Key Amenities: Universities, foreign embassies, medical facilities, shopping and dining outlets
Nearest Transport: Major roads linking the Phnom Penh International Airport and the city centre
Starting Price: US$152,300 (S$210,927)

The Gateway by TA Corp is the developer’s first large-scale project in Phnom Penh. It consists of a 36-storey tower with 299 strata-titled office units, and a 39-storey apartment block with 572 residences, which sits on top of a retail podium.

The residential component features one- to three-bedroom apartments, with unit sizes ranging from 560 sq ft to 1,184 sq ft.

The Gateway also promises 12 percent returns on apartment rentals and 16 percent returns for offices. Slated for completion in 2019, the development is located adjacent to the Cambodian Prime Minister’s Office in the central business district.

The Peak
Samdech Hun Sen Road, Phnom Penh

Type: Mixed-use development
Developer: Oxley Holdings
Tenure: Freehold
Facilities: Infinity pool, yoga room, games room, sunset viewing deck
Nearby Key Amenities: AEON Mall, Naga World Hotel, convention centre, foreign embassies
Nearest Transport: Royal Railway Station, Phnom Penh International Airport
Starting Price: US$175,000 (S$242,377)

The Peak is the second development by Oxley Holdings in Phnom Penh. The 55-storey mixed-use project features two residential towers with a total of 1,014 units, a 15-floor office tower and a 300-room hotel, all above a five-storey retail podium.

The residential unit types range from studio apartments to one, two, and three-bedroom units and penthouses, each measuring between 463 sq ft and 1,970 sq ft. It faces the Mekong River and is close to Naga World Hotel and Aeon Mall.

The developer has guaranteed a 12 percent net rental return over two years for buyers of The Peak, subject to conditions. The development is expected to be completed in 2020.

Picture Source: View of central Phnom Penh./Knight Frank Research
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Budgeting tips for aspiring homeowners

1. Determine your type

First and foremost, there are two things to establish: the type of house you want, and your buyer status. Are you looking at a HDB flat, a condominium or a landed home? Are you single, or buying together with your spouse or spouse-to-be? Are you a Singapore citizen, permanent resident (PR), or foreigner? Regardless of your marital status or nationality, you can buy a condo or landed home if you are at least 21 years old. If you are single, you are eligible to purchase a HDB flat only if you are at least 35 years old; married or engaged couples can buy HDB flats as long as they are at least 21 years old. However, do note that foreigners cannot buy HDB flats, and PRs can buy HDB flats only if they are resale units.

2. A buyer’s duty

As a home buyer, you will be subject to a Buyer’s Stamp Duty (BSD), which is tax payable on the house’s selling price or market value, whichever is higher. The system of payment is as follows: one percent on the first $180,000 of the price agreed upon by both buyer and seller, two percent on the next $180,000 and three percent on the rest of the price. This applies to all buyers, regardless of nationality and marital status.

If you are a PR, you will be subject to five percent Additional Buyer’s Stamp Duty (ABSD), whether you want to buy public or private housing. Foreigners buying private property will be subject to 15 percent ABSD.

3. Doing up your living space

Most new homes come with standard fittings, such as bathroom and kitchen fixtures. Many condos even come with wardrobes, cooker hoods, washers and more. However, you would still have to set aside a budget for furniture and décor. Your budget will depend on where you want to shop and whether or not you are planning to hire an interior designer. The former will likely cost less, but requires more time and effort on your part. The latter will cost more due to the design firm’s services, but you will spend less time shopping.

If you are buying a house from its current owner, you may wish to renovate it. This is the costliest, most time-consuming option; be sure to hire a reputable contractor and, if you so choose, a reliable interior design firm as well.

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Rental woes in our residential market

When we go out and speak to real estate agents, many of them tell us they need to work harder now, because of sluggish transactions in the real estate market. Many of them were used to earning a month’s income from one or two transactions, but had to turn to the rental market and work a lot harder, since commissions were smaller.

From afar, Singapore’s residential rental market looks like a bright spot in a lacklustre real estate industry. For both the HDB and private rental market, transactions actually moved upwards, even as sluggish sales led to many agents exiting the industry. Early indications this year also point towards the rental market doing brisk transactions as well.

Volume however, is only one part of the equation. The other is price.

Figure 1 shows the volume and median rental transactions per month over the course of 2014 and 2015 for the non-landed private residential market. Between 2014 and 2015, the number of transactions actually increased 10.4 percent, with the two year high taking place in Aug 2015.

However, prices are on a clear downward trajectory, with the year ending on a two year low of a median $3.29 psf per month across the island. While January this year did see upward movement, this is likely to be seasonal, as transactions pick up after the year-end holidays. January 2016’s overall median rental price is a 6.3 percent year-on-year decline from January 2015’s, an early indication that doesn’t bode well for rental prices this year either.

For landlords, this is a worrying trend. Singapore’s private residential property market traditionally has low yields due to our high prices. With rental rates heading south, net yields are likely to compress further, or even become

negative. For landlords dependent on rental income to pay for their mortgages, cash flow issues might force their hand and they might need to offload their assets at a time when property sales are soft.

The HDB rental market tells a similar story. Rental volumes started seeing increases in 2014, and stayed consistently high in 2015, hovering around the 10K mark per quarter, while rental prices slipped 5.6 percent over the past eight quarters (see Figure 2). 2016’s first quarter numbers will only be published this April, but what we hear from the ground is that rents remain soft, and tenants are driving hard bargains.

HDB landlords, in general, face less pressure compared to their private counterparts. Many HDB landlords are upgraders who chose to hold on to their units for rental income instead of selling them to get capital for their private property purchases. These landlords are often in a more stable financial position, especially for those who purchased their second properties after the implementation of the Total Debt Servicing Ratio (TDSR). This is because their bank loans were calculated with more stringent criteria, and they are unlikely to default on their loans, even if their HDB units remain untenanted.

Explaining the numbers

The HDB and private non-landed residential market are seeing similar transaction and price trends, because the underlying macroeconomic causes are the same.

On the one hand, we are seeing an exuberant supply of housing units hitting the market. In 2015, over 48,000 residential units were completed and entered the market. This year, that number is expected to rise to over 51,000.

This is because in 2011 and 2012, the government set about increasing the supply of Build to Order (BTO) flats to meet the demands of couples and young families, who were unable to get a unit during the ballot. At the same time, they were priced out of the resale market, with HDB sellers generating tons of froth by chasing ever higher cash-over-valuations (COV). This has alleviated somewhat, with the authorities ceasing to measure COV.

In the private market, overly optimistic land bids by developers and record high enbloc sales also led to a huge supply of private units being launched for sale. We are now seeing the fruits of those efforts today, with construction completing and keys being handed over.

The entry of all these units into the market has led to an embarrassment of riches for tenants when it comes to unit choices. This gives tenants plenty of clout when it comes to tenancy renegotiations, with rental prices being pushed downwards. Landlords must learn to budge quickly, or risk having untenanted units. Private condo landlords, especially those who are highly leveraged and need rental income to stay afloat, would quickly find themselves stuck between the proverbial rock and hard place.

While the supply of housing stock is seeing sharp increases, the supply of tenants is taking a hit.

Figure 3 shows the number of Employment Passes (EP) and S Passes (SP) approved over the past four years, as well as their rate of growth. EPs are for foreign professionals, managers and executives, and require a minimum income of $3,300 per month, while SPs are for mid-level skilled staff, with a minimum of $2,200 a month. Over the past three years, the rate of growth has remained low, due to widespread angst among locals against foreign labour coming in to Singapore.

For landlords dealing with increased competition from the increased housing supply, the reduction in foreign workers entering the country is a double whammy, making it harder for rental stock to be absorbed. The problem is also compounded by a less than optimistic global economic outlook, with several firms in the finance and oil and gas sectors announcing layoffs.

For expatriate workers who remain employed, many see compensation packages being localised, and are seeing housing allowances being reduced or even removed altogether. With lower budgets to be spent on housing, many expatriates need to seek cheaper rental alternatives, i.e., moving from private condos to HDB rentals, or negotiate for lower monthly rents.

While this explains the falls in rents we are seeing, it doesn’t necessarily explain why rental transaction volumes are on the rise. The reason, however, is a lot more depressing for landlords than the numbers might otherwise tell us. What the numbers indicate are actually the number of contracts signed by tenants, which landlords are required to declare for tax purposes. The number of contracts signed, therefore, have increased, because contracts are being signed more frequently, with tenants signing shorter-term contracts of one year or even less.

Traditionally, tenants sign two-year contracts, locking in rental rates for the period, allowing landlords to have some surety in their cashflow expectations. With one-year contracts, tenants have more leeway to negotiate their rental contracts downwards, or move to a cheaper alternative if their landlords refuse to budge. At the same time, with job security somewhat in flux, shorter contracts offer more wiggle room if they need to break their leases.

What can landlords do?

It is a tenants’ market, and landlords need to recognise that. For landlords that have holding power and who are able to absorb the reduced yields, they should be open to negotiating and reducing their rents. The key is to keep the units tenanted, even if they need to make concessions, in order to minimise what they need to fork out.

With most market watchers predicting that the property market will see the start of a recovery this year (provided the global economy doesn’t drag it down), landlords might want to relook their portfolios. Landlords who are overleveraged might need to bite the bullet and offload some properties, even if the capital appreciation is not yet where they would like it to be.

Alternatively, if a long term tenant is hard to come by, investors may choose to switch tack by using services like AirBnb to rent their units to tourists. In general, yields are better than long term tenancy, but there is a lot more hassle in managing the unit due to the turnover frequency. AirBnb, is also frowned upon by the authorities, and landlords should be aware that they are operating in a legal grey area. At the same time, the factors that would make a unit popular with tenants are the factors that would make them popular with tourists. If one’s unit has less cachet with tenants, it might be hard to attract tourists as well.

Quick tips for investors

No salesperson would ever tell you that the unit or project they are selling has no or low investment potential. It is therefore up to the individual investor to make their own assessment about the rental potential of their property. In general, investors are advised to look out for potential cachets of tenants within the vicinity, and should have a unit that is within walking distance to an MRT station. Walking distance is generally defined as 500 metres, or a five- to 10-minute walk.

In general, when looking out for areas with a larger potential tenant pool, it is also advised that landlords look for diverse industries and sources. For instance, investors like the Changi Business Park area, because of the technology, finance, and retail businesses in the area, as well as the faculty, students and staff of the Singapore University of Design and Technology (SUTD).

In Singapore, the government also publishes the Masterplan online. Investors should always refer to it and be familiar with what the government has planned for the future, to determine their potential capital appreciation, and what the tenant pool will look like in the future.

When looking at an investment unit’s price, it is also important to keep in mind what kind of rental pricing levels one would need to set. Most investors would want to set at a level that would be able to minimally cover their monthly mortgage payments. They should factor in their maintenance charges and other ownership fees as well. After doing the maths, if the desired rental sum looks far too outlandish when compared to the current rental prices, it might be better to walk away from the project, especially if holding power is an issue.

Picture Source: URA,PropertyGuru Analytics
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S’pore still the world’s most expensive city

Singapore has retained its status as the world’s most expensive city for a third consecutive year. However, its lead over the next two cities, Zurich and Hong Kong, has narrowed, according to the latest Worldwide Cost of Living Survey by the Economist Intelligence Unit (EIU).

Geneva and Paris round out the top five cities, followed by London, New York and Los Angeles. The rankings list tracked 133 cities.

Despite Singapore topping the list, the report revealed that prices in the city-state were lower in some categories, such as basic groceries. Prices are 33 percent higher in Seoul, followed by Hong Kong (28 percent) and Tokyo (26 percent).

However, Singapore is considered more expensive in other categories.

“It is the most expensive place in the world to buy and run a car, thanks to Singapore’s complex Certificate of Entitlement (COE) system. Transport costs in Singapore are 2.7 times higher than in New York. Alongside Seoul, Singapore is also a very expensive city in which to buy clothes and pay for utilities,” stated the report.

The EIU survey compares more than 400 individual prices across 160 products and services. These include food, drink, clothing, household supplies and personal care items, home rents, transport, utility bills, private schools, domestic help and recreational costs.

New York was used as a base for city-to-city comparisons; it has an index set at 100.

The purpose of the survey is to help human resources and finance managers calculate cost-of-living allowances in order to put together compensation packages for expatriates and business travellers, said the EIU.

Read the full report here.

Picture Source: Source: The Economist Intelligence Unit
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URA revises rules for property developers

In a bid to promote accountability and protect the interests of home buyers, the Urban Redevelopment Authority (URA) recently revised the criteria for issuing sales licences for home builders, reported The Straits Times.

First, the minimum paid-up capital or deposit for those applying for a licence, has been raised from $1 million to between $1 million and $4 million, depending on the project’s size.

Those intending to build and sell a housing project with up to 50 units must have a paid-up capital of $1 million, $2 million for developments with 51 to 200 units, $3 million for projects with 201 to 400 units, and $4 million for larger developments.

Second, developers can no longer cite non-residential projects in the track record, to be submitted as part of their sales licence application, as commercial and industrial projects differ from residential developments.

According to Nicholas Mak, Head of Research and Consultancy at SLP International, this would prevent some smaller players in the industrial sector from venturing into the housing market.

Third, the number of units that a developer can be allowed to build will depend on the size of the completed developments specified in the track record.

If a company has completed fewer than 10 units, it can only obtain a sales licence for a new housing project with less than 50 units. Those who have constructed 11 to 50 units are permitted to build fewer than 200 units. Those with 51 to 100 units under their portfolio are eligible for developments with less than 400 units, while firms that have built over 100 units have no restrictions.

This new rule will safeguard buyers from developers who want to launch many units, but don’t necessarily have the experience, said Augustine Tan, President of the Real Estate Developers’ Association of Singapore (REDAS).

Finally, for developers applying for a sales licence based on the track record of their companies, at least one of its directors involved in the previous project must remain in his or her position.

“Developers can always disappear from Singapore after taking profit… But if they have a couple of people who are qualified directors, these people would hopefully behave more responsibly and can be held accountable,” noted Ku Swee Yong, Chief Executive, Century 21.

The changes will apply to all new licence applications received from 1 April 2016 onwards.

Picture Source: Construction in Singapore.
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More Singaporeans now living in condos: survey

More Singaporeans now own their own homes, according to results of the latest General Household Survey released by the Department of Statistics (Singstat) on Wednesday (9 March).

In 2015, homeownership among resident households reached 90.8 percent, up from 87.2 percent in 2010. Chinese households recorded the highest rate of homeownership at 93.1 percent, followed by Malay (86.9 percent) and Indian (84.1 percent) households.

Around 80.1 percent of households in Singapore lived in HDB flats last year, down from 82.4 percent in 2010. Four-room flats remain the most common property type, with 32 percent of households residing in them, followed by five-room and executive flats (24.1 percent), and three-room flats (18.2 percent).

The proportion of households who live in condominiums and other apartments also rose to 13.9 percent last year from 11.5 percent in 2010, while the percentage of those who stay in landed properties dipped from 5.7 percent to 5.6 percent.

Meanwhile, there were more singles among younger age groups. Between 2010 and 2015, the proportion of singles among residents aged 25 to 29 increased from 54 percent to 63 percent for females, and from 74.6 percent to 80.2 percent for males. For those aged 30 and above, the figures remain unchanged.

There were also more households with elderly members. The proportion of households with at least one resident aged 65 and above rose from 24.1 percent in 2010 to 29.1 percent last year.

Meanwhile, Singapore’s resident population reached 3.9 million in June 2015, comprising 3.38 million citizens and 0.53 million permanent residents (PRs).

The survey was conducted from May to July 2015. Of the 33,000 housing units selected for the initial sample, 27,804 households responded, translating to an overall response rate of 87.4 percent.

Read the full report here.

Picture Source: Apartment blocks in Singapore.
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PropNex bucks trend with $200m in commissions

Despite Singapore’s sluggish property market, PropNex Realty saw gross commissions soar to a record high of $200 million in 2015, while transaction volume surpassed 40,000 for the first time.

In a statement, the real estate agency said its strong financial results were achieved against a backdrop of rising interest rates, softer economic growth, falling prices and transaction volumes, oversupply worries and higher vacancy rates.

Developers also face hefty extension charges for unsold units, while the exodus of property agents continues. During the latest license-renewal period with the Council for Estate Agencies (CEA), the number of registered agents and real estate agencies fell by eight percent and four percent respectively from 2014’s numbers. Only 1,299 new agents joined the industry in 2015, versus 3,006 in the previous year.

In recent years, PropNex, which has a stable of over 6,000 agents, has been appointed as the marketing agency for more than 40 local projects.

Of these, there are still around 7,500 unsold units, which the company plans to help clear, including private condos, executive condominiums (ECs), landed homes, as well as commercial and industrial properties.

Meanwhile, PropNex has proposed a number of tweaks to the government’s property cooling measures. These include easing the loan-to-value (LTV) limits, reducing the Additional Buyer’s Stamp Duty (ABSD) for local and foreign buyers, and raising the mortgage servicing ratio (MSR) for EC buyers to 45 percent, from the current 30 percent.

These recommendations are based on feedback and observations gathered from its 200,000-plus transactions since 2009.

PropNex believes that now is a good time to calibrate some of the cooling measures, as home prices have become more affordable, non-performing loans were at just 0.4 percent as at Q3 2015, and there is looming oversupply.

Speculative activity has also lessened, with quarterly sub-sales at just three to four percent of last year’s total volume. Furthermore, foreign demand has declined, with expatriates accounting for just eight percent of the overall volume in 2015, down from about 18 percent in 2011.

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Prime properties now more affordable: JLL

Prime residential property in Singapore is significantly more affordable now than in the rest of the world’s best cities, according to the latest JLL report.

“Singapore ranks amongst the top global cities, together with London, New York, Paris, Tokyo and Hong Kong. Forbes named Singapore the fourth most visited city globally. Mercer ranks Singapore the top city in Asia for quality of living and the fourth most expensive city in the world for expatriates,” said Regina Lim, JLL Singapore’s National Director for Advisory and Research for Capital Markets.

Still, prime home prices here are considerably lower than those in the aforementioned markets. Prices in Hong Kong are now 165 percent higher than Singapore, while prices in New York and London were higher by 80 to 90 percent in 2015, compared to a price advantage of just 10 to 30 percent in 2010.

Lim noted that the prices of prime residential properties here fell 20 percent from their peak in 2011 by 20 percent to S$1,991 psf in Q4 2015.

Among all the asset classes in Singapore, this segment has corrected the most in the last four years. On the other hand, office, retail and industrial property prices have fallen by just four to six percent, while prices of suburban homes have dropped by 12 percent.

On real terms, prime home prices here were also more affordable in 2015 than they were in 2003. Although last year’s prices were 70 percent higher than those recorded around 13 years ago, the median household income in Singapore has risen by 90 percent since then. Based on JLL’s estimates, prices are now equivalent to 5.6 years of income, versus 5.9 years in 2003.

In addition, the consultancy expects rents for such homes to rise after 2016 due to their limited supply, despite the existing the property cooling measures and sluggish transaction levels on the prime residential market.

There is also room for more growth, as rents are currently 40 percent below 2008’s levels and just eight percent above 2000’s levels. In contrast, Singapore’s median household income has risen 100 percent in the last 16 years.

Looking ahead, JLL believes there will be more opportunities to buy prime residential units in wholesale terms.

“For prime residential units completed in 2012, several developers have transferred unsold units to 100 percent Singapore-owned entities, or sold them in bulk at lower prices in 2014 to 2015. This further suppressed prices in a challenging market. We think developers could seek to sell around 1,000 units in bulk from 2016 to 2018 if the market does not improve expediently,” Lim added.

Picture Source: Singapore’s prime residential property is now more affordable than in other top global cities. (Photo: Erwin Soo, Wikimedia Commons)
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S’pore named best city for young professionals

Singapore was named the world’s best city for young people, in terms of employment and entrepreneurship opportunities, according to a study conducted by The Economist Intelligence Unit and commissioned by the Citi Foundation, reported The Guardian.

Based on the Accelerating Pathways Youth Economic Strategy (YES) Index 2015, the city-state took the top spot in the rankings, considering factors like employment growth, availability of quality jobs and the ease of starting a new business.

“There does not appear to be any discrimination against young people, and the working environment is safe (in Singapore),” said the report.

The Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP) also works together with employers, unions and the government to create awareness and facilitate the adoption of fair employment practices for all.

“However, the cost of living in Singapore is high, and the youth cited this as a top concern in a 2014 poll conducted in the city (Mass Media Research survey).” Furthermore, over 60 percent of the youth surveyed have considered moving abroad to realise their employment and education objectives.

Meanwhile, Toronto was ranked second in the same category, followed by Hong Kong, Miami, and Chicago. Taipei landed in sixth place, with New York, Beijing, Kuala Lumpur and London trailing behind.

The YES Index assessed the economic environment for the youth in 35 cities across the world by measuring the drivers and enablers that can improve their economic situation. The research was conducted between January 2015 and May 2015.

Read the full report here.

Picture Source: A new study has named Singapore the top city worldwide for young professionals. (Photo: Bahnfrend, Wikimedia Commons)
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15 May 2016

NParks seeks design ideas for Jurong Lake Gardens

Singapore’s National Parks Board (NParks) is inviting consultancies to take part in the concept design plan for Jurong Lake Gardens (JLG) Central and East.

A key requirement is that the ideas must integrate well with the design guidelines for JLG West and the surrounding area.

JLG West is the new name for Jurong Lake Park. JLG Central consists of the Chinese and Japanese Gardens, while JLG East comprises a five-metre wide promenade fronting the new Science Centre and the northern part of Jurong Lake.

The Science Centre will be relocated next to the Chinese Garden MRT station, and will come with green roofs and landscape terraces.

The entire development must complement the existing Jurong Gateway area, the commercial hub of Jurong Lake District. The design must also incorporate green features, through the use of water and energy efficient practices, and recycled and renewable materials.

Another consideration for the appointed consultant will be to take into account the suggestions gathered by NParks in May 2015.

“Common suggestions included preserving the tranquillity of the area, retaining existing nature and biodiversity hotspots, provision of ample basic amenities, accessibility for elderly and the handicapped, affordable food and beverage options, and careful traffic planning to mitigate potential road congestion,” said the agency.

Interested consultants must submit their proposals by 25 April. Five firms will be selected for the second and final stage of the tender in June, with the winner to be announced at the end of this year.

Construction of JLG West will commence in April and is expected to be finished by 2018, while JLG Central and East will be progressively completed from 2020 onwards.

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HK home sales plunge 70% from last year

The number of residential transactions in Hong Kong plunged by 70 percent on an annual basis last month, as buyers shunned the housing market amidst falling prices and economic uncertainty, reported Bloomberg.

According to government data, only 1,807 units were sold in February compared to 2,045 in the previous month. This is a far cry from the 6,027 transactions recorded during the same period last year.

“The newspapers keep on saying the market is going down and buyers think they can get a cheaper house half-a-year later or one year later, and so are waiting,” said Centaline Property Agency salesperson Thomas Fok, who hasn’t sold a single unit at the city’s upscale Mid-levels West district this year.

In addition, home prices fell 10 percent from their September peak due to worries over China’s slowing economy and the plan by Hong Kong authorities to raise the supply of residential units in the next five years. Local officials also reiterated that the existing property cooling measures will remain in place.

As such, BOCOM International Holdings’ analyst Alfred Lau believes that home prices in the city could fall by 30 percent in 2016.

Given this challenging environment, Sun Hung Kai Properties slashed its sales target in Hong Kong by 18 percent to HK$27 billion for the whole of 2016. Sales by New World Development also plunged 79 percent during the first half of its financial year to HK$2.8 billion, which is just 28 percent of its full-year target.

Despite the challenging situation, some developers still see opportunities in Hong Kong. For instance, Goldin Financial Holdings’ Chairman Pan Sutong feels that prices of luxury homes will remain resilient, especially for those located in areas with limited supply.

Earlier this month, his company submitted the winning bid of HK$6.38 billion for a land parcel in the posh neighbourhood of Ho Man Tin, where a subway station is being built.

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Ascott to open serviced apartment in one-north

Serviced residence owner-operator The Ascott Limited has secured a serviced apartment at one-north business park through a lease awarded by JTC Corporation. The 50-unit property is currently operating and will be rebranded to Citadines Fusionopolis Singapore from 1 April 2016.

“With its choice location within the Fusionopolis, and its spacious loft apartments that appeal to expatriates on long stay, we are confident that Citadines Fusionopolis Singapore will further strengthen Ascott’s business in Singapore,” said Anthony Khoo, Ascott’s Head of Singapore Cluster.

The units feature high ceilings, separate living and dining areas, a kitchen and bedroom. The serviced residence is located within the 30ha Fusionopolis precinct of one-north business park, Singapore’s R&D hub that is home to over 400 companies.

It is also close to Star Vista shopping mall, National University Hospital, Singapore Polytechnic, and the one-north MRT station.

Following the opening of Citadines Fusionopolis, the 220-unit Ascott Orchard Singapore is expected to welcome guests in early-2017.

Situated within the Orchard Road shopping belt, the prime serviced residence is within proximity to the Orchard and Somerset MRT stations. It will be directly linked to Paragon shopping mall via a covered link-bridge and forms part of CapitaLand’s latest integrated development.

With the opening of Citadines Fusionopolis and Ascott Orchard, the company will have more than 1,000 units in Singapore, making it one of the largest serviced residence operators here, shared Khoo.

He added that the city-state is one of Ascott’s best performing markets after China, France and the UK. Its local properties have been achieving strong occupancy of above 80 percent.

Picture Source: Citadines Fusionopolis Singapore. (Photo: JTC)
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Johor to become an economic powerhouse

With four ongoing large-scale projects, Malaysia’s Johor state is set to become the next economic powerhouse in the country behind Klang Valley, reported The Star Online.

These mega developments comprise the multibillion-ringgit Forest City, the oil and gas facilities in Pengerang, the double-tracking project between Gemas and Johor Bahru, and the Kuala Lumpur-Singapore high-speed rail (HSR).

“All these projects, together with good planning not just coming from Putrajaya but at the district as well as grassroots levels, I am sure that Johor’s future is bright despite the uncertain global economy,” said Malaysia’s Prime Minister Najib Razak.

In fact, the state attracted RM31.1 billion in investments in the manufacturing sector last year, which accounted for 41.6 percent of the country’s total investments, based on data from the Malaysian Investment Development Authority (MIDA).

“Johor is an important state for the government. And I do believe that the state is in good hands and its aspirations to become a new economic powerhouse will soon become a reality,” he noted.

Najib also expressed his optimism that Johor’s Iskandar Malaysia will continue to flourish as it has attracted over RM200 billion in investments since its creation in 2006.

He said this after unveiling the Johor Strategic Economic Growth Plan (PPSJ) and Iskandar Malaysia Comprehensive Development Plan ii (CDPii) at Educity’s Indoor Stadium on Sunday (6 March).

Under the PPSJ, all 10 districts in Johor will have the chance to receive investments by showcasing their unique products to a larger market, ensuring that all areas will benefit from the state’s economic growth.

Picture Source: View of Johor Bahru.
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Johor’s Forest City given duty-free status

Forest City in Johor is set to become a duty-free zone, announced Malaysia’s Prime Minister Najib Razak at the project’s opening ceremony today (6 March), which was also attended by Johor’s Sultan Ibrahim Sultan Iskandar.

Other packages unveiled include corporate tax incentives for qualified companies, or companies with Iskandar Development Region (IDR) status involved in the tourism, education and healthcare sectors.

Being a green development, there will also be corporate tax incentives for green developers and green development managers, and a waiver on company equity restrictions for foreign investors to claim these incentives.

Comprising four man-made islands in the Johor Strait, near the Tuas Second Link, the S$58.3 billion Forest City township is being developed by Country Garden Pacificview (CGPV), jointly owned by Chinese property giant Country Garden Holdings and Johor’s Esplanade Danga 88.

In his opening remarks, Datuk Md Othman Yusof, Executive Director of CGPV, said: “This is a historic occasion not only for Country Garden, but also Malaysia, and most importantly for Iskandar and (the) local people. We are confident that Forest City will immensely benefit our local economy, creating jobs and new business opportunities for all.”

By 2035, Forest City is expected to create 220,000 jobs for Malaysians in the finance and e-commerce sectors.

Agreements have already been signed with global partners including Shattuck St. Mary’s School and UIW/Christus, the fourth largest medical group in the US, to collaborate on international schooling and to provide residents with world-class medical services.

In addition, a duty-free shopping mall will be ready by the end of this year at Fisherman’s Wharf on Island 1, the first phase of Forest City. There will also be a five-star boutique hotel.

Meanwhile, the condominium units and high-rise coastal residences on Island 1 have already been launched for sale in Singapore, China and Malaysia. Unit sizes range from 753 sq ft to 1,862 sq ft, with prices averaging around RM1,200 psf (S$400 psf).

Forest City is Country Garden’s largest real estate project outside China. The group currently has more than 300 projects globally.

Picture Source: Artist’s impression of Forest City.
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Residential land prices down 5.8% in 2015

The price of land sites in Singapore for prime residential and office projects did not change in the second half of 2015, according to Knight Frank’s latest Prime Asia Development Land Index.

But for the entire year, residential land prices in the city-state fell by 5.8 percent, while office prices grew by six percent.

“The soft demand in the housing and office rental markets as a result of both domestic and external economic challenges coincided with strong supply pipelines to weaken the demand for land,” said Knight Frank.

“Firms in Singapore continued to face challenges from economic restructuring in the face of weak demand, while home buyers’ confidence was hurt by the prospect of rising interest rates and volatility in financial markets.” The residential cooling measures were also a factor in curbing demand, added the consultancy.

The most recent prime development land transaction in Singapore was the sale of a site at Alexandra View to Tang Skyline for $376.9 million in November, which is expected to yield about 400 homes.

Meanwhile, prices of residential sites in Asia rose by three percent in H2 2015, up from 1.2 percent in the previous six months. Tokyo and Phnom Penh led the region, with prices shooting up by 14.8 percent and 26.2 percent respectively for the year.

Knight Frank’s index tracks land prices in 13 major cities across Asia.

Picture Source: A land parcel in Singapore. (Photo: Nikki De Guzman) – Knight Frank
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07 May 2016

Strong Indonesian interest for Cairnhill Nine

A significant number of condo units have been reserved at the 268-unit Cairnhill Nine development in the Orchard area, after its developer CapitaLand held a VIP preview in Jakarta on 20 to 21 February, reported The Business Times.

Potential buyers deposited cheques to secure the units they were interested in, but they may still cancel their bookings.

According to Tata Goeyardi of Religare Capital Markets, Indonesians were attracted to the luxury condominium’s direct linkage to Paragon shopping mall, which features a medical centre on top. The project is also close to Mount Elizabeth Orchard hospital.

The apartments are also spacious, with sizes ranging from 592 sq ft for one-bedders to 2,013 sq ft for four-bedders.

Another selling point is the competitive pricing. Average prices range from $2,400 psf to $2,500 psf, and large units could go for as low as $2,200 psf. In comparison, prime freehold properties within the vicinity are selling for $2,600 psf to $2,700 psf on average.

Although this is a 99-year leasehold development, Indonesians were not put off by its tenure, unlike Singaporeans who mainly favour freehold properties, said Goeyardi.

“What surprised us is the willingness of Indonesians to purchase, even with the 15 percent Additional Buyer’s Stamp Duty (ABSD) for foreigners. This has created a new hope for the residential market in Singapore.”

According to a spokesperson for CapitaLand, Cairnhill Nine will be officially launched on 12 March, and the developer plans to hold another round of viewings by appointment this weekend.

If it’s unable to sell all the units by 31 March, it intends to market the project in other Indonesian cities like Surabaya, and even in Hong Kong.

Picture Source: Artist’s impression of CapitaLand’s latest development at Cairnhill.
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Singapore developers buoyed by Chinese demand

Amidst the lacklustre residential market in Singapore, the earnings of local developers have been boosted by strong sales in China’s largest cities, reported Nikkei Asian Review.

For instance, CapitaLand’s revenue surged by 21.3 percent year-on-year to US$3.41 billion (S$4.73 billion), driven by robust residential transactions in China. Despite the country’s softer economy, sales increased two-fold to US$2.36 billion (S$3.27 billion).

City Developments Limited (CDL), another major developer, has also reaped rewards for venturing into key Chinese cities.

For the 2015 financial year, CDL China sold 13 villas in Shanghai and nearly 700 units in Suzhou, with total sales amounting to 1.6 billion yuan (S$340.74 million). The company’s net profit inched up 0.5 percent last year to S$773.3 million.

“There have been signs of improvement, with increased buying activity in certain cities such as Shanghai and Suzhou after the government lifted several cooling measures and relaxed loan restrictions in 2015,” CDL said in a statement.

While the Chinese economy is not as vibrant as before, home builders have profited by focusing on first-tier cities, like Beijing and Shanghai, which are seeing higher growth than the rest of the country.

According to Joe Zhou, JLL’s Research Head for China, “residential sales volumes across 20 major cities in China shot up by 28 percent in 2015. Prices in Tier 1.5 and 2 cities are also gaining momentum”, but third- and fourth-tier cities are still saddled with excess supply.

The Chinese prefer to invest in first-tier cities as the quality of the properties there are generally superior to those found in other urban areas. Also, there’s limited investment opportunities in the country, explained David Ji, Knight Frank’s Head of Research and Consultancy for Greater China.

Chinese cities are categorised into tiers based on their population, gross domestic product and other factors.

Picture Source: Artist’s impression of Lotus Mansion, a residential development by CapitaLand in Shanghai.
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No respite from mounting extension charges for developers

Property developers forked out $24.9 million in extension fees last year for failing to dispose of all the residential units in their developments within the mandated period, reported The Straits Times.

While this is lower than the $29.98 million recorded in 2014, a recent report from Swiss bank Credit Suisse forecasts that extension charges could rise significantly this year.

Based on Qualifying Certificate (QC) rules, overseas developers are required to offload all the units in their private residential projects within two years of receiving the Temporary Occupation Permit (TOP). Otherwise, they must pay extension charges pro-rated to the percentage of remaining units.

The Additional Buyer’s Stamp Duty (ABSD) rules, implemented in December 2011, also stipulate that developers need to build, complete and sell all units within five years of buying the land. If there are any unsold units, they would be penalised with a 10 percent levy, which was subsequently increased to 15 percent for land plots purchased from 12 January 2013.

According to estimates from Credit Suisse, the total QC and ABSD charges could soar to $226 million in 2016 and $1.3 billion next year.

In particular, the jointly developed Nouvel 18 by CDL and Wing Tai could take the biggest hit this year, with charges amounting to $38.2 million if all of its 156 units remain unsold. This is followed by $15.2 million for China Sonangol’s TwentyOne Angullia Park near Orchard Road, and $14.6 million for Wing Tai’s Le Nouvel Ardmore at Ardmore Park.

However, experts feel that the figures reported by Credit Suisse could drop as they only cover unsold units as of 31 December 2015.

“The QC fees estimate is based on the assumption that developers do not sell any more units. That’s unlikely. As they continue to move units, the fees payable will drop.” Likewise for the ABSD charges, said Ku Swee Yong, CEO of Century 21 Singapore.

Wong Xian Yang, OrangeTee’s Senior Manager for Research and Consultancy, reckons that developers with more unsold units may pursue other means of selling their projects instead of just reducing prices. They may consider bulk sales, which is being done for iLiv@Grange.

Property firm Heeton Holdings has been seeking a buyer to purchase the 30-unit condominium. If it fails to secure a deal by October 2016, it will have to pay its second QC extension.

Picture Source: Luxury apartments in the Orchard area. (Photo: Cheryl Marie Tay)
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New overseas projects launching in Singapore

Two new overseas properties are set to launch in the city-state this weekend (5 to 6 March). Homegrown developer TA Corporation will unveil its first large-scale project in Phnom Penh, while Chengdu Galencia will showcase Chelsea Residences, the first one in Singapore from a mainland Chinese developer.

TA Corp’s twin tower project, called The Gateway, was officially launched last Sunday (28 Feb) in Cambodia’s capital.

It consists of a 36-storey tower with 299 strata-titled office units and a 39-storey apartment block with 572 residences, which sits on top of a retail podium. The residential component features one- to three-bedroom apartments with sizes ranging from 560 sq ft to 1,184 sq ft.

Indicative prices start from US$247,000 (S$346,467) for the office units and US$152,300 (S$213,631) for the residential units.

The Gateway also promises 12 percent returns on apartment rentals and 16 percent for the offices.

“We are of the view that Cambodia’s property market exhibits the right fundamentals for growth: a robust GDP supported by foreign investments translating into rising demand for office space; and rising affluence of Cambodia’s young middle class translating into demand for quality residences,” said TA Corp’s Executive Director and CEO Neo Tiam Boon.

Currently, about 30 percent of the residential apartments and 40 percent of the office units have been sold or reserved. Aside from Singapore, the project will also be marketed elsewhere in Asia, including Taiwan and China.

Meanwhile, Chengdu Galencia said the launch of Chelsea Residences was timely as there are growing Singaporean (private and institutional) interests in China.

Located within the heart of Chengdu’s High-Tech Park, the development will be operated like a serviced apartment, and comprises 430 high-end fitted units. Prospective buyers have the choice of one- to two-bedroom units, from 947 sq ft to 1,453 sq ft. Prices start from RMB1,653 psf (S$352 psf).

Chelsea Residences forms part of the developer’s integrated development known as “Chinese Financial Centre”. With a gross development value of more than RMB4 billion (approx. S$1 billion), it consists of four towers, a five-story commercial centre, and four levels of underground parking spaces.

It is within proximity to a subway station, the offices of 300 Fortune 500 companies, and over 2,000 foreign SMEs.

The Gateway’s launch will be held at the Hilton Singapore Hotel, while the exhibition for Chelsea Residences takes place at Raffles City Convention Centre Level 3.

Chelsea Residences is slated to be completed in December 2017, while The Gateway is expected to be ready in 2019.

Picture Source: Artist’s impression of The Gateway in Phnom Penh, Cambodia.
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Wandervale’s prices start from $655,000 for a 3-bedder

Sim Lian Group has released prices for the 534-unit Wandervale executive condominium (EC) in Choa Chu Kang, the first major property launch this year.

In a statement, the group said prices start from $655,000 for a three-bedroom unit, $753,000 for a three-bedroom premium unit, and $896,000 for a four-bedroom unit. The project has an average price of $755 psf.

“Wandervale is competitively priced against other ECs in the market,” said Sim Lian. The EC units range in size from 958 sq ft to 1,249 sq ft, across nine residential blocks.

Located near Choa Chu Kang MRT station, Wandervale was more than 40 percent oversubscribed, receiving a total of 783 e-applications over 11 days.

The showflat at Choa Chu Kang Avenue 3 saw more than 5,000 visitors during the e-application period, which ended on 28 February.

According to Sim Lian, potential buyers were mainly attracted to the location, spacious units and overall design of the project.

The balloting and sales booking exercise for the EC starts on 5 March at the showflat.

The 99-year leasehold project is expected to receive its TOP by 2019.

Picture Source: The showflat at Wandervale. (Photo: Yasmin Beevi)
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$1 million buys you 452 sq ft in Singapore

For US$1 million (S$1.4 million), you can purchase 452 sq ft of prime real estate in Singapore (or a small studio apartment), making it the world’s seventh most expensive place to buy luxury property, noted findings from Knight Frank’s Wealth Report 2016.

The city-state fell two places from last year’s report due to property price declines. According to the firm’s Prime International Residential Index, luxury prices here dropped by 2.1 percent in 2015. This year, Knight Frank expects prices to slide further by 3.3 percent.

“Singapore luxury property prices have dropped for several years now. The reasons for the fall are still in place – overall slowing economy, volatile financial markets, rising rates, and government cooling measures,” said Tay Kah Poh, Executive Director and Head of Residential for Knight Frank Singapore.

In the report, Singapore was named the number two Asian city, behind Hong Kong, with the most number of super-rich individuals. In 2015, there were 2,360 ultra-high net worth individuals (UHNWIs) living here, with this figure expected to grow by 48 percent over the next 10 years.

Alice Tan, Research Head at Knight Frank Singapore, said “a conducive business environment, clear regulatory framework and a progressive ecosystem of financial and business services have augmented its status amongst the wealthy as a preferred location to live and do business in Asia”.

Despite the various measures put in place to curb excessive investment by foreign buyers, property investment remains a favoured asset allocation among the super-rich. In fact, 79 percent of those surveyed would invest in Singapore and UK homes.

The report also found that the three main concerns among UHNWIs in Singapore are succession / inheritance issues, the global economic situation, and stock market volatility.

The report polled 400 private bankers, including 30 from Singapore.

Picture Source: Aerial view of luxury apartments in Keppel Bay, Singapore.
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79% of young couples will consider a smart home: survey

Around 79 percent of young couples in Singapore will consider living in an executive condominium (EC) enabled with smart technologies, according to results from an online survey carried out earlier this year by Qingjian Realty.

The study polled 100 respondents between 20 to 40 years old, to measure their attitudes towards smart living.

Among those surveyed, 63 percent said they are willing to pay $30,000 to $40,000 to furnish their home with smart technologies, including security features, electronics and appliances.

Convenience, energy efficiency and safety were listed among the top smart home features that would appeal to them. Other features that respondents would like to see are smart lighting, smart air-conditioning and smart security.

“We are working on translating this idea of a model futuristic home into one where a home is fitted with smart technologies that are available and practical for people in Singapore,” said Li Jun, General Manager, Qingjian.

“The inputs from these young couples have further enhanced our understanding of potential homeowners’ views.”

The survey was conducted amid plans by Qingjian to launch Singapore’s first Smart EC, The Visionaire in Sembawang in April.

Several new private condominiums launching this year are also adopting smart home technologies. For instance, The Wisteria condo in Yishun, which launches in March, will have features that allow homeowners to remotely control door access and air-conditioning via a smart device.

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20% of HDB loan applicants asked for larger loans

There were about 200,000 qualified applications for an HDB Loan Eligibility (HLE) letter from 2012 to 2015, revealed National Development Minister Lawrence Wong during a parliamentary session on Tuesday (1 March), reported Channel NewsAsia.

Flat buyers need to request for an HLE letter before they can obtain an HDB concessionary housing loan for their flat purchase.

Of this figure, 20 percent, or 40,000 of those who applied for the letter, appealed for a higher mortgage. Most did so to increase their housing options without stating an exact loan amount. Mr Wong was responding to a query from Non-Constituency MP Leon Perera.

“Over one in three of such appeals were successful,” he said in a written reply. The rest were not granted as the applicants could not prove that they have the resources to repay the larger loan.

“As a flat purchase is a long-term financial commitment, it would not be prudent for potential home buyers to take on additional financial burdens that they are unable to sustain,” he added.

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Completed condo prices up 0.1%

Prices of completed condominiums edged up by 0.1 percent in January 2016 compared to the previous month, according to latest flash estimates of the NUS Singapore Residential Price Index (SRPI).

Based on the Index, prices of completed units in the central region (districts 1 to 4 and 9 to 11) dipped by 0.5 percent, while those in the non-central region rose by 0.5 percent. As for small units measuring up to 506 sq ft, prices climbed by 0.6 percent.

In comparison, the revised index for December 2015 shows that prices in all three segments fell on a month-on-month basis. Values in the central region fell by 0.8 percent, those in the non-central region posted a smaller decline of 0.6 percent, while prices of small units decreased by 0.3 percent. Consequently, prices across the island slid by 0.6 percent.

Notably, the revised index for December is based on the previous Basket 7, which covers a total of 78,877 units across 429 private non-landed developments in 26 postal districts completed from October 2003 to December 2013.

On the other hand, the flash estimates for January were derived from the current Basket 8, which covers a total of 111,811 units across 574 residential projects completed between October 2003 and September 2015.

According to a statement from the NUS Institute of Real Estate Studies (IRES), Basket 8 includes newer projects with better quality amenities compared to the previous basket. It also tracks 7,120 small units versus 3,092 units for Basket 7.

The usage of the new basket took effect on Monday (29 Feb), and the composition will be adjusted every two years.

Picture Source: Condominiums in Singapore.
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Yangon looks to rebound in 2016

According to latest research from JLL, Yangon’s budding real estate market is expected to show moderate growth in 2016 as it recovers from the uncertainty of last year, reported The Nation.

The market cooled in 2015 as foreign investors waited to see the results of November’s historic elections. This caused office rents to fall while residential sales came to a standstill.

Andrew Gulbrandson, Research Head at JLL Thailand, is responsible for coordinating much of the firm’s consultancy work in Myanmar. He said this year will likely bring about stabilization in the overall market, and added that demand could soon pick up while new launches are expected to slow down after sharp growth.

“Though many challenges remain, we believe the outlook for this dynamic landscape in 2016 to be positive,” Gulbrandson explained. “So far, the formation of the new government has been smooth, easing concerns over the post-election political uncertainty. Ongoing ambiguity over the structure of the new government that has built up a legislative backlog affecting a number of regulations should be eliminated when the new government is formed.”

Many business activities in Myanmar were put on hold due to these concerns, but they are now expected to get back on track. This will likely help improve demand in Yangon’s real estate market. The city has been seeing a high level of real estate activity in recent years as military rule decreased and the process of liberalization started to take shape. However, ongoing uncertainty caused rents to drop last year.

“In addition, a more cautious approach that investors and developers have taken should lead to a decline in future project launches, allowing the existing supply to be gradually absorbed,” said Gulbrandson.

Picture Source: Aerial view of Yangon city. Photo: Flickr
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Govt cuts development charges amid soft market

UPDATED: The development charge (DC) rates paid by developers to enhance a site or build bigger projects on them were trimmed by the Ministry of National Development (MND) for the period of 1 March to 31 August 2016.

The review is carried out on a half-yearly basis, with consultation from the Chief Valuer, said the MND.

Desmond Sim, Research Head at CBRE, said the consultancy is unsurprised by the downward revision in rates.

“This is on the back of a softening real estate market, both on the commercial occupier end and a general weakness on the residential front, due to the cooling measures.”

The DC rates for the industrial sector fell the most by an average of three percent. The largest decline of 16 percent was seen in areas such as Jurong West, Tuas and Lim Chu Kang.

The commercial and non-landed residential sectors also saw corrections in their DC rates, by an average of two percent and one percent respectively.

For the residential sector, the largest decrease of four percent applies to a number of areas including Bukit Timah, River Valley Road and Sentosa.

“Any further corrections in future revision of DC rates could encourage owners to intensify use and unlock the potential of the land,” added Sim.

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5-room Bidadari flats more than 75 times oversubscribed by 2nd timers

As of 5pm on Monday (29 Feb), the 236 five-room and 3Gen flats at Alkaff Oasis in Bidadari have emerged as the most popular units in the February Build-To-Order (BTO) exercise, with an application rate of 7.6 for first-time buyers and 75.6 for second-time buyers, according to the HDB.

An application rate of 75.6 means that for every one flat available, there are over 75 applicants vying for the unit.

In mature estates such as Bidadari, up to 95 percent of the supply of three- to five-room flats are set aside for first-timers, while five percent are reserved for second-timers.

So far, there are a total of 2,537 applicants for the five-room and 3Gen flats. The 71 3Gen flats at Alkaff Oasis are specially designed for multi-generation families, said the HDB.

The project’s four-room flats also attracted keen interest, with 4,018 buyers applying for the 800 units on offer, which translates to an application rate of five times.

Mohamed Ismail, CEO of PropNex Realty, had earlier predicted that despite the higher prices, larger flats at Bidadari would be much sought-after due to its central location.

Excluding grants, prices start from $440,000 for the four-room, $546,000 for the five-room and $553,000 for the 3Gen flats.

Eligible first-time buyers of the four-room flats will enjoy up to $55,000 in housing grants, and up to $10,000 for the five-room and 3Gen flats.

Situated at the junction of Bidadari Park Drive and Alkaff Crescent in Toa Payoh, Alkaff Oasis consists of 16 residential blocks with sky terraces and roof gardens. To encourage a ‘green’ lifestyle, the project will have several eco-friendly features, including motion sensor-controlled energy-efficient lighting at staircases, and regenerative lifts to reduce energy consumption.

In its first BTO exercise of 2016, the Housing Board launched 4,170 flats for sale last Wednesday (24 Feb).

Spread across three projects in the estates of Bukit Batok, Sengkang and Bidadari, they make up the first crop of 18,000 flats that will be launched this year, the HDB said.

Interested applicants have until midnight of 1 March 2016 to apply for the flats, and can do so on the HDB InfoWEB.

They are advised to apply for a BTO flat in the non-mature estates of Bukit Batok and Sengkang to increase their chances of securing units.

About 4,070 new flats will be offered in the next BTO exercise in May, noted the HDB.

Picture Source: Artist’s impression of the Alkaff Oasis BTO project in Bidadari. Source: HDB
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Wandervale EC more than 40% oversubscribed

The application period for the Wandervale executive condominium (EC) closed on Sunday (28 Feb) after receiving 750 e-applications, said its developer Sim Lian Group.

This means that the 534-unit project is more than 40 percent oversubscribed. OrangeTee and ERA are the marketing agents for the 99-year leasehold EC.

Priced at approximately $750 psf to $770 psf on average, the Wandervale showflat at Choa Chu Kang Avenue 3 has attracted more than 5,000 visitors since e-applications started on 18 February.

The first major launch this year, the EC features 130 three-bedroom, 322 three-bedroom premium, and 82 four-bedroom units, ranging from 958 sq ft to 1,249 sq ft, across nine residential blocks.

The larger three-bedroom premium and four-bedroom units were more popular amongst potential buyers, said the developer, adding that the location, spacious units and overall design were the main reasons they chose the project.

“There was a balanced mix of first-time and second-time home buyers, primarily HDB upgraders, at the showflat,” noted Sim Lian.

Wandervale is within proximity to the Choa Chu Kang MRT station and bus interchange, Bukit Panjang MRT station on the newly opened Downtown Line 2 (DTL2), Lot One Shoppers’ Mall, and South View Primary School. The project is expected to receive its TOP by 2019.

Wandervale will open for sales booking on 5 March 2016.

Singapore-listed Sim Lian Group has launched 23 developments to date, including three projects in Malaysia.

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Median household income on the rise

Singapore’s median monthly household income from work rose to $8,666 in 2015 from $8,292 in the previous year, revealed data published by the Department of Statistics (SingStat) on Friday (26 Feb).

This represents a rise of 4.5 percent in nominal terms. With inflation taken into account, this translates to a gain of 4.9 percent in real terms, according to the agency’s annual Key Household Income Trends survey.

In comparison, the median monthly household income from work climbed 3.8 percent per annum in real terms from 2010 to 2015, resulting in a cumulative gain of 20.4 percent.

Household income from work includes employer CPF contributions.

“Taking household size into account, median household income from work per member recorded a 5.0 percent nominal growth or a 5.4 percent real growth in 2015,” said SingStat. This occurred amidst a tight labour market and higher employer CPF contribution rates.

“From 2010 to 2015, the annual growth in real median household income per household member was lower at 3.6 percent.”

Workers with the lowest salaries saw the largest growth due to ongoing government initiatives to boost their wages. Those at the bottom 10 percent of the income bracket saw their income soar by 10.7 percent, followed by 8.3 percent for those in the second lowest decile.

The third highest increase of 7.2 percent was posted by the top 10 percent of households and the 21st to 30th percentile group. For the remaining percentile groups, the income growth ranged from 5.7 percent to 6.7 percent.

Households, including those with no working person, also received $3,985 per member on average from various government schemes in 2015 compared to $3,515 in the year before.

Furthermore, there has been virtually no change in the Gini coefficient, a measure of income inequality, over the past three years. It was 0.463 in 2015, 0.464 in 2014 and 0.463 in 2013. After adjusting for government aid and taxes, the Gini coefficient in 2015 fell from 0.463 to 0.410. A lower figure suggests there is more equal distribution of income.

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Tanah Merah site awarded

The Urban Redevelopment Authority (URA) on Friday (26 Feb) awarded the tender for a residential site at New Upper Changi Road/Bedok South Avenue 3 (Parcel B) to CEL Residential Development, a subsidiary of Chip Eng Seng Corporation.

Launched for sale on 20 January, the property developer had offered the highest bid of $419.38 million for the 2.4ha site. This translates to about $761 psf on the gross floor area.

The tender for the land parcel closed last Tuesday (23 Feb) after attracting eight bids.

Located within an established private housing estate, the site is close to Tanah Merah MRT station, Changi Business Park and the Singapore University of Technology and Design.

The 99-year leasehold site is expected to yield about 570 condominium units, said the URA.

Picture Source: Map of the Tanah Merah residential site. Source: URA
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30 April 2016

5 tips when navigating Singapore’s property market in 2016

The Singapore property market faces a lacklustre year ahead as the various cooling measures, interest rate hikes and more unsold units continue to put pressure on rentals, while developers are faced with hefty extension fines.

According to fourth quarter data from the Urban Redevelopment Authority (URA), prices of condominiums in the Rest of Central Region (RCR) declined the most by 0.3 percent, followed by those in the Core Central Region (CCR) by 0.2 percent.

Meanwhile, the Outside Central Region (OCR) remains unaffected.

The government has so far made no indications on whether it will remove the cooling measures, which include the Additional Buyer’s Stamp Duty (ABSD), Seller’s Stamp Duty (SSD) and Total Debt Servicing Ratio (TDSR), which have had a significant impact on local and foreign property investors.

As a result, developers may have to pay $238 million for unsold units this year, up from the $90 million incurred in 2015.

Since 2014, the Real Estate Developers’ Association of Singapore (Redas) has been calling on the government to lift the cooling measures which have severely impacted sales of new units.

According to the URA, as of the fourth quarter, 23,271 private housing units remain unsold out of the total supply of 55,638 units.

Including executive condominiums (ECs), the total supply in the pipeline is 67,765 units.

Of this, 6,744 EC units remain unsold.

So what does this mean for you as a consumer? We give you the lowdown.

​Tip 1: Good time for prospective tenants to look for rental bargains

According to the URA, the stock of completed private residential units (excluding ECs) increased by 5,299 units in the fourth quarter.

Meanwhile, the vacancy rate rose to 8.1 percent in the same period, up from the 7.8 percent in the third quarter.

Figures from the URA show that rental declines were observed across all segments of the private residential market.

The rental market is currently facing three challenges – the tightening of foreign worker quotas and expatriates looking to secure employment passes (EPs), restrictions on the granting of permanent residencies (PRs), and an oversupply of private units.

With landlords outnumbering rental seekers, tenants are calling the shots in an already weak rental market.

Condominiums located in the OCR experienced the steepest decline of 1.8 percent, followed by the RCR and CCR at 1.6 percent and 0.4 percent respectively.

For tenants, this is an opportune time to dictate their terms and conditions and to negotiate for better prices amid the slowdown.

Tip 2: It’s a buyers’ market – bargain hunt for prime properties

New launches and take-up rates remained weak in the fourth quarter with fewer units launched.

According to the URA, 1,333 condominium units were launched in Q4 compared to the 2,435 units in the previous quarter.

Take-up rates also fell sharply, with 1,603 units sold in the fourth quarter compared to the 2,410 units in the previous quarter.

In view of the large supply coming onstream, sellers must be realistic in their asking prices and may have to sell at a loss, especially for those who had purchased properties in prime areas.

For buyers, this presents a good time to start their property hunt in the secondary market.

Tip 3: Buyers/tenants spoilt for choice in the HDB market

In November 2015, the HDB launched 12,000 new flats to meet the housing needs of Singaporeans.

This has taken some pressure off from the resale market as many buyers opt to buy directly from the HDB as it is significantly cheaper.

Still, transactions in the resale HDB market increased by two percent in the fourth quarter to 4,992 transactions, up from 4,893 transactions previously.

For the whole of 2015, the number of resale transactions reached 19,306 units. This was an increase of 11.5 percent compared to 2014.

Woodlands recorded the lowest median quantum price for three-room resale flat transactions at $273,000, while the central area (Queenstown, Redhill and Tanjong Pagar) recorded a median price of $425,000.

Moving forward, the HDB plans to launch four Build-To-Order (BTO) exercises in 2016 that will bring the total supply to about 18,000 flats. The February BTO exercise saw 4,170 flats offered in Bidadari, Bukit Batok and Sengkang.

This presents good news for buyers as they will be spoilt for choice with significant cost savings when they buy directly from the HDB, inclusive of the various grants that they could be eligible for.

For buyers who cannot wait, this means they will be able to purchase their flats at a good price from the resale market.

Tenants will rule the HDB market in 2016.

Tip 4: HDB sellers must be more realistic in their asking prices

The public housing market recorded an increase in the Resale Price Index (RPI) in the last three months of 2015, up 0.1 percent from 134.6 points in the quarter before.

In comparison, the RPI registered a decline of 0.3 percent in the previous quarter.

For sellers, the new supply coming onstream in 2016 on top of the BTO launches announced by the HDB means they need to be more realistic in their asking prices.

Buyers are now spoilt for choice and will have the upper hand.

Tip 5: HDB landlords – be prepared to drop asking prices

Landlords will need to drop their asking prices in view of the higher number of units coming onstream this year.

As mentioned, the HDB plans to launch four BTO exercises in 2016 that will bring the total supply to about 18,000 flats.

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UOL reports 43% profit drop, no condo launches in 2016

Singapore-listed UOL Group, a major player in the local property market, reported a 43 percent slump in net profit to $391.4 million for the 2015 financial year.

In a statement released on Friday (26 Feb), the group blamed the profit fall on lower fair value gains for its investment properties, as well as the absence of a large one-time profit made from the sale of a land site in Malaysia in 2014.

UOL also incurred losses of $22 million, mainly from impairment charges for a hotel in Tianjin and a mixed-use development in London.

Despite the depressed market conditions in Singapore, group revenue was up 12 percent to $1.28 billion. Specifically, revenue from property development, the group’s largest revenue generator, rose 27 percent to $557.5 million, mainly from local residential projects.

About 850 housing units in Singapore were sold last year by UOL, with a sales value of more than $900 million. In 2015, it launched two condominiums – Botanique at Bartley and Principal Garden in Prince Charles Crescent, which have sold over 70 percent and 21 percent of their units at an average price of $1,286 psf and $1,601 psf respectively. No new launches are being planned for 2016.

Under its pipeline for residential projects is a 99-year leasehold site in Clementi Avenue 1 which could yield over 500 condo units. As this is expected to be the tallest Prefabricated Pre-finished Volumetric Construction (PPVC) building in the world, UOL is adopting a conservative approach and plans to launch it next year.

Meanwhile, revenue from property investments grew 11 percent to $219.4 million for the fiscal year.

“(The) Singapore residential market remained challenging in 2015 amid an economic slowdown and the dampening effects of the government’s cooling measures. Despite this, our property development and investment business performed credibly,” said UOL Deputy Group CEO Liam Wee Sin.

“We expect market conditions to remain subdued in 2016 and will continue to build recurrent income from rentals of offices and shopping malls, and from our hospitality business,” he added.

The group’s directors have proposed a first and final dividend of 15 cents per share.

Picture Source: Artist’s impression of Botanique at Bartley. Source: UOL Group
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Riverbank @ Fernvale – an unbeatable choice

Special Advertising Feature

A convenient location coupled with a slew of outstanding facilities, UOL Group Limited’s residential project Riverbank @ Fernvale is hitting all the right notes with home buyers and investors alike.

These days, when it comes to purchasing a new property for investment or as a residential home, there’s little doubt that home buyers are pretty much spoilt for choice. There’s plenty of new project launches available in the market, with each development offering a list of impressive features catering to various needs, tastes and budgets. However, if the criteria for your ideal home includes exclusivity, proximity to nature, close walking distance to a slew of conveniences, coupled with impressive recreational facilities, look no further than Riverbank @ Fernvale in Sengkang.

Strategically located at Sengkang West Way, the 555-unit development comprises a good mix of one- to five-bedroom units ranging from 495 sq ft to 1,389 sq ft. To date, the one-, two-, as well as five-bedroom units have all been sold out, and only a limited number of three- and four-bedroom units are left. For those who require a bigger space to stay, they can opt for the three- or four-bedroom units, which range from 947 sq ft to 1,238 sq ft. And for those who are buying to invest, they can choose the three-bedroom dual-key units, which range from 990 sq ft to 1,044 sq ft.

Regardless of which unit buyers pick, they can be assured that every unit housed within the development not only features a chic and stylish interior design, but has also been outfitted with top-of-the-line fittings and functional appliances.

Raising the bar on outdoor facilities

Long gone are the days of enticing home buyers solely with location, views or the usual trappings of tennis courts, Jacuzzis, steam rooms, and state-of-the-art gymnasiums. In a bid to attract more buyers amid softer market conditions, developers are upping their game – some have introduced new types of facilities in their projects, while others are offering interest-based classes, and UOL is no exception.

Besides the requisite pools, playgrounds and BBQ pits, Riverbank @ Fernvale also features a unique bicycle sharing facility – the first-of-its-kind in condominium developments in Singapore, with UOL supplying 50 bicycles to be shared by the condominium’s residents.

Residents, especially nature lovers and outdoor enthusiasts, will be pleased to know that they can book the bicycles for free, and enjoy rides to a slew of nature spots including Lorong Halus Wetland, Punggol Park, Riverside Park Connector, My Waterway@Punggol, Pulau Ubin, and Coney Island – all of which are easily accessible from the development.

Seamless connectivity

Whether by public transportation or by car, those living at Riverbank @ Fernvale will get to enjoy more options for shorter and more comfortable journeys between Sengkang and the rest of Singapore as the area is well served by major roads and expressways, including the Central Expressway (CTE), Seletar Expressway (SLE), Tampines Expressway (TPE), and the newly unveiled Seletar Aerospace Flyover. For those who rely on public transportation, they will appreciate that Sengkang MRT station, as well as the Layar and Oasis LRT stations, are all within walking distance from the development. Residents can also use the bicycles to commute to the nearby MRT or LRT station.

Endless amenities at your doorstep

For families with school-going children, they will definitely appreciate the convenience of the development’s location, with top institutions like Nan Chiu Primary and Nan Chiau High School situated in the vicinity. In addition, the development is close to various shopping malls and eateries, such as Seletar Mall, Compass Point, Rivervale Mall, Waterway Point and Jalan Kayu.

It’s easy to see why Sengkang is fast becoming one of the more sought after housing estates in the north-eastern part of Singapore – more young families are choosing to settle down there as the area not only features a well-connected public transport network and a slew of amenities, but it is also located close to several nature spots.

That is not all, as new residents can look forward to even more amenities in future, such as the upcoming Safra Punggol (slated to be ready by April 2016), new childcare centres in approximately 1,000 places (by mid 2016), and The Oval @ Seletar Aerospace Park (SAP). Comprising a cluster of 32 black and white colonial bungalows that were gazetted for conservation under the Urban Redevelopment Authority (URA) Master Plan 2014, The Oval @ SAP will be used for an array of lifestyle businesses, including restaurants. Families with young children will also be drawn to this place as the development will include a slew of lifestyle facilities such as a playground, a boardwalk that fronts the runway, an open lawn, picnic tables, and an open hard court – perfect for family outings and events.

Strong investment potential

The position of Riverbank @ Fernvale is further strengthened by its close proximity to nearby industrial clusters such as Woodlands Regional Centre, Seletar Regional Centre and the upcoming Seletar Aerospace Park.

Seletar Aerospace Park, which is envisioned to be a world-class dedicated aerospace regional facility, is expected to create about 10,000 jobs upon its projected completion in 2018.

In short, residents of Riverbank @ Fernvale can look forward to a wealth of job opportunities near where they live.

The 99-year leasehold condominium development is expected to get its temporary occupation permit (TOP) at the end of 2016 or early 2017.

Prices start at $905,000 for three-bedders and $1.023 million for four-bedders.

Picture Source: Artist’s impression of the Riverbank @ Fernvale condo. Source: UOL Group
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Oxley launches final phase of London project

Homegrown property developer Oxley Holdings will launch the final phase of its Royal Wharf waterfront township development in London to Singaporean buyers next weekend (12 to 13 March) at Regent Hotel Singapore, following today’s launch in London and Hong Kong.

Dubbed Mariner’s Quarter, the new phase of properties comprises 207 one- to three-bedroom apartments across two buildings.

Prices at Mariner’s Quarter start from £395,000 (S$773,921) for a one-bedder, said the developer.

Commenting, Eric Low See Ching, Executive Director and Deputy CEO of Oxley said: “London offers unparalleled opportunities for development and is a natural choice for Oxley’s first venture overseas. It has all the fundamentals for a sound real estate investment: a resilient, diverse economy and a growing, thriving population.”

The site was purchased by Oxley in November 2013 for £200 million. At the time, Ian Loh, Executive Director & Head of Investment and Capital Markets at Knight Frank, which brokered the sale, said the various rounds of cooling measures in Singapore may have prompted local developers, such as Oxley Holdings, “to eye overseas development opportunities”.

Royal Wharf is at the heart of efforts to revive London’s Royal Docks near the River Thames. Stretching across nearly 40 acres, the development features 3,400 homes, a new school, a shopping street, and spaces for offices, restaurants, cafés and bars.

In 2018, a new Crossrail station will open in the area, reducing the travelling time to Heathrow Airport and the West End.

Royal Wharf was first launched to buyers in London and Singapore in early 2014, attracting strong market response with over 50 percent of the 811 units in phase one being sold on the first day of its launch in each city.

The 999-year leasehold project will be progressively completed from this year.

In addition, Oxley Holdings has a portfolio of 28 local projects and two mixed-use developments in Phnom Penh.

Picture Source: Artist’s impression of Royal Wharf in London.
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Third mixed development in Yishun launched

As a sign of developers’ confidence in the growth potential of Yishun, a new mixed-use development comprising residential and commercial units will be launched on 12 March.

Located at Yishun Ring Road, The Wisteria and Wisteria Mall is the third mixed commercial and residential project to launch in the area since the end of 2013, following Nine Residences and North Park Residences, both of which are also integrated with shopping malls.

Zoned for commercial and residential use, the approximately 105,054 sq ft site was awarded for $185.09 million in January 2015.

Located on levels 4 to 12, The Wisteria condominium comprises three nine-storey towers of 216 one- to four-bedroom apartments, ranging in size from 441 sq ft to 1,173 sq ft.

The residential units will incorporate several smart-home features, enabling homeowners to remotely control door access and air-conditioning via a smart device.

Northern Resi and Northern Retail, wholly-owned companies of NorthernOne Development, are the project’s joint developers. Array Realty, an entity of Keppel Land, is acting as a consultant.

To be launched in phases, the first phase will see 50 percent of the condominiums (108 units) being released to buyers, a spokesperson for Array Realty told PropertyGuru.

“The units will have an initial average price of $1,030 psf to $1,050 psf, inclusive of a five percent early bird discount,” she said.

Sources told PropertyGuru that the project’s average price is around 20 percent lower than North Park Residences, where recent transactions have been in the range of $1,300 psf to $1,400 psf. Units at Nine Residences have gone for an average of $1,100 psf.

A VIP preview of The Wisteria will begin this weekend at the project’s showflat at the junction of Yishun Central and Yishun Avenue 9. “We will have a better gauge of buyers’ interest levels after the VIP preview. As for the actual prices, they will only be released on the day of sales booking,” noted the spokesperson.

In addition, the residential component will adopt the Prefabricated Pre-finished Volumetric Construction (PPVC) method, which helps to speed up construction significantly and minimize dust and noise pollution in the vicinity.

“This is one of the first projects in Singapore to use the prefab method,” the spokesperson said.

According to the Building and Construction Authority (BCA), this is a new construction method that involves modules complete with internal finishes, fixtures and fittings being manufactured in factories, then transported to the site for installation in a Lego-like manner.

Meanwhile, the commercial spaces are about 40 percent leased, the anchor tenants being NTUC Finest and Kopitiam Food Court.

“This is the only commercial project in Yishun South,” said the spokesperson, adding that it will help cater to the growing number of future residents.

The 99-year leasehold project is expected to obtain TOP in end-2018.

Picture Source: Artist’s impression of The Wisteria and Wisteria Mall.
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Govt may ease property measures this year, says CDL’s Kwek

The government may ease some of its property cooling measures this year in light of the sizeable upcoming supply, according to comments made by Kwek Leng Beng, Executive Chairman of City Developments Limited (CDL), and reported by Bloomberg and TODAYonline.

“Developers hope that the government presses the button sooner than later,” he said after announcing the company’s latest financial results on Thursday (25 Feb).

“I would think that they would do something this year. That’s my speculation, especially this year, when you have a lot of mid-end and low-end homes coming up. I suspect it will be the abolishing the Additional Buyer’s Stamp Duty (ABSD).” Another existing measure is the Total Debt Servicing Ratio (TDSR) framework.

The TDSR limits mortgage repayments to 60 percent of a borrower’s monthly income, while ABSD are stamp duties that individuals have to pay based on their residency status and the number of properties owned. The ABSD rules also impose a fine of 10 to 15 percent of the land cost if developers fail to build, complete and dispose all units within five years of acquiring the land.

With the aforementioned curbs and heftier real estate taxes, the government has been able to bring down the high cost of housing.

In Q4 2015, prices of private homes fell by 8.4 percent from their peak in Q3 2013, while the number of transactions plummeted by around 50 percent from three years ago.

However, the overall drop in home prices following nine straight quarters of declines is still short of the over 60 percent surge seen in the aftermath of the 2008 Global Financial Crisis.

On Wednesday, National Development Minister Lawrence Wong said it wasn’t the right time to relax the cooling measures.

Looking ahead, Kwek believes that prices of mid- and low-end homes could fall further this year, while weakness in the high-end segment will likely persist.

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S’pore still top city for Asian expats, but haze worries persist

Singapore has been named as the best place to live in for Asian expatriates for the 17th consecutive year, taking the number one spot globally, according to the latest rankings published by human resources consultancy ECA International.

The city-state scored highly in several categories, like housing, personal security as well as diversity in culture and language, said Lee Quane, ECA’s Regional Director for Asia.

“Solid infrastructure, decent medical facilities, low crime rates and health risks have contributed to Singapore maintaining its position at the top of the global ranking for quality of living for Asian assignees.”

However, a number of factors could drag down Singapore’s position in the rankings in future, namely health risks and air pollution.

“Singapore’s proximity to Indonesia means that the haze is a very clear and present danger here,” he noted. Given its location, the city-state is also at risk from tropical diseases endemic to this region.

Meanwhile, Adelaide, Sydney and Osaka are tied in second place. Brisbane and Wellington shared fifth spot while Nagoya and Perth are tied in seventh place. Completing the top ten are Canberra and Tokyo, while Hong Kong has moved up to 28th place in the global rankings.

Globally, the hardest locations to adapt to living and working in are the Afghan locations of Kandahar (275th) and Lashkar Gah (276th).

Updated annually, ECA’s study assesses the overall quality of living in over 460 locations worldwide based on a variety of factors. These include climate, availability of health services, housing and utilities, access to a social network and leisure facilities, infrastructure, personal safety, political tensions, as well as air quality.

Picture Source: Someformofhuman/Wikimedia Commons
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Borey Penghuoth sweeps inaugural Cambodia Property Awards

The inaugural Cambodia Property Awards were held last night at Sofitel Phnom Penh Phokeethra, where leading property players around the world were recognised at a black-tie gala dinner and awards ceremony.

The Phonm Penh-based Borey Penghuoth Group was the night’s biggest nominee and winner with five awards, coming out tops in all the categories in which it had been nominated. Its awards included Best Developer (Cambodia) and Best Residential Development (Cambodia, category Grand Star Platinum).

The group also won received Special Recognition in Corporate Social Responsibility, thanks to its modern housing development initiatives for Cambodians, especially in the aftermath of the civil wars that have ravaged the country.

Other notable nominees were Olympia City Development Co Ltd, which received a total of three nominations and won the Best Mixed-Use Development award for Olympia City, and Urbanland Asia Investment Co Ltd, which won the Best Condo Development (Central Phnom Penh) award for Embassy Residences.

Around 300 industry leaders and VIPs were in attendance, including the Secretary of the State Ministry of Land Management, Urbanisation and Construction, His Excellency Dr. Pen Sophal, representative of His Excellency Senior Minister Im Chhun Lim, who delivered the keynote speech.

Associate director of CBRE Cambodia Simon Griffiths, who led the judging panel, said the awards have set a precedent for developers to continue enriching the local property market with high-quality commercial and residential developments.

“What will become a more exciting time for Cambodia is when the developers really start to differentiate within sectors — and that has yet to come in most sectors — so there are definitely more exciting times ahead,” he said.

The winners and highly commended were selected by an independent panel of judges of top experts from all segments of the industry, after a six-month nomination and judging process overseen by BDO, one of the world’s largest accounting firms.

The Real Estate Personality of the Year award went to property and e-commerce entrepreneur Rithy Sear, chairman of Worldbridge Land. Unlike the other awards, which were chosen by the judging panel, this one was selected by the editors of Property Report.

The Best of the Best winners will competing in the grand finals of the South East Asia Property Awards 2016 in Singapore this November, alongside their peers from seven ASEAN markets.

Congratulating the winners and highly commended, Terry Blackburn, founder of the Asia Property Awards and publisher of Property Report, presenter of the awards, said, “After over 10 years of organising the Asia Property Awards, tonight’s event represents a milestone — the awards are now part of PropertyGuru, Southeast Asia’s leading real estate media group.

“Cambodia now joins the other leading economies of ASEAN in hosting its own awards programme. We are grateful to all the developers, sponsors and partners who have participated this year, and we look forward to a bigger awards gala in 2017.”

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Ho Bee suffers $34.7m impairment loss from Sentosa condo stake

Ho Bee Land, a leading developer of luxury homes in Sentosa Cove, revealed on Thursday (25 Feb) that the group has suffered an impairment loss of $34.7 million due to its 35 percent interest in the Cape Royale development in Sentosa.

The Singapore-listed firm also reported a 23 percent slump in full-year net profit to $242.2 million from 2014.

In a statement, Ho Bee attributed the profit fall to a lower gain in fair value investment properties which amounted to $186.4 million, down from $281.7 million in the year before.

However, group turnover for 2015 rose 30 percent to $129.9 million, due to stronger recurring income from its portfolio of commercial properties in Singapore and London. This includes The Metropolis in the one-north precinct in Singapore and six developments in London.

Meanwhile, earnings per share for the year was 36.3 cents, as compared to 47.2 cents previously.

“Operating conditions in 2015 have been very challenging. Despite this, our robust business model built over the last few years with a strong recurring income stream has enabled us to deliver a set of sound financial results,” said Chairman and Group CEO Chua Thian Poh.

“To reward shareholders, we will be proposing a special dividend of two cents per share, in addition to a first and final dividend of five cents per share.

“The group foresees a more challenging year ahead. However, with The Metropolis at full occupancy and the rental income from the six commercial properties in London, the group will have substantial recurring income to face the headwinds. Moreover in FY2016, we expect profit contribution from the completion of development projects in Australia and China,” he added.

Picture Source: Cape Royale condominium in Sentosa Cove. (Photo: Jacklee/Wikimedia Commons)
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URA launches site in Sembawang

A residential site at Jalan Kandis in Sembawang was launched for sale by public tender this morning (25 Feb) by the Urban Redevelopment Authority (URA).

Released under the confirmed list of the first half 2016 Government Land Sales (GLS) Programme, the 75,851 sq ft plot has a gross floor area of 106,197 sq ft. Offered on a 99-year lease, the site could yield about 110 low-rise condo units.

Located within an established residential area, the site is next to Sembawang Park, and within proximity to established schools and the Sun Plaza shopping mall.

Earlier reports had indicated that developers’ bids for this site are likely to be much lower than other prime sites closer to the city. The nearby Brownstone executive condominium (EC) site at Canberra Drive was awarded to CDL for $226 million in January 2014.

The tender for the land parcel at Jalan Kandis will close on 7 April 2016, said the URA.

Picture Source: Map of the residential site at Jalan Kandis in Sembawang. Source: URA
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21 April 2016

ECs offer good profits: report

While demand for executive condominiums (ECs) have slowed down since 2014, data from the Urban Redevelopment Authority (URA) shows that this property type is generally a profitable investment in the long run, with prices catching up with private condos, according to an OrangeTee report.

In 2012 and 2013, 14 of the 16 new EC projects sold at least 33 percent of their units during the first month of launch. But in 2014 and 2015, only one of the 11 developments managed to do this due to the tougher property cooling measures, such as the 30 percent Mortgage Servicing Ratio (MSR) and the resale levy for second-time buyers.

Nevertheless, prices of EC units are almost on par with that of private condos after being fully privatised, based on historical data.

Notably, ECs can only be sold in the open market after the buyer has completed the minimum occupation period (MOP) of five years. After 10 years, it becomes fully privatised and can be sold to foreigners.

“Based on an analysis on a basket of comparable ECs and condos, the average price gap between new condominiums and ECs starts at around 20 percent or more. Upon fulfilment of MOP and at privatisation, the discount narrows to nine percent and five percent respectively,” said the report.

By matching caveats, OrangeTee also estimated the percentage profits of EC buyers at the end of the five-year MOP and after 10 years. Currently, there are 21 EC developments in Singapore that have been privatised.

“The results show that not all ECs are ‘sure win’ investments at MOP. Out of 21 projects, 13 projects made a loss after MOP completion, and the remaining eight projects managed gains of over 20 percent,” noted the report.

“Market timing was the main differentiating factor between the ‘losers’ and ‘winners’. The 13 projects that sold at a loss at MOP were launched during 1996 to 1999, just before the Asian Financial Crisis, when property prices were at their peaks. Projects which were launched during 2001 to 2005 – a period of sluggish growth, managed to achieve returns of at least 25 percent. These projects benefited from the subsequent upturn of the Singapore property market.”

After privatisation, all the EC projects were profitable. The top three earners – Nuovo, The Dew and Bishan Loft – recorded gains of 120 percent, 123 percent and 166 percent respectively. These three achieved better returns due to their locational attributes and surrounding available supply.

On the other hand, Windermere, Chestervale and Pinevale posted the lowest gains of two percent, five percent and 10 percent respectively. These three EC projects struggled to achieve substantial profits as they were launched when prices were at their peak.

Picture Source: View of the Bishan Loft executive condominium.
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Foreign buyers of UK property face overwhelming tax challenge: expert

Many property agents and developers marketing prime London homes in Singapore like to espouse the benefits of investing in the British capital, such as its global-city appeal, prospects for capital appreciation amid a housing shortage, and the British pound’s weakness in recent years, but very few investors here are aware of the increasing complexity of the UK’s taxation system.

Steven Knight, Chairman of Gibraltar-based Castle Trust Group, a financial services firm, told PropertyGuru that Singaporean buyers face an “overwhelming challenge with new taxes being introduced gradually, cancelling out the advantages that non-UK residents had in the past”.

For instance, they will have to pay £3,500 a year in annual tax on enveloped dwellings (Ated) for properties bought for at least £500,000 from April this year. First introduced in 2013, the previous payment threshold started at £2 million, but was expanded last year to include residential properties owned by foreigners worth more than £1 million, said Knight, adding that the amount of tax payable increases with the property’s price.

The Ated aims to deter foreign buyers from avoiding stamp duty and inheritance tax by holding properties through corporate entities, which many have been doing.

From April 2017, non-UK residents and offshore companies owning UK homes will also be subject to UK Inheritance Tax, currently at 40 percent on death, which Knight called “a big wake up call for Singaporean and other Asian buyers”.

Other recent changes also mean that capital gains are now subject to tax.

“I have noticed a large number of overseas buyers who have not been filing their tax returns, which results in fines and penalties for unpaid taxes, while interest continues to accrue on the unpaid balance,” warned Knight.

“Planning can reduce exposure to taxes, in some cases entirely, but it needs careful consideration.”

He revealed that the group offers a range of structures to help overseas nationals with properties in London address these tax issues, one of which is an international pension plan. How it works is an international tax advisor would review the tax exposure of the client and come up with an independent report on how best to proceed, and whether such a plan is needed, said Knight.

“A lot of foreign pensions are tax-free. In Asia, foreign pensions are not taxed and are compliant with HRMC (Her Majesty’s Revenue and Customs). The more expensive a property, the more urgent the need for planning.”

Other structures available include a dual trust arrangement, multi-generational wealth planning and insurance coverage.

Citing data from the UK Land Registry, Knight stated that buyers with Singaporean addresses are the second most prolific buyers of prime London properties, after those with local addresses.

Picture Source: Apartment buildings in London.
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HDB launches 4,170 new flats

UPDATED: In the first Build-To-Order (BTO) exercise of 2016, the Housing and Development Board (HDB) launched 4,170 new flats for sale on Wednesday (24 Feb).

Spread across three projects located in the non-mature estates of Bukit Batok and Sengkang, and the mature estate of Bidadari, they make up the first batch of 18,000 flats that will be launched this year, the HDB said in a statement.

According to Mohamed Ismail, CEO of PropNex Realty, this is “about 20 percent more than the 15,100 units which were launched last year”.

A range of 2-room Flexi to five-room and 3Gen flats are being offered, with prices ranging from $85,000 for a 2-room Flexi flat at West Plains @ Bukit Batok to $553,000 for a 3Gen flat at Alkaff Oasis in Bidadari (Toa Payoh), excluding grants.

The 2-room Flexi flats were first launched in the September 2015 BTO exercise. This scheme replaced the previous 2-room and studio apartment schemes, and allows elderly buyers to opt for shorter leases.

Meanwhile, eligible first-time buyers of new flats enjoy up to $80,000 in housing grants, comprising up to $40,000 in Special CPF Housing Grants and up to $40,000 in Additional CPF Housing Grants. With these grants, buyers of 2-room Flexi flats pay as little as $4,000, said the HDB.

It added that applicants are advised to apply for a BTO flat in non-mature estates to increase their chances of securing a unit.

“We foresee flats in Bidadari to be more popular; the higher prices might not deter buyers due to its central location – especially the larger four- and five-room flats. Such larger flats are likely to see application rates of about five times. But the overall application rate for the Bidadari BTO project will be about four times. As for Sengkang and Bukit Batok, we predict the application rate to be about two to three times,” noted Ismail.

Applications can be submitted online on the HDB InfoWEB from today to 1 March 2016.

The next BTO exercise will take place in May, with around 4,070 new flats in Ang Mo Kio, Bedok, Bukit Merah, Bukit Panjang and Sembawang being offered for sale. In addition, 5,000 balance flats will be released in a concurrent Sale of Balance Flats (SBF) exercise.

Picture Source: Artist’s impression of the Anchorvale Plains BTO project in Sengkang. Source: HDB
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Australia is the favourite among S’porean property investors

Australia, the UK and Japan have emerged as the top three destinations for Singaporeans looking to invest in overseas property, according to a survey commissioned by property investment firm IP Global.

Australia topped the list with 32 percent of respondents saying they would consider investing there. This was followed by the UK (16 percent) and Japan (13 percent).

These countries are considered favourable for investment due to their political stability, strong rule of law and ease of access. “Property prices in these countries have also been rising, making them an attractive destination for investors looking at medium to long term capital gains,” said Alex Bellingham, Director of IP Global.

For instance, the Australian cities of Melbourne and Canberra recorded the highest annual house price growth in six years during Q4 2015. In the UK, the average residential price increased by 7.7 percent year-on-year in November 2015, with prices in London up 9.8 percent, according to the Office of National Statistics. As for Japan, prices of condos have soared by over 20 percent since 2013, based on data from Japan Macro Advisors.

Moreover, the strengthening of the Singapore dollar against other currencies has been a key factor for many investors seeking out overseas assets, noted Bellingham. Over the past 12 months, it has strengthened against the Australian Dollar, British Pound and the Japanese Yen, making it more affordable for Singaporean investors to purchase properties in these countries.

The Singapore dollar has risen by nearly 30 percent versus the Australian Dollar and more than 14 percent against the Japanese Yen since the start of 2013. It has been rising steadily against the British Pound, gaining eight percent in just the past five months.

The online survey, which was carried out from 12 to 20 January 2016, involved 1,041 respondents from Singapore.

Picture Source: Melbourne’s city skyline.
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S’pore still top for safety, quality of life in Asia

Singapore has retained its position as the safest Asian city and for offering the best quality of life within the region for expatriates, according to Mercer’s 18th Annual Quality of Living Survey, which ranked 230 cities worldwide.

Globally, the city-state remained in 26th spot for quality of living, beating out its Japanese rivals Tokyo (44th), Kobe (46th), Yokohama (49th) and Osaka (58th).

Singapore also surpassed other Southeast Asian cities like Kuala Lumpur (86th), Bangkok (129th), Manila (136th) and Jakarta (142th), as well as Chinese cities such as Hong Kong (70th), Taipei (84th), Shanghai (101th) and Beijing (118th).

Meanwhile, the top five cities with the best living standards are Vienna, Zurich, Auckland, Munich and Vancouver. On the other hand, Khartoum in Sudan, Haiti’s Port-au-Prince, Sana’a in Yemen, the Central African Republic’s Bangul and Baghdad landed in the bottom five on the list.

The data was largely analysed between September and November 2015.

According to Mercer, a global human resources consulting firm, personnel safety is a key factor in determining expats’ quality of life. Ensuring that workers of multinational firms are safe is also an essential part of talent retention and recruitment strategies of these companies.

“Managing safety and health issues is of utmost importance, especially for employees who relocate with a family,” said Slagin Parakatil, Principal at Mercer, who is also responsible for the quality-of-living research.

“Other elements that add to safety costs in the host location are obtaining suitable and well secured accommodations; having an in-house comprehensive expatriate security programme and providing access to reputable professional evacuation services and medical support firms, and finally, providing security training and guarded office premises,” he added.

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Top bid of $419.4m for Tanah Merah site

The tender for a 2.4ha residential site at New Upper Changi Road/Bedok South Avenue 3 (Parcel B) closed on Tuesday (23 Feb), after attracting eight bids from property developers, revealed the Urban Redevelopment Authority (URA).

Launched for sale on 20 January this year, the site was originally on the reserve list of the Government Land Sales (GLS) Programme. The URA had, on 7 January, accepted a successful application for the site to be triggered for sale.

The highest bid of $419.38 million was submitted by CEL Residential Development, a subsidiary of Chip Eng Seng Corporation. This translates to around $761 psf on the gross floor area.

Offered on a 99-year lease, the land parcel could yield about 570 housing units.

“The plot benefits from its proximity to the Tanah Merah MRT station in a relatively mature and established estate,” said Desmond Sim, CBRE Research Head, Singapore and South East Asia.

“That the site was triggered from the reserve list indicates developers still maintain healthy interest in sites, especially in sites with a relatively palatable quantum and with time on their side. Some developers are diversifying their risk by entering joint ventures, which some of the bidders have done in this tender,” he added.

A number of condominium developments such as Stratford Court, East Meadows, Casa Merah, Optima@Tanah Merah, and the upcoming The Glades are located in the vicinity.

A decision on the award of the tender will be made after the bids have been evaluated, said the URA.

Picture Source: Map of the Tanah Merah residential site. Source: URA
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Singapore homes seriously unaffordable: report

Singapore’s market cooling measures have been effective in reducing the prices of HDB flats and private homes over the past few years, but housing costs here are still seen as too high, revealed findings published by a global report last month.

According to the 12th Annual Demographia International Housing Affordability Survey, Singapore has a “seriously unaffordable” rating of 5.0, no change from last year’s survey.

The report used the median multiple indicator, which is the median house price divided by gross annual median household income, to rate housing affordability across 367 cities in nine countries.

A grade of 3.0 and below is considered affordable, 3.1 to 4.0 (moderately unaffordable), 4.1 to 5.0 (seriously unaffordable) and 5.1 and over (severely unaffordable).

Despite being seen as expensive, the report noted that “Singapore has been far more successful in controlling housing affordability than in markets that have followed the British urban containment model”.

Specifically, the HDB was recognized for ramping up the supply of new flats and reducing new home prices.

“One strategy has been to increase what are effectively “across the board” subsidies for all new houses (not counting special grants, such as for first home buyers).

“Should the present policy continue, it is likely that resale house prices will rise slower or even fall in the future, improving Singapore’s housing affordability,” said Demographia.

Eligible first-time buyers of new HDB flats currently enjoy up to $80,000 in housing grants, comprising up to $40,000 in Special CPF Housing Grants and up to $40,000 in Additional CPF Housing Grants.

Meanwhile, Hong Kong has the least affordable housing in the world, with a median multiple of 19.0. This rating is also the highest recorded in the 12 years of the Demographia Survey.

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CapitaLand to launch integrated project in Orchard

UPDATED: CapitaLand will launch an integrated development consisting of residential apartments and serviced residences in the Orchard Road district to the public next month.

At 122 metres tall, it is set to become one of the tallest buildings in the area, and will be directly linked to Paragon via a covered link-bridge.

Located at Cairnhill Road, the 30-storey Cairnhill Nine is the first condominium to launch in the Orchard area in the last three years, and features 268 one, two and four-bedroom apartments and penthouses.

Unit sizes range from 591 sq ft to 3,864 sq ft, with prices starting from $1.35 million for a one-bedder, $2.49 million for a two-bedder, and $3.68 million for a four-bedder. The project’s average price of around $2,500 psf was benchmarked against neighbouring projects.

“Cairnhill Nine is targeted at young professionals, families and foreign buyers who enjoy living amidst the buzz of Singapore’s world-renowned shopping belt,” said Wen Khai Meng, CEO of CapitaLand Singapore.

“We have identified the profiles and lifestyle choices of potential buyers after conducting extensive research on the preferences of those seeking homes in the heart of Orchard Road.”

Last weekend, the property developer held a roadshow in Jakarta targeting Indonesians, as the Orchard area has traditionally been popular with this group of buyers, shared Wen.

Aside from premium finishings, quality fittings and built-in storage systems, the units will also incorporate smart home technologies.

“We will provide our home buyers a smart home starter kit which allows them to remotely control Internet-of-Things (IOT)-enabled home devices such as the air-conditioning system, digital lock with biometric access, and security camera,” noted Wen.

The 99-year leasehold project is close to the Orchard and Somerset MRT stations, as well as shopping malls, established schools and medical facilities. It is expected to be completed at the end of this year.

A VIP preview of Cairnhill Nine will be held at the project’s showflat at Indus Road this Saturday (27 Feb), while viewings by appointment will start next weekend.

Adjoined to Cairnhill Nine is the 20-storey Ascott Orchard Singapore. The serviced residence will feature 220 luxury apartments ranging from studios to two-bedroom units and penthouses. Scheduled to open early next year, the property will offer short- and long-term stays.

CapitaLand’s other integrated development in the vicinity, ION Orchard shopping mall and The Orchard Residences condominium, was completed in phases from 2009. During the launch of the first phase, 98 of the 175 residential units were sold for an average of $3,213 psf.

Picture Source: Artist’s impression of CapitaLand’s latest development at Cairnhill.
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Pound hits 2.5-year low against the Sing dollar

Amidst rising fears that the UK will leave the European Union (EU), the pound sterling dropped to a two-and-a-half year low against the Singapore dollar on Monday (22 Feb), after a prominent politician announced his support for Britain to exit from the 28-nation bloc, reported TODAYonline.

London Mayor Boris Johnson pledged to back the ‘Brexit’ campaign in opposition to Prime Minister David Cameron, who wants the country to remain within the EU.

“The fact that prominent members of the Conservative Party announced they will campaign for Britain to leave the EU likely underscored investors’ concerns that Brexit risks could increase,” said Valentin Marinov, Head of Group-of-10 currency strategy at Credit Agricole.

According to Bloomberg data, the pound fell to S$1.972 early Monday morning – the lowest level since 30 August 2013, when the exchange rate sank to S$1.9702. So far this year, the British currency has dropped by 5.5 percent against the Singapore dollar.

Its exchange rate versus the US dollar also declined to US$1.4067, the weakest since February 2009. This erased the gain made on Friday when Mr Cameron secured a deal on membership terms with EU leaders in Brussels.

Earlier this month, Goldman Sachs projected that the pound may slump to US$1.15 to US$1.20, the lowest levels last witnessed in 1985, if it leaves the EU. On the other hand, the currency may rise to US$1.60 by year-end if the UK remains a member, stated HSBC in a forecast last month.

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Over 400 applications for Wandervale EC

The Wandervale executive condominium (EC) by Sim Lian Group has received more than 400 e-applications since its launch on Thursday (18 Feb), sources told PropertyGuru.

This figure accounts for more than 75 percent of the 534 units at the 99-year leasehold project, which sits on a large land parcel measuring about 205,138 sq ft.

Crowds were seen streaming into the showflat located at Choa Chu Kang Avenue 3 when PropertyGuru visited the site on Sunday afternoon (21 Feb).

The EC consists of 130 three-bedroom, 322 three-bedroom premium, and 82 four-bedroom units, ranging from 958 sq ft to 1,249 sq ft, across nine residential blocks.

Wandervale is within proximity to the Choa Chu Kang MRT station and bus interchange, Bukit Panjang MRT station on the newly opened Downtown Line 2 (DTL2), Lot One Shoppers’ Mall, and South View Primary School. The project is expected to obtain its TOP by 2019.

Jointly marketed by OrangeTee and ERA, the project is priced at approximately $750 psf to $770 psf on average. The actual prices of the units will be released two days before the sales booking, which starts on 5 March.

PropertyGuru understands that the larger three-bedroom premium and four-bedroom units were more popular with buyers.

According to Doris Ong, ERA’s Chief Operating Officer, the response has been better than expected.

“We’ve seen a good level of interest from first-time buyers and HDB upgraders living nearby, as well as those working in this part of Singapore.”

She noted that the spacious layout of the units is a key selling point.

Calvin Fobrogo, a prospective buyer, said he was drawn to the project’s location and price, and was considering upgrading from a five-room HDB flat and moving his family into a four-bedroom unit.

“This EC is near my house and the price is lower than the Sol Acres EC,” noted the 39-year-old engineer.

A recent Credit Suisse report revealed that MCL Land’s Sol Acres project in Choa Chu Kang has sold 28 percent of its 1,327 units at an average price of $800 psf.

Notably, HDB upgraders have to pay a resale levy of up to $50,000 for EC units bought directly from a developer, where the land sale was launched on or after 9 December 2013, when the ruling took effect.

More Singaporean couples are now eligible to buy ECs after the income ceiling cap was raised to $14,000 in August 2015. First-time buyers are also eligible for CPF Housing Grants of up to $30,000.

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15 April 2016

Larger resale condos selling for less than $1m

With the various property cooling measures in effect, buyers are spotting homes in the private resale market for $1 million or less, reported The Straits Times.

And these homes are not all shoebox-size. Some of the bigger units in good locations like Bayshore Road have been going for this amount.

“In 2010 to 2012, $1 million was a sort of standard or expected price to pay, and it was unlikely buyers could get something good for less than that,” said R’ST Research Director Ong Kah Seng.

“Now, opportunistic buyers are referencing it as a ceiling price. They are scouring for properties significantly lower than $1 million. It is still not easy to get these deals, but definitely much easier than before.”

In fact, the proportion of freehold or 999-year leasehold homes resold at this price range climbed to 17 percent from 2014 to this month, from just six percent from 2010 to end-2013.

Aside from the resale market, bargains are also being seen in the auction market, where mortgagee sales are taking place.

Since the start of Q4 2015, units on auction with opening prices of below $1 million included the mortgagee sale of a 790 sq ft apartment in Tiong Bahru and an owner’s sale of a 527 sq ft unit at Dunearn Suites, revealed data from Colliers International.

In 2016, mortgagee sales are expected to be on a stable uptrend, potentially exceeding 270 in number, which is more than what was recorded during the 2008 Global Financial Crisis, noted Grace Ng, Deputy Managing Director at Colliers.

“The rising interest rate will add further strain on borrowers, particularly for those holding multiple properties. However, the numbers are not expected to spike as the employment rate in Singapore remains high, enabling most owners to service their mortgage loans,” she said.

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S’pore property investments up sharply in Q4

Property investment volumes in Singapore’s residential sector rose 14.8 percent to $1.69 billion in Q4 2015 from $1.47 billion in the previous quarter, revealed a Colliers International report.

“The $999.98 million transacted from the sale of three public residential state land parcels helped sustain the overall investment sales value for the residential sector during the final quarter, enabling it to claim its second top spot on the quarter’s sales chart with a market share of 28.4 percent.”

The total value of property investments in Singapore stood at $5.96 billion in Q4 2015, up 39.3 percent from Q4 2014.

In the private residential market, investment sales amounted to $688.83 million in the last three months of 2015. The good class bungalow (GCB) segment led the activity in this sector, with nine GCB transactions worth $160.67 million recorded during the period under review.

“Overall, the transactions involving large landed homes (with each worth above $5 million) contributed 70.1 percent of the $662.75 million accumulated in the private residential sector.”

Colliers noted that the most significant transaction was a two-storey freehold GCB at 61 Dalvey Road. Sold for $26 million, the bungalow is situated on an elevated plot opposite the Israeli Embassy and features five bedrooms and a swimming pool.

Meanwhile, no collective sales were recorded in Q4 2015 as tighter regulations softened end-user demand.

“Collective home sellers, on the other hand, are generally still holding on to their high asking prices. This mismatch in price expectation will likely stall the collective sales market in 2016.”

The consultancy expects public land sales this year to fall below 2015’s level as the government cuts back on public land supply.

“Given that a lower supply of land is available through the Government Land Sales (GLS) programme, the public sector’s contribution to the total investment sales value in 2016 is likely to fall below the $5.27 billion concluded in 2015.”

Picture Source: A good class bungalow in Singapore.
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Landmark launch in Singapore

Landmark Place, the latest UK development, is hoping to attract buyers from Singapore with a property exhibition being held here next weekend (27 to 28 February) at the Four Seasons Hotel, revealed marketing agent Knight Frank.

Located within the prime London city district, the 165-unit development consists of two interconnected buildings, one of nine storeys and the other eleven storeys, which appear to be wrapped in glass. The project gets its name from three landmarks bounding the buildings – the Thames, the Tower of London and Tower Bridge.

A mix of one- to three-bedroom apartments and penthouses are available, with prices ranging from around £650,000 (S$1.3 million) for a one-bedroom suite to £10 million (S$20.14 million) for a penthouse.

Landmark Place is served by the Tower Hill, Fenchurch Street and Cannon Street tube stations, as well as the Thames Clipper commuter and other leisure river services.

Linda Chern, Director, International Project Marketing, Knight Frank Singapore, said: “The UK remains one of the preferred foreign investment destinations for Singapore investors. Within close proximity to amenities, the development (Landmark Place) is easily accessible to the city and the financial district.”

UK property portal Rightmove recently revealed that London home prices rose 5.4 percent month-on-month in February 2016, bringing the average price to £643,843 (S$1.3 million). Prices in inner London climbed almost eight percent to £848,000 (S$1.7 million) during the period.

Picture Source: Artist’s impression of Landmark Place in London. Source: Knight Frank
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Developers call for cooling measures review amid hefty $100m charges

Real Estate Developers’ Association of Singapore (Redas) President Augustine Tan has urged the government to review the property cooling measures as developers face potential charges of $100 million for unsold private residential units, reported TODAYonline.

“The real estate market is reeling from the compounding effects of an oversupply situation, rising vacancy rates, weak demand and increasing interest rates,” said Tan at the association’s Spring Festival Lunch.

“There is therefore an urgent need for action to bring stability and ensure a soft landing to prevent further damage to the fragile economy,” he added, citing turmoil in financial markets, Singapore’s own restructuring journey and weak global growth as risks to the economy.

As at end-2015, there is a supply of more than 60,000 units in the pipeline and a record 25,000 vacant units, noted Tan, who also serves as Far East Organization’s Executive Director for Property Sales.

Aside from the mounting supply, developers also face pressures from measures like the Qualifying Certificate (QC) and Additional Buyer’s Stamp Duty (ABSD).

First introduced in 2011 and revised in 2013, the ABSD is a tax imposed on both developers and individual property buyers.

The amount paid by individuals depends on the number of properties they own and residency status, while developers have to pay 10 to 15 percent of the land cost unless they complete and sell all the units within five years from the date of land acquisition.

Developers with foreign holdings will also have to meet the QC rules, in which they are required to complete the project in five years of acquiring the land and sell all units within the next two years. Those who need more time to meet the requirements can pay extension charges that are pro-rated according to the proportion of unsold units. Land sold on Sentosa Cove and through the Government Land Sales (GLS) Programme do not need QC.

In 2016, Tan estimates that around 700 unsold residential units across 13 developments will be affected by the QC, with charges amounting to almost $100 million.

Moreover, the ABSD remission clawback for projects with unsold units will kick in by end-2016, putting further pressure on prices. He revealed that around 6,000 unsold units in 33 developments will be affected by the ABSD remission clawback in 2017 and 2018.

As a result, several developers have been lobbying for the removal of the ABSD, arguing that the Total Debt Servicing Ratio (TDSR) framework will help ensure that buyers stay prudent with their acquisitions even without the ABSD.

“Since 2009, the successive introduction of the government’s property measures has cooled the market, bringing down transactions and prices. With safeguards in place such as the continuation of the prudent TDSR measures together with the current economic situation, property prices will be kept in check,” said Tan.

“It is therefore timely to consider a calibration of the cooling measures.”

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Too many malls in Singapore?

According to the latest data from the government, Singapore currently has over one hundred shopping malls spread across the island. Just along Orchard Road—the country’s world-famous shopping belt—are at least 40 retail malls, with many standing side-by-side along the 2.2 kilometre shopping boulevard.

For a country known as one of the hottest shopping destinations in Asia, the number of malls currently operating in the Republic might be an indicator of how the retail property market has performed over the years. However, as always, there is a flip side to everything, a common observation among locals and tourists alike is that there are a lot, if not too many malls in Singapore already.

In fact, RHB Research reported in September 2015 that the Republic has 1.08 sqm of retail space per capita. That’s one mall for every 53,000 people.

It also stated that the city-state has the highest level of retail space per capita among ASEAN countries – significantly above Bangkok which has 0.8 sqm per capita, and nearby Kuala Lumpur with 0.71 sqm per capita.

But what does this mean for the local retail market? What are the implications to mall operators, tenants and consumers?

Here, there, everywhere

While almost half of the country’s retail supply can be found in the downtown Orchard area, a number of malls have also started sprouting up outside the shopping enclave in recent years.

As reported previously in Issue 91 of PropertyGuru News & Views, mall decentralisation in Singapore has started to pick up, and the market is seeing more retail malls dominating some areas.

Jurong East, for example, has changed dramatically in recent times. Just in the last five years, Jurong East saw the opening of four shopping malls—JCube (2012), Jem (2013), Westgate (2013) and BIGBOX (2014)—that feature specifications that are typically only seen in those located in Orchard Road.

It can be observed that these malls are situated quite close to, if not side-by-side each other, and just like those in Orchard, allow seamless connectivity to other malls around the area. Specifically, JCube, near Jurong East MRT station, is connected to it via a pedestrian crossing. Just across the station is the 7-storey mall Westgate, which provides a covered link—J-Walk—to Lend Lease’s mixed-use development, Jem.

From Jem, consumers can access Singapore’s warehouse shopping mall, BIGBOX, via a link bridge. Also in Jurong is the outlet mall IMM Building, which provides patrons shuttle services to and from Westgate and JCube, and via a link bridge to the train station.

It is noted that these malls—JCube, Westgate and IMM Building—are owned and operated by CapitaLand Malls.

Responding to an enquiry by PropertyGuru, CapitaLand discussed how they tackle the challenges of remaining relevant to consumers and how they keep their malls competitive among other malls.

“We position our malls differently to cater to different shopper segments, even though they may be located near one another,” shared Teresa Teow, Head of Retail Management for Singapore at CapitaLand Mall Asia.

“To illustrate, the three CapitaLand malls in Jurong Gateway are positioned differently to complement one another. Westgate is the premier lifestyle and family mall, offering the best of downtown shopping with brands that in the past were found only in malls along Orchard Road.

“JCube is the leisure and entertainment hub… IMM Building nearby is Singapore’s largest outlet mall which has 85 outlet stores,” Teow said, adding that these three malls “offer the equivalent of a three-in-one mega mall” forming a retail destination where there is “something to offer every shopper.”

Experts said having many malls in one location is not entirely a bad thing. “The more diversity, the more vibrant the shopping scene,” said Sulian Tan-Wijaya, executive director of retail and lifestyle at Savills Singapore.

“The upside (of having many malls) is the ability to create a critical mass and large enough cluster of shopping and lifestyle experiences for a shopping destination. This is how Orchard Road helped position Singapore as a shopping capital, where global retail giants coexist with independent, eclectic small retailers to complete the shopping experience,” she added.

However, the property consultancy also warned of the downside with an oversupply of malls. “(There is) a dilution of tenant mix, and duplication of brands. Landlords compete for the same tenants and too many retailers compete for the same pool of shoppers,” she said.

Too many, too similar

And because a lot of the malls here target the same consumers, it has resulted in a market with too many malls that are too similar.

Last year, a number of retail groups, particularly those in the fashion line, announced shop closures and consolidations. One of them is Al-Futtaim Group which manages Robinsons, John Little and Marks & Spencer in Singapore.

The group announced the closure of some of Singapore’s best-loved department stores last March, saying it’s the group’s “ongoing business strategy to ensure the long-term sustainability of our businesses”.

“There is not enough differentiation in the store,” said the group’s head of business in Asia, Kesri Kapur, as quoted in TODAY. “For such a small market, if it’s to be viable in the longer-term and sustainable, there has to be some differentiation (among) the stores.”

Among the over 100 malls in Singapore, many overlap in terms of tenant mix and offer the same brands, services and entertainment to consumers. However, there are still a number of shopping malls that stand out when it comes to their tenant mix and concept. These include Funan DigitaLife Mall at North Bridge Road, which mainly houses shops selling computers and other electronic merchandise, and Velocity in Novena, which offers an extensive range of active-lifestyle stores.

All ahead

With the current economic conditions here and overseas resulting in slower retail sales from both locals and tourists, coupled with other existing challenges such as the manpower crunch and rising business costs, analysts say that for malls to survive these challenges here, the key is to ensure competitiveness.

“Landlords will find it harder to attract tenants to their mall and will be competing amongst themselves for the same tenants. An over-supply can also lead to downward pressure on rents without increase in demand from new retailers,” Savills said. “If they are willing to lower their rents to attract the right concept for the mall, they will eventually regain their higher rents when the market recovers.”

Savills added that mall operators should be quick in “spotting new trends, customer preferences and consumption behaviours”.

“The slowdown in retail sales, competition from online retail and over-supply of malls in some areas are all negative near-term factors for malls in these locations,” said Tan-Wijaya, adding that only if these malls are responsive and receptive enough to changes emerging in the retail landscape will they be able to “strengthen their competitive position in the long term and enjoy the fruits of their efforts during the difficult times.”

CapitaLand Malls agrees with this sentiment and looks to ensure that its malls meet the needs and aspirations of consumers. “To this end, we continually reinvent our malls to ensure that they stay relevant and attractive to shoppers. This includes asset enhancement initiatives to optimize the retail offerings and refreshing the tenancy mix, as well as carrying out attractive promotions to draw shoppers to our malls.”

Looking ahead, Savills believes that the current number of well-managed retail malls here “will remain proactive in managing their tenant mix”, and expects these malls to replace weaker tenants with newer concepts or better-performing retail brands.

And while there could be some businesses that are casualties of the growing number of retail malls here, analysts believe that “the clear winner” in this scenario is the consumers as they will continue to be spoilt for choice for retail options.

Meanwhile, Knight Frank’s Q3 2015 report estimates that 4.2 million sq ft of retail space of net lettable retail space will come on-stream in Singapore until 2019 (Table). However, JLL said the retail supply in the republic, not including Jewel @ Changi Airport, would be at a 10-year low from 2016 to 2018. This comes after the government disapproved the initiation of new retail space since 2013, the property consultancy said in its 2016 market outlook.

Picture Source: REALIS,Knight Frank Research
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Commercial property outlook 2016

A year ago, the commercial market was a lot more optimistic and buoyant, on the back of tight supply, and rising rents, especially in the tight CBD area. Coupled with the outflow of capital from a residential property market seized up by 13 rounds of cooling measures, the commercial property market seemed like a bright spot in Singapore’s frigid real estate market.

In the space of a year, this optimism has become a lot more muted, with the tumbling of oil prices, a bearish Mainland Chinese economy and a weakening Eurozone. It’s time to take a good hard look at the commercial sector, and see what we can expect in the coming year.

Office Space

As an open economy that’s a regional financial hub for several companies in banking, financial services and commodities, the various crises have taken their toll on the office segment.

In 2015, high profile layoffs in companies such as Standard Chartered, Royal Bank of Scotland and Morgan Stanley made headlines. In the coming weeks and months, Barclays and Credit Suisse, amongst several others, are also expected to announce job redundancies.

With many financial institutions cutting back on overhead costs to stay buoyant, rents are taking a pummeling. Figure 1 shows the Urban Redevelopment Authority’s (URA) Office Rental Index, for both the Central and Fringe Areas. Between Q2 and Q4 of 2015, rents in the Central area fell 9.1 percent, while those in the Fringe fell 8.3 percent over the course of 2015.

With overall pessimism leading to lowered demand for office space, rent prices are likely to continue falling over the course of 2016. However, the sub-segment most likely to be affected by the economic turmoil is likely to be office spaces in the city fringe.

Figure 2 shows the different vacancy rates across the key office areas of the island, including the prime Downtown Core and Orchard Areas, as well as the Rest of Central and Fringe areas. From Q4 2014, the vacancy rate in Fringe areas have remained consistently high, around 13 percent, suggesting that more than one in 10 of completed stock is unoccupied or untenanted.

In contrast, vacancy rates for the Downtown Core and Orchard Areas have been on a decline over the course of 2015. Real estate consultancy CBRE suggests that this is a “flight to quality,” with corporate tenants taking advantage of lowered rents to move their operations into more prime areas. This is in contrast to past years, where tight supply and high rents in the prime areas led banks to move their back room operations into regional centers and business parks.

Supply in the fringe-CBD saw a boost in the second half of 2015 with the earlier than expected completion of South Beach. It is likely to increase in 2016 with Guoco Tower, part of the integrated Tanjong Pagar Center, and Duo at Beach Road, completing construction and entering the supply pool. These developments will likely continue to apply pressure on office rents outside the city fringes.


The industrial property sector is facing strong headwinds, buffeted on almost all sides. The global economic uncertainty translated to declines in manufacturing output in Singapore, with the Purchasing Managers Index (PMI) dipping to a 49.0 in January 2016. In fact, for most of 2015, the PMI stayed mostly below the 50.0 mark, suggesting an overall lack of confidence.

With output on the decline, demand for industrial property space is falling as manufacturers scaling back operations. This is exacerbated by an oversupply of industrial property space. Between 2013 to the end of 2015, JTC Corporation and URA, sold 61 sites, totaling over 583,000 sq metres of land, for both B1 (light industrial) and B2 (heavy industrial) purposes. This fi gure does not include some of the smaller industrial buildings that were collectively sold over the past two years.

URA predicts that by the end of 2016, a total of 2.2M sq metres of factory space is likely to be completed. Because this is currently beyond what the market can absorb, URA has also tapered down the supply, with a much lowered 789,000 sq metres of factory space to be completed in 2017, and then another 623,000 sq metres in 2018.

The combination of weak sentiment and oversupply has led to a vacancy rate of just over 10 percent and 6 percent for privately owned industrial property and government leased industrial property respectively (refer to Figure 3). From the charts, it is quite clear that the vacancy rate for both segments are on an upward trajectory.

Weak manufacturing sentiment and a slowing global economy will reduce demand for industrial space, suggesting that the vast upcoming supply will find it difficult to be absorbed. We might see vacancy rates increase to around 12 percent or even higher, for factory space by the end of 2016.

This has also negatively aff ected the sale prices and rentals of industrial property. Over the course of 2015, both the sale price index and rental price index of industrial properties have seen quarterly declines, ending the year at 105 and 100.6 respectively (refer to Figure 4).

These prices are likely going to tumble even further as 2016 progresses, and will be a buyers’ and tenants’ market. Investors who fl ocked to this segment, and who do not have adequate holding power, or are dependent on rents to repay their loans, are likely going to have to slash rental or sale prices.

Picture Source: A worm’s eye view of CBD buildings.
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Malaysia: Down, but not out

With the Malaysian ringgit falling 30 percent against the Singapore dollar, an uncertain economy, and the political scandal affecting Prime Minister Najib Razak, many Singaporeans are left wondering whether this is the right time to enter Malaysia’s property market, or whether they should adopt a wait-and-see attitude.

According to Ryan Khoo, Founder and Director of real estate consultancy Alpha Marketing, the current bearishness on Malaysia stems from oil price drops and the fallout from the 1MDB crisis.

But despite all the negative news reports about Malaysia, the country has been registering a GDP growth of four to 4.5 percent in the last few years, said Khoo. “Even with the recent oil price drops, GDP growth rate forecasts for 2016 are still at four percent. Compared to Singapore, which narrowly escaped a technical recession in 2015, I think Malaysia as an economy is quite vibrant and often misperceived.”

For prospective investors looking to buy Malaysian property for their own use, retirement, or passive income, Khoo explained that the sliding ringgit has made property across the causeway much cheaper and therefore, more attractive.

However, currency alone is not enough to make a buying decision, he said. “For investors today, they are generally more concerned about other factors, such as politics and oil prices, which may impact the ringgit further.

“If you want to buy Malaysian property, you must have a five- to 10-year view of how a particular location, local economy and type of property will fare, not just look at currency.”

A time to buy

Khalil Adis, founder of Khalil Adis Consultancy and brand ambassador for Iskandar Malaysia, believes that it is a good time to invest if you’re looking at fundamentals.

“Under investment fundamentals, you buy at a low,” said Adis, adding that there is still some demand for housing units and people are still renting.

“Foreigners don’t live there, so they’re spooked by the political situation, particularly the 1MDB saga. But there are good investment opportunities, such as hotel suites in areas like Malacca and Kuala Lumpur, which see many tourists but not enough hotel rooms.”

Khoo stated that contrary to popular belief, there is still a healthy rental market in Malaysia. “It’s always about location, pricing, furnishing and how you market your property. Many buyers from Singapore have to take note that managing property from a distance is not easy unless you have someone managing it for you.

“Some property types will rent faster than others. It is also becoming more popular in Malaysia to rent properties on a short-term basis via platforms such as Airbnb, as yields are higher.”

In general, high-rise properties can fetch rental yields of five to six percent at current prices, while rental yields for landed properties are in the range of four to five percent, noted Khoo.

He feels that Malaysian properties will always be on the radar of investors here due to the proximity and the fact that both countries are closely linked, culturally and economically.

His advice for investors is to look at commercial property, which has more upside potential than residential property. “Industrial property prices are at a low base, just above S$100 psf, so it’s difficult to see it dropping lower.”

He cited Iskandar Malaysia as one area that has been seeing record investments in manufacturing over the past three years that have translated into demand.

Optimism remains despite oversupply

Although the threat of an oversupply of homes in Iskandar continues to weigh heavily on the minds of investors, CapitaLand, South East Asia’s biggest property developer, remains optimistic about the potential of the region.

The Singapore-based developer is moving forward with plans to build a premier waterfront residential community on A2 Island in Danga Bay, comprising high-rise apartments, landed homes and other supporting amenities and facilities.

A statement released by the company last year said: “CapitaLand takes a long-term view of this project and is confident of the long-term prospects of Iskandar Malaysia. The development will be paced and executed in phases over a period of 10 to 12 years according to market conditions, as originally envisaged.”

During a parliamentary session in May 2015, then Minister for Culture, Community and Youth, Lawrence Wong, warned of a future housing glut in Iskandar that could devalue homes.

“Based on data from Malaysia’s National Property Information Centre (Napic), there are around 336,000 new private residential units in the pipeline — more than the total number of private homes in Singapore,” said Wong.

He added that buyers have become more cautious, with surveys showing that the number of Malaysian properties purchased through local property agencies plunged from 2,609 units in 2013 to 838 in 2014.

Adis has also observed that many Singaporeans are still waiting on the sidelines. “They are attending a lot of seminars but not purchasing property. In my opinion, they are doing their research first and waiting for the market to bottom out before jumping in.”

The HSR effect

In addition, with construction work expected to start in the next two years on the high-speed rail (HSR) link between Kuala Lumpur and Singapore, and the rapid transit system link between Johor Bahru and Singapore, Khoo believes that confidence will grow and buyers will return in huge numbers.

“Property prices in Iskandar Malaysia are still a fraction of Singapore’s, and the rail links will remove all the bottlenecks that plague the Causeway and Second Link.”

As such, “picking the right properties should ensure that you get the first choice of buyers or tenants, and that separates an average investor from a good one,” he noted.

Meanwhile, Adis reckons that Kuala Lumpur is another area worth looking at, with several upcoming mega projects, such as three MRT lines and Tun Razak Exchange. The latter is touted as Malaysia’s new financial hub, set to boost property values in the city.

Financing not an issue

For buyers looking to obtain financing, Khoo noted that while banks in both Malaysia and Singapore are tightening their lending standards for home loans, he does not see it as a major issue for overseas buyers of Malaysian property.

“Singaporeans and Malaysians earning Singapore dollars have a much easier time getting a loan, as the currency exchange is considered when factoring your repayment capability.”

But Adis thinks it is easier to get financing in Malaysia, as the banks there do not check the Total Debt Servicing Ratio (TDSR) of borrowers. Introduced by the Singapore government in June 2013, the TDSR limits the amount of a borrower’s gross monthly income that can be spent on debt repayments to 60 percent. In addition, Singaporeans buying property in Malaysia can obtain financing of 70 to 80 percent on the property’s value.

To get financing, Khoo explained that Malaysian banks require copies of the last three months of payslips, copies of bank account statements for the last three months, and past two years of IRAS tax notices.

For those who want to know more about Malaysian property investments, PropertyGuru will be hosting its first Malaysia Property Show for 2016 at the Marriott Hotel in Singapore on the weekend of 5 to 6 March. The two-day property exhibition will feature several new project launches and seminar speakers, including Adis, who will be providing insights on Malaysia’s commercial property market.

Pre-registration for the show is recommended, and those interested can do so at:


Population: 30.5 million

Total area: 329,847 sq km

Currency: Ringgit

GDP per capita: US$25,833 (2015)

GDP growth: 4.9 percent (2015)

Future transport: High-speed rail (HSR) link between Kuala Lumpur and Singapore

Average house price: US$72,519 (Q3 2015)

Distance between Singapore and Kuala Lumpur: 354 km

Summary of major property related issues and taxes associated with real estate investment in Malaysia:


Our picks of residential properties in Malaysia prospective buyers should consider.


Estuari Gardens
Estuari, Nusajaya, Johor

Type: Strata landed homes
Developer: UEM Sunrise Berhad
Tenure: Freehold
Facilities: 24-hour security, children’s playground, exercise area, cycling path
Nearby Key Amenities: Legoland Malaysia, Sanrio Hello Kitty Town, Horizon Hills Golf & Country Club
Nearest Transport: Malaysia-Singapore Second Link, Puteri Harbour International Ferry Terminal
Starting Price: RM1.39 million (approx. S$468,200)

Launched in April 2015, the freehold Estuari Gardens is a gated community consisting of 350 units of two-storey super-link houses with luxurious and spacious built-up areas ranging from 2,708 sq ft to 3,780 sq ft.

Scheduled for completion in 2017, the project’s facilities include 24-hour security, a children’s playground, exercise area and walkways/cycling path. Located in Puteri Harbour, Estuari Gardens is the first phase of the sprawling 390-acre Estuari development, which has a total gross development value of RM7.4 billion.

Branded as an eco-living community, it will comprise 2,858 residential units of mixed landed and high-rise strata properties.

Opus Kuala Lumpur
Jalan Maharaja Lela, Kuala Lumpur

Type: Serviced apartment
Developer: Bina Puri Properties Sdn Bhd
Tenure: Freehold
Facilities: Infinity pool, Jacuzzi, gymnasium, F&B services, concierge
Nearby Key Amenities: KL Sentral, Midvalley, Pavillion, KLCC
Nearest Transport: Maharaja Lela and Hang Tuah monorail stations
Starting Price: RM943,500 (approx. S$317,800)

Construction work has already started on this freehold serviced apartment project. Developed by Bina Puri Properties Sdn Bhd, it is expected to be completed by early 2019 and will comprise two high-rise tower blocks of 357 units.

The units range in size from 692 sq ft to 1,071 sq ft, and come furnished with Calvin Klein furniture. Residents will also enjoy a slew of facilities such as an infinity pool, Jacuzzi and gymnasium.

Located in the Jalan Maharaja Lela area, the development is just next to the upcoming KL118 tower, which is set to become the second-tallest building in the world when completed in 2020.

Picture Source: Landed homes in Malaysia.
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Eye on Ang Mo Kio: In the red

Singapore has no shortage of residential estates, what with more than 80 percent of its population living in HDB flats. In this regard, Ang Mo Kio is no exception.

A brief history

Unlike many other mature estates in Singapore, however, Ang Mo Kio as we know it today remained largely undeveloped till the late 20th century, after being mostly uninhabited in the 19th century. It wasn’t till the beginning of the 20th century that settlers started arriving in Ang Mo Kio because of its rubber plantations. This also meant it was called Ang Mo Kio Forest Reserve back then.

The name “Ang Mo Kio” came about only after land was cleared in the area to make way for a village, with the largely Hokkien Chinese immigrants there involved in rubber-planting and tapping. In fact, Ang Mo Kio New Town was once called Cheng San Village, which was a massive rubber plantation.

In the decade between 1922 and 1932, market gardening, as well as pig and poultry farming, became more common in Ang Mo Kio, thanks to the drop in world rubber prices. This proved useful during the second World War, when the Japanese Occupation caused many to move to the estate to take up farming as a form of livelihood.

Steady progress

Like most other mature estates in Singapore, Ang Mo Kio has flourished and is today a thriving residential estate of approximately 200,000 residents, as well as a satellite town and urban planning area. It is perhaps best known as a PAP Group Representative Constituency (GRC) under Prime Minister Lee Hsien Loong.

Its development started only in 1973, making it the seventh new town to be built in Singapore (the estate also has seven neighbourhoods). Just a decade later, the town’s design won the Singapore Institute of Architects (SIA) Outstanding Buildings Award. Three years later, the tetrahedral skylight feature at the Avenue 1 swimming complex won it the 1986 SIA Architectural Award.

As a mature estate, Ang Mo Kio today not only is home to HDB flats but also private residential projects, with certain pockets of land having been cleared to make way for new housing developments.

Everything at your doorstep

With one bus interchange, one hospital, one park, two MRT stations, four shopping malls and over 20 schools, Ang Mo Kio is undoubtedly a highly convenient estate in which to live.

Agnes Goh, Executive Adviser at Knight Frank Property Network, says: “In my opinion, Ang Mo Kio is attractive because of its mature infrastructure: a wide range of school choices, ranging from primary to tertiary education, including reputable primary schools like CHIJ St Nicholas Girls’ School, Ai Tong School and Catholic High School.

“It also has a well-established transport network connecting to all parts of Singapore — two MRT stations (Ang Mo Kio and Yio Chu Kang), and a fully air-conditioned bus interchange directly connected to the MRT station and a large shopping mall, AMK Hub. Ang Mo Kio is also within close proximity to a few expressways, which means its residents can travel to other parts of Singapore conveniently. Its central location also allows residents a fast commute to town, as well as to Woodlands for visits across the causeway.”

In addition to the aforementioned features, Ang Mo Kio has plenty of amenities catering to residents’ convenience and well-being: Thye Hua Kwan Hospital, Ang Mo Kio Polyclinic and Bishan-Ang Mo Kio Park. There are a large number of markets and food centres as well, and three other malls besides AMK Hub: Djitsun Mall, Broadway Plaza and Jubilee Square.

At the same time, Ang Mo Kio is rather close to a few international schools, such as Lycée Français de Singapour (Ang Mo Kio Avenue 3), the Australian International School (Lorong Chuan) and the Singapore American School (Woodlands), making the area attractive to expatriates who have school-going children.

New and next

In addition to the Ang Mo Kio and Yio Chu Kang MRT stations already serving the estate, Ang Mo Kio will see two more stations, Lentor and Mayflower, both on the Thomson-East Coast Line (TEL). This means residents can enjoy direct commute to key employment nodes like Shenton Way, Maxwell and Orchard.

A new North-South Expressway will also cut travelling time from Ang Mo Kio to the city, and a 20 km cycling path, the longest in any residential estate in Singapore, is to be in place by 2018.

Furthermore, three Integrated Programme (IP) schools will form a new junior college in Ang Mo Kio in 2017, and a brand new Ang Mo Kio Polyclinic is scheduled for service in 2018.

Fair warning

Though its existing and upcoming developments make Ang Mo Kio a generally attractive place to live in, Goh warns: “Do expect some inconvenience due to construction works for the upcoming infrastructure. However, given the benefits and convenience which residents can enjoy for years to come, I believe it will add value to Ang Mo Kio and the properties in the estate.”

Bright future

The outlook for the estate is generally positive, due to the existing amenities that already makes life relatively easy for its residents, as well as its upcoming infrastructure that promises to make day-to-day living even more comfortable and convenient.

Goh says, “Personally, I feel that the value of the private residential sector in Ang Mo Kio has potential for even better growth, given the limited supply within the mature estate. There hasn’t been any new property launch or land release within Ang Mo Kio for the past year, while neighbouring estates like Yishun have seen only a few.

“Property values in Ang Mo Kio are likely to remain stable, with positive, steady growth, thanks to its well-established infrastructure. The major new developments coming its way will also strengthen the property value in Ang Mo Kio.”

Picture Source: Bishan-Ang Mo Kio Park is one of the largest urban parks in central Singapore. (Photo: Atelierdreiseitl, Wikimedia Commons), PropertyGuru Analytics,URA
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Where will the Malaysian Ringgit head in 2016?

Will the Ringgit continue to slide in 2016?

Most, if not all, currencies in the world are currently Fiat currencies. This mean that the value of a currency is backed by the country, and its value is based on the confidence people have in the country. Malaysia’s currency, the Ringgit, is no different. It is also based on confidence, which stems from political stability, production capability, fiscal condition, export competitiveness and military power.

Malaysia itself has decent fundamentals. Its Gross Domestic Product (GDP) is growing at a healthy 4.7 percent (as of Q3, 2015). Malaysia is also registering fairly consistent trade surpluses on its books.

But Malaysia has also seen its fair share of problems in recent years. Its household debt levels are about 146 percent of GDP (according to McKinsey’s Q2 2015 figures), which is very high. The housing market’s prices are also elevated, providing ample fuel for a potential crisis. It is also running a budget deficit which stands at 3.5 percent of GDP.

Politically, Malaysia is also in a period of uncertainty, with its leadership currently facing allegations of scandal and corruption. Economic growth is also slowing down.

Fortunately, the value of a currency does not immediately impact the production capability of a nation. My opinion is that the currency devaluation of Malaysia is not justified, and is a form of price distortion. Did Malaysia, all of a sudden, become less competitive? I would say no.

Explaining the Ringgit’s decline

47 percent of Malaysia’s exports are technological goods, such as electrical machinery, office equipment, and telecoms apparatuses. While there have been numerous reports focusing on Malaysia’s fiscal weaknesses due to crude oil prices, these do not provide the full picture. Natural gas, petroleum and petroleum products account for only 14 percent of Malaysia’s exports. If we were to include palm oil, which accounts for approximately seven percent, these products would still only make up 21 percent of the country’s total exports.

At the same time, Malaysia also imports petroleum products to the tune of 17 percent of all its imports. The effect of lowered crude oil prices and revenues also results in lower import prices for Malaysia.

It is my opinion therefore, that the weakened Ringgit is largely a function of speculative forces at play, coupled with the near perfect timing of political uncertainty, slowing economic growth, weakening palm oil and crude oil prices, as well as an impending credit rating downgrade by the rating agencies.

A history lesson

During the 1997/1998 financial crisis, then Prime Minister Dr. Mahathir imposed currency controls, by pegging the Ringgit to the US dollar, at the rate of USD1 to RM3.80. That stabilized the ringgit within one to two years and foreign reserves recovered.

In the post mortem of the 1997/1998 financial crisis, some researchers have pointed out that portfolio funds (holdings by fund managers) invested in the capital markets (stock markets) led the way in capital outflows. Portfolio funds sold their holdings in the stock markets in large quantities, then exchanged their Ringgit for US dollars, leading to a rapid devaluation of the Ringgit and a series of financial crises.

If portfolio funds really wanted to preserve the value of their holdings upon exit for maximum gains, they should have done it gradually, without causing a stock market crash. Hence the rapid rate of exit could potentially point to some mischief.

After the crisis of the late nineties, Ringgit trading can only be done onshore, a practice still maintained today. This has reduced some level of currency speculation.

Trying to rob Malaysia

Speculators have plenty of leverage to “long” or “short” a country’s market or currency. These anonymous speculators often include the major banks’ proprietary trading desks, with access to hundreds of billions of dollars and some say even in the low trillions of dollars. They have the ability to bring down a country through currency manipulation. The currency controls implemented by Dr Mahathir were therefore a prudent measure to curb rampant speculation.

However there is still another mechanism available to currency speculators – the forward markets. Forward markets are meant for exporters and importers to hedge their risks, but have become a haven for speculators. A deliverable forward contract is an agreement by two parties to buy or sell currency at a specified future date, but agreeing on the rates today. For instance, this could be a bank agreeing today, to deliver to an exporter the Ringgit on 10 Dec 2016 at the rate of RM4.2 to USD1. This allows an exporter a little more surety, knowing that their goods would not suddenly lose value due to sudden movement in the currency markets.

However, for less internationally circulated currencies, there is another mechanism to speculate the Ringgit, offshore away from Malaysia. This is the Non-Deliverable Forward (NDF), which is traded in international financial centers like Singapore, London and New York. Unlike a deliverable forward, no actual currency is exchanged.

Currencies are deemed overvalued or undervalued against the USD using the implied NDF yield spread. A yield spread of greater than 1 percent indicates weakness against the USD. Banks of financial institutions in international as well as domestic Malaysian markets can then execute these trades. Through this indirect mechanism, speculators can drive down the Ringgit in the NDF market that hurts the Ringgit valuation.

While this might be technical and a little difficult to take in, the bottom line is that this points to the Ringgit being under speculative attacks.

Should I invest in Malaysia?

With the USD growing in strength from capital in-flows and US interest rate hikes, the Ringgit and many emerging economies will come under threat from the withdrawal of funds. This might last two to three years, as a US economic cycle usually lasts three to four years.

Malaysia needs to find its own steady and safe path. It has a lot of natural resources and food production. After weathering one round of financial crisis, it should have already developed better immunity against speculators this time round.

For foreign investors of Malaysian assets, it is a selective buy as the Ringgit may continue to be attacked. At some stage, currency controls may be re-imposed. Investors should take a five to 10 year view of their investment, when they could possibly be sitting on a recovering Ringgit. It would be good to pick up hard assets such as production capabilities and daily staple related plantations which can better withstand currency fluctuations.

For those holding Singapore dollars, they need to weigh SGD trends against ringgit so as to ensure that they will not lose money after currency conversion.

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Corporate entity versus individual: Differences in property ownership

1. Private versus public

While individual property owners can own both private and HDB housing, businesses are limited to private property. Married couples, as well as singles above the age of 35, qualify for HDB flats (so long as they are citizens or PRs), while condominiums and landed homes are available for both individual buyers of any age, as well as corporate entities.

2. Doing your duty

Do bear in mind that regardless of your status, stamp duties still apply. If you are an individual buyer, you are subject to a Buyer’s Stamp Duty (BSD) of one percent of the first $180,000 of the property’s purchase price or its market value (whichever is higher), two percent of the next $180,000 and three percent of the remaining amount. This is regardless of whether a HDB or private property is bought.

The next type of stamp duty is the Additional Buyer’s Stamp Duty (ABSD). This applies to Singapore citizens buying their second property onwards, with the ABSD at seven percent for the second property and 10 percent for the third. Singapore PRs, however, have to pay the ABSD from their first property purchase, at a respective five and 10 percent for the first and second property. If you are a foreigner or part of a corporate entity, this translates to 15 percent for any property purchase.

3. Lease after death

What happens after one of the property owners passes away? If the ownership is a joint tenancy, the deceased’s interest in the property is automatically transferred to the surviving owners. Under a
tenancy-in-common, the fate of the deceased’s interest in the property depends on his will; in the absence of a will, this interest falls into the hands of the law.

In the case of individual HDB owners, the property automatically passes to the surviving spouse or children. If the deceased does not have a surviving spouse or children, the flat is returned to the HDB.

If a corporate entity owns a residential property and one of the owners passes on, what happens to his interest in the property depends on the contract he had signed as part of the corporate entity. The entity’s property ownership is otherwise unaffected.

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Yio Chu Kang EC site draws 10 bids

The tender for an executive condominium (EC) site at Yio Chu Kang Road closed on Thursday (18 Feb), after attracting 10 bids, according to the Housing and Development Board (HDB).

Launched for sale on 29 December 2015 under the confirmed list of the second half 2015 Government Land Sales (GLS) Programme, the approximately 198,302 sq ft site has a maximum gross floor area (GFA) of about 555,267 sq ft.

Property developer Hoi Hup Realty submitted the top bid of $183.8 million, which translates to about $331 psf on the GFA. Offered on a 99-year lease, the site is expected to yield around 520 EC units.

Desmond Sim, CBRE Research Head, Singapore and South East Asia, said: “It has been some time since an EC plot has been put up for sale in the Hougang and Yio Chu Kang area in the north-eastern part of Singapore. The site is located in a mature residential estate and is relatively close to the city. These attributes probably account for the high rate of participation and the competitive bids garnered for the plot.

“Its close proximity to Rosyth School gives developers further confidence that demand might stem from young couples planning to enrol their children in the school. These factors will contribute to the selling points of the future project.”

Other nearby amenities include the Hougang 1 shopping mall, Hougang Sports Centre and Nanyang Polytechnic. The area is served by the Hougang, Buangkok and Kovan MRT stations.

The HDB said a decision on the award of the tender will be announced at a later date after the bids have been evaluated.

Picture Source: Map of the Yio Chu Kang Road residential site. Source: HDB
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Mortgagee listings surge on the back of staff cuts: DTZ

The economic slowdown and soft leasing market has led to staff cuts, which caused some affected homeowners to have difficulty financing their mortgages, revealed a DTZ Research report.

This has prompted new auction listings for mortgagee sales to soar 85 percent to 87 units in 2015 from 47 units in the year before, stated the report.

The number of auction listings for owners’ sale also surged to 135 properties last year from 77 properties in 2014.

“Given that properties that command higher price quantum tend to move slower in a quiet market, owners use auctions as an avenue to hasten disposal, so as to release their housing equity,” said DTZ.

Moreover, the report noted that more landed properties and large apartments were put up for auction in the year.

The number of landed properties listed for auction climbed to 53 units in 2015 from 39 units previously, while the number of apartments with a strata area above 2,000 sq ft rose from 17 units to 40.

DTZ expects more choice homes to enter the auction market, given the recent equity sell-off in response to signals of an economic slowdown in Japan and China.

“Sudden shocks in the equity markets tend to be a precursor for more auction listings, as owners need to adjust their financial position. This will offer prospective home buyers a window of opportunity to acquire homes at reasonable prices,” said Dr Lee Nai Jia, DTZ’s Head of SEA Research.

In fact, DTZ’s upcoming auction on 25 February will showcase several luxury homes, including a 4,219 sq ft cluster bungalow in District 21 and two adjacent penthouses in District 15.

Other listings include two split penthouses at the five-storey Veranda apartment development. Located along Lorong K Telok Kurau, just off East Coast Road, each unit has an indicative valuation of between $1.3 million and $1.6 million.

“Under current market conditions, it is difficult to acquire a good quality home through private treaty as the price gap between buyers and sellers tend to be wide due to mismatch of expectations. There are fewer good units available too as owners of such units will wait for the market to rebound first. Hence, auctions this year offer buyers a window of opportunity to seek choice homes at reasonable prices,” said Joy Tan, DTZ’s Head of Auction.

Picture Source: One of the properties being put up for auction. (Photo: DTZ)
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US housing starts down 3.8% in January

Housing starts in the US, which refers to the number of new private homes built during a given month, fell 3.8 percent to a 1.1 million annualised rate in January this year, from a 1.14 million pace in December 2015, according to Commerce Department data and reported Bloomberg.

The median forecast of 76 economists polled by Bloomberg stood at 1.17 million.

Although all four regions of the US witnessed a drop in construction, a winter storm in the East Coast probably deepend the setback at the end of last month.

The National Oceanic and Atmospheric Administration noted that the winter storm was rated as the fourth-most impactful storm since 1950, given the accumulation as well as the concentration of residents within its path.

“This is January, so seasonal adjustment could be a factor and weather could be a factor,” said Scott Brown, Chief Economist at Raymond James Financial, Inc. in St Petersburg, Florida. Moreover, “people are a little shell-shocked – buyers might be a little reluctant to step in still.”

In the Bloomberg survey, economists’ estimates for new home construction ranged between 1.1 million and 1.23 million.

Meanwhile, permits dipped 0.2 percent to a 1.2 million annualised rate, implying little scope for a rebound in February.

Last month’s drop in starts was led by a 3.9 percent decline in construction of single-family homes to a 731,000 rate.

Regionally, the Midwest registered the largest fall last month at 12.8 percent. The Northeast saw housing starts drop 3.7 percent, while starts in the South and West slipped 2.9 percent and 0.4 percent respectively.

Picture Source: A new housing development in San Jose, California. (Photo: Sean O’Flaherty/Wikimedia Commons)
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Sexy homes pricier than lovely homes

An analysis of close to 1.6 million real estate listings shows that homes with ‘seductive’ and ‘sexy’ in their property descriptions cost much more than those with ‘love’ in their descriptions, reported The Wall Street Journal.

“Love is basic,” said Economic Researcher Javier Vivas. “It’s a pre-canned pitch to generically describe something beautiful.”

Looking at homes for sale as at 1 February 2016, searched for terms of endearment used by property agents to list the properties. It then calculated the median asking price of homes that were described using sentimental words. Homes listed with the word ‘sexy’ had a median asking price of US$620,000 (S$872,177), those described as ‘seductive’ had a median price of US$640,000 (S$900,206), while those with the word ‘romance’ had a median price of US$820,000 (S$1.15 million).

“When you talk about extreme wealth, you’ll see terms like ‘sexy’ bandied about,” regardless of the product, noted Adam Alter, an Associate Professor of Marketing at New York University’s Stern School of Business. And with luxury products striving for uniqueness, it makes sense that salespeople employ impassioned language in order to set their brand apart, he said.

Meanwhile, love and its variations were used in one out of 10 listings, with the words most commonly used for low-priced homes.

In fact, homes with ‘love’ and ‘lovely’ had a median asking price of US$250,000 (S$351,626) and US$264,000 (S$90,020) respectively. Homes with ‘loving’ descriptions were listed for US$195,000 (S$274,279).

A waterfront home in North Bethany, Delaware, that was described as ‘a modern romance’ with ‘luscious views and seductive spaces’ was listed for US$2.5 million (S$3.5 million).

“The type of verbiage definitely changes a little bit once you get to that price point,” explained marketing manager Chelsea Brown, with the Debbie Reed team at Re/Max Realty, which listed the home.

On the other hand, she noted that she would use words such as ‘love’ in the same category as ‘quaint’ and ‘charming’ – terms that are usually reserved for more modest homes.

Picture Source: Luxury homes at Sentosa Cove.
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CapitaLand registers lower profit

Property giant CapitaLand reported a profit after tax and minority interests (PATMI) drop of 39.5 percent to $247.7 million in Q4 2015, compared to $409.4 million in Q4 2014.

The group’s operating PATMI also fell 12.1 percent to $249.2 million, while revenue rose 14.6 percent to $1.74 billion during the quarter.

In a statement, the Singapore-based developer noted that higher revenue was driven mainly by development projects in China and higher rental revenue from its serviced residence business.

On a yearly basis, CapitaLand’s PATMI fell 8.2 percent to $1.07 billion in 2015 from $1.16 billion in the previous year, which was boosted by a one-off gain of $123.5 million from the sale of Westgate Tower.

Operating PATMI stood at $823.6 million, up 16.8 percent from the $705.3 million registered in 2014. Revenue also increased 21.3 percent to $4.76 billion.

“CapitaLand remains focused on growth in our core markets of Singapore and China. For longer term diversification and balance, we will continue to expand in growth markets such as Vietnam and Indonesia,” said CapitaLand President and Group CEO Lim Ming Yan.

“In China, we achieved our highest residential sales value of RMB15.4 billion in 2015, and we expect residential sales in the market to continue to perform steadily this year. Our new Raffles City developments are also on-track for completion over the next few years and we expect strong demand for these projects.”

CapitaLand Group Chairman Ng Kee Choe added: “In line with CapitaLand’s policy to pay dividends on a sustainable basis, the Board is pleased to propose a dividend of nine Singapore cents a share for FY 2015.”

Picture Source: Sky Habitat by CapitaLand.
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02 April 2016

10 years on, Iskandar is struggling

Iskandar’s housing market continues to struggle, as evidenced by the drop in new launches and sales transactions last year, reported The Straits Times recently.

In fact, the number of high-rise residential projects launched last year fell to about a dozen, from 24 in 2014 and 49 in 2013, revealed property consultancy Savills.

Data from the National Property Information Centre (Napic) showed that sales of apartments and condo units for the first three quarters of 2015 dropped 23 percent year-on-year to 1,368 units.

Christopher Boyd, Executive Chairman at Savills Malaysia, noted that the drop in launches can be attributed to developers exercising self-regulation and restraint. In addition, some may be struggling to secure financing.

The slowdown first hit the market in mid-2014 following reports of rising property prices and oversupply concerns. The introduction of the goods and services tax, cooling measures, and the country’s turbulent political scene inevitably affected market confidence.

Fears of a glut were also stoked by the aggressive marketing of mega projects by Chinese developers.

The instability of the ringgit and the general economic slowdown saw most investors adopting a wait-and-see approach, said Landserve (Johor) Executive Director Wee Soon Chit.

Iskandar, which has entered its 10-year mark since its development plan was unveiled, still lacks proper industrialisation, whereby more business activity could help spur demand for property. In fact, people are only buying houses there to use as second homes.

Nonetheless, developers and property consultants remain confident about the region’s prospects.

“We are encouraged by the massive infrastructure improvements in Iskandar, as well as the investment that has gone into job-creating industries. This, and the logic of the location, guarantees substantial future demand for housing,” said Boyd.

“Sure, some developers jumped the gun, but it is only a matter of time before the market takes off again, and, at some time in the future, house prices in Iskandar could easily become the highest in the country.”

Picture Source: View of Johor Bahru.
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Wandervale EC to open for applications amid oversupply worries

Applications for the 534-unit Wandervale executive condominium (EC) at Choa Chu Kang Avenue 3, the first major property launch for 2016, will open this Thursday (18 Feb).

Developed by Sim Lian Land, the 99-year leasehold project is located close to Choa Chu Kang MRT station and the newly opened Downtown Line 2 (DTL2). Scheduled to open for sales booking in March, Wandervale will feature a range of three-bedroom, three-bedroom premium and four-bedroom units, from 958 sq ft to 1,249 sq ft.

The approximately 205,138.6 sq ft site was awarded to Sim Lian for $207.4 million in September 2014.

According to a Credit Suisse report, the project will have an average indicative price of $750 psf to $770 psf. “This is likely to place further stress on MCL Land’s Sol Acres EC in Choa Chu Kang, which has only sold 28 percent of its 1,327 units at an average price of $800 psf.”

The report stated that the future launch of Qingjian Realty’s EC project at Choa Chu Kang Avenue 5 is likely to add further oversupply concerns within the vicinity.

In January 2016, sales of new EC units improved 26 percent month-on-month to 156 units, lifted mostly by The Amore, CDL’s The Brownstone, and The Vales, which together accounted for around 40 percent of total EC sales, revealed Credit Suisse, citing data from the Urban Redevelopment Authority (URA).

“Oversupply in the EC market, however, will likely persist, as 50 percent or more of these projects and several others remain unsold, which could weigh down capital values in the mass market segment,” added the report.

Picture Source: Artist’s impression of Wandervale EC in Choa Chu Kang.
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Foreign investors zoom in on Cambodia

Cambodia’s property market has been attracting much interest in recent years, particularly among foreign investors, following the passing of legislation in April 2010 allowing foreigners to own property in the country.

Under the Foreign Ownership Property Law, foreigners can own upper floor units, not ground floor units, and up to 70 percent of a condominium project.

This restriction has little impact on foreign buyers considering that apartments are usually not built on the ground floor, according to property consultancy CBRE.

As a result, more residential developments from the kingdom are being launched to overseas buyers, including Singaporeans.

Among them is Axis Residences in Phnom Penh. The 566-unit project saw over 60 percent of its residential units pre-booked prior to the public launch in March 2015.

In January this year, Singapore-listed HLH Group launched the ground-breaking ceremony for its maiden project in Cambodia, dubbed D’Seaview.

The seafront development saw over 80 percent of the 300 units in Phase 1 subscribed by both local and foreign buyers.

“The strong response to our D’Seaview project underscores the rising demand for good quality and affordable homes among Cambodians in the country’s key cities. The majority of the buyers are young professionals and businessmen who see good value in owning these homes while the foreign buyers are keen to invest in real estate now in view of Cambodia’s rapidly growing economy,” said HLH Group CEO and Deputy Chairman Dato Johnny Ong.

“In fact, Cambodia’s GDP growth is among the highest in Asia. The World Bank has projected 2015 and 2016 economic growth for Cambodia at about 6.9 percent, which is really robust compared to other Asian countries. This will herald healthy demand for quality housing in the coming years,” he added.

CBRE noted that Cambodia’s condominium market offers great potential. The consultancy’s local branch has seen the number of condo units in Phnom Penh increase from just 178 in 2009 to 2,095 in 2014. It expects over 9,000 units to enter the market between 2015 and 2018.

Meanwhile, investors have been recording rental returns of between five and seven percent and capital growth of between five and 7.5 percent per annum.

As the residential market heats up, more property agencies are also expanding into Cambodia to support marketing efforts. US-based Century 21 opened a representative office in Phnom Penh in 2014, while international property firm Savills joined forces with Cambodia’s Keystone Property Consultants in 2015.

In what could be a sign of the country’s status as a rapidly emerging real estate market, nominees for the inaugural Cambodia Property Awards 2016, presented by PropertyGuru, were recently announced.

To be held on 25 February, the event will present a total of 13 awards, divided into the highly competitive Developer, Development and Design sections.

“The Cambodia Property Awards will present the top winners a tremendous opportunity to showcase their most outstanding projects on a regional stage at the South East Asia Property Awards grand finale to be held in Singapore later this year,” said Terry Blackburn, Managing Director, Property Awards and Publications, PropertyGuru.

“While Cambodia is still a small market, it is quickly emerging and definitely deserving of international recognition, and that’s why we’re delighted to hold Cambodia’s first national event in 2016.”

For more information on the inaugural Cambodia Property Awards, go to:

Picture Source: Phnom Penh, the capital of Cambodia.
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In the mood for romance

Just in case you forgot, February 14th is this Sunday, and is Valentine’s Day. And if you really did forget to do something special over the weekend, Chinese Valentine’s Day (Yuan Xiao), is on Feb 22.

Besides the usual flowers and candlelight dinner, why not impress your lover further with a nicely decorated bedroom that underscores your passion? The best part? It will cost you way less than your flower bouquets and fancy dinners, yet score big for effort and surprise element.

You will be surprised how your bedroom can be transformed in just seconds with the right items, such as candles, rose petals, and even a simple change of bedsheets.

Here are our 3 suggestions:

1. The Die-hard Romantic

A scented, candlelit room is a foolproof way to lift up the atmosphere and give it a sensual ambiance. Go for those scented candles with aphrodisiac properties such as ylang ylang, sandalwood, rosemary, bergamot or geranium, for a great night of romance! You can purchase reasonably priced scented candles from Spotlight or Ikea.

To spice things up further, scatter loose rose petals on the bedsheet. For a stronger visual impact, spell “I love you” or your partner’s name with them. While bouquet prices skyrocket during this period, the price for loose petals is still pretty reasonable. You can save a few more bucks by purchasing them from your neighbourhood heartland florists instead of heading to the malls.

If you are good with words, write a stack of heart-shaped post-it notes (you can get them easily from the stationery store) for your loved one. Imagine the look on her face when she walk into the house and find a trail of pink hearts with words like “You complete me”, “You are the best” written on them, from the doorway all the way to the bedroom door. Not to mention the pleasant surprise you have prepared for her behind that door! This will definitely be one memorable Valentine’s Day for both of you.

2. The Textile Lover

If scented candles and rose petals are not your thing, go for a textile makeover instead. Change your curtains and bedsheets to a soft pink or those pretty heart prints to freshen up the look, and give it a more romantic feel.

You can get them for a fraction of the cost from Spotlight and Ikea, and while you are there shopping, pick up some cutesy heart-shaped cushions, potpourri and wall decals for an additional touch too.

Instead of buying candles, you can also re-purpose those Christmas lights in the storeroom, and string them around your headboard to turn up the romance factor. To keep the lighting soft and not overly festive (this is not Christmas’ Day after all), you can wrap those tiny bulbs with coloured cellophane paper.

3. The DIY Master

Love to DIY? What better time to display your talents than on Valentine’s Day itself! Print out your favourite couple memories, and frame them up on the bedroom wall, with strings of handmade paper heart garlands. Alternatively, you can cut the photos into hearts, thread them together and hang them like a banner above the headboard.

One of our favourite tricks involves recycling condensed milk tin cans. After you have washed them clean, pierce a heart-shaped pattern on the outer surface with a hammer and nail. Once done, place a lit candle in it, adjust the projected heart-shaped design on the wall accordingly, and voila!

Learn how to fold paper flowers from those online origami tutorial videos, and impress your date further with a bed full of them. Not forgetting some soft romantic music playing in the background to end your Valentine’s Day on a good note.

Picture Source: Champagne and mood-lighting are just the start for a romantic bedroom
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6 skyline-changing buildings in Singapore

Worries about an economic slowdown haven’t dampened Singapore’s building boom, with a number of star architects designing stunning new projects that have not only won international awards, but are set to alter the city’s skyline. One example is the soon-to-be completed Tanjong Pagar Centre, Singapore’s tallest tower. We take a closer look at six famous buildings everyone’s talking about.

South Beach

Completed at the end of 2015, the South Beach mega mixed-use development on Beach Road comprises two towers and four conserved military buildings that have been refurbished into a fine dining and nightlife destination.

Jointly developed by CDL and the Malaysia-based IOI Group, the project was slated for completion in 2012, but was delayed due to the global financial crisis.

The 34-storey North Tower offers 500,000 sq ft of Grade A office space, with the anchor tenant being Facebook. The 45-storey South Tower is home to The South Beach, a luxury hotel offering 654 guestrooms.

Located on the 23rd to 45th levels of the South Tower is South Beach Residences, an ultra-posh project of 190 units that’s expected to launch when market conditions are more favourable. Earlier indicative prices for the apartments were in the range of a whopping $4,000 psf.

South Beach is easily accessible via two MRT stations – Esplanade MRT on the Circle Line and City Hall MRT interchange on the North-South and East-West lines.

Tanjong Pagar Centre

At 290 metres high, Tanjong Pagar Centre will be the tallest building in Singapore once completed in mid-2016. Property developer GuocoLand recently topped out the $3.2 billion integrated mixed-use project located above Tanjong Pagar MRT station, one of Singapore’s busiest MRT stations.

Designed by world-renowned architectural firm Skidmore, Owings & Merrill (SOM), the building will integrate 890,000 sq ft of Grade A office space at Guoco Tower, a 100,000 sq ft lifestyle and F&B component, 181 luxury homes at Wallich Residence, the 222-room Sofitel Singapore City Centre and a 150,000 sq ft landscaped Urban Park that can accommodate up to 2,000 people in a sheltered event space.

Wallich Residence gets its name from the location of the development, Number 3 Wallich Street. It will house Singapore’s tallest and largest penthouse – a three-storey duplex on levels 62 to 64, measuring 21,000 sq ft. Only 16 units have been sold so far, at an average price of $3,200 psf.

Marina One

Marina One is the largest integrated development to launch in Marina Bay, Singapore’s new downtown. Set to be completed in 2017, the 3.67 million sq ft complex is being developed by M+S, a joint venture between Malaysia’s strategic investment fund, Khazanah Nasional Berhad and Singapore’s investment company, Temasek Holdings.

It will comprise luxury condominium units, branded retail stores and prime Grade A offices, and will offer scenic views of the city skyline and the sea. A lush oasis of greenery and waterfalls will form the heart of the development.

The 34-storey residential tower, dubbed Marina One Residences, will comprise 1,042 one- to four-bedroom apartments, as well as penthouses ranging from 700 sq ft for a one-bedder to 8,568 sq ft for a penthouse. So far, 362 of the 401 units launched for sale have found buyers, with prices starting from $1.67 million.

Located close to iconic tourist attractions such as Marina Bay Sands and Gardens by the Bay, the development will be connected underground to four MRT lines: North-South, Downtown, Circle and the upcoming Thomson Line.


Another integrated development by M+S is DUO, located in Bugis, a trendy and vibrant enclave at the fringe of the business district. Scheduled for completion in 2017, it was designed by world-famous architect Ole Scheeren, the man behind the iconic CCTV Headquarters in Beijing.

DUO comprises 660 premium residences, the 5-star Andaz Singapore hotel, a boutique retail gallery and Grade A offices, all set within a park-like environment. Managed by Hyatt Hotels & Resorts, Andaz Singapore will have more than 340 guestrooms overlooking the city centre and the sea.

Meanwhile, the 49-storey DUO Residences consists of studio apartments and one- to four-bedroom units and penthouses. Sales have been brisk, with 621 units already sold at an average price of about $2,000 psf.

DUO will be connected via an underground link to the Bugis MRT station, which serves two major MRT lines – the East-West Line and Downtown Line. Bugis Junction, Singapore’s first glass-covered, air-conditioned shopping street, is also a short walk away.

The Crest

Developed by a Wing Tai-led consortium, this sprawling 469-unit residential development is currently under construction and comprises four blocks of five-storey island villas and three towers of 23-storey apartments.

Designed by Toyo Ito, one of the world’s most revered architects, the three tower blocks resemble flowers in bloom. Residents living on the higher floors will enjoy unobstructed views of Sentosa on a clear day.

Comprising a mix of one- to five-bedroom units, around 100 units have found buyers, out of the 132 launched to date. In December 2015, four units were sold at a median price of $1,749 psf.

Located at Prince Charles Crescent near Redhill and bordering the Alexandra Canal, this project is nestled within the established Good Class Bungalow (GCB) areas of Chatsworth and Bishopsgate, and across the road from HDB estates.

Scheduled to obtain TOP in mid-2018, The Crest is close to Redhill MRT station and the Orchard Road shopping belt.

Project Jewel

This upcoming mixed-use development is located on a 3.5ha site at Changi Airport Terminal 1, formerly an open-air car park, and is being developed by Changi Airport Group and CapitaMalls Asia at a cost of about $1.47 billion.

Currently under construction, Project Jewel was designed by a team of architects led by the world-renowned Moshe Safdie, who was behind the design of Marina Bay Sands. With its distinctive dome-shaped façade made of glass and steel, it is expected to become an iconic landmark in Singapore.

Jewel will comprise facilities for airport operations, leisure attractions (including a large-scale, lush indoor garden with a 40-metre high central waterfall), retail and food outlets, hotel facilities and a car park, all under one roof.

Scheduled to open by the end of 2018, the project will also enhance connectivity between Terminals 1, 2 and 3, and the Changi Airport MRT station.

Picture Source: Christopher Chitty/View of the recently completed South Beach development. /Artist’s impression of Tanjong Pagar Centre, Singapore’s tallest building./Architect’s perspective of Marina One./Aerial view of DUO by Ole Scheeren./Artist’s impression of The Crest.Artist’s impression of Changi Airport’s Project Jewel expansion.
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Hotel extension project uses Lego-like building blocks

OUE Limited, the developer of the new Crowne Plaza Changi Airport hotel extension, will only need one month to finish the top eight storeys of the project as the rooms are merely stacked together like building blocks, reported My Paper.

The rooms, which come complete with lighting, carpeting and even bathtubs, were shipped over from a Shanghai factory to be assembled on site.

With this Prefabricated Pre-finished Volumetric Construction (PPVC) method, OUE has already installed 112 of the 252 modules.

Irene Meta, Senior Vice President of Development & Projects at OUE Limited, revealed that the PPVC method has helped the firm overcome building site constraints.

The site is small, while access is limited, with delivery traffic to the worksite allowed only from 10pm to 5am.

However, the PPVC method requires fewer vehicle trips, at just 300 compared with 1,250 for conventional building methods.

The small site has also become less of an issue since less work is needed on-site.

“So we felt that, overall, this project was very suitable for the use of PPVC,” said Meta.

Featuring 243 rooms, the 10-storey extension will add significant capacity to the existing hotel.

While it took the developer about 10 months to finish the first stage of construction – which covered the foundation to the second storey, it will only take them one month to install the individual modules for the remaining floors.

Hence, the time taken to complete the remaining eight storeys has been cut from 12 months to four months.

The PPVC method also required less manpower, down from 60 workers to 36.

National Development Minister Lawrence Wong noted that such productive technology is crucial for the future of the city-state’s construction industry.

“We cannot possibly build our future infrastructure using the old ways of relying on more and more foreign workers,” he said after visiting the site.

Meanwhile, John Keung, Chief Executive Officer of the Building and Construction Authority (BCA), hopes that the hotel extension project will serve as an example to show the industry what the PPVC method can achieve.

“We hope we can build up the expertise here, whether it’s architects or contractors or developers, to give this technology a big push,” he said.

Picture Source: Crowne Plaza Changi Airport. (Photo: Katmorro/Wikimedia Commons)
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Frasers Property acquires Queensland site

Frasers Centrepoint, via its Australian unit Frasers Property Australia, has acquired a 135ha site in South East Queensland with an end value of S$270 million.

Located at Bahrs Scrub near Beenleigh, half way between Brisbane and the Gold Coast, the site will provide affordable and much-needed housing in the Logan growth corridor.

In a statement, Frasers noted that the “master-planned Bahrs Scrub site – which has not yet been named – provides for 1,350 detached housing lots which will become home to more than 3,000 residents, with natural waterway corridors and an abundance of green space providing panoramic views of the region.”

There will also be a retail hub measuring around 6,000 to 7,000 sqm and various recreational green spaces.

“Our decision to further invest in the Logan community aligns with Frasers Property’s broader strategy for growth and underlines our commitment to South East Queensland,” said Anthony Boyd, Executive General Manager Residential, Frasers Property Australia.

“A site of this scale in such a central location is a rarity. The site also has development approval in place, allowing for the project to be brought to market in Spring 2016.”

Meanwhile, Logan City Mayor Pam Parker noted that Frasers Property Australia’s decision to invest further in the city will encourage future development and improve the area’s appeal to visitors, residents and the wider community.

“This development will offer a range of affordable living options and will build on existing amenities with more community facilities and recreational venues. It will also provide more strength to the City of Logan’s economy which is currently unmatched for growth opportunity in Australia,” she added.

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Profits galore for Boon Keng flat owners

Despite the bleak property market, City View @ Boon Keng saw at least 14 flats sold even though it only entered the resale market this year, according to a recent Straits Times report.

In fact, flat owners at the premium public housing project have been reaping big profits.

Housing Board data shows that three- to five-room flats there were sold from $560,000 to $900,000, far exceeding the project’s launch prices of between $349,000 and $727,000, as well as HDB prices within the vicinity.

Century 21 Chief Executive Ku Swee Yong attributed the high prices to the project’s design and recent completion in 2011.

“It’s the newest in the neighbourhood. As a Design, Build and Sell Scheme (DBSS) project, it also has high-quality design and fittings.”

The second DBSS project after The Premiere @ Tampines, the 714-unit City View @ Boon Keng comprises three 40-storey blocks and was developed by Hoi Hup Sunway.

Although owners at City View are only allowed to sell their units from this year, following the end of their five-year minimum occupation period, 10 units were sold earlier.

This came after the HDB granted the said owners special approval. Property agents who helped sell the properties revealed that some of the reasons included emigration and divorce.

ERA agent Brandon Zheng, for instance, handled the $820,000 sale of an eighth floor five-room unit, whose owners moved to Australia.

Looking ahead, Ku expects the units at City View to go for more, given the project’s proximity to the city.

“I wouldn’t be surprised if the top-floor units exceed $1 million,” he said.

Picture Source: Public housing in Singapore. (Photo: Lionel Leo/Wikimedia Commons)
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New accreditation for renovation businesses

A new voluntary accreditation scheme was recently launched to give homeowners more assurance when securing the services of renovation contractors, reported The Straits Times.

The CaseTrust-RCMA joint accreditation scheme was developed by the Singapore Renovation Contractors and Material Suppliers Association (RCMA) and the Consumers Association of Singapore (Case) following an agreement signed in August 2014.

But unlike the previous CaseTrust scheme, the new one also protects the deposits of homeowners in the event the contractor disappears or closes shop.

Both schemes require firms to have proper and clear dispute-resolution mechanisms, on-site workmanship assessment, trained staff and clear policies on fees and refunds.

Five renovation contractors have already been accredited under the new scheme, while 12 are still in the process of being accredited.

“It gives customers confidence in us, and it also helps us to really bring up our standard,” said Rezt and Relax Interior Executive Director Wilson Teh.

Other firms that were accredited are Ciseern by Designer Furnishings, Add Space Design, Vegas Interior Design and Sky Creation Design.

The CaseTrust-RCMA accredited firms should offer a deposit performance bond which covers the deposits of customers – up to 20 percent of the contract value, if the contractor goes bust and leaves the renovation works unfinished or cannot be contacted for 30 days. The firms are also required to use a CaseTrust Standard Renovation Contract in order to ensure cost accountability and transparency.

The contractor industry is one of the top 10 industries in which Case receives the most number of complaints.

“For consumers who want peace of mind, I urge you to consider supporting businesses which have taken this additional step of being CaseTrust accredited and have committed themselves to fair trading practices,” said Case President Lim Biow Chuan.

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Balestier Point may go en bloc

Balestier Point (pictured), a mixed-use freehold development, may be put up for collective sale for approximately $250 million to $350 million, or around $1,337 to $1,872 per sq ft per plot ratio (psf ppr), reported The Straits Times.

The property’s owners appointed an eight-member collective sale committee in October 2015 and ERA Realty as the marketing agent in January this year. However, they have yet to set the date for an extraordinary general meeting to obtain the owners’ approval.

Completed in 1986, the 62,315 sq ft property comprises an 18-storey residential block and a two-storey retail podium with basement. The site is zoned commercial and residential under the 2014 Master Plan, with a building height limit of 30 to 36 storeys and a plot ratio of 3.0.

Owners may be motivated to sell considering the above-market premium for the said property. Last month, a 1,119 sq ft apartment located on the ninth floor was sold for around $1 million or $900 psf.

They are also banking on the fact that the Balestier area has been undergoing rejuvenation, with the completion of the integrated hotel-park complex comprising Zhongsan Park, Zhongsan Mall and the Days and Ramada hotels in 2014.

“It is within the Novena medical hub area and we are exploring the possibility of applying for change of use, subject to approval by the authorities,” said ERA Realty agent Stanley Koo.

Property consultancy CBRE noted that the most recent collective sale within the area was Skysuites 17, formerly Diamond Tower, for around $49.6 million or $582 psf ppr in April 2010.

“Due to the cutback on residential land offered through the Government Land Sales programme, developers may want to look at collective sales as an alternative source of land. At the end of the day, the most important thing is to bridge sellers’ and buyers’ expectations,” said Desmond Sim, Head, CBRE Research, Singapore and South East Asia.

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01 April 2016

Over 3,000 rental tenants bought first flats since 2011

The Housing and Development Board (HDB) revealed that over 3,000 rental tenants have purchased their first flat in the Build-To-Order (BTO) or Sale of Balance Flats (SBF) exercises since 2011, reported Channel NewsAsia.

Around 19 percent of them purchased a flat under the Tenants Priority Scheme (TPS), said the HDB in a statement. Under this scheme, 10 percent of the three-room and two-room Flexi flat supply in the BTO or SBF sales exercises are set aside for public rental families who are buying their first home.

Meanwhile, 73 percent of these first-time owners purchased a three-room or smaller HDB flat, noted the HDB.

About 84 percent of the rental tenants bought their flat with the help of the Special CPF Housing Grant (SHG) or the Additional CPF Housing Grant (AHG) or both. The HDB said around 12 percent received the maximum SHG and AHG of $60,000, or the maximum grant prevailing during the time they picked their unit.

To date, around 1,300 rental tenants have moved into their new flats.

The HDB noted that its Public Rental Scheme supports families who are not financially ready to buy a flat. In fact, their rental rates are heavily subsidized, with each rental term good for two years.

“Thereafter, HDB will review and assess the tenancy renewal. Tenants who are financially stable will be encouraged to consider buying a flat,” it said, noting that it now offers housing grants of up to $80,000 for eligible flat buyers – up to $40,000 for the SHG and $40,000 for the AHG.

During last year’s National Day Rally, Prime Minister Lee Hsien Loong unveiled the Fresh Start Housing Scheme, which aims to help second-timer public rental households with young children own a flat again.

“MND and HDB are studying the option of offering eligible tenants a new housing grant to buy a two-room Flexi flat on shorter lease and with stricter resale conditions,” added the Housing Board.

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SEA’s weak currency a boon for foreign investors

Falling currencies in some of Southeast Asia’s most popular real estate markets, including Thailand, has created opportunities for overseas investors to reap significant savings if those purchasing property are willing to accept some of the uncertainties, reported The Wall Street Journal.

Property in Thailand is now ten to 15 percent lower than it was at the beginning of 2015 as the value of the Thai baht has sunk, property agency Engel & Volkers Phuket explained. The Thai baht has fallen 10.5 percent against the US dollar since May 2014.

Barry King, Managing Director at Prime Real Estate Phuket, said that price declines for inland villas has helped him to sell about 20 percent more properties priced at US$3 million or higher during 2015.

At the same time, Andrew Hunter, Managing Director at Hunter Sotheby’s International Realty in Phuket, noted that inquiries for properties priced above US$2 million have increased in the past 12 months, but actual sales have been soft as investors are waiting to see how the current political situation and economic instability plays out.

However, property agents said that the military junta has not created significant upheaval in daily life and it is business as usual throughout the country, including the island of Phuket. The government is also making significant investments in the region’s infrastructure to help enhance the area.

“The tourism sector has benefited from the relative political calm since the military took over,” noted Krystal Tan, Asia Economist at research firm Capital Economics. Tourist arrivals rose 19 percent in 2015 from the previous year, even with the Bangkok bombing. Many analysts believe that tourist arrivals are often a precursor to an increase in foreign buying of property.

Bali in Indonesia along with Malaysia are two other locations experiencing the same currency devaluations that are leading to more foreign interest in property. The Indonesian rupiah dropped 11.3 percent against the US dollar in the past year while the Malaysian ringgit fell over 22.7 percent against the US dollar. This has created some opportunities in the luxury housing market in both countries along with Thailand.

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5 tips to help you organize and declutter your closet

Every start of the year, we make a resolution to start de-cluttering our closets, and by the time, Chinese New Year and the annual Spring Cleaning rolls around, we’re almost ready to raise the white flag.

Yes, it can be daunting, but there is relief in sight. A good closet organizational system should not only keep your items neat, it should also make it easy to find what you need so that you don’t end up tearing the place apart next time you need to find a tie or a dress you wear only for special occasions. Here are some tips for when you find yourself at a cleaning impasse.

#1 Installing a modular closet system

A modular closet system is a great organizational tool, and can be found at popular big furniture retailers and closet solutions providers. They use different organizational tools, such as shelves, storage bins, hanging spaces and drawers, to help you keep your clothes organized and easy to find. Because it is modular, you can customize it to your exact needs, such as longer hanging spaces for dresses and suits.

To get started, think about what you own, and how you would like to store it. For instance, some prefer to hang their t-shirts, rather than fold them. Then think about about how much you’re going to need for each different module. Remember, modular systems allow you to maximize vertical space, so don’t be afraid of making your closet taller if you have the ceiling height for it.

#2 Use shelf dividers to hold folded clothes

Most of us fold our clothes to put them away, and end up having to play clothes-Jenga each time we want to retrieve something from the middle or the bottom of the pile. Often, we’ll see our neat piles start sliding into one another, and then we’ll end up re-folding them.

A handy solution is shelf-dividers. Available online, or at closet solutions providers, shelf dividers are handy partitions that clip onto the edge of your shelves, and help you to create separate compartments for different clothes. In a pinch, bookends work as well.

#3 Going over the door

An over-the-door solution, such as over the door hooks, are great for accessories – scarves, caps, belts and bags. You can use them anywhere you have a door, such as the bathroom or home office. They also come in different styles so you can definitely find one that suits your decor style.

#4 Put a light in your closet

Visit any condo showflat, and you’ll realize that this is a common feature that many have included. A light will help you to keep things organized and make it easier to find what you need quickly. If you have the time and money, the best solution would be to install a lighting system that automatically comes on each time you open the door. However, most big hardware stores also sell attachable, battery powered LED lights, which you can turn on with a quick tap.

#5 Give away what you don’t need anymore

This article is not just about organization, but decluttering as well. Decluttering means making choices about what stays and what goes, even when its tough.

You might love that pair of jeans, and they still look practically brand new, but it might have been years since you wore them because you can’t fit into them anymore. We’ve all got a couple of such pieces in the closet. Instead of hanging on to them, donate them to the thrift store so that someone else can get more use out of it.

Of course, you should only donate what is still usable. Undergarments and torn items should be thrown away. Remember, it’s really inauspicious to wear torn undergarments during the Lunar New Year.

To start, take your clothes out and sort them into three piles – keep, donate, and throw. It might be difficult to start, but once you get into the groove of things, it does get easier.

Picture Source: Walk in closets are an organizational dream, if we can find the room for it. Source: Wikimedia, Wjablow/If you have an extra room. try turning it into an open, organized closet! Source:
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Home buyers must set realistic aspirations: Shanmugam

While the government will continue to help Singaporeans own homes and have put measures in place to protect first-time buyers from a hot housing market, “they must have a realistic pathway to achieving their aspirations”, said Home Affairs and Law Minister K. Shanmugam.

During a dialogue session with over 2,000 property agents from ERA Realty on Wednesday (3 Feb), the minister recalled how a 28-year-old President’s Scholar had lamented to him about not being able to afford a private property in Katong, despite his many achievements.

“These are unrealistic aspirations for someone who’s only in his 20s,” said the minister. He noted that Singaporeans can afford to purchase property based on income levels, and have the option of buying private property, “but they need to start somewhere”, he said in reference to those eager to move up the property ladder.

Properties in Tanjong Katong are generally more expensive compared to other areas in the East, due to their prime location and accessibility to good amenities.

One of the more recent project launches in the neighbourhood is Amber Skye, a 109-unit condominium which was relaunched in March 2015 at an indicative price range of $1,680 psf to $2,500 psf.

Owning a condominium in Singapore is seen as a dream among many Singaporeans, as it is one of the 5Cs, with the other aspirations being a car, country club membership, cash and credit cards.

Despite this, Eugene Lim, Key Executive Officer at ERA Realty, has observed that fewer HDB dwellers are now jumping straight into buying private property.

Instead, he is seeing a trend of a “fair amount of buyers upgrading to larger flat types since the second half of last year”. For instance, there are more four-room HDB flat owners shifting to five-room flats and executive flats.

“The trend of moving to larger private properties is constrained by the Total Debt Servicing Ratio (TDSR),” he said.

Introduced in June 2013, the TDSR limits the amount of a borrower’s gross monthly income that can be spent on debt repayments to 60 percent.

This has severely impacted private property sales in recent years, with transactions down to about 14,000 units in 2015 compared to around 38,000 in 2012 before the measure was introduced, revealed statistics from the Urban Redevelopment Authority (URA).

Picture Source: Condominiums in Singapore.
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Expats now living in Phuket, working in Singapore

Expatriates in Southeast Asia are relocating their families to Phuket and commuting to work in major cities nearby such as Singapore, Hong Kong, Kuala Lumpur and Bangkok during the week, before returning to the tropical island on weekends, reported the Phuket Gazette.

According to the article, Phuket’s international airport has made it easier for them to do this.

Kevin Hodges, the North Branch and Investments Manager for Siam Real Estate, said that living standards, cost of living expenses and infrastructure in Phuket are a major draw for families who would otherwise be living in much smaller and more expensive properties. This is especially true in cities like Singapore and Hong Kong.

The article stated that it is possible for a family to own or rent a four-plus bedroom villa with a private pool and other amenities in Phuket at close to the same price of a two-bedroom condo in Singapore. This is a major factor to consider for families who need additional space and amenities, as well as privacy.

Phuket has a number of international-standard medical facilities, improving infrastructure, beaches, numerous leisure activities, a low cost of living and a growing expat community that is making it more feasible for people to live there and work further afield, noted Hodges.

Another draw for families relocating to Phuket is the growing number of international schools found on the island. The newspaper reported that there are now 13 such schools on the island, with 10 established in the past decade. Demand for places in international schools from both expats and Thai families is greater than ever before and a number of these schools are expanding.

With the ASEAN Economic Community going into effect soon, more expats and possibly even Thais could choose Phuket as the place to move their families to while working in Bangkok or other cities in Southeast Asia.

Picture Source: Luxury villas in Phuket, Thailand.
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HK property sales down 12% in 2015

Property transactions in Hong Kong dropped 12 percent last year, underscoring concerns of an economic slowdown in one of Asia’s major financial centres, reported Reuters.

The total number of local sale and purchase agreements received by the Land Registry fell 12.3 percent to 55,982 in 2015, with total consideration for those transactions down 3.9 percent to US$417 billion, according to data from Hong Kong’s Rating and Valuation Department.

The Land Registry had earlier reported that sales transactions for January plunged by more than 60 percent.

A major component of individual wealth, property-related businesses account for almost a fifth of Hong Kong’s economic output, said global ratings agency Fitch.

“The middle class is aware that the economic downturn will affect their income,” said Wong Leung Sing, Senior Associate Research Director at Centaline Property Agency.

“The significant case is HSBC, which stopped increasing salaries. Other big companies will follow so the middle class cut their expenses.

“They move from high rent to lower rent or negotiate with their landlords,” noted Wong, who does not expect any near-term improvement. “They don’t want to buy, even if they already had plans to buy.”

A major employer in Hong Kong, HSBC imposed a hiring and pay freeze across the bank globally this year in line with an annual cost savings plan of up to US$5 billion by 2017.

Meanwhile, the slower property sales is being reflected in company results.

Hang Lung Properties, for instance, reported that it only sold 63 apartments and several car parking spaces in 2015. As a result, the company saw its profit slump 57 percent.

Investment bank UBS forecasted last month that home prices in Hong Kong will fall by as much as 25 percent by end-2017.

Last week, the Hong Kong Monetary Authority (HKMA) said that a regular survey it conducts showed residential mortgage loans with negative equity, a first since September 2014.

As at end-December, there were 95 loans with negative equity of a combined HK$418 million, of which HK$12 million was unsecured.

Nonetheless, Hong Kong mortgage rates are still stable even as the Hong Kong dollar is pegged to the US dollar and the Fed increased US rates by 0.25 percent late last year.

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Govt won’t let property market crash: Shanmugam

The government has a “rough idea” on when to revise the property cooling measures, “but that doesn’t mean that we announce it”, said Home Affairs and Law Minister K. Shanmugam.

Speaking to over 2,000 property agents at an ERA Realty conference on Wednesday (3 Feb), the minister said such a decision would be made by the National Development and Finance ministers when they assess the risks to be “less or manageable”.

He was responding to questions on when the Additional Buyer’s Stamp Duty (ABSD) would be removed.

He explained that the measures were put in place by the government to protect Singaporeans, and they have managed to avert the disaster of an overheated property market.

He noted that while some people are worried that the property market could go the other way, the government will ensure this doesn’t happen.

“We cannot have a healthy economy if the property market has crashed. So it’s not in anybody’s interest to see it crash.”

First introduced in December 2011, the ABSD was revised upwards in January 2013 to rein in Singapore’s escalating residential property prices.

Singaporeans are required to pay an ABSD of seven percent for a second property, and 10 percent for a third and subsequent property. However, foreigners are required to pay an ABSD of 15 percent for their first and subsequent property purchases.

Eugene Lim, Key Executive Officer at ERA Realty, believes that the government is watching the market closely and will tweak the property measures in due time.

“The question is when, and many analysts have tried to set a target of how much prices will come down before the government removes the measures, but I do not think that is the case. The government is concerned about Singaporeans over-leveraging themselves as there are many potential buyers waiting on the sidelines.

“Right now, we’re not sure how quickly prices will rebound if one of the measures is removed, and I think that is the litmus test for the government. They don’t want to remove something and cause prices to rebound, derailing the measures.

“They are looking at market stability rather than a target price. When the time comes, they will make the decision to reverse the measures, which will be a quick and easy process.”

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How do stock market losses affect property?

Recent declines in the Singapore stock market could signal a further property price correction in the coming months, according to JLL.

This comes as stock market movement typically leads property market movement by one to two quarters.

“Looking back into the past, the residential market for example, corrected by four to six percent a quarter in some instances. Should the market lose footing, it is not impossible to expect a recessionary correction of this magnitude,” said Dr Chua Yang Liang, JLL’s Research Head for South East Asia.

“If this scenario pans out and threatens the stability of the property market and wider economy, it may prompt the government to re-visit its property cooling measures and other macro-economic policies including economic stimulus packages.”

The sharp correction in the stock market was triggered primarily by the slowdown in the Chinese economy, said JLL. Should the economic conditions in China deteriorate further, a more severe correction in the Singapore property market cannot be ruled out.

In fact, the Asian Financial Crisis (AFC) in 1998 clearly illustrated the disruptive effects of a stock market crash on the property market, although the economic reasons for the crash were different, the report noted.

In 1998, the currency and financial crisis in Thailand resulted in an Asian currency meltdown, which also affected the city-state.

“Stock market losses, sharply rising interest rates and a severe credit crunch arising from its proximity to the epicentre of the crisis, and rising unemployment drove Singapore property prices lower by between 35 percent and 44 percent during the crisis, after the property bubble burst across Asia in 1998,” said JLL.

Moving forward, the consultancy expects stock market volatility to persist in 2016.

“The lack of clarity and transparency over the policy road map ahead to manage the slowdown in China will increase downside risk in the stock market.

“Considering that current debt levels in several Asian countries, including China, Malaysia, Thailand and South Korea, are higher than they were before the AFC, these economies are more vulnerable to a global economic slowdown,” added the report.

As for Singapore, downside risks in the local economy “from external shocks, leading to higher unemployment levels, a weaker Singapore dollar and rising domestic interest rates, similar to the AFC conditions, could lead to a sharper than desirable price correction in the property market.”

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Singapore still 2nd for economic freedom

Singapore is still the world’s second freest economy in the 2016 Index of Economic Freedom, although the city-state saw a 1.6-point drop in its Index score from the previous year.

“Economic growth has slowed in Singapore, but the city’s openness to global trade and investment continues to provide a solid basis for economic dynamism,” wrote the editors of the report, which tracked the performance of 178 countries.

Rival Hong Kong remains in top spot due to its open markets, strong property rights and highly competitive fiscal policies.

New Zealand, Switzerland and Australia round out the top five rankings on the Index, which is published annually by The Heritage Foundation and The Wall Street Journal.

The 2016 Index shows a third consecutive year of improvement in the Asia-Pacific. Of the 42 regional countries monitored, the scores of 22 increased, 19 declined, and one stayed the same.

Although the region has four of the world’s five freest economies, it is also home to eight of the most repressed, including Timor-Leste, Turkmenistan and North Korea, the report noted.

Meanwhile, India and China are ranked 123rd and 144th respectively in the world. Both remain “unfree”.

“Over the past year, China’s economy has undergone a period of financial market volatility and economic slowdown.

“Deep-seated structural problems, including continued over-reliance on public investment and exports for growth, a state-controlled financial sector, and regulatory inefficiency, have become more acute,” added the report.

Picture Source: The Heritage Foundation
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DBSS flat sold for $855,000

A five-room flat at City View @ Boon Keng has been resold for $855,000, making it the first unit to be sold at the Design, Build and Sell Scheme (DBSS) project, reported My Paper, citing Housing Board records.

Situated on the 24th floor, the 109 sqm flat was sold a few months before homeowners at the project are allowed to sell their units.

The HDB had given the owners, a young couple with two children, special approval to sell the unit even before the five-year minimum occupation period (MOP) for the project ends in April.

They purchased the unit for $627,000 back in 2008 during the launch of the project.

Prices for the three- to five-room units ranged between $349,000 and $727,000, prompting concerns that the units were overpriced by public housing standards.

The average price of $520 psf was wedged between those of 99-year leasehold private condos and resale HDB flats within the area.

However, property experts believe that investment into the project will pay off.

Commenting on the said transaction, Chris Koh, Director of property consultancy Chris International, said: “Despite having paid a premium, the fact that they can walk away with a profit of one-third the launch price in today’s sluggish resale market is not bad.”

The sellers revealed that they had initially asked for $950,000 for the unit.

“We realised it was unrealistic, especially given the current market,” shared the 34-year old wife, who declined to be named. “But we still think we made a reasonable profit.”

Comprising three 40-storey blocks of 714 flats, City View @ Boon Keng is close to Kallang Community Club and the Boon Keng and Bendemeer MRT stations.

And with more units expected to enter the market soon, PropNex agent James Lim expects resale prices for the project to breach the million-dollar mark, much like at Pinnacle@Duxton, partly due to its city-fringe location.

“There are a lot of low-lying buildings around the area, especially on the side facing Lavender and Jalan Besar, so the view is unblocked.”

Picture Source: Public housing in Singapore. (Photo: Lionel Leo/Wikimedia Commons)
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26 March 2016

Former Longhouse gets new lease of life

A new mixed-use development located along Upper Thomson Road on the site of the former Longhouse food court could launch as early as this month.

Dubbed 183 Longhaus, the four-storey project will comprise 40 residential apartments, 10 commercial units on the ground floor, facilities such as a Jacuzzi and gymnasium, and basement carparks.

Jonathan Phua, CEO and Executive Director of TEE Land, the developer behind the project, said they wanted to retain some semblance of the original name, due to the site’s colourful history.

The property had been an A&W fast food outlet in the 1980s before being leased to the Kopitiam Group for two years. It was subsequently abandoned for a decade before Longhouse took over in 2000 and converted it into a popular eatery.

In January 2014, TEE Land purchased the approximately 16,960 sq ft site for $45.2 million. There had been plans to acquire an adjacent plot that houses a Shell petrol station in order to amalgamate both sites and build a larger project, but the deal fell through, said Phua.

While the Urban Redevelopment Authority (URA) has yet to approve the launch of the units for sale, the showflat has been open since late January 2016.

It is understood that there have been more than 200 walk-ins from potential buyers, most of whom stay in the Thomson area. Property agency Huttons Asia is marketing the project.

One reason for the strong interest could be the freehold tenure of the property. “This is the last pocket of freehold land in Thomson,” Phua noted.

Meanwhile, the residential component will feature a mix of two- to four-bedroom apartments with sizes ranging from 529 sq ft for a two-bedder to a 1,238 sq ft penthouse.

Phua stated that prices of the apartments have not yet been finalised, but they will not be too high. “The units will be priced competitively within market expectations and at an affordable quantum.”

Early indications are that prices will start from below $900,000 for a two-bedroom unit.

As for the commercial spaces, he revealed that they are in talks with a few potential tenants. “At this point, we haven’t decided whether to sell or lease the units, but we are looking for upmarket tenants.”

Situated within an established landed housing estate, 183 Longhaus is close to Thomson Plaza and popular eateries along Thomson Road. Marymount MRT station, the future Upper Thomson MRT station on the Thomson-East Coast Line and MacRitchie Reservoir are also nearby.

Construction is expected to begin in June and the project is scheduled to obtain TOP in 2019.

Separately, TEE Land is also marketing Hilbre 28, a 999-year leasehold residential development in Kovan. Launched last year, close to 50 percent of the 28 units have already been sold at an average price of $1,219 psf.

Commenting on prospects for the Singapore property market in 2016, Phua admitted that “home seekers have become more cautious and would rather hold on to their money for now”.

Despite this, TEE Land will continue to be on the lookout for good sites to build boutique projects of up to 100 units each, he added.

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1 in 3 Singaporeans are in debt

Around 33 percent, or one in three Singaporean investors are in debt, revealed the latest Manulife Investor Sentiment Index and reported Channel NewsAsia.

This places the city-state behind Malaysia (68 percent) and the Philippines (41 percent), but ahead of Taiwan and China (both 32 percent). Examples of debt include student loans, personal loans and credit card debts. Mortgages were not included.

Manulife found that 46 percent of indebted investors here owe $10,000 or more, and 44 percent expect to take over one and a half years to pay off their debt. Daily living expenses, like food, transportation and utilities emerged as the top contributor to investors’ debt, followed by discretionary expenses like travel, clothes and entertainment.

Fewer female investors were in debt compared to their male counterparts, at 28 percent compared to 37 percent respectively. Moreover, men held a significantly higher average debt at $40,985 compared with $25,502 for women.

Meanwhile, 69 percent of Singapore investors regret not planning their investments better, the survey showed.

When asked the reasons for their regrets, 27 percent said they were not proactive when they reviewed their portfolio, while 26 percent cited holding on to too much cash rather than making more investments.

“Singapore investors are taking steps in the right direction by working hard to keep track of their expenses and save for retirement. However, their debt burdens may be holding them back from achieving their financial goals,” said Naveen Irshad, President and CEO of Manulife Singapore.

“We encourage Singaporeans to look at planning their finances holistically, from making the most of their savings to protecting their wealth and securing a comfortable retirement.”

The Index is a half-yearly survey which tracks and measures investors’ views across eight markets within the region. Manulife noted that the findings are based on 500 online interviews in each market, namely Singapore, Hong Kong, Taiwan, China, Indonesia, Malaysia, Japan and the Philippines.

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Property investment sales lowest since 2009

Property investment sales in Singapore plunged 15 percent year-on-year to $16 billion in 2015, the lowest sales volume in six years, according to a DTZ Research report.

Property sales by government agencies fell 13 percent to $5.8 billion while private investment sales dropped eight percent to $10.3 billion.

The report stated that the decline in investment sales was largely due to the mismatch of price expectations between buyers and sellers, and the slowdown in launches of new sites from the Government Land Sales (GLS) programme.

Sales were also affected by the uncertainty in global markets, as local investors seek to diversify their portfolio by growing their asset pool overseas.

Notwithstanding, there was still much interest for Singaporean properties in 2015 given the country’s good governance and dynamic economic environment, said DTZ.

The biggest deal completed last year was the sale of a site in Paya Lebar for $1.67 billion to Abu Dhabi Investment Authority and Lend Lease. The developers plan to build a mixed development that will have 91,340 sqm gross floor area of office space, 43,740 sqm of retail space and 429 apartments.

Meanwhile, the sale of a land parcel at Dundee Road in Queenstown was the most expensive residential site sold in 2015 via the GLS programme, fetching the highest price of $483 million. Awarded to Hao Yuan Investment, the site also saw the highest residential price per square foot per plot ratio (psf ppr) in the year at $871 psf ppr. The breakeven price for the proposed development is expected to be at least $1,240 psf, noted DTZ.

The consultancy added that investors are willing to bid for leasehold projects that are priced reasonably and have redevelopment potential.

For instance, The Verge, which was sold for $317 million in Q4 2015, can be redeveloped into a mixed-use development.

Going forward, DTZ expects the real estate investment market in Singapore to present interesting opportunities to investors.

“2016 is expected to be a rocky year for the commodities and stock market, so real estate will become an attractive asset class for investors. Additionally, in a populous, land-scarce Singapore, the economic conditions are favourable for long-term property appreciation, so real estate with good specifications and location will still be in demand,” said Swee Shou Fern, DTZ’s Senior Director of Investment Advisory Services.

Picture Source: Photo: William Cho/Wikimedia Commons
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TDSR doing its job, stats show

The impact of the Total Debt Servicing Ratio (TDSR) framework is being felt, with less than 10 percent of existing borrowers having a TDSR of more than 60 percent, reported The Business Times, citing statistics from the Monetary Authority of Singapore (MAS).

In fact, the prevalence of highly leveraged borrowers has declined for new housing loans, said the MAS.

“Almost all new housing loans are below the 60 percent TDSR threshold, with a significant proportion of new borrowers having TDSRs of less than 40 percent.”

Moreover, borrowers are now taking out fewer mortgages. Borrowers with more than one loan accounted for 20 percent of all new housing loans in Q3 2015, down from the 30 percent seen in 2011.

With this, the MAS is encouraging households to prepay their home loans in order to avoid monthly repayments and higher interest costs.

Banks also noticed that households have improved the risk profile of their home loans by paring down their mortgages.

Tok Geok Peng, DBS Bank’s Executive Director of Secured Lending, believes that the property cooling measures have helped homeowners to downsize their loan commitment via debt consolidation, capital repayment and other means.

Sherry Leong, Head of Secured Finance Solutions at Citibank Singapore, added: “We do not foresee any impact to (borrowers) with respect to the transition period, which should be sufficient for them to make any changes to their refinancing arrangement if required.”

The MAS revealed that the purpose of the three-year transition period is to encourage highly leveraged borrowers to “right-size their loans as early as possible”.

In February 2014, the central bank introduced a concession which broadened the exemption of the TDSR to include homeowners who breached the 60 percent limit but were hoping to refinance the loan on the property that they live in.

As for investment homes, the MAS allows a grace period until 30 June 2017 for refinancing, should the borrower agree to pay down a portion (usually at least three percent) of the outstanding loan.

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Singapore developers more pessimistic: survey

Business sentiment among property developers in Singapore fell further in Q4 2015, reported The Business Times, citing a survey by the Real Estate Developers’ Association of Singapore (Redas) and the National University of Singapore (NUS).

The Current Sentiment Index, which monitors changes in sentiment during the last six months, dipped to 3.6 in Q4 from 3.7 in the previous quarter.

On the other hand, the Future Sentiment Index, which monitors sentiment in the next six months, dropped to 3.4 in Q4 from 3.7 in the quarter before.

As a result, the Composite Sentiment Index slid to 3.5 from 3.7 previously. A score of less than five indicates deteriorating market conditions while a score of more than five implies improving conditions.

Conducted among senior executives of Redas’ member firms, the quarterly survey showed that nine in 10 developers expect the global economy to slow down, with three in four expecting the increase in interest rates and inflation to affect market sentiment over the next six months.

“Job losses, decline in domestic economy, excessive supply of new property launches are other potential risks that will adversely impact the market sentiment,” the report said.

Meanwhile, seven in 10 of the respondents expect new launches to moderately increase, while more than a fifth of the developers said they will launch relatively fewer units.

On price changes, six in 10 expect residential property prices to drop moderately in the next six months.

As for the impact of the cut in supply of the first half 2016 Government Land Sales (GLS) programme, around six in 10 anticipate minimal impact on demand in the commercial and residential property sectors.

One developer noted that a lack of new launches may see buyers revisiting the secondary market. “The lower GLS supply will provide support for prices, which lead to lower new developer sales. Some buyers will revisit unsold and resale units in existing projects.”

Picture Source: Photo: Someformofhuman/Wikimedia Commons
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Singapore property costs lower, but taxes can be a killer

The cost of buying, holding and selling a mass market private home in Singapore is significantly lower compared to that in London and Sydney, but tax costs are much higher, revealed Knight Frank’s first-ever Global Tax Report.

The report studied the property and taxation costs in 15 key cities worldwide for foreigners purchasing a unit in their own name as an investment, and renting it out over a five-year period from 2015 to 2020.

Property costs in Singapore amounted to 4.3 percent for a US$1 million property, compared to 7.8 percent and 9.8 percent for London and Sydney respectively. However, tax costs in the city-state were higher at 19 percent, while London and Sydney were 11.3 percent and 18 percent respectively.

Despite this, tax costs for luxury properties here are more favourable, the findings showed.

For a US$10 million home, property costs were at 2.8 percent, compared to 5.4 percent in London and 5.9 percent in Sydney. In addition, tax costs in Singapore were at 20.5 percent, lower than London (20.8 percent) and Sydney (26 percent).

“Taxes can sometimes make or break a deal. But at the highest end of the market, the study shows that even accounting for tax, value has emerged for Singapore residential in comparison with other key cities,” said Kah-Poh Tay, Executive Director of Residential Services, Knight Frank Singapore.

The largest tax costs in Singapore are the stamp duties, namely the Buyer’s Stamp Duty (BSD) and the Additional Buyer’s Stamp Duty (ABSD), payable upon purchase of the property.

In the past year, there have been a growing number of calls from developers for the government to tweak the property taxes, as many are unable to sell all their units. However, the government has repeatedly rejected such appeals to adjust the measures.

Alice Tan, Research Head at Knight Frank Singapore, believes there will be no changes introduced in the next three to six months, given that the government’s key objective is to ensure that housing remains affordable.

However, she thinks that Singaporean buyers will find high-end homes more appealing now, due to declining prices.

“Compared to UK and Australia, Singapore offers lower prices on an average psf basis for ultra-luxury non-landed homes. Currency shifts have also made property prices in Singapore more attractive.”

Prices of prime non-landed residential properties in Singapore fell 7.9 percent in Q3 2015 from the previous year, according to Knight Frank’s latest Prime Global Cities Index. Prices in London and Sydney rose 1.3 percent and 13.7 percent respectively during the same period.

Picture Source: Condominium building in Singapore. (Photo: ProjectManhattan / Wikimedia Commons)
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Staging your house for sale

With rents expected to drop further this year and resale property prices stabilizing, some sellers and landlords have turned to home staging to make their property stand out in a buyer’s market, reported The Straits Times.

This decorating idea is said to have originated in the US, and refers to transforming a lived-in house to make it more appealing to buyers. It usually involves repainting walls, cleaning up and re-arranging furniture, and even baking bread during viewings to create a welcoming atmosphere.

For landlords, home staging may involve renting new furniture for the apartment instead of leaving it empty for viewings.

In Singapore, only a handful of professionals offer home staging services. These include styling studio paper+white, which upcycles existing furniture, and Asian Professional Organisers, which specializes in interior design and space management.

There are also several furniture rental companies such as Singapore Furniture Rental, which leases out furniture and home accessories like cutlery and carpets, and WTP The Furniture Company, which rents out furniture for a minimum of three months.

Packages start from $1,400 per month to furnish a studio apartment. At Singapore Furniture Rental, the cost usually includes photography and transportation, as well as the services of a stylist who will arrange the furniture.

Some property agents also offer home staging services.

For instance, Vestor Realty Vice-President Lawrence Poh goes to great lengths just to decorate a property he is putting on the market.

He brings in various cutlery, potted plants and throw pillows before taking a picture of the house or hosting a viewing. He would sometimes change the bedsheets of homeowners to fit the theme.

He may even serve wine or use home scents during viewings.

While many baulk at the idea of spending money to sell a house, home stagers reckon it’s worth it.

“Elsewhere, homeowners understand that they can spend a five-figure sum to home stage, but they can get back that amount and an even bigger profit because their house has attracted buyers willing to bid high for a good-looking house. The difference can be enormous,” said Davina Stanley, Founder and Creative Director at paper+white.

Eugene Lim, ERA Realty Key Executive Officer, noted that buyers are more likely to go for a spruced-up home over a messy home, even if it is priced a little higher.

“A cluttered house is visually not appealing and stays on the market longer. The longer the house stays on the market, the more likely it will sell at a lower price.”

Picture Source: Staging a living room. Photo: Flickr
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Habibie to build US$1 billion Batam project

Pollux Habibie International, the company of Indonesia’s former president BJ Habibie, is set to build luxury apartments in Batam in an attempt to woo foreign buyers, especially Singaporeans, reported The Jakarta Post.

Called Meisterstadt, the US$1 billion (S$1.4 billion) project will be developed on a nine-hectare site, and will consist of 11 towers of apartments, hotel rooms, offices and a hospital.

Ilham Akbar Habibie, son of President Habibie and commissioner of Pollux Habibie International, revealed that the mega project will be built in four stages, with works set to begin in the middle of this year.

“Initially, the plan to construct a hospital in the superblock was in the last will and testament of my mum (the late Ainun Habibie). It will be implemented in the third stage of this superblock’s construction,” he said during the project’s launch on Saturday (30 Jan).

Ilham noted that the property market in Batam is promising due to its close proximity to Singapore. He hopes that Singaporeans will be the main buyers of the apartments.

“Singapore now has five million residents and it has continued to grow. We hope that we can benefit the country’s population, particularly in the property sector,” he said.

“It happened in Hong Kong in the 1950s, during which the region’s population had flown to several provinces of the Chinese mainland near Hong Kong. We’ve now seen a similar situation in Guangdong, in which industries and businesses from Hong Kong have flown to the city.

“Such an effect will happen between Singapore and Batam.”

The developer hopes to sell a third of the apartments to foreigners while the rest will be marketed to local buyers.

In fact, 1,575 apartments in two of the towers have already been booked by potential buyers holding VVIP pass cards during the launch. A total of 1,874 VVIP pass cards were released for the event.

To be built during the first stage of construction, the apartments come in three different sizes – 24.82 sqm, 42.51 sqm and 51.59 sqm. Unit prices start from Rp 400 million (S$41,618).

Picture Source: Artist’s impression of Meisterstadt, Batam.
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Myanmar relaxes foreign ownership laws

In a sign that Myanmar is further opening up to the world, its parliament recently passed a draft law allowing foreigners to own up to 40 percent of condominium units, reported Property Report.

In Myanmar, a condominium building must be at least six-storeys high and located on a site exceeding 20,000 sq ft.

While this is welcome news for overseas buyers looking to buy property in emerging markets, the law does not allow foreigners to “manage” condo units, which raises the question whether they can rent out the units.

Existing laws also prevent foreigners from owning land in Myanmar.

The Ministry of Construction is expected to announce further details of the Condominium Law at a later date.

Picture Source: Aerial view of Yangon city. Photo: Flickr
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Majority successful in BTO flat applications: Wong

National Development Minister Lawrence Wong revealed that around nine in 10 first-timer families and seven in 10 second-timer families had successfully applied for Build-To-Order (BTO) flats in non-mature estates from 2013 to 2015, reported Channel NewsAsia.

Responding to a parliamentary query from MP Alex Yam, Wong said that most flat applicants who were unsuccessful in their multiple applications had applied for flats that are in high demand but are limited in supply, like those located in mature estates and balance flats.

He stated that the Housing Board had tapered the BTO supply to 15,100 flats in 2015 from 22,400 in 2014 after the demand-supply balance was restored.

In 2016, the HDB is looking to release around 18,000 BTO units in order to meet the new demand arising from recent policy changes such as the enhanced Special CPF Housing Grant and higher income ceilings, the Minister said.

“We will continue to monitor the market closely and adjust the supply when necessary, in line with our broader plan to keep supply at a sustainable level over the long-term,” added Wong.

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18 March 2016

Lift upgrading to benefit 33,000 HDB households

National Development Minister Lawrence Wong on Thursday (28 Jan), said that the Housing and Development Board (HDB) has been working with the town councils to replace old lifts under the Selective Lift Replacement Programme (SLRP), reported Channel NewsAsia.

He noted that the outcomes are being monitored by the Ministry of National Development (MND), which will decide on the next course of action.

Wong said this in response to MP Tin Pei Ling’s query on whether a new upgrading programme can be implemented to replace aging lifts in HDB estates which are seeing frequent breakdowns.

The Minister revealed that the SLRP was introduced in September 2014 to replace around 750 old lifts with modern ones that come with better security and safety features. He added that the new features will benefit around 33,000 households.

Responding to Aljunied GRC MP Pritam Singh’s question on the programme’s selection criteria, Wong explained that lifts under the SLRP are selected based on the date of original installation.

He added that it is the statutory responsibility of the town councils to carry out the lifts’ maintenance and cyclical replacements, which they are doing so now.

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Istanbul named a city to watch

Istanbul has outranked London and Edinburgh as one of the top European cities for investment and development prospects, according to a report from PwC and the Urban Land Institute.

In fact, Turkey’s largest city climbed six places from last year’s listings, the report showed.

Despite the recent political uncertainty, these findings suggest that Istanbul’s young demographic, coupled with the influx of new-build property, will continue to drive investment.

According to Cushman & Wakefield research, by Q2 2015 there were 1.9 million sqm of space under construction in Istanbul, and this increasing demand for property looks set to continue.

Adil Yaman, Director of Universal 21, the largest management company based in the city, said: “Istanbul has made great advances in recent years, especially in relation to its real estate market and its ability to attract overseas investors. Property in Istanbul is still in high demand.

“We would expect 2016 to be another successful year for Istanbul’s housing market and PwC and the Urban Land Institute’s latest findings only confirm its place amongst key European cities with the best investment and development prospects.”

Turkey’s Prime Minister, Ahmet Davutoğlu, recently expressed his own confidence in the country’s future. Writing for The Wall Street Journal, he suggested that “Turkey’s economy has become synonymous with stability and success”, and one that will continue to appeal to both domestic and international investors.

He added: “The success of the past decade hasn’t weakened our resolve to go even further”.

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All boxed up

Paper might be thin but we accumulate so much of it over time. What’s precious, of course, is what’s on it. Our school notes from all those years ago are still in their folders at the back of the shelf. We’re not going to throw them out because we worked so hard over them, even if we’ll never need to remember what dy over dx, or the Periodic table is. Our favourite books from when we were younger that we know we’ll read again, one day when we have the time.

These items are great memories, but they also take up too much space. An easy way to create some space at home, and still have these items available for when you need them is to use a storage service.

Box up clothes and shoes you rarely use

Let’s be honest. How many of the clothes we keep in our closet do we wear in a month, or even a year? What about the cute little onesies the baby has outgrown? The wedding gown. That favourite dress from five years ago that we know we can fit into again if we just diet a little. Those pretty heels that we’ll only wear for the most special occasions. They’re still in the closet, making it hard to put away the clothes that we wear to work almost every week.Clothes not only take up space, but can end up being quite heavy. Fortunately, there are services that not only store these bulky items for us, but also collect it from our homes.

Clothes not only take up space, but can end up being quite heavy. Fortunately, there are services that not only store these bulky items for us, but also collect it from our homes.

Get rid of bulky items

We’ve all got that really big suitcase we bought for those shopping holidays. Nothing is more fun than hitting those overseas factory outlets or summer sales. But let’s face facts. We might only go on such a holiday once every few years. And all that time, this massive suitcase is taking up space in our store room or bomb shelter.

Storage facilities can accommodate these bulky and even odd-sized items. It would be a lot more practical to use such a service and then retrieve them only when needed. Best of all, they even deliver the item to your house when you need it!

Storage solution

Work+Store Valet Storage offers easy, affordable solutions to help you store these precious items and memories away for when you need them again.

Order a storage box online, and have it sent to you for free. Pack your items, take a photo, and use the handy system to keep track of what you’re putting in storage. Schedule a pick up online, and a team member will pick it up from your home. Now all you have to do is sit back, and think about how to use all the space you’ve freed up.

Whenever you need an item, just schedule a delivery, and have it sent straight to you.

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Buying property as a corporate entity

It is not just individuals and families who buy homes in Singapore. Sometimes, a corporate entity may purchase a residential property for investment purposes. If you and your business partners are considering doing so, here’s what you need to know.

1) You can buy only private property

HDB flats are meant for owner-occupiers (especially families, married couples and senior citizens), HDB tenants and tenants of non-corporate landlords. The HDB does not permit corporate entities to purchase its flats for investment purposes. Condominiums and landed homes, however are legally permitted for corporate entities to purchase.

2) Consensus is compulsory

The corporate entity involved in the purchase should engage a lawyer to draw up a contract which is mutually agreed upon by all buying parties. All parties must then sign the contract and transfer documents individually before the sale of the property can proceed. Details like each party’s share of ownership in the property and the purpose of the property must be determined and stated in the
contract. If the purpose of the purchase is to lease the property, all parties must also sign the tenancy agreement to lease it.

3) Your share of ownership of the property is not necessarily equivalent to your share in the company

It all depends on the contract, whose terms must be discussed thoroughly among all involved parties. You may have a straightforward situation whereby your share in the company reflects your share of ownership of the property, or it could be that your contractual terms are more complex than that. It is vital to determine amongst all relevant parties what works best before drawing up a
contract and signing it. However, a private limited company is seen as a separate legal entity from its shareholders, and the extent of each shareholder’s liability is limited to his stake in the company.

4) Death has no power here

Unlike in a tenancy-in-common or joint tenancy agreement, the death of any of the owners of a residential property held by a corporate entity will not affect the company, property-wise. If a shareholder wants to relinquish his ownership, this is subject to the company’s Memorandum & Articles of Association (M&AA). He can then sell his shares to either his fellow shareholders or to a third party.

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Hokkaido: Snow City

Although interest in ski resort properties cooled following the 2008 Global Financial Crisis, investor reluctance appears to be thawing, as many global high-net-worth individuals (HNWIs) are now looking to own alpine homes, which have become a status symbol.

According to a 2014 (Knight Frank) survey of wealth advisors representing 30,000 ultra-rich individuals, around 25 percent of those polled in China and 11 percent in Singapore were interested in owning a ski home, especially ski-in ski-out accommodation where the ski slopes are right outside your door.

With the renewed interest, prime property prices in major ski resorts worldwide rose by 5.9 percent in the year to June 2014, revealed data from the consultancy. The price index reached its lowest point in June 2009, but had since risen by 14.9 percent.

Asia’s own Aspen

In Asia alone, there are hundreds of ski resorts, but very few can compare to Niseko in Hokkaido. Dubbed the “Aspen of Asia”, the small town is famous for its fine, powder-like snow.

“Considered one of the snowiest places in the world, Hokkaido has been bestowed with the finest snow which falls consistently every year, thus attracting many ski enthusiasts from all over Asia Pacific,” said Low Su Ming, Executive Director of Low Yat Group, a major Malaysian player in Niseko.

Aside from Niseko’s rugged beauty, she noted that the shorter travelling time compared to long flights to Europe and the Americas has also contributed to the rising number of wealthy Asian investors looking at ski resort properties in Hokkaido.

In addition, the area is easily accessible by train and bus services, while Japanese food and culture appeals greatly to many Asians.

Meanwhile, the Japanese Yen has fallen from ¥77.50 = US$1 in November 2011 to ¥122.54 = US$1 in November 2015, making the country more attractive to potential investors, noted Low.

Aussie connection

Despite the Yen being at a low point, sources told PropertyGuru that Hokkaido’s economy, which is based mainly on food production, has remained stable. But after the discovery of Niseko’s good quality snow some years ago, Australian skiers started investing and creating a community of their own. Since then, more tourists have been flocking there.

As Hokkaido’s popularity is still in its infancy, Low believes many investors will see growth opportunities in the area.

“Hokkaido is similar to Bali or Phuket when it was first discovered. There is a huge potential for growth here. As for tourism, it is becoming an all-season destination. There are plenty of things to do in Hokkaido that are still new to visitors from Asia and elsewhere.”

In a blog post on 360niseko, a website dedicated to information about the town, Keith Rodgers, President of Niseko-based Taiga Real Estate and Project Management, wrote that it is witnessing “the best tourism numbers since 2007”. According to the Niseko Tourism Board, visitor numbers soared by 103 percent during the 2011 and 2012 seasons.

While Niseko’s property market had been dominated by Australian and Hong Kong buyers in the past, nowadays they are coming from Singapore, Malaysia, and increasingly, from Indonesia, Thailand and Taiwan, said Rodgers.

Holiday home

So what are they looking to buy in this snowy location? In the case of Low Yat Group’s Shiki Niseko project, the majority of investors are interested in lifestyle investments, specifically a vacation home, shared Low.

Shiki comprises 68 luxurious apartments on a one acre plot and includes 10,000 sq ft of retail space and restaurants. Its unique location means that all the residential units offer breathtaking views of either Mt. Yotei or the steep slopes of the Grand Hirafu Ski Resort on Mt. Annupuri.

“Most of the units are on leaseback arrangement. Owners enjoy a duration of stay during the year whilst the hospitality arm manages the property based on a pool revenue sharing system at other times of the year. Hence, they receive returns in the months that they aren’t occupying the unit.

“These types of properties are gaining popularity, and Shiki Niseko was the first luxury property to start this type of investment.”

When asked to name one hotspot in Niseko, Low points to Hirafu Village and Kutchan, which are the town centres located close to ski lifts. “There are plenty of ski activities to be found here, while restaurants, cafés and shops are all within walking distance.”

Money matters

Borrowers looking to get a loan for Japanese properties outside of Tokyo will find it tough to do so in Singapore, but the process is much easier through Malaysian banks, according to Low.

In Japan, home loan interest rates are around 1.8 percent to two percent and savvy investors will usually seek the best rates and packages available in the market before making a purchase.

Low reckons that now is a good time to buy a ski resort property, as housing and land prices have already tripled over the last two years. At the same time, Hokkaido has seen many developers entering the market to build new resorts. Right now, rental yields are in the range of two to five percent, depending on the property type and the level of service.

She added: “Demand for accommodation within the area has also increased, especially during the winter season. This comes as the number of tourists flocking to the area rapidly increases every year.”

In fact, most of the resorts and apartment units were fully booked last winter, and tourists found it difficult to secure accommodation even three months before, said a source.


Population: Around 5.6 million

Total area: 83,457 sq km

Currency: Yen

GDP per capita: US$33,896

GDP growth: 0.1 percent

Future transport: Extension of the Hokkaido Shinkansen (bullet train)

Ski resort prices: Up three times over the last two years

Distance from Singapore: 5,940 km


Niseko is home to some of the world’s top ski resorts, which see high demand from wealthy travellers. Here are two new developments you should check out.


Shiki Niseko
Abuta District, Niseko

Type: Condotel
Developer: AP Land Berhad
Tenure: Freehold
Facilities: Housekeeping services, fully equipped kitchen, ski equipment storage, drying rooms
Nearby Key Amenities: Michelin Star restaurant, gourmet food store, coffee bar, car rental services
Nearby Transport: Shuttle buses, Kutchan railway station
Starting Price: Approx. S$968,000

This luxury landmark condotel is located in the village of Hirafu, comprising 68 units of one- to three-bedroom apartments with amazing mountain views.

Boasting a contemporary Japanese aesthetic, the hotel-style condominium was completed in 2012 and is operational all year round.

First-class facilities include housekeeping services, a fully-equipped kitchen, storage spaces for ski equipment and drying rooms for skiers.

An exquisite Michelin Star-rated restaurant, gourmet store with fresh local produce, and an inviting coffee bar are also available for guests.

Abuta District, Niseko

Type: Luxury apartments
Developer: Niseko Resorts Group
Tenure: Freehold
Facilities: Concierge service
Nearby Key Amenities: Japanese restaurants, bars
Nearby Transport: Shuttle bus service, Kutchan railway station
Starting Price: Approx. S$488,000

Situated in the heart of Hirafu village in Niseko, which has been dubbed the “Aspen of Asia”, this development features 25 fully-furnished apartments.

Units range from studios to two-bedroom units up to 956 sq ft, with a spacious four-bedroom penthouse at 1,560 sq ft.

Completed in 2013, Akazora is an eye-catching building that blends Western and Japanese design elements.

The boutique project is just a stone’s throw away from Niseko’s famous ski slopes, popular restaurants and bars. It is also conveniently located near a ski shuttle service.

Picture Source: Hokkaido is famous for its quaint towns and powder snow.
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Eye on Chinatown: Cultural evolution

Chinatown — there’s one in (almost) every country, yet perhaps, none as diverse as Singapore’s.

Comprising the precincts of Ann Siang Hill, Bukit Pasoh, Kreta Ayer, Tanjong Pagar and Telok Ayer, Chinatown is a mish-mash of the old and the new. While the place certainly lives up to its name, what with its iconic Chinese Buddhist temple, multiple restaurants offering a range of Chinese cuisines (from Hong Kong and Taiwan to mainland China), shops selling traditional Chinese wear and an endless variety of Oriental trinkets, its diversity also makes it unique.

There is no shortage of local delicacies for which Singapore is well known, or even European cuisine. Bars, pubs and clubs catering to the non-Chinese crowd also abound — though mostly in the nearby Tanjong Pagar area — and it is not uncommon to see locals and tourists alike enjoying the sights and sounds Chinatown. There is also a Hindu temple in the estate.

Once upon a time

Needless to say, the Chinatown we know today was not always the vibrant, diverse hive of activity it is now. In Singapore’s early days, migrants from China arrived in the country in great numbers, prompting Sir Stamford Raffles and colony engineer Lieutenant Philip Jackson to begin drawing up the plan for Singapore to ensure organized growth.

The different ethnic groups were subsequently settled into enclaves along the Singapore river; the Chinese, who made up 70 percent of the migrant population, were allotted the entire region southwest of the river. Each dialect group even had its own enclave within the region: the Teochew around Fort Canning and along Clarke Quay, the Hakka and Cantonese in Kreta Ayer, and the Hokkien in Telok Ayer. The Hainanese were the last to arrive and settled wherever they could.

The dialect segregation and challenging environment led to clan associations being formed as a way to provide community support when it came to employment, funerals, and legal matters. However, under the guise of aid and support, kongsi (secret societies that were actually violent street gangs) also arose; opium, prostitution and gambling were their industries of choice. Finally, in 1889, the Suppression of Secret Societies Ordinance cracked down on them.

Chinatown still had to endure the ordeal that was the Japanese Occupation during WWII. As the area was crowded and devoid of air shelters, Japanese air raids claimed up to 2,000 lives daily.

But Chinatown survived and eventually flourished. Food, apparel, markets, street-side Chinese wayang, Chinese medicinal halls, fortune-telling and festival celebrations sprang up all over the estate, marking the beginning of its transformation to Chinatown as we know it today.

Convenience in tradition

Today, Chinatown is considered by a good number of Singaporeans to be a “tourist trap”, abounding in souvenirs and tourist-centric services whose prices are grossly inflated (just ask anyone who has ever been on a trishaw ride in Singapore). But while that much rings true, it still has much to offer.

One cannot deny that it is rich in history and culturally significant. The narrow, cramped walkways littered with food stalls and street hawkers selling a large selection of food from Hokkien mee to satay, are remnants of Chinatown’s past that are highly unlikely to go away any time soon.

Though the place has been cleaned up and offers modern conveniences such as free Wi-Fi, the trademark crowded streets, cluttered shops selling all sorts of things from Chinese fans to cheongsams, and Chinese medicinal halls are still a common sight in Chinatown.

Needless to say, the festivities are always in full swing come the Lunar New Year, and one would be hard-pressed to walk anywhere in Chinatown without having to squeeze his way past the throngs of shoppers patronizing the stores that stay open late into the night during this period.

Still, modern advances have given rise to a mall (Chinatown Point), numerous hotels, and improved connectivity between Chinatown and the rest of the island.

Large sections of it are governed by the Urban Redevelopment Authority’s (URA) conservation act, and being in the Outram planning area, it is in the heart of the central region. The central business district (CBD) is within walking distance, and the Central Expressway (CTE) is located nearby.

Apart from the CTE, the three MRT lines serving the area — the Northeast, East-West and Downtown lines — help to maximize its accessibility. Connectivity will be enhanced even more in the near future thanks to the upcoming Thomson East line, which will pass through the existing Outram Park MRT station and a new station at Maxwell.

The long haul for old homes

When it comes to residential property in the area, buyers and investors should note that most of the housing projects there are relatively old, and take this into account when looking at housing in Chinatown.

Wong Xian Yang, Senior Manager (Research & Consultancy) at, says: “Many of the developments, such as People’s Park Complex, People’s Park Centre, Fook Hai Building and Pearl Bank Apartments were completed in the 1970s. As they are quite old, there is an incentive to try for collective sales.

“Investors who are interested in purchasing them in anticipation of en bloc sales could look at some of the older developments. However, they should know that the current measures in place, such as the ABSD (additional buyers’ stamp duty) have bogged down the en bloc market.

“Moreover, there is still a gap in expectations between buyers and sellers, especially in the current lacklustre market. As such, investors would be well advised to view (such purchases) as long-term investments.”

Pearl Bank Apartments is one such example. The multiple attempts so far to put it up for en bloc sale have been unsuccessful. At the moment, its owners are trying to list the development as a conservation project.

Furthermore, older buildings tend to incur higher maintenance fees, which lead to relatively higher holding costs, something buyers and investors should be aware if before making any commitments.

However, residential property in Chinatown is not limited to old apartments. Wong assures buyers and investors: “For buyers who are keen to tap into the convenience of Chinatown and who desire newer housing, there are developments such as Dorsett Residences.”

Completed in 2013, Dorsett Residences is a 99-year leasehold condominium on New Bridge Road, near Dorsett Hotel. It is one of the more recent residential developments in the area, and offers good prospects for both buyers and investors.

Of Chinatown’s property market prospects, Wong says, “In view of area’s connectivity, central location and limited available land, there may be significant interest for collective sales when the en bloc market picks up.”

Picture Source: URA,PropertyGuru Analytics
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HDB outlook for 2016

While condo transactions continue to be scrutinized by most market watchers, often due to the aspirational nature of the property class, it is necessary to keep an eye on HDB resales. To Singaporeans, HDB has always been a very bread and butter issue, with a large majority of families living in them.

Furthermore, for those looking to upgrade from public housing, they would need to sell their HDB starter homes, hopefully with a decent upside, to be able to afford the move to condominiums, or executive condominiums (ECs). The health of the HDB resale market, therefore, affects the private market as well.

We take a closer look at the ups and downs of the HDB market in 2015 to make some predictions for where this market segment will head in 2016.

Overall HDB market

What then, was the pulse of the HDB market in 2015?

In the space of the 12 months of 2015, 19,015 HDB resale units exchanged hands, a 10 percent increase from 2014’s 17,318 (refer to Figure 1). This translates to an average of around 4,700 units transacted per quarter of the year, with the second quarter seeing a high of 5,286 units. This is comparable to the numbers that were seen in 2012 and 2013, before cooling measures froze the market and reduced transactions to a mere trickle.

While the number of transactions increased, prices dipped 1.6 percent. This decline is a far milder than the 6.1 percent dip seen in 2014, suggesting that the fall in prices might be coming to a trough. A burgeoning sign of promise was that prices actually saw a small 0.2 percent bump in the final quarter of the year, according to the HDB resale price index. However, most market watchers caution that it is far too early to call it the start of a recovery, and that more sustained signs of recovery must be seen.

The two key cooling measures that have brought about this fall in prices in the HDB resale market are the Mortgage Servicing Ratio (MSR), and the removal of Cash-Over-Valuation (COV). MSR caps the payable monthly mortgage 30 percent of one’s monthly income. Buyers therefore have to look at what the bank tells them they can afford, instead of what they think they can afford.

The removal of COV was a welcome move as well, because sellers often focused on COV to determine their asking price. This meant that buyers were paying more than the fair valuation price, and had to pay premiums to buy a unit. Furthermore, sellers often set higher and higher COVs, based on what they heard their neighbours had sold for, creating a system of escalating quantums. Removing COV, therefore, put some sense back into the system.

It might be better therefore, to see where HDB prices have gone, not so much as a downturn, but rather, as some kind of sensibility entering the market, with sellers making more rational decisions around the pricing and the actual value of their homes.

Breaking down the numbers

Despite prices falling across the board, the picture gets more complex once we delve into the details.

In general, flats in mature housing estates have held up better in terms of prices than their non-mature counterparts. For instance, the top five performing estates in terms of median prices for four-room flats were Serangoon, Bukit Merah, Geylang, Kallang / Whampoa, and Queenstown. Geylang’s prices showed a 15.3 percent increment, an incredible jump, given the market. However, due to the relatively small size of the estate, it did not move the overall market needle.

Meanwhile, the top five performing estates for five-room flats were also mature estates. Geylang again took the crown, with Toa Payoh, Ang Mo Kio, Bishan and Yishun coming in below it, all showing more moderate increases below two percent.

With the distribution and buildup of resources across the island, it is likely that the reason mature estates do better is due to the greater number of amenities available. Rather, all the mature estates that performed well in 2015 were located within a 20-minute MRT ride to the city, or even closer. Furthermore, Bukit Merah, Queenstown and Kallang / Whampoa are receiving a lot of attention from affluent, younger couples who are drawn to the revivification of those estates with hipster cafés, bars and shops.

Supply is likely to play a part as well. Aside from Ang Mo Kio and Toa Payoh, these are all smaller, early estates. The supply of resale flats within these areas is unlikely to be high, and many of the older blocks could have already been earmarked for HDB’s Selective Enbloc Redevelopment Scheme (SERS), which would discourage people from buying them, only to face the hassle of relocation in the future. This lowered supply then, continues to support elevated prices.

Record busters

In 2015, 110 HDB units sold for prices above $900,000.

Out of these, 53 were units at Pinnacle at Duxton, where record prices continue to be set for HDB flats. In fact, the highest price ever recorded for a four-room flat took place at Pinnacle at Duxton this year, for $990,000. However, even though over 50 units were sold for above $900,000, only nine managed to cross the psychological one million dollar mark, all of which were five-room units.

Three other flats sold in 2015 also managed to cross this threshold. These flats were located in Toa Payoh, Toh Yi Drive and Jalan Ma’mor. The Jalan Ma’mor flat is particularly interesting, because it is also a rare jumbo unit at 3,014 square feet, and sold for $1,060,000. Its size, rarity and location close to Balestier and Novena were factors that contributed to its higher prices.

While we are all used to Bishan’s million dollar maisonettes, it might be surprising to some that Toh Yi Drive also saw seven duplex units move at prices over $900,000, with one unit going for a million on the dot. The proximity to the Bukit Timah school stretch, and the newly opened Beauty World MRT on the Downtown Line likely contributed to those prices. Marine Parade also saw three flats that went for over $900,000. All three were located in point blocks, within walking distance to the beach, and also to the ever-popular Tao Nan School.

These unit types – jumbo flats, point blocks and executive maisonettes – are no longer built, which has definitely made them scarcer. For those looking to live in such units, therefore, and want the conveniences of amenities, popular schools and transport links, there is definitely a premium price to be paid.

Market insiders revealed that buyers of these record breaking flats were unlikely to be regular HDB upgraders. Often, these were owners of private property, who had cashed out of their homes with really decent capital appreciation, and were willing to pay top dollar to purchase a home in a location they desired. They are therefore the exception, rather than the rule.

Public rentals

On the surface, the HDB rental market looks like it is doing quite well. The number of transactions in 2015 was 13 percent more than 2014’s, with 41,109 rental contracts reported to HDB. Five-room units are the most popular, with a 22 percent increase year-on-year (refer to Figure 2).

The pricing story, however, is a lot more depressing for landlords and homeowners. Overall, the year saw a four percent dip in median prices from 2014. Some of the sharpest drops year-on-year came from popular locations. For instance, Marine Parade saw median four-room rental prices drop by a rather steep 11 percent, while Bukit Merah saw prices for the same sub-type decline seven percent.

As such, those who have suggested that the HDB rental market is recovering have actually called it in error. In places like Marine Parade, for instance, tenants could easily threaten to move to a rental condo instead of sticking with a HDB, because declines have also brought down rents in the private market. Most landlords would rather capitulate than lose a tenant and have the unit sit empty.

The reason for the higher number of rental contracts signed is not because tenants have increased. Rather, it is because the frequency of contracts being signed have increased, because tenants are opting for one- instead of two-year contracts, negotiating for further concessions from landlords, be it rental price reductions, new furniture, or subsidized utilities.

Ball gazing

So where is the market likely to move in the next 12 months?

For HDB resale transactions, our house view is that transactions will gain further momentum, even as prices continue to fall. With a bumper crop of 28,000 new Build-to-Order (BTO) flat owners receiving their keys this year, we will likely see an increase in resale flats hitting the market, as upgraders will need to move their existing units within six months. We think that sales volume is likely going to be between 4,200 and 5,400 per quarter, with 2016 closing with under 20,000 units exchanging hands. Given seasonal fluctuations, resale prices are likely to vary about 1.5 percent up or down each quarter. We think that the year is likely to end with overall prices falling between 0.3 and 0.8 percent.

The prognosis of the rental market is more dismal. While volumes might climb moderately, we are likely to see a sharper decline in prices. With a projected global economic slowdown, as well as the political climate on foreign labour remaining negative, there are fewer demand drivers for the rental market.

With a bumper crop of over 50,000 dwelling units hitting the market, there will be a supply glut in the market. HDB rentals are likely going to find themselves competing with investment units in suburban condos, as they race to the bottom dollar to find tenants.

Furthermore, those upgrading from HDBs to condominiums might decide to hold on to their flats and rent them out for income while waiting for prices to further appreciate, exacerbating the supply issue. As such, our house view is that rental prices for HDBs are going decline further by five to eight percent.

Picture Source: HDB, PropertyGuru Analytics
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Government measures fail to boost EC market

In August 2015, Prime Minister Lee Hsien Loong announced during his National Day Rally speech a slew of new measures meant to impact the real estate market. This included raising the income ceiling for couples buying executive condominium (EC) units from $12,000 to $14,000. As such, higher-income households (making up another six percent of the population) could now qualify for subsidised housing, and would not have to overstretch themselves to buy private property.

At the time, analysts felt the changes would reverse the slump in the EC market, which had seen the number of unsold units rise to an unprecedented 5,200 units as of July 2015, according to figures from CBRE.

It didn’t help that launch prices for most EC projects were hovering around $800 psf for seven quarters before the income ceiling was raised, while the private residential property index fell by 7.2 percent during the period.

But five months after the policy kicked in, the EC market seems suppressed rather than stimulated. Only 124 units were sold by developers in December 2015, down by about 33 percent from the previous month, revealed a JLL report citing data from the Urban Redevelopment Authority (URA).

The report stated that for the entire year, an estimated 2,562 new EC units were sold, compared to the 3,750 units launched.

Further exacerbating the supply glut is the recent launch of two EC sites, one at Yio Chu Kang Road under the confirmed list of the second half 2015 Government Land Sales (GLS) Programme, and the other at Sumang Walk in Punggol under the reserve list. Both are expected to yield a total of 1,300 housing units.

Great expectations

Ong Teck Hui, National Director, Research & Consultancy at JLL, said: “One of the reasons why EC sales have remained slow despite the income ceiling hike is the mismatch between prices and buyers’ expectations.

“Many new ECs are currently marketed at around $800 psf on average, about 15 percent higher than in 2011. With falling private residential prices, some potential EC buyers would be mulling over the possibility of buying private homes instead of ECs, especially with the narrowing price gap between the two.”

The mortgage servicing ratio (MSR) cap of 30 percent for ECs has also led to softening demand, with one developer telling PropertyGuru that the MSR limit for ECs should not be the same as HDB flats, because ECs are a public-private housing hybrid, and therefore, the MSR should be capped at 45 percent.

PropNex agent Edmund Ee agrees that this measure should be tweaked to help homeowners looking for a bigger place.

“With the MSR at 30 percent, HDB upgraders who want bigger units are being limited by the loan amount and are deciding to hold off on their purchases, since upgrading to an EC would mean a smaller living space.

“If the MSR is at 45 percent, it’s definitely good news for eligible buyers, as they will be able to buy a bigger unit.”

But Ong explained that the current MSR rate is a policy consideration and should be kept in place.

“With a lower MSR, buyers will borrow less, which means that EC units will have to be priced accordingly. It is part of the overall plan to keep housing prices in check, maintain affordability and prevent excessive borrowing.”

Another concern among HDB upgraders is the resale levy of up to $50,000 for EC units bought directly from developers, but Ee reckons that buyers will probably consider projects where the land sales were launched before 9 December 2013, when the ruling took effect.

With EC buyers becoming more price-sensitive, Ong does not foresee a pick-up in transactions in the coming months.

“Under current market conditions, a strong sales take-up at launch is quite unlikely, so new EC projects are just trying to achieve gradual and steady sales progress in the months after launching.”

Housing the sandwich class

Despite what the figures show, Ee has observed more first-time buyers from the “sandwich class” (within the $12,000 to $14,000 income bracket) visiting EC showflats since the income ceiling was raised. “They prefer ECs as the room sizes are generally bigger than private condominiums,” he said.

URA data revealed that the top-selling EC projects in December were The Brownstone in Sembawang, which sold 20 units at a median price of $814 psf, The Terrace at Punggol (15 units at a median price of $788 psf), and Sol Acres in Choa Chu Kang (14 units at a median price of $796 psf).

Ee believes these projects reported better sales due to their proximity to public transportation.

“The Brownstone is close to the upcoming Canberra MRT station on the North-South Line, while Sol Acres is near the new Bukit Panjang MRT station on Downtown Line 2. Buyers know that there is a premium to pay for being close to an MRT station, but the price is definitely lower compared to private condos nearby.”

However, Ong thinks the economic slowdown will continue to put pressure on the market, and the only way to revive demand is to price units more attractively.

More launches coming soon

In 2016, a number of new EC launches are expected to take place, including Wandervale at Choa Chu Kang Drive, The Visionaire at Canberra Drive and Parc Life at Sembawang Avenue (refer to Figure 2).

Based on the land prices, developers are expected to price these three projects more competitively, with estimates ranging from about $740 psf to $820 psf, noted Ee.

“As developers become more price-sensitive, hoping for better take-up rates, new EC prices should be at a good entry level.”

He added that tough competition from the new supply will see developers offering discounts for EC projects that are nearing completion.

“Looking at the upcoming launches, I do not foresee a sharp spike in the sales transactions of EC units as there is still ample supply in the market. EC transactions should reach around the 2015 level of over 2,500 units sold.”

Picture Source: URA,JLL Research & HDB,PropertyNet Research
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Completed condo price falls slow

Prices of completed non-landed residential properties in Singapore fell by 0.4 percent in December 2015 after dropping by 0.7 percent in the month before, according to latest flash estimates of the NUS Singapore Residential Price Index (SRPI).

Excluding small units, the central region saw prices decline by 0.6 percent last month, compared to the 0.9 percent decrease in November. In the non-central region, prices fell by 0.2 percent, lower than the previous 0.4 percent drop.

The central region comprises the postal districts 1 to 4 and 9 to 11, while the non-central region covers the other postal districts.

Meanwhile, prices of small units up to 506 sq ft remain unchanged after falling by 1.3 percent in November.

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Property trough in sight: CBRE

Compared to the robust market conditions seen in 2013, sales of new private homes in the last two years have been severely depressed, with transactions halving to 7,300 units in 2014 and 7,440 units last year, according to CBRE Research.

The report stated that Singapore’s housing market is likely to remain flat this year as demand continues to be hindered by the property cooling measures, economic slowdown and rising interest rates.

As sales have slowed, developers are finding themselves stuck with many unsold units, but the situation is not as bad as before. The number of uncompleted unsold units fell to 23,000 at the end of 2015 from nearly 27,000 in 2014, said CBRE.

“The reduction is due to lesser new projects being added due to fewer sites being sold in 2015, translating to a limited new supply going forward.”

Meanwhile, the private property price index has dropped by 8.4 percent since peaking in Q3 2013. Specifically, the price gap between the Core Central Region and the outer regions have narrowed, presenting a window of opportunity for investors looking for good deals in the prime market, noted the consultancy.

It believes that after suffering nine quarters of price and volume adjustments, the trough may be in sight as supply runs low and prices reach an equilibrium.

“Should the government relax the existing cooling measures, it may stoke buying interest. When that happens, the window of opportunity will narrow and prices might see some upside as early as 2018, led by the prime segment.”

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14 March 2016

Shunfu Ville tries to en bloc again

Shunfu Ville has been re-launched for collective sale at the same reserve price of $688 million, or $791 psf ppr, said marketing agent JLL.

This is the second time that the 358-unit residential development built in the 1980s has gone en bloc after more than 80 percent of the owners agreed to the sale.

The first attempt at a collective sale in September 2015 attracted expressions of interest from two developers, but PropertyGuru understands that the offers were rejected for being too low.

Situated in the Bishan/Thomson area, the 408,927 sq ft site is zoned residential under the 2014 Master Plan and could yield over 1,100 units with an average size of 1,000 sq ft.

Yong Choon Fah, National Director of Capital Markets at JLL, noted that while the residential market continues to be bogged down by the property cooling measures, some positive signs are now emerging.

“With price moderation working its way alongside the continued rise in wages and the stabilisation of HDB flat prices, private housing has become very much affordable. We estimate that it now takes about 5.6 years of income to buy a home, close to the 5.9 years in 2003, which was a recession year. At the peaks of the market in 1996 and 2008, home prices were equivalent to nine to 10 years of income.”

With this, she reckons that developers will continue to press on with replenishing their land banks.

Moreover, there has been no Government Land Sales (GLS) site released for sale in the area since the Lorong Puntong land parcel (Thomson Impressions) was awarded to a Chinese developer in October 2014.

The Shunfu Ville site is also close to established schools, shopping malls and two MRT lines.

At $688 million, the estimated breakeven cost for the successful buyer stands at around $1,250 psf, with the new units expected to fetch between $1,400 psf and $1,450 psf, said JLL.

The tender for Shunfu Ville will close on 10 March 2016.

Picture Source: Aerial view of the Shunfu Ville site. (Photo: JLL)
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Aussie developer dips toes into Singapore’s housing market

Property giant Lend Lease is set to enter Singapore’s residential market after receiving planning approval to develop a mixed-use development in Paya Lebar Central, which includes over 400 apartments, reported The Australian.

The Urban Redevelopment Authority (URA) has granted provisional permission to a consortium comprising the Abu Dhabi Investment Authority (ADIA) and Lend Lease to develop the project.

The developers had won the tender for the 99-year leasehold site with a bid of $1.67 billion.

The project is expected to further expand Lend Lease’s presence in the city-state after building mostly shopping centres during its 40 years in Singapore.

As the lead developer, Lend Lease holds a 30 percent stake in the consortium, while ADIA owns the remaining 70 percent.

Aside from the residential component, the project will also feature 45,000 sqm of retail space and a 90,000 sqm office tower.

Located in the city fringe, the 3.9ha site is part of the government’s plan to establish commercial clusters outside the central business district.

Meanwhile, the move by Lend Lease aims to target key urban regeneration projects in gateway cities across the world.

The Australian group is also jointly developing the International Quarter in London while building the Lifestyle Quarter at Tun Razak Exchange in KL.

Denis Hickey, Chief Executive of Lend Lease Americas, had earlier revealed that the group is running the ruler over various billion-dollar urban regeneration projects in the United States.

Picture Source: Artist’s impression of future developments in Paya Lebar Central.(Photo: URA)
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Malaysian property promising despite headwinds

Even with the challenging headwinds ahead, independent economist Lee Heng Guie believes that the medium-term prospects for Malaysian property are still promising, reported The Star.

And while property prices may ease further, he does not expect a significant drop.

“This is because Malaysia is not heading for an economic recession,” said Lee during a presentation at the 9th Malaysian Property Summit recently.

“The softening property market renders the buyers the opportunity to purchase property. For foreigners looking to invest in real estate in Malaysia, the weaker ringgit comes as a boon.”

However, he noted that the market is still hampered by weak economic growth, cautious sentiment and affordability issues.

“The prospects of higher domestic interest rates in 2017 may be a dampening factor,” he said.

“Likewise, the banks are expected to maintain vigilance in the evaluation of property loans while ensuring the good credit-worthy borrowers will continue accessing home financing.”

Lee hopes that the government will keep the property cooling measures in place for now.

“The right time to adjust some of the measures is when the market equilibrium is a lot more certain and sustainable. An over-adjustment of the property sector must be avoided for now.”

In addition, the authorities should closely monitor the supply and demand conditions in order to prevent overbuilding in some segments and avoid a systemic risk to the banking sector, in case of prolonged economic slowdown and severe correction in property prices, said Lee.

“While ensuring a sustainable property sector, Bank Negara should ensure the banking institutions continue to lend to those eligible borrowers,” he added.

“Fiscal incentives such as stamp duty relief and developers’ interest bearing schemes should consider for the first time home buyer and for the property priced below RM1 million.”

Picture Source: Aerial view of Penang.
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Balestier condo sale rejected

Singapore-listed developer SingHaiyi must first complete the development of the City Suites project before it can be allowed to sell its stake, reported The Straits Times.

The Controller of Residential Property recently rejected SingHaiyi’s application for approval on the proposed sale of the condominium project in Balesteir to Ang Cheng Guan Construction.

Last April, the developer announced plans to sell Corporate Residence, which is the developer of City Suites, for $16.38 million “in view of the possible levy as a result of the Qualifying Certificate on unsold units”.

It revealed that the 56-unit development witnessed slow sales progress at around 10 percent since its launch in May 2013.

Meanwhile, the Singapore Land Authority (SLA) explained that the application was rejected in order “to ensure that the developer fulfils its obligations to complete the development under the Qualifying Certificate (QC)”.

The rule mandates that developers should complete a project and obtain the Temporary Occupation Permit (TOP) within five years from the date of issuance of the QC – which needs to be obtained by foreign developers to acquire private residential land in Singapore.

The estimated TOP for the City Suites project is this year.

“We are working closely with the main contractor to come up with the project timeline,” said a SingHaiyi spokesman.

Under the QC conditions, a developer cannot transfer its shares without prior approval from the Controller until all units have been sold or when the TOP has been issued, whichever comes later, said Lee Liat Yeang, partner at Rodyk & Davidson.

Picture Source: View of Balestier Road. (Photo by Terence Ong / Wikimedia Commons)
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MP urges removal of ABSD for Singaporeans

Should a citizen who can afford to buy a second or third property through the Total Debt Servicing Ratio (TDSR) regime also be required to pay the Additional Buyer’s Stamp Duty (ABSD)? This was a question posed by Mr Christopher De Souza in Parliament on Monday, reported Channel NewsAsia.

He urged the government to remove the ABSD for Singaporeans while retaining the ABSD for foreigners and TDSR for Singaporeans.

“By retaining the TDSR, the Singaporean is only going to be allowed a credit line that is within his means. By retaining the ABSD for foreigners, we help ensure that the foreigners will not enter the Singaporean market in an overly speculative way,” said the MP for Holland-Bukit Timah GRC.

First introduced in December 2011, the ABSD was revised upwards in January 2013 to rein in Singapore’s escalating residential property prices.

Singaporeans are required to pay an ABSD of seven percent for a second property, and 10 percent for a third and subsequent property. However, foreigners are required to pay an ABSD of 15 percent for their first and subsequent property purchases.

Meanwhile, the TDSR framework limits the amount borrowers can spend on debt repayments to 60 percent of their gross monthly income.

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11 March 2016

Tough times ahead for self-storage industry

2016 is shaping up to be a challenging year for Singapore’s self-storage industry as more households and businesses tighten their purse strings in anticipation of tougher times ahead.

Helen Ng, Deputy Chair of the Self-Storage Association Asia and Group Chief Executive Officer of General Storage Company, said: “Households may try to discard their belongings instead of storing them and businesses may reduce their inventory to reduce overstock.”

Despite the headwinds for the self-storage industry, Ng believes there are still growth opportunities.

For instance, some demand is likely to come from businesses selling Chinese New Year merchandise. Ng noted that unlike traditional warehousing where there is a lengthy lock-in period, storage terms at self-storage facilities are flexible, and thus more appealing to businesses that want the flexibility to adjust their inventory according to seasonal demand.

Ella Sherman, Founder of popular Singaporean brand Animal Merchandise, which specialises in animal-themed homeware, gifts and cushions, chooses to store her stock at Lock+Store’s Serangoon North branch.

“We expand and reduce our storage space according to the retail season, with Christmas and Chinese New Year being our busiest periods. Storing our inventory at a self-storage facility allows us to scale up to meet seasonal peaks and troughs while managing our operating budget throughout the year. It works out to be far more cost effective and efficient than using a logistics company.”

The rise of Ecommerce storers across the region has also created a new revenue stream for the self-storage industry.

“In Asia, there is a trend of women entrepreneurs leading the Ecommerce revolution by setting up online stores retailing fashion and lifestyle products. They eschew traditional brick and mortar stores for self-storage and choose to operate from homes instead,” said Ng.

Ecommerce storer and owner of Rainbow Lab, Ervinna Neo, who sells lifestyle products such as Hello Kitties, opted to use a self-storage facility because she had run out of space at home.

“I have been using the self-storage space since January 2015. I love the flexibility of going to the facility whenever I wish. There is also an onsite bulk parcel drop-off service. I can access the goods in my storage unit and mail them to my buyers straightaway.”

Picture Source: Photo of self-storage units in Singapore.
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Tenants rule the rental market

Gone are the days when property owners and investors ruled the market as tenants today have the choice of being picky given the influx of new units, reported The Straits Times.

In the case of Celine Tan, her potential tenant wanted the unit to be fully furnished, have new bath towels and cutlery, a bigger TV set and free servicing of air-conditioners.

“It’s quite ridiculous. I never had this experience in the last 10 to 15 years of renting, but everyone in the market is so competitive… (that I) have to accede to most of their requests,” she said.

Although Tan did not provide new bath towels and cutlery, she gave in to the other demands, which included refurbishing the dining room and bedroom, with the tenants selecting the new furniture. “They took a picture at Ikea and showed me the model they wanted,” she added.

With that, she was able to rent her three-bedroom apartment at Robertson 100 in Robertson Quay last year for $4,600 per month, down from $5,200 previously.

Aside from lower rents, tenants are also demanding shorter leases of six months to one year, noted PropNex agent Anthea Yeo. “Rental is coming down; nobody wants to commit to two years because they know next year, it could be cheaper.”

She revealed that the lacklustre market also saw her income drop by $200,000 in 2015 from the year before.

According to data from the Urban Redevelopment Authority (URA), private residential rents dropped by 4.6 percent last year. The suburbs registered the biggest decline, with rents falling 5.6 percent, followed by the city fringe and city area at 4.9 percent and 3.8 percent respectively.

Analysts expect rents to continue sliding this year amid the weaker economy, tight immigration policies and a flood of 26,467 new private homes and executive condominiums.

In fact, rents may fall by more than eight percent this year, said Century 21 Singapore Chief Executive Ku Swee Yong. Private home rents in suburban areas are expected to face more pressure as the bulk of new homes are found there.

Cushman & Wakefield Research Head Christine Li expects the vacancy rate for private homes to increase from 8.1 percent in Q4 2015 to a “critical point” of nine to 10 percent this year.

“At that level, it shows that the market is correcting in a big way, and owners may be a bit jittery, so they may rush to offload their units,” noted Li.

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New Silver Zone at Lengkok Bahru

Elderly residents living in Lengkok Bahru, a small neighbourhood in Redhill, will now find it easier to cross the road with the completion of the Silver Zone in their estate, revealed the Land Transport Authority (LTA) in a Facebook post.

The Silver Zone programme involves installing senior-friendly road safety features to make motorists slow down and look out for pedestrians, and urges seniors to be more careful when crossing the road.

Launched on Sunday, 24 January, the Silver Zone at Lengkok Bahru includes raised informal crossings, fitted with ramps to provide users with a barrier-free route when crossing the road. In addition, land widths were reduced to encourage motorists to travel at lower speeds.

The LTA said it plans to build 35 new Silver Zones in Singapore by 2020.

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Mega project the size of Ang Mo Kio launching soon

A S$58.3 billion township the size of Ang Mo Kio is set to rise near the Tuas Second Link in the Johor Strait.

The first phase of Forest City, a 14 sq km mixed-use development comprising four man-made islands, will launch in Singapore, China and Malaysia in the first quarter of 2016, but the sales gallery is already open for bookings.

Aside from condominium units and high-rise coastal residences, Forest City also consists of hotels, retail centres, parks and leisure attractions, which will be developed in nine phases over 20 years.

Country Garden Pacificview, the master developer, is jointly owned by Chinese property giant Country Garden Holdings and Johor’s Esplanade Danga 88.

As part of long-term planning, Country Garden is in discussions with the Malaysian government to set up dedicated entry points to Forest City, such as a light rail transit system and a ferry network that will link to Singapore and to the planned high-speed rail (HSR) between Singapore and Malaysia.

This is the biggest overseas development undertaken by Country Garden, which has more than 200 projects globally.

At a global press conference held in Singapore on Friday, the Hong Kong-listed developer said that the project is still under construction and prices of the residential units have not yet been set, but will likely cost around RM1,200 psf (S$400 psf) on average. Comprising two- to four-bedroom units, sizes range from about 818 sq ft to 1,915 sq ft.

Meanwhile, a Straits Times report last year stated that the project could house around 700,000 people. So far, 700 residential units at Forest City have been approved for sale, excluding the 336,000 new private residential units in the pipeline for Johor.

Responding to media queries about the future oversupply in Iskandar’s property market, Country Garden Pacificview executive director Datuk Md Othman Yusof said: “We are working with a company (Country Garden) that has a strong capital base and knows how to create their own market. Most of their launched projects are more than 60 percent sold.”

Country Garden is also developing a waterfront project in Danga Bay featuring 9,000 residential apartments. Covering 50 acres, phase one and two have launched with more than 6,000 units already sold. More than 50 percent of the units were sold to overseas buyers from Singapore, Indonesia and the Middle East, said the developer.

Picture Source: Artist’s impression of Forest City.
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More help for the vulnerable

The Ministry of National Development (MND) on Thursday said it is committed to helping young couples and lower-income families own homes, while enabling the elderly to age gracefully, reported Channel NewsAsia.

“We will ensure that our housing policies continue to help young couples start a family, uplift the lower-income and vulnerable to a better future, and enable our elderly to age gracefully,” said National Development Minister Lawrence Wong in his ministry’s addendum to President Tony Tan Keng Yam’s address to Parliament.

“We remain committed to help Singaporeans own their homes and keep housing affordable for future generations.”

In fact, it plans to enhance various programmes to make housing more affordable to vulnerable groups.

For instance, the MND will work closely with social agencies to provide holistic support to second-timer public rental families under the Fresh Start Housing Scheme. This includes helping them keep their children in school and finding a job.

The ministry also plans to build more public rental flats.

“We will also look into ways to support other vulnerable groups, including divorcees and low-income singles,” shared Wong, noting that demand for new flats from singles has been strong since they were made available to them in 2013.

For senior citizens, the ministry aims to help them live in safer environments, with new smart-enabled homes. It will also build on schemes like the Two-Room Flexi Scheme and Lease Buyback Scheme to ensure affordability for the elderly.

Meanwhile, the living environment of older estates will also be improved via the Remaking Our Heartland initiative, Home Improvement Programme, Neighbourhood Renewal Programme and Selective En bloc Redevelopment Scheme.

The ministry will also make greenery more accessible to Singaporeans, with nine in ten households situated within 400m of a park or park connector by 2030, Wong said. The network of green corridors will also increase to 400km from 300km.

“We will activate green spaces and intensify greenery horizontally and vertically, and work with passionate Singaporeans to conserve our biodiversity and celebrate our built heritage,” he added.

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10 March 2016

Private home prices keep falling

Prices of private residential properties fell by 0.5 percent in the last three months of 2015, compared to the 1.3 percent decline in the previous quarter. For the year, prices fell by 3.7 percent, compared with the 4.0 percent decline in 2014, revealed latest figures from the Urban Redevelopment Authority (URA).

For the whole of 2015, prices of non-landed properties in the Core Central Region (CCR), Rest of Central Region (RCR) and Outside Central Region (OCR) fell by 2.5 percent, 4.3 percent and 3.7 percent respectively. Prices of landed properties declined by 4.1 percent.

The URA added that rentals of private residential properties fell by 4.6 percent for the whole of 2015. During the period, rentals of non-landed properties in the CCR, RCR and OCR declined by 3.8 percent, 4.9 percent and 5.6 percent respectively. Rentals of landed properties fell by 4.5 percent.

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HDB resale prices drop further

HDB resale flat prices rose slightly by 0.1 percent in Q4 2015 from the previous quarter, according to the latest resale price index (RPI) from the Housing Board. However, resale flat prices for the whole of 2015 fell by 1.6 percent.

The number of resale transactions for the year reached 19,306 cases, up 11.5 percent from 2014.

As at 31 December 2015, 50,264 HDB flats were sublet, up 0.9 percent from the 49,796 units in the previous quarter.

In 2016, the HDB plans to launch four Build-To-Order (BTO) exercises, with a total supply of about 18,000 new flats. These flats will be spread across various locations, so that home buyers can choose a flat that best meets their budget and needs.

The first BTO exercise will be held next month where about 4,150 flats in Bidadari, Bukit Batok and Sengkang will be offered.

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CDL, CapitaLand honoured for sustainability

City Developments Limited (CDL) has emerged as the 10th most sustainable corporation in the world and the most sustainable real estate firm globally in Corporate Knight’s 2016 Global 100 Sustainability Index.

This makes CDL the first and only Singapore firm to be ranked on the list for seven consecutive years. The company started in 81st position in 2010, before rising to 34th in 2015 and 10th this year.

Considered the gold standard in corporate sustainability analysis, the announcement was made at the World Economic Forum in Davos, Switzerland.

“Over the past two decades, CDL has continuously innovated, invested and improved on the way buildings sustain life. We are focused on sustainable development and have helped to green Singapore with more than 80 Green Mark buildings,” said Chief Executive Officer, Grant Kelley.

“Our efforts have created stronger brand equity and product differentiation. They have also given us a first-mover advantage as environmental regulations have been mandated progressively for the property sector.”

Meanwhile, CapitaLand was ranked in the Global 100 list for the fifth year running.

The developer was also listed in The Sustainability Yearbook 2016 of RobecoSAM, with a ‘Bronze Class’ distinction, effectively placing it among the top five real estate companies worldwide.

“This is our seventh listing in The Sustainability Yearbook, and our second consecutive listing as a ‘Bronze Class’ recipient. These accolades validate our success in integrating sustainability into our business. We will stay the course and continue developing and operating sustainably and responsibly,” said Tan Seng Chai, Group Chief Corporate Officer of CapitaLand and Chairman of the CapitaLand Sustainability Steering Committee.

RobecoSAM is an investment specialist that exclusively focuses on sustainability investing. Its annual report recognises the top 15 percent of companies across various industries worldwide, and identifies companies that are strongly positioned to create long-term shareholder value.

Picture Source & Source copied: Tree House condominium in Singapore. (Photo: CDL)

JLL: Home price recovery in 2017

Singapore’s annual population growth fell from 3.2 percent in the 2006 to 2012 period to 1.2 percent in 2015, which implies that annual housing demand plummeted from 38,000 to 16,000 units, according to property consultancy JLL.

Nonetheless, housing supply remains high at 50,000 units per year from 2014 to 2018. This comes as the government looks to compensate for the low supply recorded till 2013.

JLL expects most of the new supply to be developed in the suburbs. Public housing units will account for 73 percent of the total stock, down from 80 percent in 2000.

Meanwhile, the slew of property cooling measures rolled out by the government has dampened the mood in the housing market.

In 2011 to 2012, home loans grew by 17 percent and 13 percent per annum for owner-occupied and investment properties, but the number of housing units grew by only two percent per annum.

JLL revealed that loan growth fell to 4.7 percent and zero percent in 2015 respectively after a cap on the Total Debt Servicing Ratio (TDSR) was imposed. Primary sales fell 60 percent as the capital base shrunk.

The presence of the Additional Buyer’s Stamp Duty (ABSD) also saw foreign purchases within the central region shrink to 10 percent from 20 to 25 percent.

Moreover, prices of high-end homes fell by 20 percent following the introduction of the ABSD in 2011, while the implementation of the TDSR in 2013 has resulted in mass market home prices dropping by 12 percent.

Looking ahead, prime and mass market prices are expected to fall five to 10 percent more before recovering in 2017.

The report noted that the government could consider replacing the various additional buyer and seller stamp duties with higher property taxes in order to push up transactions and remove friction in the market.

“Currently, non-owner occupied residential taxes do not differentiate between residents and foreigners and this can be tweaked,” added JLL.

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Chinese buyers shun Singapore

Discouraged by the high taxes in Singapore, fewer foreigners are purchasing private homes here, leaving the market to rely on local buyers, reported Reuters.

Data compiled by DTZ showed that foreigners, including permanent residents, purchased 499 homes in Q4 2015. This accounted for around 16 percent of total transactions, down from 30 percent recorded in Q3 2011 just before the introduction of the Additional Buyer’s Stamp Duty.

Acquisitions by the Chinese, considered one of the biggest foreign buyers of Singapore private homes, fell 40 percent from a year earlier to 151 units. DTZ noted that the figure is also down 80 percent from the peak in Q3 2011.

The figures were based on caveats lodged as of 15 January, with the land planning authority maintaining an online database.

“Chinese money is being attracted by Australia and the UK,” said Alan Cheong, Research Head at Savills Singapore.

He noted that the stamp duties should be rolled back to a level where the city-state can still capitalise on Chinese funds without attracting too much hot money.

“If we continue to sit by with all these measures, we are just going to miss the boat,” he said.

And with the benchmark 3-month Singapore Interbank Offered Rate (Sibor) on an uptrend, local buyers may also become cautious. The Sibor, which is used to set interest rates on mortgages, rose to 1.254 percent this week, or its highest since October 2008.

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04 March 2016

New Disney Park in Laos?

There remains a mystery about the possibility of a Disney Laos being built, according to The Nation, with business leaders in nearby Nakhon Phanom in Northeast Thailand trying to verify a report that construction of the project will commence soon. The local government is concerned that the report is a hoax, but could still trigger a round of land price speculation in the province.

Charnyuth Uppapong, chairman of the provincial chamber of commerce, is unable to confirm if construction work is scheduled to take place despite having discussions with officials in the Khammuan province of Laos where the supposed park is set to be built.

He added that this could see investors purchasing land in an attempt to jump on what could be a lucrative opportunity for the region. He explained that if the report of Disney Laos is true, the province could benefit greatly from both tourists coming to visit the area during their trip and people from Laos having more spending power and coming across the border to make purchases.

“If this is true, it would bring great benefits to Nakhon Phanom as our province could be a transport centre, thanks to our readiness in terms of roads and airport,” said Charnyuth. “We have thousands of restaurants and hotels. If Disney Laos takes shape, Nakhon Phanom would be the must-visit province to all.”

But Tharin Phanthumai of the province’s tourism council is not convinced that the project will actually happen because of several logistical issues. “What concerns me is this could be a hoax, designed to drive up land prices. This will affect real estate development. If this is a hoax, it would definitely hurt Thailand,” he shared.

Somjith Aliyaphaphone, chairman of Akane Farm Sole, a Lao investor in the project, told the Vientiane Times that Disney Laos would be part of the third phase of a massive investment project in Khammuan’s Thakhek Specific Economic Zone. He noted that any further reports on the project would be released at the end of this month, but that could be too late for officials in Nakhon Phanom to stop speculators from buying up land in the region.

Picture Source: Disneyland Resort in California. (Photo: Cd637/Wikimedia Commons)
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Tanah Merah site launched for sale

UPDATED: A residential site at New Upper Changi Road/Bedok South Avenue 3 (Parcel B) was launched for sale by public tender today, revealed the Urban Redevelopment Authority (URA).

The 2.4ha site which could yield about 570 housing units was made available for sale on the reserve list of the second half 2015 Government Land Sales (GLS) Programme.

On 7 January 2016, the URA announced that it had received an application from a developer for the site to be put up for public tender. The developer had committed to a minimum bid price of $320 million in the tender for the site.

“The bid that triggered the launch of the site is slightly conservative, as the developer may have presumed a 15 percent decrease in sales price from December 2015 to October 2016. Assuming that prices will dip by about five percent, we anticipate the winning bid to be around $380 million ($690 psf) to $400 million ($725 psf),” said Dr Lee Nai Jia, Regional Head of Southeast Asia Research, DTZ.

“Given the location, we expect the number of bids to be around 10,” he added.

The 99-year leasehold site is close to Tanah Merah MRT station, Changi Business Park and the Singapore University of Technology and Design.

“Rental yield in the area is about three percent to 3.5 percent, which is pretty attractive for residential developments,” noted Lee.

The tender exercise will close on 23 February 2016, said the URA, adding that any tender below $320 million will not be considered.

Meanwhile, The Glades, a 726-unit condominium located at the corner of Bedok and New Upper Changi roads, is set to be completed in 2017. The 3.2ha site was sold to Keppel Land for $434.6 million in October 2012.

According to Lee, The Glades has sold 371 of the 400 units launched, while nearly all units in Eco, another nearby development, have been transacted. The prices for The Glades as at December 2015 ranged from $1,274 psf to $1,540 psf.

Picture Source: Aerial view of the site at Tanah Merah. (Photo by URA)
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Developers cut prices as ABSD deadline looms

Singapore developers are starting to slash condo prices as the deadline for the Additional Buyer’s Stamp Duty (ABSD) looms, reported The Straits Times.

Under the ABSD rules, developers are given five years within which to complete a housing project and sell all units. Otherwise, they must pay the ABSD, which was initially set at 10 percent of the site’s purchase price, and subsequently raised to 15 percent on 12 January 2013.

Since it was first introduced on 8 December 2011, the first deadline comes up at the end of this year.

As such, projects such as The Trillinq, which is believed to be the first site to come under the ABSD rules, saw median prices drop to $1,329 psf in Q4 2015, from $1,545 psf in Q1 2013 during the project’s launch. The 755-unit project has sold 220 units as at end-2015.

Over at Mon Jervois, which is set to incur ABSD from early-2017, median prices for units stood at $1,852 psf in Q4 2015, down from $2,087 psf in Q2 2013. As at end-2015, the project moved 46 out of the 109 units.

Also poised to incur ABSD from early next year is Kingsford@Hillview Peak. The project sold 242 of 512 units as at end-2015, with median prices falling from $1,340 psf in Q2 2013 to $1,288 psf in Q4 last year.

Another source of pressure for developers is the Qualifying Certificate (QC) rules.

Under these rules, non-Singaporean developers should finish building a housing project in five years of acquiring the site and sell all the units in two years from the date of completion. Developers looking for more time on either deadline can pay extension charges. But unlike the ABSD, the amount is pro-rated for QC based on the number of unsold units.

“As the ABSD charges will kick in first, developers are now given a shorter timeline to clear the units if they want to avoid the hefty fine,” said Cushman & Wakefield Research Director Christine Li.

She noted that ABSD charges will still apply even if developers only have one unsold unit. This is “in stark contrast with QC extension charges, which are more progressive, especially in the first year”.

Picture Source: Condominiums in Singapore. Photo: Cheryl Marie Tay
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Famed developer sells $25m bungalow

Luxury property developer Simon Cheong recently sold a good class bungalow (GCB) that he built along King Albert Park within the Bukit Timah/Clementi Road vicinity, reported The Business Times.

The property was sold for $25 million, which works out to $1,493 psf based on the freehold land area of 16,750 sq ft.

Completed in late 2012, the two-storey bungalow has a built-up area of around 10,000 sq ft and comes with a swimming pool. The property is currently being tenanted.

The buyer, Absolute Kinetics Consultancy founder Fang Koh Look, is expected to occupy the property following the end of the existing lease.

Known for building luxurious condos under the SC Global Developments brand, Cheong also develops landed properties under SC Homes. He owns several GCBs on Pierce Road and is believed to be open to selling them at the right price.

Meanwhile, a wholly-owned unit of Soilbuild Group Holdings has acquired an old, two-storey bungalow along Wilkinson Road for $19.28 million. This translates to $1,203 psf based on the land area of 16,031 sq ft.

Soilbuild Executive Chairman Lim Chap Huat noted that the freehold property could easily be 40 to 50 years old.

“We are buying it from a family,” he said.

He revealed that the group plans to redevelop the site, which is zoned for two-storey bungalow use, into two new bungalows.

Set to be completed in two years, works for the new bungalows is expected to begin around the middle of this year.

One of the bungalows will be bigger, with a land area of around 11,000 sq ft and a built-up area of around 6,000 to 8,000 sq ft. It will also feature a swimming pool.

Nestled on about 5,000 sq ft of land, the smaller bungalow will have a built-up area of 5,000 sq ft as well. Both bungalows will be two storeys high with four bedrooms and an attic.

With a construction cost of almost $6 million, the two properties will be the first landed housing project by the group in over two decades.

“In the early 1990s, we developed about 40 landed homes in various locations in the Sixth Avenue vicinity. Even before that, in the early 1980s, we built 18 landed houses at Coronation Road,” said Lim.

Picture Source: File photo of a GCB.
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Rangoon Road properties for sale

A row of adjoining properties located along Rangoon Road have been launched for sale by tender, revealed marketing agent Knight Frank Singapore.

The 6,879 sq ft site comprises a four-storey mixed-use building and a two-storey shophouse. Under the Master Plan 2014, the entire site is zoned residential with commercial at 1st storey at a gross plot ratio of 3.0.

The properties could be upgraded through asset enhancement initiatives or redeveloped into a brand new mixed-use development with shops on the ground floor and residential apartments on the upper levels, said Knight Frank.

The site is close to Farrer Park MRT station and shopping malls. Connexion at Farrer Park, the world’s first fully integrated healthcare and hospitality complex, is also nearby.

“We expect the properties to attract strong interest in view of their strategic location, proximity to an MRT station, prominent main street frontage and relatively affordable investment size,” noted Ian Loh, Executive Director & Head, Investment and Capital Markets at Knight Frank.

The tender for the subject properties will close on 1 March 2016.

Picture Source: Knight Frank Singapore.
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New German school at Dairy Farm Road

The construction of a new German European School Singapore (GESS) at Dairy Farm Road is set to commence next month after a subsidiary of Singapore-listed TA Corporation secured a $94 million contract to undertake the project.

This brings the order book for the group’s construction business to approximately $300 million.

“This new construction contract from GESS marks an exciting start to 2016, and further validates our capabilities and reputation as a top-tier construction company,” said Neo Tiam Boon, Chief Executive Officer and Executive Director of TA Corporation.

“We remain sanguine on opportunities within the Singapore construction industry,” he added.

Some of the group’s notable educational developments include the iconic School of the Arts (SOTA) and the Singapore American School.

The latest contract is not expected to have a material impact on the net tangible assets and earnings per share of the group for the current financial year.

Completion of the GESS is expected within 25 months.

Picture Source: Artist’s impression of the new GESS.
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Siglap condo site awarded

A 1.93ha residential site at Siglap Road has been awarded to a consortium comprising Frasers Centrepoint unit FCL Topaz, Sekisui House and Keong Hong Holdings unit KH Capital, after the developers submitted the highest bid of $624.18 million, according to the Urban Redevelopment Authority.

The offer translates to about $858 per square foot per plot ratio.

The tender for the 99-year leasehold site closed on 14 January 2016 with eight bids. It could yield 750 housing units.

The land parcel is within proximity to the future Siglap MRT station and the East Coast Parkway (ECP). Parkway Parade, 112 Katong and established schools such as Victoria Junior College and Tao Nan School are also nearby.

Picture Source: Aerial view of the site at Siglap Road. (Photo: URA)
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03 March 2016

City Suites sale hits snag

The Controller of Residential Property has rejected the application of SingHaiyi Group for the proposed sale of City Suites, reported The Business Times.

This effectively results in the termination of the memorandum of understanding that the company entered into with ACG Construction.

In April 2015, SingHaiyi announced plans to sell Corporate Residence Pte Ltd, the developer behind City Suites, to Ang Cheng Guan Construction for $16.38 million.

Located along Balestier Road, the 56-unit freehold private residential project has witnessed slow sales, at around 10 percent, since its launch in May 2013.

SingHaiyi noted that the Controller rejected both its application and subsequent appeal for approval.

As such, the proposed disposal could not proceed and was therefore aborted, the firm added.

Picture Source: View of Balestier Road. (Photo by Terence Ong / Wikimedia Commons)
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Fall in number of Singapore’s ultra-high net worth individuals: Survey

While there was a drop of 205 people with a net worth of more than US$30 million (S$42 million) to 2,360 last year, the Republic retained its second place in the Asian league table, according to the study by Knight Frank.

SINGAPORE: There has been a fall in the number of people in Singapore with a net worth of more than US$30 million (S$42 million), according to a study by UK-based property consultancy Knight Frank.

The study, released on Wednesday (Mar 2), showed that there were 2,360 “ultra-high net worth individuals” (UHNWIs) in Singapore last year, down from 2,565 in 2014.

That put Singapore in sixth place in the global league table, behind New York (5,600), London (4,905), Hong Kong (3,854), Moscow (3,457) and Los Angeles (2,820).

Knight Frank said the study tracks the growing “super-rich population” in 98 cities across 91 countries. The survey was based on the views of about 400 leading private bankers and wealth advisors globally who, between them, manage assets for about 45,000 UHNWIs with a combined wealth of over half a trillion US dollars, it added.

The decline in the number of such individuals in Singapore follows a global 3 per cent slide in the total number of UHNWIs. Almost 6,000 people fell out of the wealth bracket in 2015, the first annual dip in ultra-wealthy populations since 2008, the consultancy said.

Over the next 10 years, Knight Frank projects that the UHNWI population in Singapore will increase a further 48 per cent.

Head of Consultancy & Research of Knight Frank Singapore Alice Tan said the attributes that Singapore had built over the decades — a conducive business environment, clear regulatory framework and a progressive ecosystem of financial and business services — had “augmented its status amongst the wealthy as a preferred location to live and do business in Asia”.

“Singapore’s excellent infrastructure, education and healthcare systems further anchors its global city accolade by promoting a vibrant economy, which will in turn boost the country’s real estate landscape within the next decade.”


The study also ranked the cities that mattered most to the world’s wealthy, based on where they live, invest, educate their children, grow their businesses, network and spend their leisure time.

Singapore was ranked third in the world for its importance to UHNWIs based on these factors in 2016 according to the study, overtaking Hong Kong from fourth place in 2015. London and New York retained the first and second positions as the most important cities to UHNWIs worldwide.

Although more than half of survey respondents did not believe that the two top cities could be overtaken in importance in the coming decade, the 34 per cent of respondents who did believe that this was possible placed Singapore as the top contender for the next most important city in the next 10 years. This included respondents from Singapore, India, Australia, the US, Hong Kong, UAE, the UK, Malaysia and China.

Ms Tan suggested that if the Republic strengthened its trade relations with East and Southeast Asian markets and positioning as a strategic location it could further grow the size of its external market.

“Advancing the growth of wealth management and professional services in key business industries could foster a greater impetus for UHNWIs to make Singapore a city of choice,” she added.

Picture Source: Marina Bay Sands and skyscrapers of Singapore’s central business district. (Photo: Hester Tan)
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Singapore office vacancies to rise as economy falters

Analysts predict vacancy rates will continue to rise this year, with real estate services firm JLL estimating prime office rents to fall between 10 per cent and 20 per cent.

SINGAPORE: Vacancies at Singapore’s gleaming office towers are nearing their highest level in almost a decade, with construction of the city-state’s tallest building – GuocoLand Ltd’s 64-floor block in the financial district – wrapping up just as the economy slows.

Singapore’s export-oriented economy has been hit by the slowdown in China and beyond, which has also put pressure on key sectors such as marine oil and gas, commodity trading and banks. Last year, the economy grew just 2 per cent, its slowest pace since 2009.

A January review by real estate services firm JLL of major foreign international banks in the financial district showed half had either reduced the size of their office space over the past year and a half, or had to contend with extra space.

Analysts predict vacancy rates will continue to rise this year, with JLL estimating prime office rents to fall between 10 per cent and 20 per cent after dropping 15 per cent last year in a city that is ranked the 11th most expensive in the world to rent top-quality offices.

Nicholas Mak, executive director at SLP International Property Consultants, said many of the buildings that are now ready for occupancy were planned about five years ago, towards the end of the global financial crisis.

“Many people thought that this is the new boom, let’s try to capitalise on it. Nobody expected the party to end by end of 2015,” he said, adding that office vacancy rates could hit 13.5 per cent, a level not seen since 2005.

Broader cost-cutting at banks due to the slowdown in the global economy is likely to have an impact on vacancies as financial institutions are key tenants for prime commercial space in Singapore.

Barclays will cut about 1,000 jobs in investment banking worldwide and close its cash equities business in Asia, an internal memo seen by Reuters showed.

Societe Generale gave up two floors in an office tower after selling its private banking activities in Asia to DBS Group Holdings in end-2014, taking up a smaller space in an existing building instead.

Mr Mak said vacancy rates could improve by the end of next year if the economy picks up and as demand catches up with the supply, easing the glut.

In the meantime, office landlords are limiting the number of leases that will expire over the next couple of years as well as diversifying their tenants to cope with the glut.

“This will be a short-term blip,” Lynette Leong, chief executive of CapitaLand Commercial Trust, said in January.

Banking, insurance and financial services represented 33 per cent of Capitaland Commercial Trust’s tenant mix at end-2015, compared with 38 per cent five years ago, its results show.

Picture Source: A view of high-rise financial district office buildings from the Marina Bay promenade in Singapore. (Photo: AFP/Roslan Rahman)
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15 February 2016

$10m for owners affected by MRT Line

Eight owners of partial land lots that are being acquired for the construction of the Thomson-East Coast MRT Line received a total of $10 million, reported Channel NewsAsia.

According to the Singapore Land Authority (SLA), the owners were paid the corresponding market value of their property as determined by private valuers and in accordance with the Land Acquisition Act.

Most of the 24,000 sqm of land is located within the Marine Parade and Changi South areas. Over 17,000 sqm is owned by the Laguna National Golf and Country Club.

In April last year, owners of 15 houses affected by construction of the MRT line were awarded $45 million. The homes are situated at Tanjong Katong Road and Amber Road.

The SLA revealed that some of the owners have accepted the compensation while others have appealed to the Appeals Board. One valuer noted that the valuation process is not that straightforward sometimes.

“The challenges are basically understanding of the asset, what are the encumbrances, covenants or restrictions,” said Tan Keng Chiam, Head of Valuation Advisory Services at JLL.

“I think one has to understand the product and thereafter determine the basis. In many occasions, differences arises because of different assumptions.”

Picture Source: LTA
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Thailand property to see growth in 2016

Several property firms are predicting that Thailand’s real estate market will see growth of around five to ten percent in 2016, with Greater Bangkok expected to lead the charge, reported The Nation. The government’s investment in infrastructure projects across the country is just one reason for the positive outlook this year.

“When the government starts to invest in infrastructure projects, that will open up new land for property firms to develop residential projects,” said Thongma Vijitpongpun, President and Chief Executive Officer of Pruksa Real Estate. “This will challenge property firms to invest in the new locations following the new mass-transit route from Bangkok to the suburbs and nearby provinces.”

The Nation noted that infrastructure projects either under construction or scheduled to begin construction soon include railway double-tracking, motorways, and ten new mass-transit routes. The goal is to make Thailand a regional transport hub and this in turn will boost demand to buy homes in the country as foreign companies see Thailand as a gateway to other Asean countries, noted Thongma.

He added: “We believe that Thailand’s property market will show average growth of five to ten percent a year from 2016 to 2020. We will launch more new residential projects nationwide to serve strong demand in the market, especially in locations close to the mass-transit system.”

Tritecha Thanmatithum, Supalai Deputy Managing Director, agrees with this sentiment and noted that the government measures to cut transfer and mortgage fees will also help improve the property market this year. He said that the company plans to launch up to 29 residential projects in 2016. Of these, 20 will be low-rise developments such as detached houses and townhouses, while the rest will be condominiums.

Chanond Ruangkritya, President and CEO of Ananda Development, also believes that the property market in Thailand will see growth and the developer is making plans accordingly. It expects to launch ten residential projects in 2016, of which eight will be condominiums and the other two detached housing projects.

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Nearly 230 babies born to couples living in PPHS flats

Close to 230 babies have been born to couples living in Parenthood Provisional Housing Scheme (PPHS) flats, wrote Senior Minister of State (Prime Minister’s Office) Josephine Teo in a Facebook post, reported Channel NewsAsia.

Introduced in January 2013, the scheme offers interim housing for those who have booked an uncompleted HDB unit under the Build-to-Order (BTO) or Sale of Balance Flats (SBF) exercises. Applicants under the Fiancé/Fiancée Scheme or married couples, and widowed or divorced parents with children, are eligible to rent a flat under the PPHS.

Currently, there are around 1,900 PPHS flats in several locations including Jurong, Tiong Bahru and Commonwealth, said Teo, who also helps oversee the National Population and Talent Division (NPTD).

She noted that couples need not wait until their BTO flats are completed before marrying or having a child since PPHS offers a temporary rental option within an HDB setting.

“It’s a helpful scheme which I hope HDB will similarly scale up if there’s demand,” she added.

National Development Minister Lawrence Wong recently revealed that this year’s supply of BTO flats will increase by 3,000 units from last year to 18,000 units. This comes after the last BTO exercise in November 2015 saw a healthy response.

“With affordable HDB housing more readily available now, young couples should not wait too long to welcome (a) baby to the family,” said Teo.

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Vietnam condo to go on sale in Singapore

The first luxury condominium from Vietnam to be launched for sale in the city-state this year will take place next weekend, 16 to 17 January, at the Grand Hyatt Singapore, revealed marketing agent CBRE.

Located in the Thao Dien area in prime District 2 of Ho Chi Minh City, the 238-unit Nassim project by Hong Kong Land and SonKim Land will bear resemblance to the prestigious Nassim enclave in Singapore.

A selected number of one- to four-bedroom units will be available, with prices starting from around S$195,000 for a one-bedroom apartment.

Set to be completed in 2018, the development is close to the scenic Saigon River, Vincom Mega Mall Thao Dien, restaurants, international schools and clinics, making it popular among wealthy Vietnamese and much sought after by expatriates, said CBRE.

The upcoming An Phu Metro station (Ho Chi Minh City’s first Metro line) will help to improve connectivity and accessibility. CBRE also noted that properties within a 10 minute walk to Metro stations will command a 10 to 20 percent premium over those sited further away.

In fact, prices in the high-end and luxury segments have recorded growth since the market bottomed out, with the sales volume of prime-grade condos starting to pick up since the second half of 2014.

New luxury properties at very prime locations such as those in District 2 will probably reach S$325 to S$377 psf in 2016, added CBRE.

Meanwhile, Leong Boon Hoe, Managing Director of CBRE Realty Associates, is confident that the project will attract strong interest from Singaporean investors.

“The Nassim will be one of the very few and limited high-end condominium projects to be classified as luxury class available for sale now. Early investors will reap very good growth potential given the very limited number of projects of this category in HCMC at this moment. As the city matures and rides the wave of economic reform and increasing foreign direct investments, the growing affluence and confidence of the market in investing into the high-end condominium segment, it is not surprising The Nassim sold very well when it previewed in HCMC just two months ago,” he said.

Vietnam has been in the spotlight in recent months after changes to property ownership rules were implemented in July 2015, allowing foreigners with a valid visa to own property in the country. Previously, only foreigners married to Vietnamese nationals and those making contributions to the country were allowed to buy property.

Picture Source: Artist’s impression of The Nassim. Photo by CBRE
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Residential site close to Tanah Merah MRT triggered for sale

A 99-year leasehold residential site at New Upper Changi Road/Bedok South Avenue 3 (Parcel B) that was on the reserve list was triggered for sale today after a property developer committed to bid a minimum price of $320 million for the plot, said the Urban Redevelopment Authority (URA).

As the minimum price committed by the developer is acceptable to the government, the site will be released for sale by public tender.

With a land area of about 2.4ha, the land parcel is expected to generate a gross floor area of around 51,228 sqm and yield up to 570 housing units.

The site is close to Tanah Merah MRT station, Changi Business Park and the Singapore University of Technology and Design. Many condominiums such as Stratford Court, East Meadows, Casa Merah and Optima@Tanah Merah are also located nearby.

The URA will launch the public tender for the site in about two weeks.

Picture Source: URA
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12 February 2016

Location, pricing still key to attracting buyers

Last year’s property launches showed that home buyers go for reasonably priced homes in good locations, reported The Straits Times.

In fact, three projects performed exceptionally well during their launch despite the cooling measures, primarily due to pricing and location.

High Park Residences in Sengkang moved 1,169 units at a median price of $989 psf, while North Park Residences in Yishun sold 486 units at a median price of $1,374 psf.

Over in the city fringe area, The Poiz Residences in Potong Pasir moved 277 units at a median price of $1,440 psf during its launch.

ERA Realty Key Executive Officer, Eugene Lim, noted that projects that sold well in 2015 were all attractively priced, situated close to an upcoming or existing MRT station, and near various amenities like shopping malls and reputable schools.

“This year, we expect buyers to be equally discerning of new projects. Prices and location should remain the determining factors behind a project’s performance.”

According to PropNex Realty’s Chief Executive, Mohamed Ismail, a project is considered highly attractive to home buyers when they are priced towards the lower end for the area it is located. For the Core Central Region, this would be closer to $2,000 psf and nearer to $1,000 psf for the Outside Central Region. The Rest of Central Region, on the other hand, would be closer to $1,500 psf.

“However, a premium may be commanded due to the location and availability of transportation – near the MRT – or the nature of the project, such as a mixed development,” said Ismail.

He noted that buyers showed a willingness to pay a premium for mixed-use projects like J Gateway, DUO Residences and North Park Residences.

“But for most cases, price is the main factor,” said Ismail.

This is comes as the “restrictive loan environment prevents developers from setting a price that is unrealistically high,” he added.

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BCA looks to raise productivity of tunnelling projects

Works for tunnelling projects may soon be completed in a shorter span of time and be less noisy as the Building and Construction Authority (BCA) expands a framework presently used to improve productivity in high-rise buildings, reported My Paper.

Under the buildability framework, designers and developers are required to meet a minimum standard of labour-saving methods as well as technology, or face penalties.

They can, for instance, use machines and prefabrication to reduce the excavation on site.

On prefabrication, Deputy Prime Minister Tharman Shanmugaratnam said: “There’s a lot of reduction of disamenities for the public because projects are completed faster, less noisily and with much less dust.”

In fact, BCA expects site productivity to increase yearly by over two percent in the next five years, up from the annual growth of about 1.2 percent in the last five years, said Mr Tharman, who also serves as Chairman of the National Productivity Council, during his visit to the construction site of Nanyang Technological University’s three new residential halls.

The new residential halls are being built using the ‘prefabricated prefinished volumetric construction’ (PPVC) method, in which whole rooms, including fittings like fans and lights, are made overseas and fitted out further here before being taken to constructions sites where they are stacked ‘Lego-style’.

This construction method helps developers save up to 25 to 40 percent in labour and 15 to 20 percent in construction time.

Mr Tharman stated that while the method costs about 18 percent more than conventional concrete construction, such costs can be reduced as suppliers come onboard.

“The public sector is taking the lead in building up demand,” he said.

Meanwhile, BCA Chief Executive John Keung expects civil engineering projects to take up a bigger portion of future construction demand in Singapore.

“It’s not a building, so you’ve got to find a different way to encourage them to make it easy to build,” noted Dr Keung.

Picture Source: Prefabricated Prefinished Volumetric Construction. Source: UB Australia
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16 tips on buying overseas property in 2016

The arrival of New Year is a time when many first-time investors finally plan to buy their dream home overseas.

While the overseas market offers many great value properties for those who know where to look, Chris White, Founding Director of Ideal Homes International, says: “We would always advise buyers to be cautious though, particularly if they haven’t bought overseas before – it’s really important to do your homework and buy through a trusted and reputable company.”

As such, White and his team have put together their 16 top tips on buying a home overseas in 2016, to help buyers turn their dreams into reality.

1. Investigate on the Internet – research potential areas thoroughly, rather than individual properties. Find out about local amenities, from beaches to restaurants, based on your priorities. Think about how those priorities may change in the future as well – a holiday home bought this year could serve as a retirement pad later on, so what facilities would you want on hand then? Don’t fall in love with a particular property until you know the location is right for you!

2. Use an agent with form – opt for an organisation with a good track record. Make sure they have been in business for some time and have a long list of satisfied customers happy to speak about their experiences.

3. Budget carefully – buying overseas isn’t just about the property price. Be aware of the buying costs like fees and local taxes. These can vary hugely from country to country, so do your research and budget accordingly.

4. Plan a trip – once you’ve identified the places you like on the Internet, hop on a plane and check them out for yourself. You will quickly be able to get a feel for whether or not a place is right for you, and a few hundred dollars invested at this stage can serve extremely well when it comes to finding the perfect location for your new home overseas.

5. Know what you want BEFORE you visit – think about how many bedrooms you need, whether proximity to the beach or a local golf course is important to you, whether you simply must have your own pool, and whether the local supermarket can be reached on foot or by car. Whatever your preferences, have them firmly fixed in mind before you visit – and be sure that your agent understands them too. This will ensure that he/she is able to show you properties that perfectly suit your requirements, and avoid wasting time spent touring unsuitable homes.

6. Think about the journey – work out the journey from your current home to the area in which you plan to purchase. What are the flight times and costs like? Is there just one airline that flies into the local airport or several? Can you hire a car easily upon arrival if you need to? These factors will impact on how relaxed you are by the time you arrive at your overseas property each and every time you visit, so think the journey through in detail.

7. Find a reputable lawyer – this is one of the most important elements of buying a second home overseas. A good agent should be able to recommend a reputable lawyer, or you can do your own research on the Internet and by speaking to others who have bought property in the area. Chat on the phone with the lawyer and meet him or her when you visit – test their knowledge and be sure to choose someone you are comfortable with.

8. Think about money matters – once you’ve bought your property, you will need to get money out to that country regularly in order to pay bills, take care of maintenance issues and so forth. Look at what you need to do to set up a local bank account and plan to do this as early as possible in the process. Bear in mind that many overseas banks also have a local branch where you can take care of some of the initial paperwork should you need to do so.

9. Remember the insurance – before you commit to purchasing a property, check that it is insurable and at a reasonable rate. If the area that you like the look of is prone to flooding or sink holes, then it might be time to look elsewhere.

10. Ask about hidden requirements – speak to your agent and conduct your own research online to ensure that you know everything you need to. In Portugal, for example, you need a fiscal number in order to purchase a property. You can get one quickly and easily from the local Finanças department for a small fee – or you can appoint a lawyer to take care of this on your behalf.

11. Consider other significant expenses – what other expenses might your property purchase give rise to? One of the most commonly overlooked items is the need for a car, so think about whether you can access your new home on public transport, whether you will pay for a hire car each time, or whether you would prefer to purchase a car of your own overseas.

12. Is the property just for you? – if you plan to rent your property out as well as using it yourself, then be sure that it appeals to a wide range of holidaymakers. Neutral décor and access to a pool can make a big difference to the number of people choosing your holiday home over another one.

13. Speak to the experts – join some online forums and Facebook groups and chat to those who have already purchased in the area you like. Even better, find people who have moved full-time and benefit from their experiences of local life.

14. Know the market – understand price trends in the country and region you like in order to know whether or not your expectations are realistic based on your budget. Knowledge of local prices will also help you to gauge whether you are paying over the odds or picking up a real bargain.

15. Think about maintenance – unless you are planning a permanent move, you will need to consider how best to maintain your property from afar. An isolated villa might be your dream holiday home, but an apartment on a managed condominium might present far fewer headaches in terms of regular maintenance, particularly if you plan to rent it out as well as use it yourself.

16. Use an agent who does it all – find an agent you trust and who can offer you the whole package. They will be able to support you with every step of the process, from finding a reputable lawyer to arranging an inspection trip. This can often be by far the quickest and cheapest approach – and also the least hassle!

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New survey to seek input on smart homes

Leading up to the launch of Singapore’s first smart executive condominium (EC) in the first quarter of 2016, Qingjian Realty is looking to find out young couples’ attitudes towards smart living.

In a statement, the developer said this will be achieved through a survey of about 100 respondents living in Singapore.

The EC project in Sembawang will be targeted at families who are looking to live in a home that embraces the latest technological advancements.

“Technology has become essential in our lives and has immense potential to positively impact our lifestyles even further. To build a smart home that supports the integration of technology to offer homeowners a seamless connection and greater convenience, we need to find out the lifestyle aspirations that they have for their dream homes,” said Li Jun, General Manager, Qingjian Realty.

The survey also aims to find out what features young couples would like to see in a smart EC.

For more details, go to:

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Property agents turn to Uber amidst chilly housing market

Due to the slump in home sales and the difficulty in securing deals amidst fierce competition, some property agents in Singapore are driving for Uber, a tech firm that allows users to utilise the service of a taxi or private car via their smartphone, reported Bloomberg.

“The market is slow because of the cooling measures. We have no choice, we have to come up with means to make ends meet, said 50-year-old Billy Loh, who started working as a property agent in 2008, but began driving for Uber late last year.

By driving passengers around Singapore, he earns $3,000 per month on average, a far cry from the $30,000 commission he could get selling a unit during the market’s heyday.

Although property agents in other countries typically take on other jobs to supplement their income when the market is not doing so well, the situation in Singapore is very gloomy. Among the world’s major housing markets, it suffered the highest price drop in 2015 and total transaction levels have plummeted by 68 percent since 2012. In fact, developers only managed to move around 7,000 new homes last year, according to SLP International Property Consultants.

Making matters worse, the city-state has a relatively large number of property agents compared with the volume of deals. There are more than 30,000 registered estate agents, ten times the volume of monthly transactions. In comparison, there are only 1,840 agents in the state of New South Wales in Australia who handle an average of 8,160 monthly transactions, noted CoreLogic Inc.

To help agents cope with the weak residential market, the Institute of Estate Agents in Singapore is offering courses and helping agents to get trained in other jobs.

Teaching property agents other skills would enable them to “at least earn a fixed income rather than only rely on commissions in this market,” said its President Jeff Foo.

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08 February 2016

Luxury home prices to slide further in 2016

Prices of luxury homes in Singapore are expected to drop by 3.3 percent in 2016 compared to an estimated decline of 3.5 percent last year, according to Knight Frank’s Prime Cities Forecast Report.

However, the city-state is expected to fare better than Hong Kong, where prices of prime properties are predicted to fall by five percent versus an estimated growth of 1.5 percent in 2015.

As such, the property consultancy foresees that the territory will overtake Singapore as the weakest-performing luxury residential market this year among the ten global cities being tracked.

“Many of the Asia-Pacific prime residential markets will face existing and new headwinds in 2016, with our forecasts showing quite a range of price performances, including negative price growth in Hong Kong and Singapore. Despite that, there remain pockets of opportunity in these two markets, as prime supply is relatively limited,” said Nicholas Holt, Knight Frank’s Research Head for Asia Pacific.

Meanwhile, Sydney is expected to see the strongest price growth of 10 percent in 2016, albeit slower than the estimated 15 percent expansion last year due to Australia’s economic slowdown, weaker stock market performance in recent months, and the introduction of foreign investment fees.

This is followed by Monaco and New York with a forecasted price growth of five percent each. Shanghai is expected to post a gain of four percent, while Miami and London could each post growth of two percent. Conversely, prices in Geneva are likely to remain unchanged, while Paris could see a dip of three percent.

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Colliers Singapore appoints new business leaders

As part of its growth plans, Colliers International has announced two senior appointments to strengthen its Singapore team.

Duncan White will head up the Office Services team, while Anthea To (pictured) joined the firm in November last year to lead Research and Advisory.

White joined the team in June 2015 and has more than 10 years’ experience in corporate commercial real estate and workplace strategy. He will be responsible for driving Colliers’ Office Services business through an advisory-led approach and a commitment to best practices.

To, who relocated from the UK, has more than 10 years’ experience working with major real estate research houses in the European markets. She will focus on creating market-leading, forward-looking research and thought leadership to support clients and industry professionals.

Commenting, Tang Wei Leng, Managing Director of Colliers International, Singapore, said: “Our most important resource is our people. In building our business, we are always seeking to attract, grow and retain the best talent the market has to offer.

“We chose Duncan and Anthea because they are ambitious, passionate, driven and fit well into our collaborative and high performance culture. Duncan’s promotion demonstrates our commitment to accelerate the success of our people,” she added.

The new business leaders will report directly to Tang and work closely with the regional team.

Meanwhile, former Deputy Managing Director, Calvin Yeo, has left the company, while Grace Ng will continue to head up the Auction team and grow the local brokerage business, noted Colliers.

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6 resolutions for homeowners in 2016

The fireworks have gone off, the champagne has been drunk, the Auld Lang Synes have been sung. It’s officially 2016, and we’ve got out our (virtual) pens and papers, and we started making our list of resolutions, as homeowners.

We’re often so busy working to pay the mortgage on our homes that sometimes, we forget to actually live in our homes. So here are six resolutions we came up with, to be better people, and better homeowners.

1. Time to declutter.
Yup, those online sales are definitely tempting, and perhaps we went a little crazy during the Great Singapore Sale. But the fact of the matter is, the square footage in our home didn’t grow a single square centimeter in the past year, even if the closets are filled to bursting. So we’re going to get a head start on Chinese New Year Spring Cleaning, and really de-clutter. Good, usable items will be donated to the Salvation Army, or sold online.

2. Don’t buy stuff I don’t need.
And of course, after decluttering, we need to make a resolution not to buy more stuff than we need. We don’t really need photo frames for that gallery wall that won’t happen because I haven’t printed the photos off my phone from that vacation two years ago. Nor will we need a fancy noodle maker for my kitchen when we barely cook once a month. So no matter how tempting the sale, we will resist and keep from buying what we do not need.

3. Invest in greener appliances.
If we do need to buy something however, like a new washing machine to replace the current unit that only partially cleans our clothes, we’ll invest in appliances that consume less resources and energy. This helps us to conserve the environment, and helps us save money in the long run as well, by keeping our PUB bills down.

4. Have more plants.
Speaking of green, we think that we should have some plants in our home. Aside from cleaning the air, houseplants are supposed to affect productivity, fight indoor pollution, and help to prevent illnesses. And they have the added benefit of making our home look better. Now, if we only we can remember to water the plants regularly.

5. Creating a quiet place.
Since these resolutions are to help us really live in and enjoy our home, we think we should create a lovely quiet corner on the balcony, a place that we can sit, relax, and read a book. Sip at a cup of coffee. It’s important to have those quiet moments, to think and to re-center ourselves. Perhaps we could put a couple of plants there as well.

6. Do at least one DIY project.
We’ve seen the TV shows, the “hacks” and the magazines. Perhaps it’s time to try this ourselves? We’re not going to be over-ambitious, and build a new sofa or something, but something that we can show off to our friends when they come over. Perhaps one of those Edison bulb light fixtures that we see so often in cool cafes. Can’t be too hard, right? Right..?

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Grim 2016 for private housing market

The overall 2015 price fall of 3.7 percent is the lowest decline for private home prices for more than two years, revealed PropNex Realty citing latest flash estimates of the Urban Redevelopment Authority (URA) price index.

However, this still reflects the current languid market sentiment and the sustained impact of the cooling measures, noted the property firm.

Prices in the Core Central Region (CCR) dropped by 2.6 percent last year, lower than in the Rest of Central Region (RCR) and Outside Central Region (OCR), which saw overall prices decrease by 3.9 percent and 3.8 percent respectively.

According to PropNex, luxury prices in the CCR fell the least as wealthy buyers with greater holding power are taking their time to search for their next investment property whilst also looking out for overseas properties.

Meanwhile, the bigger price declines in the other regions is the result of the Total Debt Servicing Ratio (TDSR) framework, which impacts the mass market segment where the capacity to take up loans is critical for middle-income buyers.

Mohamed Ismail, CEO of PropNex, believes that it is becoming more difficult for potential buyers to invest in a private home with a price quantum over $1.3 million given the stricter lending conditions.

At the same time, sellers of resale homes face stiff competition from developers who are continuing to launch projects at more attractive prices and with incentives.

“As such, buyers will have more options – they will only commit if they perceive the property to be a good value proposition. This may put a fair bit of pressure on sellers in the resale market, who may have to lower prices in order to make a sale,” shared Ismail.

In 2016, Ismail maintains that home buyers will continue to look for reasonably-priced properties with desirable product and location attributes. Despite this, private home prices are set to decline further, with weak demand coming from the TDSR and Additional Buyer’s Stamp Duty (ABSD) restricting home buying.

“Buyers are now more discerning and are taking a longer time to decide on investing in private homes.

“Additionally, HDB resale flat prices have further softened, thus reducing the motivation for HDB owners to upgrade to mass market private properties as their purchasing power have been affected – due to a mix of abundant incoming supply, continued enforcement of cooling measures and public housing regulations such as the tighter MSR (Mortgage Servicing Ratio) on HDB loans,” explained Ismail.

He added: “With TDSR being a long-term instrument – and together with the ABSD, will continue to dampen any speculative activity. Under such an environment, we expect price weakness to persist into 2016, with possible negative growth of about 3.0 percent. The government has stated that it is not time to unwind the existing cooling measures yet; however, with nine consecutive quarters of price declines and lukewarm transaction volume, it is timely to look into tweaking some of the measures, namely the ABSD.”

Picture Source: URA
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Perennial hints at changes afoot at Capitol Singapore

In the face of a tough retail environment, landlord Perennial Real Estate says it will work on finding the right tenant and a “win-win” rental structure.

SINGAPORE: Some changes could be afoot at Capitol Singapore after it has been hit with a depressed retail environment. Landlord Perennial Real Estate on Friday (Feb 5) said it is looking at ways to help tenants.

CEO of Perennial Real Estate Holdings Pua Seck Guan, said: “The retail sector is not easy now, because a lot of retailers are faced with the problem of labour shortage and also in this volatile market.

“As a landlord, we therefore have to adopt a strategy to find the right tenant and a win-win rental structure, and some of the rentals we may have to get it on a turnover basis rather than insist on a very high base rent.”

The announcement comes as Capitol Singapore integrated development is edging closer to completion. The 157-room The Patina hotel has been completed, although it has not yet opened its doors. Meanwhile, the luxury Eden Residences expects to receive its Temporary Occupation License by end-February. The retail complex has been opening in phases since May 2015.

Concerns about Capitol’s retail tenants aside, Perennial presented a strong report card for the three months to December at a briefing on Friday, with net profit almost doubling up 93 per cent to S$41.1 million.

Property consultant, Chestertons, said Capitol could get a boost when the hotel starts operating. “One potential catalyst that might come out for Capitol’s retail centre would be the opening of Patina Hotel,” said managing director of Chestertons Donald Han.

“The Patina is almost ready to open its doors and it would welcome high-end or business tourists. So effectively, that could be a crowd puller to be able to support some of the high -end offering in Capitol. This year might potentially might see some footfall traffic. I think it might see higher occupancy settling in, as the year moves on. ”

Turning to its other Singapore properties, Perennial said it hopes to start selling office space and medical suites at TripleOne Somerset sometime in the second quarter, and it is awaiting final approval to do the same for AXA Tower.

Perennial’s other properties in Singapore include Chinatown Point and CHIJMES. The Singapore properties account for 21 per cent of the group’s total assets, behind China whichs accounts for around 73 per cent.

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05 February 2016

HDB resale prices to be flat in 2016

For the first time in 10 quarters, resale flat prices rose slightly by 0.2 percent in the fourth quarter of 2015, revealed latest data from the HDB.

According to property agency PropNex Realty, this comes after a 0.7 percent and 6.2 percent contraction in 2013 and 2014 respectively. Meanwhile, overall prices fell 1.5 percent last year.

“The potent combination of the measures has been effective at slowing down the price growth of HDB resale prices. Though we expect resale prices to be flat in 2016, it may have already reached a bottoming-out level in Q3 2015,” said Mohamed Ismail, CEO of PropNex.

He believes that the government will maintain measures to stabilise the public housing market such as the Mortgage Servicing Ratio (MSR) cap of 30 percent and the maximum loan term of 25 years for HDB mortgage loans, three-year wait for new PRs before they can buy resale HDB flats, and allowing singles to buy 2-room BTO flats in non-mature estates.

In addition, the Housing Board will launch 18,000 new Build-To-Order (BTO) flats this year, up from the 15,000 units launched in 2015, which will sap demand from the resale market, thereby stabilising prices, noted Ismail.

“HDB prices are going through a period of consolidation with marginal price movements as compared to 2014 when overall resale prices slid 6.2 percent. 2016 may spring a surprise as the current price points will entice more buyers to enter the market as it is attractive enough for young couples and upgraders – which could also be partly attributed to the non-existence of COV (Cash-Over-Valuation) across the board,” he added.

Ismail reckons that 2016 could see prices drop marginally by about one to two percent, with the sales volume exceeding 20,000 units due to the lower asking prices.

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S’pore GDP beats expectations, up 2.1% in 2015

The Singapore economy beat many analysts’ expectations, growing 2.1 percent in 2015, which is in line with government forecasts, based on advance GDP estimates from the Ministry of Trade and Industry (MTI) and reported Channel NewsAsia.

According to the central bank’s latest quarterly survey last month, private sector economists had expected full-year GDP growth to reach 1.9 percent, while the government had predicted growth of “close to two percent”.

In Q4 2015, the GDP expanded by two percent from the previous year, up slightly from the 1.8 percent growth registered in Q3 2015. On a quarter-on-quarter seasonally-adjusted annualised basis, the economy grew 5.7 percent in Q4, a significant increase from the 1.7 percent growth seen in the previous quarter.

The manufacturing sector contracted by six percent in Q4, making it the “weakest link” for the economy.

“Both cyclical and structural challenges are dampening the growth prospects of this sector. External competition, rising business costs and weak external demand were key challenges facing the manufacturing sector for the past years,” said DBS senior economist Irvin Seah.

The construction sector grew 2.2 percent, an improvement from the 1.1 percent growth posted during the previous quarter, while the services sector expanded by 3.2 percent.

Despite beating expectations, Seah noted that overall economic growth was at its slowest in six years.

Moreover, risks remain with the potential capital flight which may result from fears of further deceleration within the Chinese economy and from further US interest rate hikes.

“(The) growth outlook in the next six to nine months will remain tepid before an improvement in the later part of 2016 can be expected. This should bring overall GDP growth for 2016 to 2.1 percent,” added Seah.

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Singapore still discussing HSR services with Malaysia

The plan to have two services – one direct service and another with transit stops – on the Kuala Lumpur-Singapore high-speed rail (HSR) route remains under discussion as both countries consider the commercial and operating models of the project, including the possibility of two different services, said Singapore’s Transport Ministry in response to a report by The Edge.

Mohd Nur Ismal Mohamed Kamal, Chief Executive of MyHSR Corp Sdn Bhd, mentioned about stakeholders “envisioning to start with two services — one that will go directly to Singapore, and another that will stop with transit services in Bandar Malaysia, Seremban, Malacca, Muar, Batu Pahat and Nusajaya, and then (across the Causeway to) Singapore”, reported TODAYonline.

According to a spokesperson from the Transport Ministry, “Singapore has proposed that the transit service, which will stop at several stations in Malaysia and hence primarily serve commuters travelling within Malaysia, be operated separately from the express non-stop HSR service. This will give Malaysia autonomy over the transit service to serve Malaysia’s domestic needs, while both countries work together on the cross-border HSR services.”

Mohd Nur Ismal also said that travel time on the non-stop service would take 90 minutes, while the other service with six transit stops would take around two hours.

On Mohd Nur Ismal’s statement that both parties have “come to a consensus on the alignment of the 330km high-speed rail”, Singapore explained that the issue is still under discussion and will be finalised following the completion of detailed engineering studies.

A few months ago, Singapore’s Land Transport Authority and Malaysia’s Land Public Transport Commission jointly launched a request for information (RFI) exercise to assess industry opinion, public perception as well as gauge market interest in the HSR project.

Singapore revealed that the exercise was already completed last month, with both countries studying the feedback, which will be used “to improve the project’s commercial and operating models and procurement approach”.

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Private home prices down 3.7% in 2015

Prices of private residential properties fell 3.7 percent for the whole of 2015, compared with the 4.0 percent fall in 2014, according to flash estimates of the Urban Redevelopment Authority (URA) price index.

On a quarterly basis, prices declined 0.5 percent in Q3 2015, compared with the 1.3 percent decline in the previous quarter.

Specifically, prices of non-landed private units declined by 0.4 percent in the Core Central Region (CCR), compared with the 1.2 percent decline in the previous quarter. Prices in the Rest of Central Region (RCR) and Outside Central Region (OCR) remained unchanged, compared with the 1.6 percent decline in each segment in the previous quarter.

For the whole of 2015, prices in the CCR, RCR and OCR fell by 2.6 percent, 3.9 percent and 3.7 percent respectively. Prices of landed properties fell 2.1 percent, compared to the 0.4 percent decline in the previous quarter. For the whole of 2015, prices of landed properties fell by 4.4 percent.

The flash estimates are compiled based on transaction prices given in contracts submitted for stamp duty payment and survey data on new units sold by developers during the first ten weeks of the quarter. The full statistics will be updated by the URA four weeks later.

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HDB resale prices down 1.5% in 2015

Resale flat prices declined by 1.5 percent for the whole of 2015 compared with the previous year, according to HDB’s flash estimates.

In Q4 2015, prices in the resale public housing market increased by 0.2 percent, compared to the 0.3 percent decline in the previous quarter.

In a statement, HDB said more detailed public housing data for Q4 2015 will be released on 22 January.

In 2016, the government plans to launch about 18,000 new flats, up from the 15,100 units in 2015. This is to meet the expected demand due to recent policy changes.

Meanwhile, the first Build-To-Order (BTO) exercise will be held in February where about 4,150 flats will be launched in Bidadari, Bukit Batok and Sengkang.

Picture Source: HDB
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01 February 2016

New flats are still affordable: HDB

New HDB flats have remained affordable over the past few years, said the Housing and Development Board (HDB) and reported Channel NewsAsia.

In fact, first-time home buyers used an average of less than 25 percent of their monthly income to pay for their housing loans in 2014, which is below the international benchmarks of 30 to 35 percent.

Moreover, around 80 percent of first-timers used their CPF savings to service their monthly instalments, with no cash outlay required.

As of November 2015, HDB has offered $1.6 billion in Additional CPF Housing Grants (AHG) since 2006 to almost 83,000 households, and $297.61 million in Special CPF Housing Grants (SHG) to nearly 20,000 households since 2011.

In an update, HDB revealed that eligible first-timers now enjoy up to $80,000 in housing grants – comprising up to $40,000 in SHG and up to $40,000 in AHG.

Enhancements to the SHG unveiled at the National Day Rally last year took effect from the Build-To-Order (BTO) and Sale of Balance Flats exercises held in November. This saw the SHG being extended to around 6,500 households earning up to $8,500 – an increase from the previous ceiling of $6,500 – to purchase new flats in non-mature estates.

HDB noted that all eligible families received a higher SHG amount that reached up to $20,000 and above in some cases. The income ceiling for singles and the maximum SHG amount received by them were half of that of households.

Meanwhile, those who benefitted from the AHG rose above 13,000 in 2011 and peaked in 2012 at 13,325. It then dwindled to 8,098 between January and November 2015.

“For 2011, HDB had launched the largest number of BTOs – up to 28,000 units. And in 2012, they launched about 25,000 units. With the large number of BTO launches and with the pent-up demand, obviously there are more people who will be applying and obviously the number of people applying for the grant would be highest,” explained PropNex Key Executive Officer Lim Yong Hock.

The easing of demand over the years, particularly during the past two years, resulted in fewer applicants for the grant and BTO flats, he added.

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GCB sales on the rise

Despite softer prices, the Good Class Bungalow (GCB) market recorded 34 transactions in 2015 totalling $730 million, up from the 28 deals amounting to $626 million in the year before, reported The Business Times.

GCBs are considered the most prestigious type of landed housing in Singapore due to the planning constraints imposed by the Urban Redevelopment Authority (URA), which has designated 39 locations in mainland Singapore as GCB Areas.

The latest figure is the market’s best showing since 2012, when 54 GCBs were transacted for $1.17 billion.

William Wong, Managing Director at Realstar Premier Group, believes GCB prices fell by 10 to 15 percent last year.

“A good GCB in a location such as Dalvey/Holland which used to be able to sell at $30-32 million a year ago will probably be able to fetch $25-27 million at best now.”

The price drop is generally due to weaker economic sentiment globally and in Singapore, he said.

“Also owners are more realistic in their pricing especially for those who have not been able to find a buyer after putting their property in the market for more than a year. Coupled with the fact that there are quite a few GCBs transacted below $20 million, this has somehow brought the overall asking prices of GCBs a notch down,” he added.

Samuel Eyo, Managing Director of Singapore Christie’s International Real Estate, also acknowledged that prices fell by about 10 percent last year. Aside from deteriorating economic sentiment, he attributed the price drop to higher interest rates.

Although GCB prices declined in 2015, the year witnessed two record price transactions – the $91.7 million paid for 35 Ridout Road, or the biggest sale recorded on absolute quantum price basis within a GCB area, and the $33 million sale of a three-year-old bungalow in Bishopsgate, which marked a record psf land price at $2,190 psf within a GCB Area.

Looking ahead, Eyo expects GCB prices to dip by around five percent this year if the government does not ease the property cooling measures and interest rates continue to rise.

Wong, on the other hand, expects GCB prices to continue falling in the first half of 2016 in the absence of any positive stimulus – prior to stabilising in the second half.

“I expect to see a 10 percent increase in transaction volumes for the whole of 2016 amid a better matching of pricing expectations between buyers and sellers.”

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Top 10 stories of 2015

2015 has been a busy year for the property market, and as the year draws to a close, we take another look at the 10 most read stories on PropertyGuru this year.

10. The outlook for Singapore’s non-landed private housing market in the second half of 2015 was cautiously optimistic, with the cooling measures continuing to stabilise the market. Sales of condo units were expected to slip further despite the pick up in mass-market project launches in H2. Meanwhile, there were projections that prices could bottom out towards the end of the year.

9. In April, a DBS report stated that Singapore’s government could relax the property cooling measures at the end of this year. Any policy action would likely be targeted at the mass market where more supply is coming in. However, private home prices would need to drop significantly before warranting any government intervention.

8. A report released by Square Foot Research in January revealed there were at least five private residential projects that ran the risk of incurring hefty fines under the Qualifying Certificate (QC) rules due to the high number of unsold units. At the time, The Interlace by CapitaLand was leading with 168 unsold units.

7. At a Credit Suisse luncheon held earlier this month, one property expert predicted that the property cooling measures could be tweaked sometime in the second half of 2016. A price drop of about 15 percent would likely trigger this, with the Additional Buyer’s Stamp Duty (ABSD) and Seller’s Stamp Duty (SSD) likely to be revised.

6. For borrowers looking to refinance their property, one question they’ll have is whether to obtain a bank loan or get a HDB loan. Published in July, this article compares the differences between both loan types, their merits, and what homeowners need to look at before choosing a refinancing package.

5. Although sentiment in the private residential market remains weak, some condo projects launched in 2015 attracted healthy interest from prospective buyers, with crowds showing up at the showflats. Notably, location and pricing were two major factors which contributed to their popularity. In November, PropertyGuru reviewed seven of them to see what all the hype was about.

4. More private homes in Singapore are sitting empty as buyers continue to adopt a cautious approach, with over 24,000 vacant units recorded in Q4 2014, according to data released in January by the Urban Redevelopment Authority (URA). The vacancy rate was the highest recorded since Q4 2005. Meanwhile, the completion of over 20,000 private units in 2015 will likely worsen the situation.

3. Property consultancy Savills predicted at the start of this year that there would be 10 major private residential launches in 2015. Most of the projects would be located in the suburbs, with the biggest one being the 1,165-unit Kingsford Waterbay in Upper Serangoon. Meanwhile, analysts were of the opinion that developers would need to price units more affordably to drive sales.

2. With more MRT lines being completed, more properties in Singapore will be located close to an MRT station, which should increase their value. However, there can be negative side-effects such as noise pollution, which can adversely affect the desirability of the property. This article published in February looks at how the MRT effect can affect your property’s value.

1. Malaysia’s property market is expected to slow down further in 2016 due to lesser demand and a weakened economy, putting additional pressure on home prices, warned industry expert Datuk Gavin Tee in December. However, the drop in prices is not expected to translate to more sales for developers due to a drop in foreign investment and lower purchasing ability from Malaysians. High loan rejection rates are also being seen, especially for properties in the Iskandar region.

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Indonesia struggles with 13.5m housing backlog

Indonesia’s government is struggling to tackle the country’s housing backlog of 13.5 million units as it has only been able to supply 50 to 62.5 percent of the total annual demand, reported the Jakarta Globe.

After President Joko Widodo was elected in October 2014, he promised to build one million homes to address the yearly demand of about 800,000 new units arising from urbanisation and population growth.

However, the authorities have only been able to provide 400,000 to 500,000 units every year since Mr Widodo came into power, according to Public Works and Housing Minister Basuki Hadimuljono.

“There’s still a gap of 400,000 units every year, which, if we don’t take care of the issue quickly, will cause the backlog to increase more and more,” he said.

Another issue is that 64 million Indonesians are categorised as belonging to low-income families, meaning they cannot afford to purchase their own homes. Even though 20 percent of them can purchase a house outright, 40 percent require government subsidies to buy a house, while the remaining 40 percent need to take out mortgages.

“Still, even the government’s budget for housing is not enough to cover (the requisite amount) as it only encompasses one percent of total government spending,” noted Basuki.

Making matters worse is that most of the population works in the informal sector with low financial literacy and limited access to financing. “The relatively high interest rate is also a stumbling block as mortgages have become more expensive,” he added.

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Empty offices and falling rents spell further gloom for landlords

TODAY reports: Office buildings in the city fringes may be increasingly left empty as tenants move into Grade A premises in the Central Business District amid weakening rents.

SINGAPORE: Office buildings in the city fringes may be increasingly left vacant as tenants seek the opportunity to move into Grade A premises in the Central Business District (CBD) with rents weakening amid an onslaught of incoming supply.

Pundits, such as Bloomberg columnist Andy Mukherjee, have blamed the weak office market here on a “fundamental miscalculation” on the part of some Singapore developers that had “misplaced optimism” that China would sustain its rapid pace of its growth and pull the rest of Asia along.

With another 7 million square feet of new office space under construction at a time when businesses are holding back expansion plans, rents in Singapore will continue to tumble, analysts warned. Mr Nicholas Mak, executive director at SLP International Property Consultants, has forecast a 10 to 15 per cent fall in rents this year, accelerating from the 6.5 per cent decline last year.

“In the past six months, we have already seen a noticeable slowdown in demand (for offices). The financial services industry has been the main demand driver but that has been the biggest weakness in the last few years,” said Mr Desmond Sim, head of CBRE Research in Singapore and Southeast Asia.

As of the end of last year, Grade A office rents in the CBD cost between S$8.00 and S$12.80 psf, according to a report by property firm Knight Frank Singapore. Those outside the CBD but still within Singapore’s central areas fetched S$7.50 to S$11.90 psf, while rents for offices in the city fringes and suburbs ranged from S$4.40-S$8.10 psf.

Competition for tenants is intensifying, with landlords offering attractive renewal terms to retain existing tenants, said Ms Louise Toovey, director of office agency at Knight Frank.

They are also more willing to extend competitive rental rates to new tenants and offer additional incentives such as a rent-free period within the lease, she added.

The landlords’ willingness to lower rents have already resulted in several flight-to-quality cases. Online travel company Expedia vacated its Hong Kong Street premises for space in the recently-completed South Beach Tower. Immigration services provider Fragomen also moved into South Beach Tower from Haw Par Glass Tower, real estate consultancies Colliers International and Knight Frank reported. But with fewer companies expanding and fewer new companies being set up, this phenomenon comes at the expense of older, less attractive buildings.

“Flight-to-quality will definitely leave voids in other markets. The non-beneficiaries are buildings that are functionally-challenged – smaller floor plates, pencil-thin buildings or very, very aged buildings. This might encourage some sort of regeneration to keep these buildings up-to-scratch. Regeneration could even come in a change of use,” Mr Sim said.

This also means that islandwide office vacancy rates will likely soar past the current 9.5 per cent, as almost 4 million sq ft of the estimated 7 million sq ft of supply is due for completion in the second half of this year.

Signs of rising vacancy are clear, analysts said, citing Tanjong Pagar Centre as an example of slower demand for offices. At 290 metres, the prestigious mixed-use development will be Singapore’s tallest building when completed later this year, but it has secured barely 10 per cent of lease commitments for its 890,000 sq ft of office space. Other major developments set to enter the market include Marina One and DUO Tower, which will add more than 2 million sq ft of office space.

In response to TODAY’s query on the take-up rates of Marina One and DUO, developer M+S would only say that it is seeing “healthy interest” and “various tenants have pre-committed” to both projects.

Property analysts said that the days of quick supply absorption are well over and the current weak market could take as long as five years to recover even as land supply for commercial development has been scaled back.

“It is bad enough. Supply is at record high this year at a time when companies are downsizing and merging,” said Mr Ku Swee Yong, chief executive of property firm Century 21.

“Good or bad market, there should have been a controlled but steady supply of land. Controlled, meaning the developers shouldn’t have been so excessive. The Government may have been excessive in releasing land through GLS (Government Land Sales programme), but its premise is that with more land, there can be better control of prices,” he added.

CIMB Private Banking economist Song Seng Wun said that regardless of macroeconomic conditions, the Government has taken a deliberate approach to have supply exceed potential take-up.

“Today’s demand may be softer than earlier projected, but this is part and parcel of any cyclical market. It’s always difficult to predict,” he said.

Picture Source: File photo of buildings in Singapore’s Central Business District. (Photo: Calvin Oh)
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31 January 2016

Hong Kong to exceed housing supply target

The Hong Kong government is set to surpass its target of providing land yielding 19,000 new private homes for the 2015/2016 fiscal year, reported The South China Morning Post.

In its last land sales programme for the financial year, the authorities on Wednesday launched four more plots to be sold over the next three months. Offering a total of 1,550 housing units, these sites are located in Stanley, Ho Man Tin, Sha Tin and Tuen Mun.

Together with the flats sited on other plots sold this year and the 1,100 units to be developed by MTR Corporation at Lohas Park, the overall figure is expected to reach 20,300 units at the end of the fiscal year.

“We are pretty confident that the private housing land supply target for this year will be met,” said Development Minister Paul Chan Mo-po, adding that the existing property cooling measures will remain in place.

“We have observed softening in the property market, but in terms of (the) government’s determination to supply private residential land to the market, there is no change in our policy or position.”

Meanwhile, Centaline Property Agency’s Managing Director Louis Chan Wing-kit said the government’s housing supply announcement would negatively affect buying sentiment.

“Why buy today if abundant supply is coming and prices will be lower tomorrow and the day after tomorrow?” he said. “When home prices are falling, people will stay away from buying.”

The Centa-City Leading Index, which monitors resale home prices, dipped by 0.32 percent week-on-week to 136.86 for the week ended 20 December. It also reflects a 6.8 percent decline in residential prices since it peaked in September.

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18,000 new flats to be launched in 2016

The Housing and Development Board (HDB) is planning to launch about 18,000 new Build-To-Order (BTO) flats in 2016, more than the 15,000 units launched this year, said National Development Minister, Lawrence Wong, in a blog post.

The new flats will be spread across different locations, catering for every budget and need.

“While the 2016 flat supply will be increased to meet new demand from the recent policy changes, the broader plan remains to keep supply at a more sustainable level over the long-term,” said Wong.

This year will see around 26,000 BTO flats being completed, noted the Minister, after visiting a few families who recently moved into their new flats in the Tampines Greenlace BTO project.

He revealed that the BTO application rate for first-timer families (applying for 3-room and bigger flats in non-mature estates) has stabilised to about 1.6 times. “This means that most of these families would have been able to book their flats in their first attempt.”

“Over the coming year, we will continue to monitor the market closely and adjust our building programme when necessary,” he shared.

Meanwhile, the HDB resale market is on track for a soft-landing, with prices moderating to 2011 levels, and more than half of resale flats are now transacting close to their market value.

The stabilisation of the market has allowed the government to focus on enhancing the housing policies to benefit more Singaporeans. These include new 2-room Flexi flats, higher income ceilings, and additional grants, like the new Proximity Housing Grant and the enhanced Special CPF Housing Grant.

“We’ve had a very good response to these new policies. We will focus on making our housing policies more inclusive and build even better homes for all Singaporeans,” added Wong.

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HDB launches tenders for EC sites at Yio Chu Kang Road, Sumang Walk

The Housing and Development Board (HDB) on Tuesday, 29 December, launched an executive condominium (EC) site at Yio Chu Kang Road for sale under the confirmed list of the second half 2015 Government Land Sales (GLS) Programme.

Another EC site at Sumang Walk in Punggol was also released for application under the reserve list. According to the HDB, both sites could yield about 1,300 homes.

The 99-year leasehold Yio Chu Kang Road site has a land area of 18,422.9 sqm and a maximum gross floor area of 51,584.12 sqm, with a gross plot ratio of 2.8. The area is served by the Hougang, Buangkok and Kovan MRT stations, while nearby amenities include the Hougang 1 shopping mall, Hougang Sports Centre and Nanyang Polytechnic.

Meanwhile, the 27,056.4 sqm site at Sumang Walk has a maximum gross floor area of 81,169.2 sqm and a gross plot ratio of 3.0. Offered on a 99-year lease, the land parcel is within proximity to the Punggol MRT and LRT station, My Waterway@Punggol and the Waterway Point Shopping Centre. Many primary and secondary schools are also located in the vicinity.

The tender for the site at Yio Chu Kang Road will close on 18 February 2016.

Picture Source: Map of the Yio Chu Kang Road residential site. Source: HDB
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Experts forecast lower loan growth

Loan growth in Singapore is expected to fall to five percent for the whole of 2015, but this could decline further next year, reported Channel NewsAsia citing experts.

“Between 2013 and 2015, while domestic growth has slowed down, overseas growth was able to compensate for slowness in domestic growth. But now, with China-led regional slowdown, even the overseas loan expansion has come down as well. So on the whole, we’ll be seeing slower loans growth of between 3 and 5 percent for 2016,” said Standard & Poor’s Financial Services Ratings Director, Ivan Tan.

The slower loan growth in the region is also expected to drag down asset quality. In Q3 2015, the central bank’s Financial Stability report revealed that non-performing loans accounted for around 1.5 percent of the total loans granted by Singapore banks compared to 1.1 percent a year ago.

In addition, the forecasted weaker loan growth would impact the earnings of Singapore financial institutions as interest income represents a major source of income for banks, noted Tan.

Other issues that lenders are facing include the fallout in commodity prices and the interest rate hike in the US.

Despite these headwinds, experts believe Singapore banks remain resilient due to their ample capital and liquidity buffers. Nevertheless, next year is expected to be a challenging year for them, as they adopt a more cautious stance and focus on maintaining loan quality while keeping expenses down.

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London buyers fazed by higher stamp duty

Wealthy home buyers in London are rattled over additional costs arising from the new stamp duty rules, according to The Daily Mail citing a Knight Frank report.

As the UK housing market enters what is traditionally its busiest time of the year just days before the New Year, the consultancy warned that most players in the market have adopted a cautious stance, with uncertainty lingering in the minds of both buyers and sellers.

In autumn, the government announced plans to impose a three percent surcharge on buy-to-let landlords and second homeowners. This move followed a revision of the stamp duty system in 2014 that raised the property tax of homes costing more than £937,000.

These new measures are intended to deter wealthy buyers from purchasing second homes so that cash-strapped first-timers would have a higher chance of getting on the property ladder. And they appear to be working as residential transactions in the priciest parts of London have fallen by 20 percent year-on-year, revealed Knight Frank earlier this month.

In its most recent report, the consultancy said home prices are starting to take into account the higher stamp duty for luxury homes. “Higher transactional costs at the top end of the market are increasingly being factored into pricing,” it said.

But due to the heftier price tag, buyers are more mindful of the cost. In fact, the number of withdrawn transactions rose 12 percent on an annual basis between April and November 2015.

“The prime central London market remains fragile and price-sensitive. Buyer caution is related to high transaction costs and decisions are increasingly taken on a longer-term basis, producing a flight to quality for the best property and addresses,” added Knight Frank.

In spite of this, it believes home prices will increase by three percent next year.

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25 January 2016

Tougher times ahead for housing market

Analysts expect Singapore’s private housing market to face tougher times next year, with the lacklustre economic environment dampening sentiment further, reported TODAYonline.

The US Federal Reserve’s decision to raise interest rates and the existing property curbs could see prices drop by up to eight percent in the next 12 months.

JLL’s National Director for Research and Consultancy Ong Teck Hui, said: “Higher interest rates coupled with cooling measures will dampen demand, perpetuate sluggish market conditions and softening in prices … In 2016, it is expected to fall by at least the same pace or faster if economic conditions worsen.”

The five to eight percent price moderation forecasted by analysts for 2016 is faster than the expected drop this year. Data from the Urban Redevelopment Authority (URA) shows that private home prices dropped 3.2 percent during the first nine months of 2015, and is expected to end the year at around five percent lower than 2014’s level, noted analysts.

Some property developers may also come under pressure to clear inventory next year as their respective deadlines to avoid paying extension fees and stamp duties near. To move units, analysts believe that these developers may be forced to slash prices, potentially improving next year’s sales volume.

Notably, an Additional Buyer’s Stamp Duty (ABSD) of 15 percent will be imposed on developers, unless they build, complete and sell all the units in their project within five years from the date of land acquisition.

Developers with foreign holdings and not building on land sold by the government are also subject to Qualifying Certificate conditions that require them to complete construction in five years and sell all the units in two years.

“There could potentially be more transaction activity in 2016 … (But) this could be at the expense of prices. We anticipate sales only being achieved for the motivated sellers who are prepared to be realistic on price,” said Colliers International, without providing a sales projection for 2016.

Other analysts expect developers to sell between 7,000 and 8,000 units in 2016, which appears to be an increase from 2015’s sales, but still a far cry from 2012’s 22,000 transactions.

Pending this year’s final URA statistics, which is due in January 2016, developers have sold about 5,800 units during the first nine months of 2015. With this, analysts expect sales to reach around 7,000 units this year.

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Non-landed home prices down 0.6%

Prices of completed non-landed private homes dipped 0.6 percent in November 2015 compared to a 0.1 percent increase in the previous month, revealed flash estimates of the NUS Singapore Residential Price Index (SRPI).

Excluding small units, prices in the central region fell 0.8 percent last month after rising 0.5 percent in October. In the non-central region, prices dropped 0.4 percent, slightly more than the 0.3 percent decline in the month before.

Prices of small units measuring 506 sq ft and below saw the biggest fall of 1.2 percent, higher than the 0.4 percent decrease in October.

The central region sub-basket comprises properties located in districts 1 to 4 and 9 to 11. Properties located in other districts fall within the non-central region sub-basket.

Picture Source: NUS Institute of Real Estate Studies.
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UK tax hike to impact overseas buyers

The UK government’s plan to raise sales taxes on second homes in Britain will also cover buyers living abroad, reported Bloomberg.

In November, UK Chancellor of the Exchequer, George Osborne, said buyers of second homes as well as buy-to-let properties within the UK will have to pay stamp-duty sales tax that is three percentage points higher from April compared to those who are purchasing a home to live in.

A consultation document revealed that the government will consider assets located outside the UK when determining whether a person is acquiring an additional home.

“This means that if someone is purchasing their first or only property in England, Wales or Northern Ireland, they may pay the higher rates if they own property outside these areas,” stated the document.

Demand from foreign buyers has contributed to an increase in London home prices, while off-plan sales abroad have helped property developers fund projects such as the Battersea Power Station. Data from the Office for National Statistics shows that home prices within the city climbed 7.7 percent in the year through October.

Meanwhile, the stamp-duty sales tax will increase from 12 to 15 percent for acquisitions of £1.5 million (S$3 million) or more. Tax rates for properties with a lower value will be raised from between zero and 10 percent to between three and 13 percent.

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HDB scheme benefits 74,000 elderly households

The Housing and Development Board’s (HDB) Enhancement for Active Seniors (EASE) programme has seen almost 74,000 households applying for the scheme, reported TODAYonline.

Aimed at enhancing the safety and comfort of seniors living in HDB flats, the scheme was introduced in July 2012 and allows for the installation of fittings like ramps, grab bars and slip-resistant treatment to floor tiles in bathrooms.

The government offers a subsidy of up to 95 percent of the overall cost of improvement works for flats under EASE.

The Housing Board noted that about 28,600 households applied directly for the scheme, while 45,000 opted for EASE along with the Home Improvement Programme (HIP) – a scheme which helps resolve common maintenance problems of residents living in HDB flats built before 1986 and have not undergone any upgrading.

In August 2014, HDB lowered the age criteria for EASE to 65 from 70 years old, allowing for another 5,300 direct applicants to be eligible, according to HDB data.

The programme was also enhanced last year, allowing slip-resistant floor treatment and grab bars to be installed in a second toilet.

The enhancement benefitted 24,000 households, of which 73 percent opted for it along with HIP.

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2016 will be “the worst year for Malaysian property”, says expert

Investment guru Datuk Gavin Tee expects 2016 to be “the worst year for Malaysian property” on the back of weaker economic growth, loss of pricing power and subdued financing, reported The Malaysian Reserve.

“2015 was bad, and 2016 will be worse,” said Tee, founder and President of SwhengTee International Real Estate Investors Club, at a recent briefing in Kuala Lumpur.

“I’ve travelled all over the region, speaking to ministers, developers, investors and the media. The feedback (on Malaysia) is something you don’t want to hear.”

Notably, property prices within the secondary market fell 15 percent this year due to weaker demand and the absence of speculators.

As such, Tee expects prices to drop even further compared to the past few years as buyers do not foresee significant positive changes in the first half of 2016.

And while property prices may not go back to the levels seen in 2009 and 2010, they will be at their lowest for the next eight years, he noted.

Lower prices, however, will not translate to more sales for developers given the slowing demand for property.

“Demand is low in the sense that there is lower foreign investment and job creation, lower purchasing ability from Malaysians, as well as the poor economic and political situations,” shared Tee.

A bigger dilemma is the high loan rejection rates, which stands at over 50 percent for KL-based properties and 80 percent for Iskandar-based properties.

Tee said that the Malaysian government should relax the cooling measures and take more steps to make it easier for investors to acquire property.

He added that if financing policies do not change, the government would not be killing the Malaysian property sector but the “Malaysian pockets”.

“If you make it difficult for local investors, the wealth will transfer to foreign hands,” he said.

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24 January 2016

Asia’s most expensive apartment sells for S$106.86m

A 5,732 sq ft duplex apartment in Hong Kong is believed to have been sold for a whopping HK$590 million (S$106.86 million) or HK$102,900 (S$18,637 psf), reported the South China Morning Post.

Located on the 46th level of Henderson Land Development’s 39 Conduit Road, the luxury duplex unit comprises four bedrooms and a 1,754 sq ft roof top, an industry source said.

Once the deal is completed, it will replace the Opus Hong Kong unit as the most expensive apartment in Asia. Read more > Most expensive apartment in Asia sells for S$93.2mil

Meanwhile, another apartment located on the ground and first floors of Opus Hong Kong was sold for HK$487 million (S$88.28 million) or HK$95,971 (S$17,397) psf in June.

The sale comes after housing market sentiment fell to a new low following the US Federal Reserve’s decision to raise interest rates by 25 basis points.

The secondary market saw jittery homeowners reduce prices by over HK$1 million (S$181,338), while developers witnessed lukewarm responses during their project launches.

Sino Land, for instance, sold only 28 percent or 27 units of the first batch of 96 units at The Mediterranean in Sai Kung.

Meanwhile, luxury home transactions at 35 housing estates tracked by Riacorp Properties plunged 25 percent from 52 in October to 39 in November.

“It falls to below 100 deals for four consecutive months and it is also a drop to an 11-year low,” said Ricacorp Director Eric Cheung.

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US new home sales up 4.3% in Nov

New single-family home sales in the US rose 4.3 percent in November to a seasonally adjusted annual rate of 490,000 units, while October’s sales growth was revised down by the Commerce Department from 495,000 to 470,000 units, reported Reuters.

Economists expect last month’s new home sales, which account for around 9.3 percent of the housing market, to increase at a rate of 505,000 units. Sales climbed 9.1 percent over the same period in 2014.

Despite signs of loss of momentum, the rise in new home sales will help allay concerns of a sudden slowdown in activity following a report of a surprising drop in home resales.

The National Association of Realtors revealed that sales of previously owned homes plunged 10.5 percent in November. Economists and realtors attributed the significant drop in home resales to new regulations which delay contract closings.

New home sales are counted once contracts are signed, implying that they were not affected by the new mortgage disclosure policy that lengthened the closing time for purchase contracts.

New home sales climbed 4.5 percent in the South and soared 20.5 percent in the Midwest. However, sales declined 8.6 percent in the West, while falling 28.6 percent in the Northeast.

The market saw the inventory of new homes increase 2.2 percent to 232,000 units in November, or the highest since January 2010. But while construction has been ramped up by builders, new home supply remains significantly lower than what was recorded during the height of the housing boom.

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S’pore rental prices fall 4.3% from last year

Rental prices of private residential properties in Singapore fell 4.3 percent in the third quarter of 2015 from the same period last year, according to the Knight Frank Global House Price Index.

The city-state was among the world’s weakest performing rental markets, ranking 52nd out of 55 housing markets tracked by the index.

The index’s overall performance is weighted by GDP on a Purchasing Power Parity basis.

Turkey leads the rankings with prices up 18.9 percent year-on-year. Strong levels of foreign investment, an expanding population and a slowdown in construction contributed to the upward pressure on prices, noted Knight Frank.

Aside from Turkey, four other countries recorded double-digit annual price growth; Hong Kong, Sweden, New Zealand and Luxembourg.

Meanwhile, the recent US interest rate hike is likely to have repercussions for those currencies pegged to the US dollar, with some emerging markets expected to slip down the house price rankings in 2016, added the property consultancy.

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An opportune time to ease cooling measures: analysts

With the residential market stabilising, analysts believe that this could be an opportune time to tweak the property cooling measures.

Private resale home prices have fallen by around eight percent, while HDB resale prices have dropped by about 10 percent from their 2013 highs, reported Channel NewsAsia.

In fact, one analyst feels that a slowing economy could offer the best environment to ease some of the curbs without fear of market spikes.

“If the Government’s main concern or restrictions against removing or lessening some of the cooling measures are fears that once the measures are reduced, prices will again rebound and grow quite rapidly, then perhaps the best environment for the Government to ease off on some of the cooling measures is when the economy is in the slow state of growth or even maybe in a recession,” noted Nicholas Mak, Executive Director of Research and Consultancy at SLP International.

“In such a situation, housing demand will naturally be weaker if the Government were to remove any of the cooling measures in such an environment, then the chances of prices growing strongly are minimised,” he added.

Although potential home buyers are concerned about the normalisation of interest rates, one observer believes that the market has already factored this in.

“The only kind of risk is maybe interest rates increasing in the coming year. However the market would have already factored that in, because loan approvals are based on a 3.5 percent interest rate calculation, whereas current housing rates are at two percent, or if even there was any increase, it would possibly be quite less than 2.5 percent in total,” said ERA Realty Key Executive Officer Eugene Lim.

“So you’d still be paying less than what your approval was based on. There’s still quite some buffer. There is no danger of people being priced out of the market because of interest rate increase.”

Looking ahead, another consultant expects 2016 to pick up where the market has left off this year, with transaction volumes continuing to improve as “50-50” buyers could come back into the market.

“In 2016, we’ll see buyers starting to come back into the market because in the new sale market, prices will remain pretty firm. And it has been remaining pretty firm for areas like the RCR (Rest of Central Region) and OCR (Outside Central Region), the mid-tier and mass market for new sales, because land costs have not really fallen that much. In fact it’s gone up for some recent tenders,” said Alan Cheong, Research Head at Savills.

“It’s only in the resale market that transaction volumes may start to pick up (as) the number of buyers who’ve been sitting on the sidelines start to see value emerge in the resale market.”

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Majority support demolition of LKY’s house

A survey has found that the majority of Singaporeans support former Prime Minister Lee Kuan Yew’s wish of having his house at 38 Oxley Road (pictured) demolished, reported The Straits Times.

About 77 percent of the 1,000 people polled online by Hong Kong-based market research firm YouGov indicated that they backed Mr Lee’s wishes. The survey was conducted from 9 to 11 December.

Mr Lee, who died on 23 March 2015, had lived in the pre-war bungalow since the 1940s. In his will, he stated that he wished for the house to be demolished after his death, or should his daughter, Dr Lee Wei Ling, decide to move out.

Among those who supported the wish, 61 percent felt that they should honour his wish, while the rest felt that they should respect his privacy.

However, there have also been calls to preserve the property and convert it into a heritage site or museum.

In fact, 15 percent of respondents want the house retained. Of these, 75 percent want the house to be opened to the public due to its high cultural and historical value, while 25 percent believe the house “belongs to all Singaporeans and they should have a say regarding what happens to the house”.

In a joint statement released on 4 December, Mr Lee’s children – Prime Minister Lee Hsien Loong, Mr Lee Hsien Yang and Dr Lee Wei Ling – said they would be honouring their late father’s wishes on the house. There are plans to also donate half of the value of the house to eight charities.

The charitable act has gained the support of respondents, with 61 percent calling it “great”.

On the issue of building a Founders’ Memorial, 56 percent of respondents indicated their support for the idea, while 34 percent felt it was not necessary since there are already existing monuments for such purposes.

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23 January 2016

Singapore’s housing market still struggling

Singapore’s residential property market remains weak, with home prices falling 3.62 percent during the year to Q3 2015, revealed a survey by Global Property Guide.

This is the eighth consecutive quarter of price falls in the city-state. House prices fell 1.06 percent on quarter in Q3.

At the same time, demand and supply continues to slide. According to the Urban Redevelopment Authority (URA), the number of private residential units sold fell 3.7 percent to 5,599 units in the first three quarters of 2015 from a year ago.

The number of uncompleted private units launched also fell around 6.2 percent to 5,723 units over the same period.

Hong Kong has the highest housing price rises in Asia and is the third strongest global housing market, the report noted.

Residential property prices on the island surged 12.64 percent during the year to Q3 2015, up sharply from the 1.76 percent year-on-year increase during the previous year to Q3 2014. Housing prices rose 1.12 percent quarter-on-quarter during the latest quarter.

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Property auction sales value hits 5-year high

Singapore’s property auction market saw total sales value for this year soar 41 percent to $102.27 million from $72.50 million last year – its highest in five years, revealed a JLL report.

This comes even as the total number of properties successfully auctioned this year is similar to that of last year at 34 properties.

JLL attributed the rise in total sales value to big-ticket items sold earlier in the year, with the $16.30 million sale of a single-storey bungalow with redevelopment potential at 25 Branksome Road in September emerging as this year’s biggest auction deal.

The report stated that the residential sector accounted for 68 percent of total sales value in 2015, due to the large share of sales listings which reached 70 percent in Q1 and Q4 2015, or an annual percentage of 65 percent.

Except for 2013, the number of residential properties put up for auction since 2009 has consistently surpassed the combined number of commercial and industrial properties, said JLL. Residential properties accounted for only 46 percent of total listings in 2013.

Meanwhile, 88 percent of the 26 properties sold this year were mortgagee listings, a similar percentage to that recorded in 2014, when 16 of the 20 residential properties sold were mortgagee listings.

The past two years marked a significant growth in the percentage of mortgagee properties as a portion of residential auction sales, noted JLL. This is a departure from 2010 to 2013, when mortgagee listings accounted for less than 50 percent of total residential sales.

“In the environment of impending further increase in interest rates and softening of rental market, we are likely to see more mortgagee sales put up in 2016. The majority of these are likely to comprise residential properties,” said Mok Sze Sze, Head of Auction and Sales at JLL.

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BCA unveils VR tech equipped training facility

The Building and Construction Authority (BCA) has launched a new training facility that is equipped with virtual reality technology, reported Channel NewsAsia.

As part of the BCA’s Centre for Lean and Virtual Construction, the facility allows contractors and designers in Singapore to simulate the whole construction process in 3D as opposed to using traditional screen and paper models.

It is the first of its kind in Singapore and is also Southeast Asia’s biggest virtual design and construction facility.

Builders and designers can use tools such as giant virtual reality screens and 3D glasses to virtually walk through a building project.

Aside from increasing productivity by 20 percent, the technology will also help save time and reduce costs.

“With the opening of this one-stop centre, we hope industry firms of all sizes could come forward to take the first step in transforming their processes,” said the BCA’s CEO Dr John Keung.

“In this Centre, firms like ours can sharpen our skills while keeping updated on the latest technologies,” added RSP Architect Planners & Engineers Director, Mdm Vivien Heng.

The facilities can be used by industry players for $150 per hour, while government agencies and schools can use them for a subsidised rate of $50 per hour.

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2 Singapore firms hit Top 10 of most sustainable organisations globally

According to the 2016 Corporate Knights’ Global 100 index, info-communications provider Starhub was ranked eighth while real estate company City Developments Limited came in tenth.

SINGAPORE: Two companies in the Republic have emerged among the top ten most sustainable corporations in the world.

According to the 2016 Corporate Knights’ Global 100 index that was released on Thursday (Jan 21), info-communications provider Starhub was ranked eighth while real estate company City Developments Limited (CDL) came in tenth.

According to the Corporate Knights website, “the companies comprising the 2016 Top 100 Most Sustainable Corporations in the World are those tackling these sustainability problems head on”.

Before entering the top 10 in 2016, Starhub was ranked 24th in 2015 and 29th in 2014. It first appeared in the top 100 in 2013 at rank 66.

Said Chief Executive Officer of StarHub, Tan Tong Hai: “I am very happy that our efforts to create a sustainable future and to deliver long term value for our stakeholders are recognised.

“It has always been important to us to do what is right for the business, community and the environment. Our efforts are ongoing, and we will continue to work hard in our sustainability efforts.”

Meanwhile, CDL is the first and only Singapore company to be listed on the ranking for seven consecutive years. It first appeared at 81st place on the list in 2010, and moved up to 34th place in 2015.

Said CDL Chief Executive Officer Grant Kelley: “We are focused on sustainable development and have helped to green Singapore with more than 80 Green Mark buildings.

“Our efforts have created stronger brand equity and product differentiation. They have also given us a first-mover advantage as environmental regulations have been mandated progressively for the property sector.”

Two other Singaporean companies – Keppel Corporation and CapitaLand – made the top 100 of the list, at 55th and 93rd respectively.

Singapore was the only Southeast Asian country represented. In Asia, only Japan, South Korea and China joined Singapore in having representatives on the list. The top Japanese company was 80th-ranked Takeda Pharmaceutical (ranked 80th), while the best performing South Korean company was Shinhan Financial Group at 18th.

China’s only representative, Lenovo, took 68th place. Germany’s BMW was ranked the top overall in the world, with France’s Dassault Systemes at second place and Outotec from Finland in third.

Corporate Knights is a Toronto-based media and investment advisory company. Its Corporate Knights’ Global 100 is released annually.

The top 10:

BMW – Germany
Dassault Systemes – France
Outotec – Finland
Commonwealth Bank of America – Australia
adidas – Germany
Enagas – Spain
Danske Bank – Denmark
Starhub – Singapore
Reckitt Benckiser Group – UK
City Developments – Singapore

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High-end property market promising despite lack of foreign demand: Analysts

With a lack of new supply expected in coming years, some analysts say the prime segment could the first to benefit from a market recovery.

SINGAPORE: The private home market in the Republic is in the doldrums, with the prime residential segment especially quiet. However, with a lack of new supply expected in coming years, some analysts have said the prime segment could be the first to benefit from a market recovery.

One reason why high-end projects appear to have been hit hardest is the drop in foreign demand, due to measures such as the Additional Buyer Stamp Duty (ABSD).

The ABSD has had a disproportionate impact on foreign demand for Singapore property, since foreigners who are non-permanent residents must pay an additional duty of 15 per cent when they buy a home in Singapore.

In contrast, a Singaporean buying a second home pays 5 per cent, while permanent residents pay 5 per cent for their first residential property and 10 per cent for their second.

Property consultancy JLL estimated that foreigners now account for just 10 per cent of purchases in the central region – down from 20 to 25 per cent in 2011.

Said JLL’s international director Karamjit Singh: “On one hand you have a disproportionate amount of new units in the upper end of the market that is ready to be completed, or ready to be occupied.

“On the other hand, you have measures that has brought down demand from foreigners and investors and these are the two large segments that used to buy high-end. So, a combination of these two has brought down volumes and naturally values.”


Despite the lack of foreign demand, analysts have remained cautiously optimistic about the high-end property market. They said prices are coming to levels which high-income earners could find attractive, and the oversupply is not as pronounced when compared with mass market homes.

“There is inventory in the high-end segment,” said Mr Chong Kang-Ho, BNP Paribas’ head of research for Singapore, Malaysia and Indonesia and ASEAN property research. “Having said that, in the next five years, the supply pipeline for high-end is actually very manageable.

“Especially if you compare it with mass market, which will account for a larger proportion of the supply pipeline to come. So in that aspect, we do see greater chance of high-end stabilising compared to the mass market.”

Mr Singh added: “We still feel prices will trend downward, during the course of this year. But the positive that’s taking place arising from the steady decline in real estate residential prices, is that it’s taking place at the same time when wages are rising.”

JLL said prices of prime residential property could fall another 5 to 10 per cent this year, before seeing a recovery in 2017.


Mr Singh also said some developers are taking the approach of “choosing to wait it out” if they do not have the luxury of time or the ability to hold on.

Meanwhile, developer GuocoLand said it is in no rush to sell. It is developing Wallich Residence at Tanjong Pagar Centre, which is expected to get its Temporary Occupation Permit (TOP) in the middle of this year. According to URA data, just 16 out of the 181 units have been sold to-date.

“We have not been actively marketing the residential component but one of the main reasons is because it is part of the apex of our tallest building in Singapore,” said Managing Director of GuocoLand Singapore Cheng Hsing Yao.

“We are going to let the construction continue until it is close to completion, because we are putting in very high-quality design and finishes. At that point then we will start to market the project.”

Picture Source: A general view of private homes in Singapore. (AFP File)
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18 January 2016

Asia still alluring for foreign developers

More foreign property developers are launching their projects in Asia, with some even starting their campaigns in the region first, reported The Straits Times.

New York firm Extell Development Company started selling its 80-storey condo One Manhattan Square in Taiwan, China, Singapore, Hong Kong and Malaysia in November before launching it in the US. Unit prices range between US$1 million (S$1.4 million) and US$3 million (S$4.2 million).

Singapore’s residential sector saw apartment prices drop 4.3 percent year-on-year in September amid property cooling measures.

Meanwhile, Australia, Britain and the US have witnessed an increase in property prices over the years, revealed the Knight Frank Global House Price Index for Q3 2015.

Australia posted an annual price growth of 9.8 percent in the 12 months to 30 September, while the US and Britain recorded an increase of 4.9 percent and 3.7 percent respectively.

Santhosh Gowda, Chairman of London real estate firm Strawberry Star Group, said: “The London property market offers higher returns than any city as of now. Many prestigious developers are unveiling their projects in London, Singapore and Hong Kong as all these locations are very important from the investors’ point of view.”

As an indication of how important Singaporean investment is in the London property market, Strawberry Star opened an office in the city-state this year to provide lettings, sales and management services to foreign investors.

JLL, Extell’s partner in marketing One Manhattan Square, revealed that Asian investment in the US residential property market has doubled since 2010, accounting for 35 percent of foreign purchases.

In London, at least 50 percent of property investors are foreigners, the majority of whom are from Hong Kong, the Middle East and Singapore, said Gowda.

London property specialist Johns&Co noted that Singaporeans acquired 25 percent of luxury new build units in London. In fact, 75 of the 360 units sold at Providence Tower were purchased by Singaporeans. This translates to almost S$60 million of investment, noted Singapore-based client relationship manager Duncan Peacock.

The lure of overseas property for Singaporean investors is partly driven by the falling prospects of real estate here, said analysts.

A survey by Colliers International showed that Singapore is the top investor from Asia investing in Australia and the UK.

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Keppel Land, M1 make a smarter condo

Keppel Land and M1 are running a pilot programme to create a smart home system at The Luxurie condominium, reported The Straits Times.

Under the M1-Keppel Smart Lives programme, 30 households at the 622-unit development in Sengkang will get to enjoy smart home and healthcare solutions.

Alan Ang, one of the beneficiaries of the programme, has been making full use of the technology enablers set up in his unit’s security system, lights and healthcare devices.

For instance, a security camera installed at the front door of his unit takes a picture whenever motion is detected at his doorstep and sends it to Ang. Aside from live streaming the movements at his front door, the security camera also allows Ang to remotely unlock the front door.

In addition, a light in Ang’s living room automatically switches on whenever someone enters the home. On weekdays, lights in his bedroom are programmed to turn on at 6:15am and switch off at 7am.

His home was also installed with healthcare devices that are connected to a remote server. Readings by these devices – glucometer, pulse oximeter and blood pressure monitor – are digitally stored and shared with medical staff, who can make recommendations through remote access.

“I like the security system because… as I’m at work, I’m being notified if my kids are home. That’s very nice and, in the worst-case event, if my kids forget the key I can even unlock (the door) if I want to,” said Ang, who is head of finance at a multinational firm.

“It’s (also) good to have someone monitoring my vital signs,” he added.

Keppel Land revealed that residents involved in the pilot programme need not pay for it as they are still working out the cost of implementing the integrated suite of solutions to future households.

The system comprising the lights and security devices installed in Ang’s unit, for instance, costs about $2,500 on the market. The central system controlling three programmable bulbs are sold by lighting firm Philips for around $320 to the public, while each of the medical devices costs about $120.

Other participants of the 12-month programme will be randomly picked from a pool of applicants, with priority given to M1 fibre broadband users.

According to Willis Sim, Chief Product Development and Corporate Solutions Officer at M1, the programme utilises the “latest in Internet of Things developments to make lives safer, more comfortable and productive”.

Picture Source: Artist’s impression of The Luxurie condo.
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Data journalism – Small data for big impact

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3-month SIBOR edges up slightly after Fed rate hike

Key benchmark rates in the republic were up on Thursday (17 December) following the Fed’s rate hike announcement—the first in nearly a decade.

The three-month Singapore interbank offered rate (SIBOR) edged up slightly to 1.133 percent from Wednesday’s 1.132 percent. The current rate is still below the 12-month high of 1.139 percent recorded in September, but is almost three times the 0.444 percent recorded in the same period a year ago.

SIBOR is the key interest rate at which banks loan to one another and is a widely-used measure of the cost of funds. It is also the rate used to determine the interest rate for housing loans.

As the rates are expected to increase gradually in the future, analysts expect the rate hike to have an impact on the local and global property scene.

“The long-awaited Fed rate rise will have a marginal short-term impact on global property markets. However, the hike will likely affect the Singapore market more than others in the region as historically, Singapore’s monetary policy has closely followed that of the Fed. Therefore, we expect to see a decrease in mortgage applications and further downward pressure on the Singapore property market, in light of this and the government’s continued market cooling measure,” said IP Global Singapore director Alex Bellingham.

“The upside of this move, however, is that the Singapore dollar will likely continue to appreciate [against] other major currencies,” he added.

Colliers International said: “As long as the cooling measures and loan curbs remain in place, coupled with the Federal Reserve’s rate hike announcement [on Wednesday], sentiments in the private residential market is expected to remain subdued. This is despite the fact that some developers are ready to adopt a more competitive pricing strategy to move sales.”

“On a 12-month view, we think that the higher interest rate environment and an over-supply of residential homes could prompt the government to rethink their stance on policy relaxation, particularly if the market sees further price correction,” it added.

The Federal Reserve raised interest rates for the first time in nearly a decade on Wednesday (16 December), with a range of benchmark rates increasing by a quarter of a percentage point to between 0.25 percent and 0.50 percent.

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Mortgagee listings reach 7-year high

Mortgagee listings in Singapore hit a seven-year high in 2015, with the number of repossessed properties put up for auction soaring by almost 52 percent to 241 from 159 in 2014, reported Channel NewsAsia citing Colliers International.

Owner listings, on the other hand, stood at 555, taking the total number of auction listings to a six-year high of 796. Last year, there were 529 auction listings.

Colliers attributed the increase to the difficulty faced by borrowers in default to sell their properties.

It noted that residential properties accounted for 79.6 percent of the listings. Mortgagee listings for landed homes jumped to 50 units from 19 last year, while non-landed properties rose to 142 from 104 in 2014.

Despite the increase, the numbers are still lower compared to that recorded during the 1998 Asian Financial Crisis and the 2008 Global Financial Crisis, noted the property consultancy.

Looking ahead, Colliers expects the number of mortgagee sales to continue increasing next year as higher interest rates put more pressure on borrowers struggling to service their bank loans.

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World’s most expensive property sold for S$462m

A French chateau located outside of Paris was sold for a stunning US$301 million (S$462 million), making it the most expensive property ever sold in the world, reported AsiaOne.

Dubbed Chateau Louis XIV, the mansion was built in the style of a 17th century home and completed in 2011, said Bloomberg, citing two sources with knowledge on the matter.

It was acquired by a Middle Eastern buyer who requested anonymity, and was brokered by Christie’s International Real Estate.

Nestled on a 23 hectare site between Mary-le-Roi and Versailles, the vast mansion features an underground nightclub, a lavish ballroom, a squash court, a cavernous wine cellar with space for 3,000 wine bottles, and a home cinema, revealed the Daily Mail.

The Telegraph added that the chateau boasts 10 bedroom suites, a library, a grand reception room with a 52ft-high frescoed dome ceiling, and a ‘meditation room’ within a sturgeon-filled aquarium.

It noted that the mansion was built on a site which once housed the Swiss Guards that ensured the protection of Louis XIV, France’s king from 1643 till his death. The estate also comes with a 1.2 mile maze and a three quarter-sized replica of the Chateau de Versailles’ fountain of Apollo, the statues of which are covered in gold leaf.

The luxury property is heavily guarded with a hi-tech alarm system and 40 state-of-the-art surveillance cameras that can be viewed from across the world via an iPad.

Picture Source: Daily Mail Online
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Federal Reserve increases interest rates, first since 2006

The Federal Reserve on Wednesday (16 December) raised interest rates for the first time in nearly a decade, with a range of benchmark rates increasing by a quarter of a percentage point to between 0.25 percent and 0.50 percent.

“This action marks the end of an extraordinary seven-year period,” Federal Reserve chair Janet Yellen said in a press conference after the bank’s statement was released. The federal funds rate was held to near zero after the 2007-2009 financial crisis to help boost the economy as well as the collapsed housing market. The move to increase the rates signals faith that the US economy has largely recovered since.

“With the economy performing well and expected to continue to do so, the committee judges that a modest increase in the federal funds rate is appropriate,” said the US central bank’s policy-setting committee. “The economic recovery has clearly come a long way.”

The Fed also noted the “considerable improvement” on the US labour market conditions this year, adding that the Federal Open Market Committee (FOMC) is “reasonably confident” that inflation will rise over the medium term, to its two percent objective.

“The stance of monetary policy remains accommodative after this increase, thereby supporting further improvements in labour market conditions and return to 2 percent inflation,” the FOMC statement said.

“The process of normalising interest rates is likely to proceed gradually,” Yellen said, a hint that further hikes will be slowly coming. She added that the committee is hoping for a slow rate rise but also one that will keep the Fed ahead of the curve as the economic recovery continues. “To keep the economy moving along the growth path it is on … we would like to avoid a situation where we have left so much accommodation in place for so long we have to tighten abruptly.”

Locally, experts believe the recent hike should not have a sudden or disruptive impact on interest rates, as well as the property market in Asia Pacific, given that the increases has been widely anticipated.

“The varied rate cycles in which markets in Asia Pacific currently find themselves should counterbalance the effect on property yields. There may be a gradual upward resetting of return expectations, which in the short term may be more muted as this move has been expected. However, this will work through as rates rise further in the future,” said Dr Henry Chin, Head, CBRE Research, Asia Pacific.

In Singapore, the rate hike is expected to have a minimal impact on the Singapore interbank offered rate (SIBOR) as the local central bank have already priced in the increases. Meanwhile, CBRE’s Desmond Sim noted that it will, however, “put further pressure on capital values in light of the weakening occupier market. The yield spread is not expected to compress any further.”

Picture Source: Federal Reserve Building
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Govt announces land sales programme for first half of 2016

Four confirmed list sites and 12 reserve list sites will be released under the first half 2016 Government Land Sales (GLS) Programme, revealed the Ministry of National Development (MND).

The sites could yield up to 7,420 private residential units, including 1,460 executive condominium (EC) units, and 272,600 sqm gross floor area (GFA) of commercial space.

The confirmed list comprises three private residential sites (including one EC site), and one commercial and residential site, which could yield about 1,560 private units (including 640 EC units) and 11,000 sqm GFA of commercial space.

The reserve list comprises eight private residential sites (including one EC site), one commercial and residential site, two commercial sites and one White site. These sites could yield about 5,860 private residential units (including 820 EC units) and 261,600 sqm GFA of commercial space, mostly for office use.

The supply of private housing and commercial space from the GLS Programme, together with supply from projects in the pipeline, will be adequate to meet the demand for private housing and commercial space over the next few years, noted the MND.

The residential sites on the 1H 2016 confirmed list are located in the Outside Central Region and Core Central Region. These sites are expected to add about 1,560 private residential units (including 640 EC units) to the existing pipeline supply of about 73,000 private residential units (including ECs).

The 1H 2016 reserve list includes three sites at Beach Road, Woodlands Square and Central Boulevard for mixed-use developments which will comprise mainly office space. These three sites will allow developers to initiate the development of more office space if they assess that there is demand.

For more details on the proposed sites under the 1H 2016 GLS Programme, click here

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S’poreans more cautious on buying overseas property

Singaporean buyers are becoming more cautious when it comes to purchasing foreign properties, reported Singapore Business Review citing the Monetary Authority of Singapore (MAS).

In its latest Financial Stability Report, MAS revealed that Singapore households pumped $0.4 billion into overseas property transactions in 1H 2015, down from the $1.1 billion injected in 1H 2014.

“This suggests that Singaporeans are adopting a more cautious attitude towards such investments,” said the MAS.

Overseas property deals have been on a steady decline since its peak in 1H 2013, when the deal value stood at around $1.7 billion.

“While the weakening of some regional currencies vis-à-vis the Singapore dollar may lower the cost of investing in overseas properties, households should be mindful of the additional risks associated with investing in overseas property markets,” warned the central bank.

“In particular, currency fluctuations could affect the value of their debt obligations and their rental returns. Potential oversupply problems in overseas property markets could exacerbate the risk of significant price falls and capital losses to investors. Households should continue to carry out due diligence before making any property investments, including for overseas properties,” it added.

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Average Manhattan apartment prices surpass US$1m mark

Average prices of apartments within the New York borough of Manhattan has, for the first time, breached the US$1 million mark, reported AFP citing CityRealty.

A study by CityRealty revealed that apartment prices in Manhattan soared by 60 percent during the last 10 years.

In fact, the median price, or the midpoint of all sales prices, now stands at US$1.1 million, while the mean price, or the average of all sales prices, is now at US$1.9 million.

For this year, CityRealty expects total real estate sales in Manhattan to reach US$24 billion.

Traditionally, Manhattan’s market is composed of co-ops, where apartment owners are shareholders with a voice in the corporation owning the building, and condominiums, in which owners have a right to use common areas but have less of a voice on building practices or rules.

While condos accounted for the bulk of new construction this year, 57 percent of sales came from co-ops, with the rest accounted for by condo units.

The average psf price of a condo stood at US$1,732, up five percent from 2014, while new construction carries a higher psf price at US$2,073. CityRealty offered no corresponding data for co-ops.

Meanwhile, apartments at some sought-after addresses fetch a much higher price. The 26 apartments sold at the One57 development, for instance, had an average psf price of US$5,149.

The six apartments sold at 15 Central Park West, Manhattan’s most expensive address, carried an average psf price of US$6,292.

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13 January 2016

More help for public rental families to own a home

Former flat owners now living in public rental flats may soon be able to apply for a new housing grant and a concessionary loan, as well as acquire 2-room Flexi-flats on shorter leases, wrote National Development Minister Lawrence Wong in a blog post.

He shared that some of the views were gathered by the MND and the HDB from public dialogues on the Fresh Start Housing Scheme.

“Most said they wanted to own a flat again for their children to grow up in, but were unable to get mortgage loans. Some also said it was difficult to pay the resale levy in cash.”

As such, he noted that a new Fresh Start Housing Grant may be offered to these families under the Fresh Start Housing Scheme in order to reduce the amount they need to pay for a flat.

But instead of a single lump-sum payout, the grant may be disbursed in tranches over time, subject to certain conditions which have to be met.

He revealed that the ministry is also looking at providing the said families with another HDB concessionary loan.

The Housing Board will also explore offering 2-room Flexi-flats on shorter leases, but with a longer minimum occupation period. Currently, the flats are only available to the elderly.

While some families may prefer to buy a larger flat, “it would be more prudent to secure a flat first, and then move on to a bigger unit when they are able to do so,” said Wong.

“The two-room Flexi-flats will be similar in size to their existing rental flats, but this will be a flat which they will pay for and will eventually be able to call their own, unlike a rental flat. This is the big difference.”

“Taken together, the provision of another housing grant, another concessionary HDB loan, and a shorter lease flat are significant steps to help these families,” he added.

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New private home sales up 39%

Property developers in Singapore sold 759 private housing units last month, up 39 percent from the 548 units sold in October 2015, revealed latest data from the Urban Redevelopment Authority (URA) and reported The Business Times.

On a yearly basis, new private home sales jumped 79 percent.

MCC Land’s The Poiz Residences (pictured) emerged as the best-selling project in the month, with 277 units sold at a median price of $1,440 psf.

This was followed by Sky Vue, a condominium project in Bishan that was first launched in September 2013. CapitaLand sold another 59 units at a median price of $1,522 psf at the project after reportedly reducing prices by up to 10 percent. Nonetheless, the project’s median price in 2013 was still lower at $1,401 psf.

UOL Group’s Principal Garden moved another 45 units at a median price of $1,626 psf, while Sims Urban Oasis by GuocoLand sold 39 units at a median price of $1,388 psf.

Meanwhile, Nanshan Group sold another 38 units at Thomson Impressions at a median price of $1,396 psf.

Including executive condominiums, developers sold 945 units last month, a 15 percent increase from the 823 units sold in October, but 26 percent down from November 2014.

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Rents expected to dip more in 2016: Analyst

New malls in 2016 and consumer sentiments are expected to exert further downward pressure on rents, especially in other city areas, says real-estate consulting firm DTZ Southeast Asia. This comes after a 1.2% dip in first-storey rents in the fourth quarter of 2015.

SINGAPORE: Rental values are likely to continue to slide in 2016, though this dip is not expected to last for too much longer, according to real-estate consulting firm DTZ Southeast Asia.

Consumer sentiments, coupled with the expected completion of retail developments such as OUE Downtown Gallery, The Heart at Marina One and Tanjong Pagar Centre this year, are expected to “exert further downward pressure on rentals values, especially in other city areas”, DTZ said in a press release on Wednesday (Jan 13).

This comes after average islandwide first-storey rents dipped by 1.2 per cent to S$30.50 per square foot in the fourth quarter of 2015 compared to the previous quarter, according to DTZ.

The consulting firm said this was the third consecutive quarter of decline since the second quarter of 2015. Overall, average first-story rents fell 5.9 per cent in 2015, compared to a 0.3 per cent dip in 2014.

This decline was attributed to “weakened consumer sentiments amid uncertain global economic conditions”, said the consulting firm.

However, the decline in rents this year expected to be temporary, said DTZ’s Director of Research Dr Lee Nai Jia.

“While the pending completions in 2016 will pressure retail rents in other city area to fall, the decline is likely to be temporary,” said Dr Lee. “We anticipate retail rents to recover when the residential components in the mixed-use developments receive their Temporary Occupation Permits. The increase in resident population in the other city area will support the retail trade.”


Rents in Orchard Road and Scotts Road saw the least decline last year, said DTZ. The average first-storey rents in the area fell 5 per cent in 2015 compared to the previous year.

In suburban areas, average first-story rents fell 5.7 per cent last year compared to 2014. However, in the other city areas, there was a 6.9 per cent year-on-year fall in rents, “largely due to area’s dependence on the weekday office crowd for sales volume”, said DTZ.

While rents fell, occupancy rates remained healthy, said the consulting firm. “In fact, overall retail occupancy inched up 0.3 percentage point to 92.1 per cent in the third quarter of 2015, according to the latest URA statistics,” it said.

Occupancy rates in Orchard and Scotts Road remained unchanged at 92 per cent in the third qurater 2015, while occupancy rate in the other city areas and suburban areas inched up 0.6 percentage points and 0.1 percentage points to 90.6 per cent and 93.1 per cent, respectively, compared to the previous quarter.

Picture Source: A general view shows the prime district area around Orchard Road with hotels, shopping mall and residential housing on Mar 6, 2014 in Singapore. (Photo: Roslan Rahman / AFP)
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Overall outlook for ASEAN economies this year positive: Expert

Countries like Singapore that are more exposed to the United States will benefit greatly from its recovery, says Centennial Asia Advisors, Singapore’s CEO, while speaking at the annual Regional Outlook Forum.

SINGAPORE: The overall outlook for ASEAN economies in 2016 is positive, according to Mr Manu Bhaskaran, CEO of Centennial Asia Advisors, Singapore.

Speaking at the annual Regional Outlook Forum 2016 on Tuesday (Jan 12), Mr Bhaskaran pointed out that their economic trajectories will be determined by the balance among several forces.

For example, the impact of recovery in the United States, Europe and Japan, against the uneven and probably negative spill-overs from China’s economic challenges.

“Countries in ASEAN that are much more exposed to the United States in particular, obviously will do well. I think Singapore is one of those countries that will benefit greatly from a recovery in the United States,” said Mr Bhaskaran on the sidelines of the event.

He noted: “We are significantly exposed to the world economy. I think more than 80 per cent of total demand in the system is actually external demand, not domestic demand, so the benefits from global recovery are going to be very considerable and should help our economy.

“Unfortunately, we also have domestic headwinds. The real estate sector, I suspect, is going to correct more and there will be an impact on the economy – through real estate transactions, through a wealth effect, through an impact on the construction sector.

“In addition, we have a local corporate sector that has had to grapple with high labour costs, problems with labour availability because of necessary policy interventions, with a loss of cost-competitiveness over the last three years. These are not adjustments that will be done very quickly. It takes time and I think 2016, 2017 will be periods of adjustment.”


However, Mr Bhaskaran also warned about possible turmoil in Chinese markets.

He said: “The impact is first felt through China’s demand for imports, but a lot of the imports have been commodities and I think the big hit for commodities in terms of the price effect, volume effect … actually has already been felt in terms of the negative effect.

“Secondly, there is a tourism effect. If you look at the numbers, tourism from China is making a huge comeback. You’re getting extraordinary strong numbers in Thailand, in Malaysia and so on. So I think that it will continue to be positive despite the problems in China, because the one thing that is still doing quite well in China is household income, wages, and people are going out and spending as a result. So you have a currency impact which we should not underestimate.

“I suspect the Chinese yuan will be weakened cautiously over time. That is going to create ructions in foreign exchange markets and you’ve seen how damaging that can be. So I think that’s something we need to watch out for and probably need to manage more cautiously.”


Other speakers at the forum said ASEAN can also benefit from other developments.

An example is China’s proposed “One Belt, One Road” initiative, which seeks to improve connectivity across 65 countries via an overland belt that links China with Europe, and a sea route that passes through Southeast Asia, Africa and the Middle East.

“China will continue to work with ASEAN countries and try to develop cooperation, especially now (that) China wants to push for the One Belt, One Road initiative,” said Dr Jia Qingguo, the School of International Studies’ Dean at Peking University. “I think this is an initiative that would benefit both China and Southeast Asian countries.”

“China has technologies and also managerial skills in a way, and Southeast Asian countries, quite a number of them badly need infrastructure improvements. So they can work together in the best interests of both sides, so there is a great potential economically to engage in greater economic cooperation,” he added.

Another recent development is the ASEAN Economic Community (AEC) which was formed on Dec 31, 2015. It aims to create a single market with free movement of goods, services, investment, skilled labour and capital.

“AEC will increase employment and increase our business opportunities. So most important is implementation, how to open the market, how to kick out non-tariff barriers within the next 10 years,” said Mr Junichi Sasaki, CEO of the ASEAN and South West Asia Bloc at Itochu Corporation.

Business leaders at the forum also pointed out other hurdles that need to be addressed – for example, more clarity for transactions and licensing requirements.


Speakers at the forum also shared insights on tensions that ASEAN will likely confront. These include threats from Islamic State and territorial disputes in the region.

According to academic Ms Sidney Jones, a director from the Institute for Policy Analysis of Conflict in Indonesia, it is not a flood of returning fighters from Islamic State who pose the biggest risk, but members from its local support network who are eager to undertake attacks.

While local members lack the capacity to mount attacks, Ms Jones said the intent to do so could increase under orders from Islamic State leadership.

Another academic spoke of his findings of detainees in Malaysia.

“In my interviews with some of those detainees accused of being associated with ISIS or on their way to Syria, I found that they have this perception that ISIS is the messiah to solve the conflict,” said Dr Maszlee Malik, an assistant professor in the Faculty of Islamic Revealed Knowledge and Human Sciences at the International Islamic University Malaysia.

Dr Maszlee said to address the threat, people need to have hope that the conflicts can be resolved.

He said: “As long as there is conflict in the world, there will be terrorists. As we know, ISIS is part of the reaction to conflict in Syria and Iraq, so we need to address both, the root cause and also the symptom.

We need to give hope to the people that all the conflicts could be solved diplomatically and through democratic means and through civil means, but we need to be serious with it. We need to really convince not only Muslim youth, but I would say people all around the world that peace is still meaningful, peace is still a hope, but again, it requires a holistic and comprehensive effort from all parties.”


Analysts are also calling for more cooperation among government leaders to manage disputes in the South China Sea. China claims most of the South China Sea – through which more than US$5 trillion (S$7 trillion) of world trade ships every year – while Vietnam, Malaysia, Brunei, the Philippines and Taiwan have rival claims.

“A Code of Conduct probably would help freeze the interactions on the disputes, territorial disputes, maritime disputes,” said Dr Jia. “The current set of interactions is quite negative; if it’s not controlled, if it’s not well managed, then it may get into a military conflict, which is in the worst interests of all the parties.

“Now we have a pending case initiated by the Philippines in the court. I believe that probably the best alternative is for the Philippines to negotiate with to talk to China instead of going to the court to settle this business.”

Dr Jia said that freezing the interactions on the disputes would give ASEAN time to think about how to develop cooperation.

Now into its 19th year, the forum is organised by ISEAS-Yusof Ishak Institute and seeks to raise understanding of key developments in Southeast Asia.

This year’s forum features six sessions on topics such as regional economic and political trends, and saw about 550 attendees, including academics, Government and business leaders.

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Confidence levels among retail investors hit 3-year low: Survey

Latest findings show the JP Morgan Confidence Index dropped sharply in December 2015 to 101, compared to 116 six months ago.

SINGAPORE: Retail investors’ confidence in the local stock market and economy in the next six months declined sharply in December 2015, to the lowest level since June 2012.

The JP Morgan Investor Confidence Index – a half-yearly survey of investor sentiment by JP Morgan Asset Management – dropped 15 points to 101 in December. The index stood at 116 six months ago.

An index level of 100 is neutral, while 200 is extremely optimistic and 0 is extremely pessimistic.

Said Mr Brian Tan, JP Morgan Asset Management’s Head of Fund Sales: “The latest survey results are hardly surprising and are a reflection of a tough fourth quarter for investors that has certainly carried on into the start of 2016. With weak oil and commodity prices coupled with policy divergence finally underway, we expect to see more volatility ahead.”

He noted that despite lower confidence levels, the survey also showed that investors recognise the need to stay invested.

About 36 per cent of investors expected the STI to rise in the first half of this year – down from 53 per cent six months ago, while 31 per cent thought the STI would decline. As for local economic conditions, 28 per cent expected an improved environment, while 39 per cent predicted conditions would worsen.

However, despite the loss in confidence, 85 per cent of investors surveyed said they plan to stay invested and not try to time the market.

Looking ahead, JP Morgan predicts further headwinds for the local stock market, citing slower economic growth and weakness in the offshore and marine sector due to low oil prices. For investors to turn optimistic, the Chinese economy had to first stabilise, it added.

“The Singapore stock market could still go through a rather challenging time in 2016, because if you think about the economics of Singapore, if you look at for example the global economy, clearly that is still a bit of a headwind for the Singapore economy, which is very open,” said Mr Tai Hui, chief market strategist Asia at JP Morgan Asset Management. “If you think about the local real estate, that is still going through consolidation and correction. The bank loan growth is still also coming under a bit of pressure.”

The survey was commissioned by JP Morgan Asset Management and conducted by TNS, an independent research company. This is the 11th time the survey has been conducted.

Picture Source: File photo of the skyline of Singapore’s financial district. (AFP/Simin Wang)
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10 January 2016

Global boost in construction activity

The volume of construction output is expected to increase by 85 percent to US$15.5 trillion worldwide by 2030, according to the Global Construction 2030 report, a massive research project by Global Construction Perspectives and Oxford Economics. The report noted that three countries – China, the US and India – will account for 57 percent of all global growth, but places like Indonesia could also see a significant increase as well.

This growth will be driven by developed countries that continue to recover from the economic instability of the past few years. The report also stated that emerging countries continuing to industrialize will also play a role in the surge of worldwide construction output.

“China’s share of the world construction market will increase only marginally as growth slows in the world’s largest construction market to 2030. In comparison, US construction will grow faster than China over the next 15 years – growing by an average of five percent per annum. Meanwhile, we’re due to see a surge in construction rates in India as it overtakes Japan to become the world’s third largest construction market by 2021,” Graham Robinson, Executive Director, Global Construction Perspectives, told the Associated Press.

Construction growth in China is expected to slow considerably due to the housing slump and the first ever decline in housing output that is expected to occur this year. However, the report stated that there will be new opportunities for growth in construction, with projects like healthcare, education, social infrastructure, retail and other consumer end-markets, as the country transitions to a consumer and services driven economy.

According to the report, the construction sector in India will grow almost twice as fast as China until 2030. India’s urban population could increase by as much 165 million in that time, with Delhi possibly becoming the second largest city in the world. Other growing markets for construction during this time will include Mexico and Indonesia.

“Whilst there is an interesting relationship between the top three countries, it is important not to forget that we see significant weakness in Brazil and Russia, whilst we see extraordinary growth in Indonesia. In Latin America, we expect Mexico to overtake Brazil, whilst Indonesia will overtake Japan by 2030,” said Jeremy Leonard, Director of Industry Services, Oxford Economics.

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Analysts forecast property rebound in mid-2016

Amidst the mostly bearish views on Singapore’s housing market, some experts believe that transaction levels could start to recover in the second half of 2016, reported The Business Times.

Next year could be a tale of two halves for the property sector. A tepid first-half followed by a rebound in transaction levels over the next six months, especially in the luxury housing market, said Knight Frank’s Head of Research & Consultancy, Alice Tan.

She thinks that interest from both local and foreign buyers may rise due to the likelihood of some economic stimulus from the government, coupled with the unfavourable situation in some mature overseas property markets like Australia and London.

A number of buyers could also return to the market, particularly in 2H 2016, when they feel that the hefty price corrections they were anticipating are unlikely to happen, noted Alan Cheong, Research Head at Savills.

As for transaction levels, he forecasts that primary sales of private non-landed homes, excluding executive condominiums, could hover around 7,500 units next year.

Such optimistic views are also shared by OrangeTee’s Senior Manager for Research and Consultancy, Wong Xian Yang, who believes home prices in the Core Central Region (CCR) and Rest of Central Region (RCR) could start to stabilise in late 2016 or 2017, as long as the economy remains positive.

“Demand may start gravitating towards the central regions (CCR and RCR) as prices become more attractive and affordable,” he said.

However, property experts believe that the looming supply glut could worsen vacancy rates.

“With the impending new completion of around 22,300 private home units next year, (the) vacancy rate may creep up to 10 percent or higher especially for non-landed homes,” noted Tan.

Cheong thinks “it may take about 18 months till mid-2017 for the rental market and vacancy levels to improve.” In particular, the vacancy level for non-landed homes could surpass 10 percent next year.

Meanwhile, SLP International’s Executive Director Nicholas Mak reckons that non-landed home prices could dip by 2.5 to five percent in 2016. In the worst-case scenario, prices may fall by more than five percent next year.

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Meet 2015’s Property Person of the Year

Crown Group’s CEO Iwan Sunito was named the 2015 Property Person of the Year at a prestigious industry event held in Sydney last night.

More than 350 dignitaries, past winners and guests attended the ceremony, which was hosted by Urban Taskforce Australia.

At 49, Sunito is the youngest recipient of the accolade. Born in Indonesia, he spent his childhood on the island of Borneo before migrating to Australia to study architecture at the University of New South Wales (UNSW). He co-founded Crown Group with business partner Paul Sathio in 1996.

Today, the company is considered one of the leading developers of high-end apartments in Sydney with a portfolio of projects amounting to more than A$4.5 billion.

“I am immensely honoured to receive this award,” Sunito said.

“This award pays tribute to the efforts and hard work of our whole team and could not have been achieved without my business partner Paul Sathio.

“It is an acknowledgement of many years of commitment to innovative design and quality in everything we do. Our philosophy is not ‘bigger first then better’ but rather ‘better first and bigger will follow’,” he added.

In August this year, the developer sold more than A$380 million worth of apartments in one day at the launch of its latest development, Infinity by Crown Group, located in Green Square.

Other major projects under construction include the 20-storey Skye by Crown Group in North Sydney and a 25-storey residential tower at Clarence Street, in the heart of Sydney’s central business district.

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More discussion needed on HSR link

The governments of Singapore and Malaysia have jointly requested the presence of representatives from 14 companies and consortia to further deliberate their feedback about the High Speed Rail (HSR) project that will connect the city-state with Kuala Lumpur, reported Channel NewsAsia.

Previously, the authorities had initiated a joint Request for Information, which was participated by 98 entities. But more firms could still be invited, revealed Singapore’s Land Transport Authority (LTA).

Based on Malaysian reports, China Railway is among the companies invited for further discussions. South Korea and Japan are also interested to take part in this mega project.

According to the LTA, the next step is to thoroughly scrutinise the feedback and use it to enhance the commercial and procurement approach for the HSR project. The agency also remains open to suggestions and pledged to carry out a formal tender process in an “open, fair and transparent manner”.

However, the Request for Information exercise and the subsequent discussions involved have no impact on the formal tender process, which will be announced at a later stage.

Spanning 350 kilometres, the HSR project is expected to significantly reduce travel time between both cities to only 90 minutes. The Singapore terminus will be at Jurong East while Malaysia’s station will be in Bandar Malaysia.

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5 lessons we learnt about renovations this year

As we end the year and look back, we may wish we did not do some of the things we did. We’d like to share some of the lessons we learnt about renovations, so that at the end of next year, you’d be in better shape than us!

Regret 1: Taking on a renovation package because it seemed like a good deal.
Renovation packages can be enticing. However, we found out that after basic renovation work is covered, some companies will stack costs on. Homeowners end up paying extra for additional work, just to get better quality workmanship.

Lesson learnt: If there is a need to move in urgently and you’re unfussy with design, a design package might be a better deal. Otherwise, it’s probably better to discuss your requirements and needs with the designer as they can customize a home design that fits your living lifestyle. If you do go with a package, make sure you understand what it entails before you sign on the dotted line.

Regret 2: Relying only on friends and family for recommendations on home professionals
After hearing so many horror stories of what could go wrong during renovations, we turned to friends and families for recommendations. However, what worked well for them and their designers and contractors might not work as well for you. Tastes and chemistry may differ, so a good relationship between two parties, might not mean that you’d have the same good relationship too. Also, when it comes to issues like money, or design tastes, tread carefully, as there’s a chance that the relationship might be ruined, if people disagree.

Lesson learnt: Most homeowners select their interior designers based on the chemistry between them. Before you sign an agreement with the interior designer, make sure that you feel safe and comfortable with him / her.

Regret 3: Listening to the advice of too many well-meaning people
When you tell people that you are embarking on a home renovation, people will often proffer their unsolicited, but well-meant advice. For first-timers especially, this can be very confusing, and overwhelming. The circumstances and experiences each person has for their own renovation is unique, and their recommendations might not be suitable for you.

Lesson learnt: Your home should reflect your own needs and tastes, so you should consider all advice, but only take into account those you think apply to you, and make sense for you.

Regret 4: Procrastinating to the very last minute on your renovation
Often times, homeowners under-budget the time needed for renovation, and get flustered when they are unable to move in to their new homes in time. Unforeseen delays might happen, or the decision process might have taken longer than expected. Demand for renovations is highest leading up to festive seasons like the year-end, Chinese New Year and Hari Raya. If you are looking to complete your renovations for the festive period, be sure to budget even more time.

Lesson learnt: Three months isn’t enough time to work on a renovation. Six months is probably a more comfortable time-frame, for the short-listing of firm, design and construction process. Also, cleaning up post renovation and moving in also takes time. It would be good to starting thinking about what designs you want, putting together some inspirational photos and finalizing a budget, before you even sit down with any interior design firm.

Regret 5: Doing what’s hot for now, instead of what you can live with for the long term.
Design trends often come and go. This year, it’s industrial; last year, it was modern and Scandinavian. Before you commit to a design, think what you can live with for the long term. Black wire and Edison bulb light fixtures are very popular right now, but would you still enjoy the sight of them, or dusting them five years from today?

Lesson learnt: Before you populate your new home with all the latest trends, think about how long you will be staying in the home and how comfortable you will be with the decor over the next few years. Also think about maintenance, and how much time and effort you want to spend on upkeep and cleaning.

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09 January 2016

All eyes on Vietnam

Vietnam could soon become the new property hotspot in the Asia Pacific region, challenging the likes of Bangkok and Singapore for investment dollars. Channel NewsAsia recently reported that the country’s growing middle-class, along with relaxed regulations on foreign ownership, could help the property market grow significantly in the near future.

At the moment, Vietnam’s economic outlook is healthy, which is one reason why prospective investors are starting to enter the market. The article stated that annual growth of six to seven percent is forecasted between now and 2020, driven by foreign investment and a slew of free trade deals such as the Trans-Pacific Partnership.

The real estate market has also seen quite a bit of action in recent years, with unsold real estate inventory in the entire country amounting to US$2.4 billion last month. The figure is nearly 50 percent lower than what it was in early 2013.

A new law introduced by the government in July 2015 has made it possible for foreigners to purchase property in Vietnam. However, the upturn in investors has yet to materialise. While local confidence in the property market is high, rental yields are still proving to be an issue, keeping foreign investors at bay. For instance, apartment yields in Hanoi average five percent and around three to four percent for villas.

“The problem we’ve got here is rental yield. The rents are too low – still too low compared with the purchase price of property. So we have to use special techniques to make it work,” said Welsh property investor and multi-millionaire Kevin Green.

This is just one issue facing Vietnam before it can start to seriously challenge countries like Thailand for foreign real estate investment. There are also some issues with taxes that need to be worked out before Vietnam’s property sector can truly take off.

“Like how you transfer money from other countries into Vietnam. For example, after a few years if you want to sell the property how do you take out the profits and money back to your country? We need some guidelines from the State Bank of Vietnam,” said Pham Thanh Hung of Cen Group Holdings.

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Trio clinch Singapore’s top design award

Three designers and 13 designs were awarded Singapore’s most prestigious honour for design excellence and creative innovation – the President’s Design Award (PDA) – at a ceremony held last Friday evening at the Istana.

Managed by the DesignSingapore Council of the Ministry of Communications and Information (MCI) and the Urban Redevelopment Authority (URA), this is the 10th edition of the Award which attracted 111 eligible nominations.

The lauded designers are an architect and two accredited landscape architects, while there were three architectural projects among the awarded designs. This includes a condominium with dramatic green sky terraces that provide exclusivity and privacy.

“I am encouraged by the quality of projects that our architectural and landscape design community continues to field for the Award,” said Ng Lang, CEO of the URA.

“Design excellence combines aesthetics with good functionality and synthesis with the surrounding environment. The resulting product is unique to Singapore and reflective of our rich and multi-layered history and culture, combined with modern sensitivity and dynamism,” he added.

An exhibition of the PDA 2015 will be held at the National Gallery Singapore from today to 3 January 2016, the URA Centre from 5 to 31 January 2016, and at the National Design Centre from 2 to 29 February 2016. Admission is free.

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Clementi site awarded to highest bidder

The Urban Redevelopment Authority (URA) has awarded the tender for a residential site at Clementi Avenue 1 (pictured) to Singland Homes and UOL Venture Investments, after the developers submitted the highest bid of $302.1 million, which translates to $6,620 psm.

The tender for the 99-year leasehold site measuring 140,339 sq ft closed on 9 December 2015 after attracting six bids. With a maximum permissible gross floor area of 491,190 sq ft, the land parcel could yield 460 homes.

Located in the western region of Singapore, the site is close to the National University of Singapore (NUS), Clementi Sports Hall and Jurong Lake District, which is just one station away from Clementi MRT station.

Picture Source: Location of the Clementi Avenue 1 site. Source: URA
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S’pore may ease cooling measures in second half of 2016

Property cooling measures in Singapore could be eased as early as the second half of 2016 if private home prices continue falling, revealed Donald Han, Managing Director of Chesterton Singapore, at a luncheon hosted by Credit Suisse for its Singapore investors.

He believes a price drop of around 15 percent is likely to prompt an adjustment of current housing policies, given the small buffer before property owners slip into negative equity.

The Urban Redevelopment Authority’s (URA) residential price index has recorded an eight percent slide from the peak in Q3 2013.

As a result, property measures could be relaxed in 2H 2016, with rising interest rates acting as the “9th cooling measure”, shared Han.

“A reduction in the ABSD (Additional Buyer’s Stamp Duty) is most likely, but a reduction in the SSD (Seller’s Stamp Duty) could also materialise, should there be higher instances of mortgagee sales. The TDSR (Total Debt Servicing Ratio) is unlikely to be removed, however.

“Despite the easing of cooling measures and demand from PRs waiting to purchase, prices are only expected to bottom in 2018. New sales of 7,000 to 8,000 units are likely to be the new norm, with current unsold stock of around 24,000 units requiring three years to clear.”

Meanwhile, mass market homes are expected to see the fastest erosion in prices as the bulk of private supply is within the Outside Central Region (OCR), said Han. In addition, he predicts the large supply of up to 20,000 HDB flats in 2016 will put further pressure on suburban home prices.

This comes on the back of the “Bidadari” effect, where strong demand was seen in the November Build-To-Order (BTO) launch, which saw 5-room flats oversubscribed by 23 times.

In a report, Credit Suisse added: “We believe the stage is set for a pre-emptive re-calibration of cooling measures in 2H 2016, given persistent oversupply, speculative activity and foreign demand that have been curbed, while income growth has outpaced home prices. This would be a key re-rating catalyst for the sector.”

The Zurich-based firm has rated City Developments Limited (CDL) as its top pick among property developers, as “CDL is also best positioned for a turnaround in the Singapore residential market sentiment in 2016″.

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Red House project sells majority of units

The Red House project in the Katong area has seen over two-thirds of its units sold amid a slowdown in the private property market, reported Channel NewsAsia.

Considered an iconic landmark, the Red House was once a famous bakery, but is now being developed into a residential-retail lifestyle development by Warees Investments, the Islamic Religious Council of Singapore’s (MUIS) property arm.

Launched in 2013, the project is on track for completion by Q2 2016, said Warees Investments.

It will have 42 residential units that are categorised into three classes – Residences (28 units), Suites (10 units) and Lofts (four units) – with unit sizes ranging from 441 sq ft to 1,206 sq ft.

“Construction for the development which includes the iconic Red House in Katong is currently at 90 percent completion,” the developer noted.

Minister for Communications and Information and Minister-in-charge of Muslim Affairs Yaacob Ibrahim was briefed on the progress of the project during his visit to the development site on Thursday.

Commenting on how the development will enhance the heritage of Joo Chiat and Katong, Dr Yaacob said: “This is a conserved building. We are able to maintain the facade and as the architect explained, they work painstakingly to restore the frontage of the building which I think is very important.

“The Red House of course is another icon, so I think we have done our part to make sure that the heritage of Joo Chiat and Katong is maintained.”

Notably, five adjacent shophouses at 63, 65, 67, 69 and 71 East Coast Road, as well as the Red House at 75 East Coast Road were declared as Wakaf (Islamic endowment) assets in 1957.

To “relive the good days of Katong and preserve the character and heritage of the district”, a bakery will reopen at the Red House building, added Warees Investments.

Aside from selling bread, the bakery will also feature a gallery as a tribute to the building’s heritage. The developer is currently looking at ways on how it can allow the public to access the gallery round-the-clock.

Picture Source: Artist’s impression of the Red House project in Katong.
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07 January 2016

Singapore among Asia’s most expensive cities for expats

Singapore has been rated by human resources consultancy ECA International as Asia’s eighth most expensive city for expatriates in its latest cost of living survey, reported TodayOnline.

Globally, the city-state was ranked the 18th most expensive city for expats.

Shanghai, Beijing and Hong Kong topped ECA’s Asia rankings, while Zurich, Geneva and Bern emerged as the world’s top three most expensive cities.

After being ranked behind Singapore last year, Hong Kong has now overtaken the republic and is five places above it.

ECA attributed Hong Kong’s rise up the rankings to the relative strength of its currency over the past 12 months. Prices of goods and services within ECA’s shopping basket for Singapore last year were one percent higher than for Hong Kong. However, this year, the said prices were eight percent less compared to Hong Kong.

The ECA survey calculates the cost of living based on the allowance needed to purchase a basket of like-for-like consumer goods and services that are commonly purchased by expats in over 450 locations worldwide. However, this basket does not include certain living costs that are usually covered by separate allowances, like utilities, accommodation rental, school fees and car purchases.

Last month, the Asian Competitiveness Institute (ACI), a research centre under the Lee Kuan Yew School of Public Policy, unveiled its list of the most expensive cities for expats.

Under ACI’s list, Singapore was ranked as the most expensive city in Asia and fourth globally.

ACI looked at wages, purchasing power and cost of living for expatriates across 103 key cities. The results were based on 2013 data, which was the most recently available when the study was conducted.

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Hong Kong: Top of the peak

Land scarcity in Hong Kong has driven developers to build taller buildings, contributing to the city having one of the world’s most beautiful skylines. However, the lack of space also means land costs are extremely high, making it one of the most expensive places to buy real estate.

According to Knight Frank’s Global House Price Index, prices in Hong Kong surged a whopping 16.7 percent in the third quarter of 2015 from a year ago. The report noted that it was one of only five countries in the world to record double-digit annual price growth.

Apartments of the rich and famous

The luxury property market, in particular, has seen prices rise to dizzying heights. Just last month, it was reported that a 5,444 sq ft unit at the ultra-posh Opus Hong Kong apartment block on Victoria Peak sold for HK$509.6 million (S$93.2 million), earning it the title of most expensive apartment in Asia.

In June this year, a duplex in the same building was purchased for HK$95,971 psf (S$17,555 psf), making it the most expensive unit on a psf basis.

The sky-high prices have trickled down to lower segments of the market, but some property analysts say price growth has been decelerating since 2010 when the first property cooling measure, the Special Stamp Duty, was introduced.

Supply boom amid steady sales

Meanwhile, home sales are performing considerably better than expected. “(There were) 49,113 residential transactions recorded during the first 10 months of 2015, of which 6,390 involved luxury units worth HK$10 million (S$1.8 million) and above,” said David Ji, Director, Head of Research & Consultancy, Greater China at Knight Frank.

“We expect the total volume to reach about 60,000 units in 2015, down six percent from the 2014 total, mainly due to a slow secondary sales market,” he told PropertyGuru.

The high demand for homes is propelling the Hong Kong government’s initiative to increase housing supply, with the number of completed mass market residential units rising from 8,254 units in 2013 to 15,719 units last year, noted Ji. He expects the annual average supply to increase to about 20,000 units a year in the coming years, although luxury residential supply will be more limited.

Asian investors, especially Chinese buyers flush with cash, seem to be driving home sales on the island.

“Chinese investors prefer Hong Kong properties partly because of their close proximity. They are veteran investors who are familiar with the market.

“Hong Kong is also preferred by Asian investors for its advanced and simple tax and law systems, low tax rates, stable economic and political conditions, and abundant supply of quality units. In addition, the Hong Kong dollar’s peg to the US dollar provides a certain degree of stability in the investment market,” said Ji.

Economic optimism

Confidence in the economy is high, with GDP growth hitting 2.3 percent for the third quarter of 2015. This year, Hong Kong’s economy is expected to expand between two and three percent, after registering growth rates of 2.3 percent in 2014, 2.9 percent in 2013 and 1.6 percent in 2012, revealed Global Property Guide.

In addition, unemployment stayed low at 3.3 percent in the August to October period, while the inflation rate remained healthy at 2.4 percent in October 2015, Ji noted.

For Singaporeans who wish to enter the market, he explained that the three big local banks – DBS, OCBC and UOB – don’t provide loans for Hong Kong properties, although international loan application in Singapore is pretty straightforward if the applicant meets the Total Debt Servicing Ratio (TDSR) requirement. “The way it works is you fill up an application form and provide documents that show proof of income.”

What to buy and where

So what should prospective investors be looking at? Ji recommends that buyers focus on new residential projects due to their abundant supply, high quality and competitive prices comparable with secondary units. In addition, many luxury apartments are sought after due to their greater resilience and growth potential resulting from their limited supply and prestigious status, he said, adding that properties located on the Peak, Island South and the Mid-Levels would make good buys.

Meanwhile, Ji forecasts a mixed bag for the rental market. “With the slower expansion of multinational corporations, luxury residential leasing has become slower, but mass residential leasing remains stable with consumers who cannot afford high house prices or are waiting for prices to drop along with the potential increase in interest rates.

“The increasing residential supply has been suppressing rental growth. Luxury and mass residential yields remained low at 2.3 percent and 2.7 percent in September 2015.”


Population: 7.3 million

Total area: 1,104 sq km

Currency: Hong Kong dollar

GDP per capita: US$34,222 (2014)

GDP growth: 2.3 percent (Q3 2015)

Future transport: Completion of Hong Kong-Zhuhai-Macau Bridge by end-2017

Home prices: Up 16.7 percent from Q3 2014

Distance from Singapore: 2,569 km

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From homes to hotels

Short term rentals, defined as leases below six months in length, are technically illegal. While the Urban Redevelopment Authority is currently re-examining its short term lease policy, many homeowners have already started renting out their properties to tourists using services like Airbnb and Tujia. More often than not, residential homes have taken over the roles of hotels, and are providing tourists a place of lodging during their travels.

There are a number of push and pull factors that have led homeowners to adopt this model, rather than staying with traditional one- or two-year leases to longer term tenants. For the purpose of analysis, we will only be looking at private non-landed residential homes, which a quick survey of Airbnb and Tujia reveal, is the majority of the short term properties available for lease here.

Tenants Versus Tourists

Sentiment in the real estate market is in the doldrums currently, with the private non-residential rental segment taking a hit as well. Figure 1 shows the movement of rental volumes over the past 12 quarters in a general upward direction. This is deceptively positive. While this does indicates tenant demand, the situation is a little more complex.

Even as rental volumes have increased, so too has the vacancy rate (Figure 1, right-hand side axis). In Q2 2015, the vacancy rate for non-landed private residential homes reached a record 9.2 percent, before dipping slightly to 9.1 percent in the last quarter. What these two data points suggest is that existing demand, while at a relatively high level, is unable to absorb the supply coming on stream.

On the ground, we are also hearing that a number of condominium units that sold exceeding well due to their investment potential three or four years ago are now facing stiff competition for tenants, with landlords in a race to the bottom dollar to secure agreements. The supply side situation is likely to exacerbate further in 2016, with over 20,000 more private non-landed residential units set to complete construction.

Furthermore, the prognosis for the rental market is far from rosy. A slowing global economy does not bode well for trade in exports reliant Singapore, and it is unlikely we will see an increase in companies setting up their regional headquarters here. This would also imply a slowdown in the arrival of expatriates and their families, which would lead to a weakening of demand for rental units.

Given this, savvy landlords began to turn to another population other than tenants to occupy their empty units, with tourists stepping in to fill the gaps. We compiled Singapore Tourism Board’s (STB) international tourist arrivals in Singapore over the past 18 quarters. Figures have remained consistently above the 3 million level each quarter, and just crossed 4 million in the third quarter of this year (Figure 2), the quarter we traditionally see arrival peaks each year.

The consistency of tourist arrivals, enabled by disruptive Internet services, provides landlords a solution to monetize the excess capacity available, without the high operational costs and risks a hotel operator would face. Using these services, landlords are able to charge less per night than a regular hotel, undercutting them in price, while promising a more authentic experience.

Furthermore, switching to this model also cuts out the real estate agent, which saves on commission charges for landlords. However, there are other costs involved with this model as well, with both Airbnb and Tujia charging a service fees. Landlords would probably need to pay more in maintenance with more wear and tear, and cleaning costs associated with shorter-term rentals.

Yielding More

One of the attractions of switching to this model, even if landlords were able to find long-term tenants easily, is the promise of higher rental yields. Let’s run some numbers and see if this bears out.

Let’s take a hypothetical 800-sq ft, two-bedroom residential apartment bought at $1M. If the homeowner were to fully qualify for the maximum loan-to-value ratio (LTV) and loan tenure, the loan amount would be $800,000 over a 30-year mortgage. We will assume an interest rate of 1.2 percent. According to PropertyGuru’s mortgage repayment calculator, this will work out to be a monthly payment of $2,647 a month. We will also assume a monthly maintenance of about $453 on the condo unit as well, which brings the total expected monthly outlay to $3,100.

Regular one-year lease

At the current median rental price of $3.45 per square foot per month, the homeowner can ask for a market rate of about $2,760 per month. While on paper, gross rental yields would work out to be about 3.3 percent per annum, in real terms, the homeowner would be paying $4,080 each year out of pocket. On top of this, the homeowner would also have paid his / her real estate agent a standard one month’s commission of $2,760 as well, bringing the total annual outlay to $6,840 per year.

If the homeowner wants to avoid having negative cash flow each month, and asks for $3,100 in rents, the tenant would be paying $3.88 per square foot per month, 12 percent above the current median. This is not necessarily unattainable, especially if the unit is newer, and in a good location. This rate will not cover the agent’s commission either, which the homeowner will continue to pay out of pocket.

Short term rentals

Airbnb estimates that homeowners in Singapore can earn about $1,882 per week if they were to rent out their entire apartment to a maximum of four guests, or about $268 per night. If we assume that the apartment was only occupied for half the month, or 15 days out of 30, the rental income after Airbnb’s three percent service fee is about $3,912. The gross annual yield hence would be about 4.7 percent, and the homeowner would receive a passive income of $812 per month. Even if the homeowner were to incur an extra $100 per week for cleaning and maintenance charges, there would still be a positive cash flow of $412.

Beyond the Numbers

Just looking at the numbers, short term rentals can provide better yields than regular long term leases. However, the homeowner will also take on more risk by choosing this particular model for investment income. While Airbnb does provide a $1.2M guarantee for loss and damages to homeowners, it will not cover wear and tear, which is likely to be higher with a short-term rental model. Furthermore, tourism arrivals are seasonal, and there is no guarantee of a consistent occupancy rate of even 50 percent throughout the year. Homeowners might, therefore, need a certain degree of reserves to tide them through the lull months instead of counting on rental income.

Not every particular private property can use the short term rental model successfully as well. While tourists might arrive in Singapore by the millions per quarter, they are unlikely to want to stay in further flung suburban areas with longer commutes to tourist attractions and shopping destinations. Most of the properties available on Airbnb currently are either within the city core, or interesting city fringe areas, like Marine Parade, Geylang and Tiong Bahru.

While the shortterm rental model could be a viable alternative for homeowners to earn some investment income in a weak rental market, it is very clear that what makes a home attractive to long term tenants, i.e., proximity to transportation, amenities, and the city center, are the same factors that would make them successful long term rentals. However, homeowners and landlords do need to keep in mind that this is still technically illegal, and they could face legal consequences if caught.

Picture Source: Propertyguru Analytics,STB
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Better to rent than buy?

In a country like Singapore, where home-ownership is almost a national imperative, the question of buying versus renting can seem rather strange. Isn’t owning always better than buying, one may ask? The answer, perhaps counterintuitively, might be, not necessarily so, especially if we were to look at the private residential market.

Homeownership is an extremely expensive enterprise, not least of all in Singapore, one of the priciest markets for real estate in the world. Furthermore, with the prospect of mortgage interest rates rising, homeownership costs will definitely rise.

Running numbers

Let’s run two separate scenarios for the private property market in Singapore to examine if it is better to rent or to buy the same piece of property. To provide an accurate comparison, we will assume that this property is about 1000 square feet, in the city fringe area, and is already move-in ready, and that the total rental or living period is four years.

Scenario one: Renting

The median rental in a city fringe district like District 15, as at the end of Q3 this year, was about $3.30 per square foot per month. This would suggest that the starting rental for a 1000 square foot unit would be around $3,300. Figure 1 below works out what the total rent would be over four years, based on an assumed five percent increase of the rental price per year.

In this case, over a period of four years, the tenant would have paid a total of $170,681. This figure does not include other costs of tenancy, such as utilities, the security deposit,

Scenario two: Buying

Generally, new-ish units in the city fringes are going for about $1,700 per square foot. Applying this to our hypothetical condo unit, we would end up with a buying price of $1.7M. If we assume that the homebuyer gets a loan with a 30-year tenure, the mortgage amount is $1.36M.

First year costs, not including the monthly mortgage, would include a downpayment of $340,000, and a buyer’s stamp duty (BSD) of $45,600. This works out to $385,000.

The monthly mortgage payments, based on differing interest rates, are given in Figure 2, and are calculated using PropertyGuru’s Mortgage Calculator. If we were to go with the lowest interest rate, the total outlay from the first year alone would be $446,280.

Since this is a private residential unit, we also added in an annual maintenance charge of $6,000, based on an estimated monthly maintenance fee of $500.

After four years, the total costs of ownership, would work out to be about $630,120. At this point of time, the remaining loan principal stands at around $1,205,666. If the homeowner were to sell at this point of time, s / he would need to set a price of about $1.84M, in order to break even. This is purely based on the numbers worked out here alone, and do not include option fees, renovation costs, agent’s commissions, bank administrative fees etc.

For the homeowner to cover costs, they would need to have their property appreciate by about eight percent over the four years, or a compounded annual growth rate of about 2 percent. However, one should note that if the homeowner only managed to cover costs, they would still have to pay for the downpayment for their next home entirely out of pocket.

Breaking it down

What this implies hence, is that if the annual growth in value of the home were to be less than two percent per year, or if interest rates were to rise, the homeowner might have been better off renting, because of the money that was lost. Due to the prices of homes in Singapore, homeowners would need to commit to the long term, rather than staying and flipping in the medium term.

At the same time, there is also an opportunity cost to the money that is used to pay off the downpayment, and the monthly mortgage. Homebuyers, or at least the ones who are looking at homebuying as an investment, need to ask themselves what other ventures could they have used their money to reap similar returns.

It therefore is a matter of timing for homebuyers. Timing the market well – buying when the market is low and selling when the market peaks – is a definite way of making sure that one reaps returns. However, this is contingent on the homeowner having adequate holding power. Selling while the market is still in the doldrums, or exposing oneself to sellers stamp duties by letting go before four years would adversely affect the returns on investment one would expect.

Beyond the numbers

Homeownership however is more than purely numbers. There are very strong psychological and cultural factors that drive individuals and families into buying a home, rather than renting. These could include the idea of having a place to call one’s own to raise a family, or having an asset to pass down to future generations. The shorter to medium term returns might therefore not be such a strong argument for many.

However, renting is not without its benefits, and is in many countries, a common system where many find their homes to live. Renting provides opportunities for more frequent change, a larger degree of disposable income with which to enjoy life, and less obligations.

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GIC enters joint venture to acquire US student housing portfolio

Singapore’s sovereign wealth fund and the Canada Pension Plan Investment Board will each own a 47.5 per cent interest in the University House Communities Group, while operator Scion will own the remaining 5 per cent.

SINGAPORE: GIC has formed a joint venture with Canada Pension Plan Investment Board (CPPIB) and The Scion Group (Scion) to acquire a US student housing portfolio for approximately US$1.4 billion (S$2 billion), the Republic’s sovereign wealth fund announced on Monday (Jan 4).

Through the joint venture, GIC and CPPIB will each own a 47.5 per cent interest in the University House Communities Group (UHC). Scion, which will manage and operate the portfolio, will own the remaining 5 per cent. It added that the venture will also pursue opportunities “to acquire high-quality student housing assets primarily in Tier 1 university markets in the US”.

The transaction is expected to close in mid-2016.

UHC is one of the largest Class A national student housing portfolios in the US, with nearly 13,000 beds and concentrated among top-ranked universities with large student enrollment populations.

GIC Real Estate’s regional head for Americas, Mr Lee Kok Sun, said GIC expects UHC to generate steady cash flows moving forward: “Our confidence in the US student housing sector continues, given its positive fundamentals and potential.”

He also said he believes GIC’s experience investing in student housing in Australia and the UK “will add value to the joint venture”.

CPPIB’s managing director Peter Ballon said he saw the portfolio as a “valuable opportunity to enter the US student housing sector with top-tier, well-located assets”, while Scion’s president Robert Bronstein described the partnership with the firms as a “wonderful opportunity” for the operator.

Picture Source: Radian, one of the assets that comes with the University House Communities Group. (Photo: GIC)
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04 January 2016

Diagnosing the health of the real estate market in 2016

How property prices and demand fare are both a national obsession and a key driver of investment activity in the overseas markets. As 2015 draws to a close, it is time for investors to take stock of what occurred in the year and reflect on the performance of the real estate market in key countries. For many people, reviewing the overall trends of the year seems to mainly paint a bleak picture.

Indeed, a quick glimpse of the news reveals that the global economy is slowing. China’s performance is lacklustre compared to previous boom years. 2015 signalled the end of its growth cycle with the collapse of China’s stock market on Black Monday. Meanwhile, Europe has yet to experience a recovery and there is much talk about the possibility of a recession looming. The pressing question on everyone’s minds in the weeks leading up to the festive season will therefore be on what is next for the property market in the new year?

A disappointing 2015 notwithstanding, there are still pockets of opportunities and silver linings for certain property markets. For example, London’s residential market, especially in Greater London, is predicted to register positive demand in 2016 with the average housing price in the city fringe soaring 62 percent since 2008. Likewise, the Philippine real estate sector is likely to remain buoyant, backed by strong economic growth and bullish prospects for the business process outsourcing (BPO) industry. This is mainly attributed to the transformation of major central business districts in and around Metro Manila, which creates more investment opportunities for foreign investors and hikes up demand for real estate.

With growing interest among investors in understanding the outlook for overseas markets, PropertyGuru’s inaugural two day Real Estate Investment Conference was launched last weekend at Orchard Hotel. This provided investors an opportunity to engage with the leading players in Asia’s real estate industry as well as allow them to view specially selected properties from in and around the region. More than 200 investors braved the rain to attend the event and learn more about the outlook of Asia’s markets. They were also able to develop a deeper understanding of how broader economic trends can influence real estate as an asset class.

Among some of the highlights of the event included forum discussions where industry leaders debated on current pertinent topics influencing real estate markets. These included a focus on the regional currency turmoil and the impact of the upcoming interest rate hike by the US Federal Reserve and the opportunities and risks involved in investing in overseas markets. Panellists for each of these sessions came from diverse backgrounds encompassing the finance, property and research disciplines such as Alfred Chia, CEO of SingCapital, Mohamed Ismail, CEO of PropNex and Sigrid Zialcita, Managing Director – Research Services from Cushman and Wakefield.

In addition, there were other invited speakers at the show such as Diana Chua from SMATs group and Monty Nawaz from Saffron International who shed light on perennially popular investment locations such as Australia and London.

“Singaporean investors, though cautious, have remained optimistic over the investment prospects in established markets such as London. They are also relatively open to understanding more about developing ones which could potentially garner high returns such as the Philippines and Cambodia. Regardless of the country, there must be prior research done to understand the regulations and policies in the respective markets. Investors should also start to take a long term investment view and weigh their options before making their commitment,” said Steve Melhuish, Co-founder and CEO of PropertyGuru Group.

“The experienced industry leaders we have invited to speak at our inaugural Real Estate Investment Conference will be able to share in-depth their expert opinions and knowledge and educate investors about the region.”

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How to know if you are eligible for the PPHS

1. Determine your status

To qualify for the PPHS, you have to have booked an uncompleted BTO or SBF (Sale of Balance Flats) flat. If you are a married couple or an applicant under the Fiancé / Fiancée Scheme, you must ensure either both you and your spouse or fiancé / fiancée are first-timers, or that at least one of you is a first-timer, and the other a second-timer.

The PPHS is not just for engaged or newlywed couples. Divorced or widowed parents with children can also qualify, so long as they have booked uncompleted BTO or SBF flats.

2. Documentation and legal matters

If you are married and have just taken possession of your PPHS rental flat, you must produce your marriage certificate within three months. At the same time, at least one of you has to be a Singapore citizen. The one who is not a citizen must be a permanent resident (PR).

3. Ownership and occupancy

None of the occupiers of the PPHS rental flat are allowed to own any existing HDB flat. You can be a co-owner of a HDB flat with your parent(s) and / or sibling(s) if they are not listed in your BTO / SBF application, but you would be required to surrender your co-ownership within six months of taking possession of the rental flat.

All applicants for the PPHS rental flat must also be listed in the application for the BTO / SBF flat, and you can only apply for one PPHS rental flat within the same month.

You are also allowed to share your PPHS rental flat with another eligible couple or household. But remember: a three-room PPHS flat can accommodate up to six people, and a four- or five-room PPHS flat can accommodate up to nine people.

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Small town, big potential

Considered a mature estate in northeast Singapore under the Toa Payoh planning area, Potong Pasir is perhaps best known for being home to the St Andrew’s family of schools: St Andrew’s Junior School, St Andrew’s Secondary School and St Andrew’s Junior College.

It is also a stone’s throw from the now hotly contested Bidadari estate, which has been in the news of late thanks to its recent Build-to-Order (BTO) launches.

Furthermore, Potong Pasir’s relatively central location and well developed transport infrastructure allow quick and easy commute to the CBD and Orchard Road, with the PIE and CTE just a short drive away.

Over the years

Populated by numerous sand quarries and ponds between 1910 and 1937, Potong Pasir later became one of Singapore’s most prominent and successful vegetable-producing areas in the 1950s.

Still, it was a rural area with government-leased farmland, as well as low-quality roads; flooding was also a regular occurrence. But thanks to rapid development in the decades following the 1950s, it improved tremendously.

From bridges across the ponds and a village community centre where children could be educated in the 1950s to electricity and piped water in the 1960s, Potong Pasir underwent a massive transformation.

In the 1970s, government took over the land for redevelopment purposes, necessitating the relocation of the villagers. This eventually led to the public housing estate of Potong Pasir to be formed in the 1980s, resulting in the now iconic sloping rooftops of several of the HDB blocks there.

Despite all this development, however, Potong Pasir has managed to maintain the quaint, peaceful charm of a small neighbourhood, whose shops are mostly locally owned businesses that meet the needs of its residents.

A homely affair

More recently, after some controversy, The Poiz Residences and The Poiz Centre were finally launched. Initially named The Andrew Residences and The Andrew Village, complaints from some of the St Andrew’s alumni that the original names would detract from the schools’ rich history led the developer, MCC Land, to rename both the condominium project and its commercial building.

Though Potong Pasir consists mainly of HDB flats, there are a variety of private residential and mixed-use developments in and around the area. One of them is The Venue, a 99-year leasehold residential and commercial project at Tai Thong Crescent.

Wong Xian Yang, Senior Manager of Research & Consultancy at, says one of the selling points of The Venue is that it is “surrounded by good schools such as Cedar Primary (School), the St Andrew clusters and Maris Stella High School, which is a draw for parents with (school-going) kids”.

He adds: “Essentially, the most attractive selling point for mixed developments such as The Poiz Residences and The Venue is the convenience it brings. Their city fringe location and close proximity to transport infrastructures such as Potong Pasir MRT station and the PIE allow commuters to reach the CBD and Orchard Road without much hassle. This is particularly true for The Poiz Residences, as it is connected to the MRT station.”

The Poiz Residences is recently launched 99-year leasehold mixed-use development connected to Potong Pasir MRT station, and features 731 residential units and 84 commercial units in The Poiz Centre.

Wong says, “For now, MCC Land has not decided to sell the strata retail units of The Poiz Centre, and is choosing instead to lease out the units themselves. This arrangement would lead to better control over the tenant mix, and should create more value for the residents.”

Prospects and potential

Now that The Poiz Residences has been launched to enthusiastic response, with nearly 75 percent of its released units having been sold during its first weekend of sales alone, Potong Pasir will no doubt be more densely populated.

Some long-time residents may not welcome this change, but there is no denying that this bodes well for the property market in the estate, which has been doing rather well so far. Wong predicts: “Going forward, the population in the vicinity is set to increase with the completion of The Poiz Residences, The Venue, and the BTO projects in Bidadari estate, breathing more life into the currently quiet estate.

“The retail components in some of the aforementioned developments, together with the upcoming market square in Bidadari, will provide more variety in amenities for residents. Given its city fringe location, value is expected to hold up as the developments in the area can continue to command a premium price for the convenience and host of nearby amenities.

“In the long run, the build-up of the Bidadari estate may eventually increase the demand for private residential units nearby, as upgraders often prefer moving within the estate.”

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Calls to legalise home sharing

In recent years, short-term rental websites such as Airbnb and Roomorama have disrupted the rental and hospitality markets in many countries around the world. Today, travellers can arrange to stay in someone’s house for a price much lower than that of most hotels. For homeowners, it offers them a quick and easy way to monetise their property.

Many people who have used such rental websites for their travels also say it allows them the opportunity to experience other cultures and make new friends.

“Short-term and vacation rentals give visitors a wider choice of accommodation options and allow for greater and more immersive tourism,” Roomorama’s co-founder Jia En Teo told PropertyGuru.

For instance, it allows tourists to see more of Singapore as they interact with locals in residential neighbourhoods, she said. has been connecting travellers with hosts across the world for the past five years.

Despite the many advantages of such portals, current regulations in Singapore do not allow HDB flats or private properties to be rented out on a daily or weekly basis.

An ongoing debate

The topic is currently being debated for private housing, with the Urban Redevelopment Authority (URA) holding a public consultation exercise in January 2015 on whether rules regarding the minimum period of stay need to be changed. Right now, the minimum period allowed for the subletting of private units is six months.

According to the URA, this is to ensure that residents in the area are not inconvenienced by the frequent turnover of guests. The government agency is also looking at further enforcing the law through investigations.

Although the feedback exercise closed in February and a public review was meant to be completed this year, a URA spokesperson said it is still studying the issue and more time is needed to review the feedback provided.

Sceptical Khaw

Meanwhile, some of Singapore’s politicians have expressed reservations regarding short-term home stays in the city-state.

In a blog post, former National Development Minister Khaw Boon Wan admitted that he isn’t a fan of the idea.

“While it earns extra income for homeowners, their neighbours would not like to see their quiet neighbourhood becoming a hotel district,” he wrote.

Aside from Singapore, the practice has also been hotly debated in other cities.

“New York City has banned it, while Amsterdam and San Francisco allow it but are considering tighter regulations,” added Mr Khaw.

Meanwhile, the URA has been receiving various views from private homeowners, with some requesting a shorter period of stays to be allowed, catering to tourists who prefer living with locals, or to let homeowners supplement their income.

But others have raised concerns over noise, loss of privacy, security, and misuse of common facilities. Some residents have even called for stronger enforcement of laws governing the subletting of apartments.

HDB not budging

While the URA has been actively engaging Singaporeans in the decision-making process, the Housing and Development Board (HDB) is standing firm against allowing HDB flats and bedrooms to be let out for short-term stays. In response to media queries, a HDB spokesperson said the rules are meant to protect the residential character of HDB blocks and the interest of residents.

“This is to pre-empt the high turnover of occupants, which will disrupt the pleasant living environment for HDB residents. Some residents also raised concerns that the frequent change of occupants and the presence of unfamiliar faces in the blocks would pose security concerns to them,” she said.

For flat owners who flout the rules and open their homes for short-term rentals, the Housing Board warns that they can expect to feel the full force of the law as this is an infringement of the lease.

“HDB takes a serious view of such infringements and will take stern action against the flat owners, including imposing a financial penalty, or even compulsory acquisition of the flat,” the spokesperson said.

Beware the snitches

In fact, HDB relies on residents and members of the public to report any cases of unauthorised subletting and misuse of flats in their neighbourhood, which it regularly investigates.

“We encourage those who come across suspected cases of unauthorised subletting and misuse of HDB flats to call us at 1800 555-6370. All feedback will be kept confidential.

“We also track closely the advertisements on home rental websites and investigate possible cases of misuse,” she added.

Despite being illegal, a search on Roomorama revealed close to 300 short-term rental listings in Singapore, of which the majority are apartments. Prices range from above $30 for a room per night to just under $400 per night for a house.

Rise of the sharing economy

Commenting on how their business model works in Singapore’s heavily regulated market, Teo said: “In today’s sharing economy, one size does not fit all. We try our best to operate within the guidelines of the host countries within the cultural norms.”

To protect property owners who open their homes to visitors, Roomorama encourages them to collect a security deposit from their guests to cover against any losses or damages. This is refunded upon checkout, as long as everything is in order.

Moving forward, Teo is hoping for a positive outcome from URA’s feedback exercise. “This is a great opportunity for clear guidelines to catch up with the rapid development of this trend of travel. The industry is evolving and we welcome all views and initiatives, like this public consultation.”

A risk worth taking

PropertyGuru’s Cheryl Marie Tay spoke to one tenant who rents out a spare room to guests as a way to make money and new friends.

Although Airbnb is technically illegal in Singapore, that hasn’t stopped people living here from signing up on the website as hosts. Both owners of HDB and private properties do this, sometimes renting out a single room and sometimes renting out entire homes.

In fact, some tenants in private condos and apartments also act as Airbnb hosts, with their own landlords either closing one eye to the matter, or completely unaware of it.

Steven, an expat who has been living in Singapore for nearly four years, is one such tenant. He rents a condo in the city area, and exclusively through Airbnb, lets his spare bedroom to tourists. He does so about once every month, sometimes less frequently, and his landlord is oblivious to this.

When asked if he ever worries that his landlord may find out when he comes to inspect the unit, he says he does not, since the latter “owns the whole condo and never checks on individual units”.

Steven accommodates both men and women, and has entertained 10 guests so far. He allows a maximum of two guests at a time, and charges a flat rate of $90 per night for the room. But after the horror stories we have heard of both guests and hosts being drugged, robbed and worse, how does he know his guests can be trusted?

He explains: “If you’re a traveller and have an Airbnb account, your host can leave a review of you — whether you obeyed the rules, how clean you were, whether you made a lot of noise…that sort of thing. I only rent to guests who have good reviews on the website.”

Like many other expats in Singapore, Steven hosts Airbnb guests for two main reasons: the money he makes from hosting helps in paying his own rental of the condo, and he finds it easier to make friends in this manner.

He shares, “I’ve made a friend or two through Airbnb, which is part of the reason I do it. Living on my own is a bit lonely sometimes, so it’s nice to have somebody over. It’s a good medium between living alone and having a flatmate. I don’t want flatmates, but I do like having people over. Besides, I make money at the same time.”

He is also well aware of the laws and rules in Singapore regarding services like Airbnb, and thinks the underlying issue is the fear that competition from Airbnb will harm the hospitality industry. However, he believes this fear is, for the most part, unfounded.

He says: “I understand I’m basically ‘stealing’ business from hotels, but when you think about it, that’s not really true. If I rent the room to a backpacker, I’m not stealing hotel business; backpackers won’t pay $200 a night for a hotel stay, and that’s where people like me can help.”

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Private residential property prices down 3.7% in 2015: URA

Prices fell 0.5 per cent in the fourth quarter of 2015, following a 1.3 per cent drop in the previous quarter, based on flash estimates released by the Urban Redevelopment Authority.

SINGAPORE: Private residential property prices fell 3.7 per cent for the whole of 2015, extending a 4 per cent decline in 2014, according to Urban Redevelopment Authority (URA) flash estimates released on Monday (Jan 4).

Prices fell 0.5 per cent in the fourth quarter of 2015, following a 1.3 per cent drop in the previous quarter, based on the private residential property index, which declined 0.7 points to 141.6 points in the fourth quarter.

Prices of non-landed private residential properties declined by 0.4 per cent in the Core Central Region (CCR), compared with the 1.2 per cent decline in the previous quarter. Prices in the Rest of Central Region (RCR) and Outside Central Region (OCR) remained unchanged, compared with the 1.6 per cent decline in each segment in the previous quarter.

For the whole of 2015, prices in CCR, RCR and OCR have fallen by 2.6 per cent, 3.9 per cent and 3.7 per cent, respectively. Prices of landed properties fell 2.1 per cent, compared to the 0.4 per cent decline in the previous quarter. For the whole of 2015, prices of landed properties fell by 4.4 per cent.

The flash estimates are compiled based on transaction prices given in contracts submitted for stamp duty payment and survey data on new units sold by developers during the first 10 weeks of the quarter. The statistics will be updated four weeks later when URA releases the full real estate statistics for the fourth quarter of 2015, which captures more data from the stamp duty records and the take-up of new projects.

“Past data have shown that the difference between the quarterly price changes indicated by the flash estimate and the actual price changes could be significant when the change is small. The public is advised to interpret the flash estimates with caution,” the URA added.

Picture Source: File photo of private housing in Singapore. (Photo: TODAY)
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29 December 2015

Home prices to remain depressed in 2016

While no major correction is expected next year, analysts believe that several factors from oversupply to lending curbs will keep prices of executive condominiums (ECs) and private homes depressed, reported The Straits Times.

Knight Frank Singapore research head Alice Tan expects new home prices to drop by three to five percent in 2016, while projects with many unsold units may lower prices even more.

ECs have seen average prices fall from a high of more than $800 psf in H1 2015 to $780 psf in H2 2015, noted R’ST research director Ong Kah Seng, adding that average prices of ECs could drop next year to $750 to $780 psf.

With around 24,000 new unsold units in the market, remnant stock is a major issue plaguing the private residential market. Aside from this, developers are also under increasing pressure to move units due to the Additional Buyer’s Stamp Duty (ABSD) and Qualifying Certificate penalties, he said.

Developers have been slashing prices all year as market realities start to bite. The Panorama, for instance, saw median prices fall to $1,226 psf in October from $1,343 psf during its initial launch in January last year, revealed OrangeTee research manager Wong Xian Yang.

Prices at Sims Urban Oasis also slipped to $1,285 psf in October from $1,397 psf during its February launch.

Clearly, buyers affected by both the ABSD and Total Debt Servicing Ratio (TDSR) have become more selective nowadays.

But while new private home sales were lower this year, the unsold stock has also been decreasing. Knight Frank’s Tan said there were 24,149 unsold units in Q3 this year, down 18 percent from Q3 2014 and 25 percent lower than in Q3 2013.

“The adjustment of prices, albeit at a moderate level from about two to three percent discount, coupled with pent-up demand, especially from local home buyers, has helped improve take-up rates in the last two quarters,” she said.

Over in the resale market, the year’s top five projects saw prices drop by six to 11 percent from 2013, though prices increased at one of the developments, said OrangeTee.

Despite the rise in resale volumes, Wong expects rentals to remain soft due to the limited growth in foreign labour and many completions expected next year.

Century 21 chief executive officer Ku Swee Yong said EC developers may become more desperate to move units in projects where there are over 300 unsold units, like at The Criterion, The Terrace and Sol Acres.

“The raised income ceiling of $14,000 (earlier this year) does not seem to have brought in many buyers,” he said.

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More dark clouds loom for private housing market next year

TODAY reports: The lacklustre economic environment is likely to depress sentiment further, warn property analysts following another year of subdued home buying activity.

SINGAPORE: After another year of subdued home buying activity, property analysts warned that the Republic’s private residential property market may be in for tougher times in 2016 as the lacklustre economic environment is likely to depress sentiment further.

Adding to the woes is the United States Federal Reserve’s decision to start normalising interest rates, which is expected to keep prospective buyers on the sidelines as they adjust to the new reality. That, coupled with existing property curbs, could cause prices to fall by up to 8 per cent in the next 12 months, analysts told TODAY.

“Higher interest rates coupled with cooling measures will dampen demand, perpetuate sluggish market conditions and softening in prices … In 2016, it is expected to fall by at least the same pace or faster if economic conditions worsen,” said Mr Ong Teck Hui, JLL’s national director for research and consultancy.

The 5 to 8 per cent of price moderation that analysts forecast for 2016 is quicker than the expected decline this year.

Urban Redevelopment Authority (URA) statistics showed that in the first nine months of 2015, private home prices fell by 3.2 per cent and will likely end the year at about 5 per cent lower than the previous year’s level, analysts said.

Compared with the peak in 2013’s third quarter, prices have fallen 8 per cent as of end-September and will likely inch towards 10 per cent by the end of this year. Such a magnitude of decline – though still shy of the 60 per cent surge between 2009 and 2013’s peak – may draw some potential buyers into the market and boost sales for the year.

Next year could also see some developers coming under pressure to clear inventory as their respective deadlines to avoid paying stamp duties and extension fees near. These developers may be more compelled to lower prices to meet buyers’ expectations – a move that could potentially help next year’s sales volume improve, analysts said.

Several developers TODAY approached declined to comment.

Developers are required to pay an Additional Buyer’s Stamp Duty (ABSD) of 15 per cent unless they build, complete and sell all units five years from the date of the land acquisition.

Besides that, developers with foreign holdings and not building on land sold by the Government are subject to Qualifying Certificate conditions, which require them to complete construction within five years and sell all dwelling units within two years.

“There could potentially be more transaction activity in 2016 … (But) this could be at the expense of prices. We anticipate sales only being achieved for the motivated sellers who are prepared to be realistic on price,” Colliers International told TODAY, without giving a sales projection for 2016.

But other analysts are forecasting that developers could sell anything between 7,000 and 8,000 units next year, which looks set to be an increase from this year’s sales but a far cry from the over 22,000 transactions seen during the peak in 2012.

Pending the final URA real estate statistics for 2015 due in January, developers have sold around 5,800 units in January-to-September. Analysts expect sales to total around 7,000 units this year.


Across the Republic, the Core Central Region (CCR) or city centre that has been the worst hit by the series of Government measures is expected to be more resilient next year, analysts said.

These properties were most affected by measures such as ABSD and the Total Debt Servicing Ratio (TDSR) framework given their higher price tags. Demand was seen shifting towards the Outside Central Region (OCR), or suburbs, where home prices are of smaller quantum, which supported prices in the area. However, the reverse could be seen in 2016 as prices in the city centre and city fringes have “become more attractive”, noted Mr Wong Xian Yang, senior manager of research and consultancy at OrangeTee.

Mr Wong expects CCR prices to post the smallest price decline of up to 3 per cent in 2016, while private homes in OCR would see the steepest fall of up to 7 per cent. The Rest of Central Region (RCR), or city fringes, could see prices dip up to 5 per cent.

Supporting his view is Ms Alice Tan, director and head of consultancy and research at Knight Frank, who noted that the CCR will see limited new supply in the coming years. Higher number of new completions in the OCR next year also means that rents in the suburbs are likely to lead the downward adjustment in the overall market.

In the first nine months this year, overall rents in Singapore slipped by 3.3 per cent. Compared to its peaks in the third quarter of 2013, rents have fallen for a total of 6.7 per cent in eight consecutive quarters, URA figures showed.

The number of private residences due for completion will peak in 2016 at around 22,000 units, URA said, which means the competition for tenants is set to intensify next year and vacancy rates will possibly hit double digits from the 7.8 per cent as of the third quarter 2015.

Ms Tan said: “Overall rentals of private homes could slip by 4 to 6 per cent year-on-year by the fourth quarter of 2016, in view that population growth next year is not likely to exceed the 1 per cent of annual increase seen in the last two years and with the likely continuation of tight immigration and foreign workforce polices.”


With private residential property prices softening at a moderate pace and expected to continue so next year, analysts agreed that the current situation presents “little incentive” for the Government to tweak any cooling measures.

“If it ain’t broke, don’t fix it,” said OrangeTee’s Mr Wong. “The current situation seems to be in line with the Government’s plan for a soft landing for the property market … So if the situation remains unchanged, we probably would not see a revision in cooling measures.”

Several industry players, including the Real Estate Developers’ Association of Singapore, have repeatedly urged the Government to relook the curbs as prices and sales volume have moderated. In response, the Government has also come forward to state that it is still early to review the measures, but gave assurance that it will keep a close watch of market developments.

In view of that, analysts said any adjustments would likely come in the later part of 2016.

“We do not expect the cooling measures to be revised until the Government is satisfied that prices have eased sufficiently and threats to market stability have been resolved. My view is that should there be any adjustments to the cooling measures, it is unlikely to be before the later part of 2016 or possibly beyond that,” said JLL’s Mr Ong.

Nevertheless, the Government remains a party that will be keenly watched by the industry for any developments that could potentially have a bearing on the property market will be keenly watched in 2016, analysts said.

Other major factors that could affect sentiment is the macroeconomic situation and movements in interest rates.

“The Budget definitely is one key event to watch out for, as the Government may fine-tune current cooling measures. The other event is to see whether the global economy, especially China, can rebound,” said Dr Lee Nai Jia, DTZ’s regional head of research for Southeast Asia.

Picture Source: File photo of a condominium in Singapore. (Photo: TODAY)
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Singapore IPO market languishes as Hong Kong surges

TODAY reports: As the Singapore Exchange languishes with only one IPO listed on the mainboard this year, Hong Kong has been on a tear as it reclaims its position as the world’s top IPO market.

SINGAPORE: The number of initial public offerings (IPO) on the Singapore Exchange (SGX) plunged 57 per cent this year from last year, with analysts attributing the lacklustre performance to a weak market outlook and competition from a much stronger Hong Kong.

Only 13 IPOs were listed on the SGX this year — just one on the mainboard and the other 12 on Catalist, raising a total of about S$630 million. This compared to the 30 IPOs last year, of which 12 were on the mainboard and 18 on the junior board, raising about S$3.5 billion altogether.

BHG Retail Real Estate Investment Trust (REIT) raised S$394.2 million when it listed on the mainboard this month, making it the biggest IPO in Singapore for the year. The units closed unchanged at S$0.80 on its debut day after the underwriter emerged to support the market. At the close on Monday (Dec 28), BHG Retail REIT units remained at S$0.80. Most of the Catalist-listed IPOs, which had offer prices ranging from S$0.20 to S$0.46, gave investors little cheer this year.

Mr Ernest Lim, a remisier at CIMB Securities, said: “Performance of the new listings had more than half registering negative returns, with five of them registering almost 40 per cent drops since their debut. While two of them registered flat returns and two of them, namely Jumbo and Singapore O&G, soared 48 per cent and 198 per cent, respectively … the overall performance is not exactly fantastic.”

“Most clients traded less this year as they are cautious on the overall market environment, slowing China economy, weak Singapore economy and generally lacklustre corporate results,” he added.

As the SGX languishes, Hong Kong has been on a tear as it reclaims its position as the world’s top IPO market. In the first 11 months of the year, 71 companies listed in the city, raising a total of US$31.2 billion (S$43.9 billion), accounting for almost 16 per cent market share of IPO funds worldwide, the South China Morning Post reported.

IG market strategist Bernard Aw said: “Firstly, the red-hot Hong Kong IPO market may have drawn companies away from listing in Singapore … Hong Kong benefited from its proximity to mainland China, compared to Singapore. We can see this advantage quite clearly from the growing number of mainland firms listing in Hong Kong.”

“Secondly, the higher financial bar for a mainboard listing in Singapore (minimum market value of S$150 million or pre-tax profit of at least S$30 million) may have continued to disqualify medium-sized companies, which earned about S$20 million.”

The poor IPO market came amid a turbulent year for the SGX. In June, the bourse had to pony up an estimated S$20 million to address gaps in its service recovery capabilities after it was reprimanded by the Monetary Authority of Singapore over two trading outages last year, one of which brought trading to a halt for hours and hurt Singapore’s reputation as a financial centre.

In July, veteran banker Loh Boon Chye took over from Mr Magnus Bocker as chief executive to spearhead a revival in the fortunes of SGX. In September, local shares plunged in line with other Asian markets following a slew of weak Chinese economic data, with the Straits Times Index falling past the key 2,800 mark. On Monday, the benchmark ended at 2,875.32 in thin year-end trade.

The SGX toughened up its rules on corporate governance in October and this month launched a listing compliance bulletin as part of moves to increase transparency on disciplinary actions.

“At the moment, the initiatives are not directly geared towards attracting new public listings. The new changes at SGX are certainly welcoming, and should provide a fresh start for Singapore’s stock market, but it remains to be seen how they can attract more IPOs,” said Mr Aw.

Picture Source: The Singapore Exchange Centre. (File photo: Calvin Oh)
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Resale prices of private homes dip in November: SRPI

Overall prices dipped 0.6 per cent month-on-month in November, after a 0.1 per cent growth in October, according to the Singapore Residential Price Index estimates.

SINGAPORE: Resale prices of private homes dipped in November, according to the Singapore Residential Price Index (SRPI) estimates, which were released on Monday (Dec 28).

The SRPI, compiled by the National University of Singapore’s Institute of Real Estate Studies, showed overall prices decreased 0.6 per cent month-on-month in November, down from the 0.1 per cent growth in October.

Prices of home in the central region, excluding small units, was down 0.8 per cent, while prices of homes in the non-central region, excluding small units, was down 0.4 per cent in November.

Prices of small units, which have a floor area of 506sqf or below, showed the biggest drop with its 1.2 per cent decline, according to SRPI.

Picture Source: File photo of private housing in Singapore. (Photo: TODAY)
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HDB to explore use of smart planning tools for more towns and estates

Modelling tools help the Housing and Development Board to simulate environmental conditions such as wind flow, sun and shade for better estate planning.

SINGAPORE: Modelling tools to visualise heat, shade and wind flow were used to plan and design new precincts and building forms within Singapore’s first “eco-precinct” Punggol town. These resulted in smart Housing and Development Board (HDB) homes in districts such as the waterfront Punggol Northshore.

On Sunday (Dec 27), the HDB announced in a news release that it will explore applying such smart planning tools beyond Punggol and to existing and upcoming towns and estates.


There are two types of smart planning tools used to improve the planning and design of HDB towns under the Smart HDB Town Framework, the housing board said.

The first, Urban Environmental Modelling (UEM) simulates environmental conditions such as wind flow and solar irradiance, which is the amount of energy generated by the sun per unit area.

This was put to use at the Treelodge @ Punggol precinct, where simulations allowed town planners to orient blocks to maximise wind flow, thereby optimising natural ventilation and minimising the need for electrical cooling, HDB said. UEM also helps planners identify areas within the town that would receive large amounts of heat from the sun throughout the day, so they can introduce more greenery in such areas to reduce heat build-up.

The modelling tool highlights shaded areas within the town as well, enabling planners to site community facilities like playgrounds and childcare centres in places which get more shade.

“This allows us to identify better placement of facilities, such as children’s playgrounds,” explained Mr Leroy Tan, senior engineer at HDB’s Building Research Institute.

“Because normally we know children usually come out during the evenings or late afternoons to spend their time in the playgrounds, so this is one example where we can use it to identify placement of facilities so we can encourage the community to come out and have activities at these places.”

The Urban Environmental Modelling tool helps planners identify shaded areas to site community facilities like playgrounds and childcare centres

The second, Complex Systems Modelling (CSM), is a decision-making tool that simulates the impact of green initiatives.

This helps town planners, architects and engineers more accurately assess the trade-offs involved when introducing new sustainable features in HDB towns and choose the most effective combination of solutions to achieve the desired sustainability targets, HDB stated. For instance, the tool can be used to study the most effective way to place rooftop solar panels, which in turn could influence the orientation and design of buildings.

“This is particularly useful for our town planners because they cannot afford experimentation with actual developments in land-scarce Singapore,” HDB said.

CSM has been tested in the Yuhua precinct in Jurong. Planners for the neighbourhood used it to weigh the energy savings of “smart lighting”, which adjusts the intensity of lighting based on the footfall throughout the day, against the higher cost of installing such lighting compared to LED lights for corridors.

After Yuhua, CSM was also used in the urban planning for Punggol Northshore. In future, the tool could also be applied to existing towns to help assess the feasibility of rolling out the HDB Greenprint programme, the housing board said.

A simulation model of Yuhua neighbourhood created by the prototype of the Complex System Modelling Tool

HDB added that it will progressively leverage such modelling tools to complement town planning efforts to provide well-designed homes in green, sustainable and self-sufficient towns.

Under the Smart HDB Town Framework introduced in Sep 2014, data collected by a network of sensors will help build more accurate simulations for planning and can offer real-time feedback on an estate to optimise maintenance cycles and to pre-empt problems.

Picture Source: An artist’s impression of the common green and community pods at Northshore Plaza. (Photo: Housing and Development Board) & HDB
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27 December 2015

Clementi site draws six bids

A 99-year leasehold residential site at Clementi Avenue 1 has attracted six bids after its tender closed yesterday, revealed the Urban Redevelopment Authority (URA).

Launched for sale on 23 October under the second half 2015 Government Land Sales (GLS) Programme, the site is expected to yield 460 housing units.

A consortium comprising Singland Homes and UOL Venture Investments submitted the highest bid of $302.1 million ($6,620 psm), followed by Oxley-Lian Beng Ventures with an offer of $276.201 million.

The 140,339 sq ft site has a maximum permissible gross floor area of 491,190 sq ft, and is within proximity to the National University of Singapore (NUS), Clementi Sports Hall and Jurong Lake District, which is just one station away from Clementi MRT station.

Desmond Sim, Head of CBRE Research, Singapore and South East Asia, said the number of bids reflect the need for developers to shore up their land bank.

“It is encouraging to see that the Singapore residential market is still a key business focus for developers. The bidders are taking a long-term view of the Singapore residential market,” he noted.

The URA said a decision on the award of the tender will be made after the bids have been evaluated.

Picture Source: (by URA): Aerial view of the Clementi Avenue 1 site.
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S’pore among 10 most expensive cities for construction

Singapore is the third most expensive Asian city to build in after Hong Kong and Macau, according to the latest International Construction Costs Index published by Arcadis, a global design and consultancy firm for natural and built assets.

Globally, Singapore is ranked 10th. New York is the world’s most expensive city for construction, followed by London and Hong Kong.

The annual Arcadis index analyzes the relative cost of construction across 44 major cities, and found that strong currency performance and significant resource constraints have seen these places command premiums of up to 60 percent compared with many European locations.

However, this price inflation comes at a cost, with the viability of major commercial and public sector schemes put at risk in these cities as prices continue to soar. Furthermore, rising costs and the falling value of currencies could restrict demand from emerging market investors in these areas, potentially triggering a shift in interest to lower-cost cities in the long term, noted Arcadis.

The consultancy stated that every construction market this year saw overall cost inflation restricted due to the drop in commodity prices. Particularly with oil, growing uncertainty over prices will have a long-term impact on the global construction industry.

Alan Hearn, Head of Buildings Solutions, Asia, said: “Singapore’s construction market has enjoyed a strong recovery since 2010. It is for this reason that the recent slowdown in residential and commercial markets represents something of a correction. In the private sector, both the residential and industrial sectors were relatively weak in 2015 and the office market also suffered due to oversupply.

“Looking ahead, continued investment in road and rail can be anticipated as these aspects of infrastructure have not received as much investment in recent years in Singapore.

“For Asia, China’s economic slowdown and weakening demand in many cities, including Singapore and Jakarta, mean that growth in the region is expected to ease as we enter 2016.”

Ho Chi Minh City, Kuala Lumpur, Bangkok, Bangalore and Taipei are among the world’s cheapest cities for construction, added the report.

The full report can be downloaded here.

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CDL invests in A$275m Brisbane project

City Developments Limited (CDL) announced on Thursday that it is jointly developing a prime residential land site in Brisbane’s highly sought after South Bank precinct with Australian developers Abacus Property Group and KPG Capital.

CDL and Abacus will provide the majority of equity funding via a preferred equity interest of approximately A$30 million each.

The 472-unit project (pictured) comprising two 30-storey towers will be developed on a 2,733 sqm freehold site at Merivale Street, and will have a gross development value of around A$275 million.

According to CDL, works have started and both towers have been launched for pre-sales, attracting a very positive response from buyers.

The site is close to the South Brisbane Train Station and major universities, and offers easy accessibility to Brisbane’s central business district and the upcoming Queens Wharf integrated resort. Future plans for the area will include over A$5 billion of proposed infrastructure investment.

Kwek Leng Beng, CDL’s Executive Chairman, said: “Our re-entry into Australia’s residential market is in line with CDL’s overseas expansion strategy, which we announced two years ago to supplement our existing Singapore operations. Brisbane’s residential market remains highly attractive due to its affordability when compared to other major cities in Australia. Both domestic and international buyers are looking to Brisbane for greater value and higher yield.”

CDL has been developing projects in Australia since 2003, with properties in Brisbane, Sydney and Perth.

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Economists lower Singapore’s growth forecast for 2015, 2016: MAS

Private sector economists trimmed their outlook for Singapore’s economic growth for 2015, amid slower growth across all sectors of the economy, the quarterly survey released by the Monetary Authority of Singapore (MAS) revealed Wednesday (9 December).

Economists polled in the survey downgrade their previous growth forecast of 2.2 percent to 1.9 percent this year. Growth forecast for 2016 was also adjusted to come in at 2.2 percent, compared to 2.8 percent expected in the previous MAS survey published in September.

The survey also showed that economists expect GDP growth in the fourth quarter to come in at 1.4 percent year-on-year, down from 2.3 percent expected in previously.

The republic’s inflation forecast were also trimmed for next year, according to the survey. The headline consumer inflation rate was seen at 0.5 percent in 2016, down from 1.1 percent in the September survey. Core inflation was expected at 1.0 percent, down from 1.3 percent.

Economists also see the all-items consumer inflation rate at -0.5 percent this year, down from their previous expectation for -0.2 per cent, while core inflation remained unchanged, to come in 0.5 percent in 2015.

Interest rates here are also likely to edge up, economists said, with the US Federal Reserve looking to raise rates next week. With this, the survey said the three-month Sibor could hit 1.25 percent.

The republic softened its growth forecast for the year in November against the backdrop of sluggish global demand. This is despite the city-state’s faster-than-expected growth in the third quarter of the year as driven by the service industry.

The government now expects full-year economic growth in 2015 to be “close to 2.0 percent,” while growth for next year is expected to be at 1.0 to 3.0 percent.

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Aspial launches Australia’s tallest residential tower

Singapore developer Aspial Corporation has revealed plans to expand its Australian pipeline via its subsidiary World Class Land during the launch of the A$1 billion (S$1.02 billion) Australia 108 tower, reported The Australian.

Situated in Melbourne’s Southbank, the tower is poised to be Australia’s tallest residential building at 319 metres tall. The development will feature 1105 apartments, including a penthouse which was acquired by a Chinese businessman for A$25 million (S$25.45 million) this year – an Australian record.

“We are considering some sites but it depends on the opportunities. We have two sites in Brisbane, one in Cairns and two in Melbourne,” said Aspial chief executive Koh Wee Seng. He noted that the group is also looking at making an entry into Sydney.

“Overall Australia is a very good place…The environment, friendly people, established people, it is a place where a lot of people aspire to stay,” he said, adding that the decision by the federal government to charge an additional stamp duty on foreign buyers has not dissuaded the group. He said he even supports the measure.

“I think it’s a good thing for the market and we feel the government is doing a good thing for the country.”

Brookfield Multiplex is the builder of Australia 108, while Fender Katsalidis Architects created the design for the project. CBRE, on the other hand, handled the project’s off-the-plan sales campaign.

Andrew Leoncelli, CBRE managing director of Victorian residential projects, said only 25 apartments remain to be sold at the project. “We’ve got a selection of the three and four-bedroom product remaining,” he said.

“The CBD continues to get huge demand for investors and the international market.”

Picture Source: Melbourne skyline
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26 December 2015

More properties under the hammer in 2015

Singapore’s auction market saw 60 properties listed in Q4 2015, bringing the total number of new listings to 215 for this year, revealed a DTZ report.

According to the property consultancy, the number of properties put up for auction has steadily increased since the TDSR framework was introduced in 2013. Notably, there were 136 new listings in 2014, up from 82 in 2013.

“Both the number of listings for owner sales and mortgagee sales went up significantly year-on-year,” said DTZ.

Owner-sales listings increased from 74 properties in 2015 to 125 in 2015, while mortgagee-sales listings climbed from 47 listings in 2014 to 78 in 2015. Of the 215 properties listed this year, 138 were non-landed residential apartments, and 48 properties were landed homes.

The listings with the highest opening bids in 2015 were dominated by landed properties, which included the landed residential property at 25 Branksome Road at S$15 million and 35 Binjai Park, a Good Class Bungalow, at S$35 million.

The average gross floor area for landed properties listed in auction increased from 4,077 sq ft in 2014 to 4,297 sq ft in 2015, while that for the residential apartments increased from 1,430 sq ft in 2014 to 1,880 sq ft this year.

Overall, the success rate of selling during or before the auction stood at around 13 percent in 2015, down from 2014’s sale rate of 14 percent. Of those successfully sold, 23 were non-landed homes.

There were also more successful bids for larger non-landed homes in 2015 compared to those in 2014. The average floor area of those successfully auctioned climbed from 1,382 sq ft to 1,624 sq ft, with average prices at around S$1.6 million.

The prices of the successfully auctioned properties were usually sold at a discount from 3.5 percent to six percent, said DTZ. However, the price cuts for attractive properties at choice locations is lower as these properties are rarely available for sale.

“Choice properties, especially those that are rarely available in the market, attract a lot of buyers’ interest due to its scarcity. Additionally, we see more buyers willing to purchase these units of higher quantum despite the Additional Buyers’ Stamp Duties, as they offer great value for money,” said DTZ’s Head of Auction Joy Tan.

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Challenging times for Johor, Penang property

Johor and Penang’s property markets languished in 2015 due to the weak ringgit, the recently implemented goods & services tax (GST), and economic uncertainty within and outside Malaysia.

Looking ahead, Landserve (Johor) Executive Director Wee Soon Chit believes that uncertainty in the state’s property market will linger in 2016 due to sluggish economic conditions.

“Johor’s property market is rather weak. This coincides with the traditional holiday/festive season from end-November to February. Less people are likely to commit themselves during this period, but we foresee stronger interest for properties in the second quarter of next year.”

On a positive note, the weakened ringgit has made homes more affordable for Singaporeans and other expatriates. The situation has also helped Malaysians working in Singapore.

“This group contributed to a significant demand for properties and we expect them to continue to form the bulk of property purchases,” Wee noted.

However, foreigners like Singaporeans will be cautious when investing in Johor properties.

“The slowdown in the property market, the concern about the general economy and oversupply situation, however, makes them more cautious about property investment here,” he said.

Potential buyers are also worried about the supply glut of homes in Johor as large developers from China, like Greenland, Country Gardens and R&F Properties are building many properties.

As a result, Johor’s real estate sector has tilted in favour of buyers. In fact, some developers are offering up to 20 percent in discounts just to woo customers, especially for luxury homes.

Meanwhile, market activity in Penang’s property market has plunged by nearly half since it peaked in 2011, said Michael Geh, a senior partner at Raine & Horne Malaysia.

“The market recorded total transactions of 9,667 in the last quarter of 2011 which is the highest number of transactions in the past four years before it saw a drastic drop of about 48.47 percent in the first quarter of 2012 to only 4,981 transactions.”

At the same time, the value of transactions fell sharply from RM2.27 billion to RM1.5 billion in Q1 2012.

“The market continued to contract in 2013 where transactions dropped slightly by 786 transactions to 4,193 transactions (with a total value of RM1.55 billion) in the first quarter and it remained stable with slight increases throughout the year, bringing the total transactions to 17,700 units with a total value of RM7.1 billion for the year.”

In 2015, the number of deals decreased by around 26.17 percent to 3,834 transactions with a collective value of RM1.55 billion compared to the levels seen in Q4 2015. “If compared to the same quarter of last year, the market also saw a contraction of about 10.65 percent or by 457 transactions.”

Moving forward, prospects for Penang property hinge on how the market will respond to the unveiled Public Transportation plan. According to experts, residential prices in areas located near upcoming LRT stations are expected to remain unchanged or rise significantly.

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Malaysia’s Gamuda to grow Singapore land bank

Malaysian-listed infrastructure group Gamuda is looking to grow its Singapore land bank following its successful bid for a residential site in Toa Payoh in June, reported The Straits Times.

Gamuda and its partners, Maxdin and Evia Real Estate, won the tender for the 99-year leasehold site for $345.86 million.

Group Managing Director Lin Yun Ling noted that while the Singapore property market has reached a turning point, it is not expected to pick up quickly.

“I remember three, four years ago, we felt it was very ‘toppish’ and not the right time. But we thought in the recent months that it is probably the bottom,” he said.

Private home prices fell four percent in 2014, compared with the 1.1 percent and 2.8 percent increase seen in 2013 and 2012 respectively.

With a market capitalisation of US$3 billion, Gamuda started seeking growth opportunities here around two years ago.

Earlier this year, the group considered submitting a bid for a residential site in Paya Lebar, but decided against it.

As for the Toa Payoh site, Gamuda offered few details about its plans, except to say that the project will focus on a ‘lifestyle’ concept. It is looking at providing buyers incentives like a temporary golf membership to play at the 18-hole Horizon Hills township course in Iskandar Malaysia.

The Toa Payoh development could be soft launched in March at an indicative price of around $1,400 psf on average, said Gamuda.

“It is really just dipping our toes into the water, there will be the next stage after the toes of course, the feet, even if it is not the legs. We will probably approach it that way,” said Lin, who described Gamuda’s move into Singapore as ‘logical growth’.

He added that the foray into Singapore will help the company boost its non-ringgit revenue, which accounts for much of its growth.

Aside from Singapore and Malaysia, Gamuda also has operations in Vietnam, Qatar, Australia, Taiwan and India.

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Oxley to post record profits

RHB Research expects Oxley Holdings to post record-breaking profits in 2016 to 2017, reported Singapore Business Review.

The property firm has $3.3 billion in total unbilled sales across its local and overseas development projects, which will underpin record profits for the next two years, said RHB.

Oxley is developing various high-yielding mixed development projects that are expected to be completed over the next 12 to 18 months. The developer has also witnessed impressive take-up rates at its overseas residential launches.

“It has also built up a sizable overseas portfolio to drive the next wave of NAV growth, with planned UK, Cambodia, Ireland, Malaysia and Myanmar launches in the upcoming months. The stock is one of our property sector top picks,” added RHB.

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Rowsley and Thomson Medical partner to develop Iskandar project

Property developer Rowsley has signed a memorandum of understanding (MOU) with Thomson Medical for the private hospital to be Rowsley’s strategic partner in the RM5 billion Vantage Bay Healthcare City project in Iskandar Malaysia.

The two parties will work together to conceptualise and develop the project. Located a kilometre from the Johor Causeway, it will comprise a specialist hospital, community hospital, long-term care facilities, teaching hospital, medical school, research and training institutions, purpose-built urban wellness resort, wellness retail services and other associated facilities.

Singapore-based Thomson Medical, which operates Thomson Medical Centre as well as a network of specialist clinics and imaging centres, will advise on the wellness and healthcare aspects of the project.

Both parties will leverage on their combined network and expertise to jointly promote the project to suitable prospective partners, investors and operators. Thomson Medical will also evaluate opportunities to operate relevant components of the project, either on its own or together with third parties.

In September 2015, Rowsley announced that it was re-positioning Vantage Bay into a healthcare city with the goal of turning it into a leading healthcare destination in Asia. This is on the back of soft market sentiments for residential apartments in Iskandar in the last year.

According to official statistics, the number of Malaysians and Singaporeans aged 65 and above will double to six million by 2030. With an aging population and rising healthcare costs, the development is expected to provide quality and affordable healthcare.

Ho Kiam Kheong, Rowsley’s Executive Director, said: “We are delighted to sign this MOU with Thomson Medical given their strong track record and branding in healthcare both in Singapore and the region. We will now be able to expedite and execute our plans to develop Vantage Bay Healthcare City as a leading medical hub, serving both the local and regional markets.”

Rowsley intends to fund the investment through a diverse mix of financing, including equity funding from investors.

Picture Source: Artist’s impression of the Vantage Bay project in Iskandar Malaysia.
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24 December 2015

Roxy-Pacific acquires Sydney sites

Singapore-listed property developer Roxy-Pacific Holdings will acquire two vacant sites in Glebe, a suburb of Sydney, Australia for A$67.38 million.

Located at No. 14 Cowper Street (Lot 10) and No.8 Elger Street (Lot 11), both sites have a total land area of around 7,125 sqm, and could yield about 248 housing units subject to regulatory approval.

The purchase consideration was arrived on a willing-buyer willing-seller basis, after taking into account various commercial factors including inter alia, the location of the properties, and the recent transacted prices for other properties in the vicinity.

In a statement, the group said the acquisition will be financed by internal funds and bank borrowings, and is not expected to have any material impact on the earnings per share and net tangible assets per share of the company for the financial year ending 31 December 2015.

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Punggol flat sells for $760,000

A 5-room HDB resale flat in Treelodge@Punggol with a rare loft design was sold last month for $760,000, a new record for the non-mature estate, reported The Straits Times.

Although it is just one of 14 loft units in the entire development, the 147 sqm (1,582 sq ft) unit commanded a premium price as it is bigger than the usual size of 110 sqm (1,184 sq ft), said PropNex agent Godfrey Chan who brokered the deal on behalf of the seller with his partner Rosalind Teo.

When the Housing Board launched these lofts in 2007, such flats only cost up to $383,000, so it was possible that the seller doubled his investment, noted Chan.

Moreover, the flat is situated on the 16th to 18th floor of HDB’s first eco-friendly project, which features solar panels, energy-efficient lighting and a design that allows optimum wind flow.

According to the buyer’s agent, Dennis Wee Realty’s Tammy Ho, her client was originally not interested in buying a flat in Punggol, but later changed his mind after personally visiting the flat.

Another selling point is the rarity of the unit. “Even at this price, you might not be able to get such units anymore,” she added.

The previous record in Punggol was set by an apartment that was purchased for $650,000 in 2012. But the secondary market has been languishing since then.

The previous record in Punggol was set by an apartment that was bought for $650,000 in 2012. But the resale market has weakened since then. Before the most recent record-breaking deal, 5-room flats in Punggol were being resold from $355,000 to $544,000 in the past 12 months. Price levels of around $760,000 are more commonly seen in mature estates like Queenstown.

Furthermore, the flats in Treelodge@Punggol have only recently entered the resale market following the completion of the five-year minimum occupation period.

Since October, at least three 4-room flats have found buyers for $520,000 to $548,888, the highest price achieved in the last 12 months. In Coralinus, another premium HDB project in Punggol, four units of 4-room flats were bought at similar prices of at least $520,000 this year.

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Home prices may drop 8% in 2016

Prices of homes in Singapore could continue to slide next year and fall by up to eight percent, compared to a drop of about three percent in the first ten months of 2015, revealed JP Morgan in an AsiaOne report.

With declining residential values, consumer prices have steadily dropped in the past 12 months. This raises fears over deflation, which happens when the inflation rate decreases below zero percent.

“Overall, it makes for a fairly challenging outlook for domestic demand,” said Aditya Srinath, chief of ASEAN equity research at JP Morgan.

Nevertheless, the looming interest rate hike in the US could help some sectors of Singapore’s economy, but this could be offset by gloominess in China and weaker domestic consumption.

In addition, the city-state is experiencing a patch of slow growth as it’s not easy to transition an economy that was heavily reliant on foreign workers to one that is geared towards higher productivity, but with limited foreign manpower.

Given the situation, JP Morgan has taken a cautious view on investing in Singapore, rating the country as underweight for 2016, Srinath added.

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Xenophobic sign at condo

Xenophobia has reared its ugly head at the Alam Prima condominium at Seksyen 22, Shah Alam, after an Australian man was greeted by a banner that no tourist wants to see, reported Malay Mail Online.

‘Foreigner you are not welcome to stay here…!’ read the sign hanging at the building’s lobby.

“As a result of the banner, I didn’t feel comfortable there and I only slept there. I left the apartment early in the morning each day and returned quite late at night because I didn’t want to be there,” said Wayne Parry, who rented a unit at the condo via Airbnb, a website where people can list, find and lease accommodation.

After spending the seven nights he had already paid for, he subsequently moved to another place within Kuala Lumpur for the rest of his stay.

Despite being put-off by the banner, Parry said he did not experience any bad incidents at Alam Prima during his short stay. The owner even told him that the sign was not intended for Australians.

According to Norhayaty Ariffin, a member of the condominium’s joint management committee, foreigners are only allowed to stay as guests for up to three months and residents should inform the management if an expat intends to reside there for a long period.

Residents of the 440 units are also not permitted to use their homes as ‘hostels’ to prevent any bad incidents from happening as foreigners are “not necessarily knowledgeable of local culture and customs.”

This has been part of the condo’s rules since 2012 and none of the residents have objected to it, she added.

Meanwhile, there are also other Malaysian condominiums that have a no-foreigner policy. In 2013, Malay Mail Online reported that a property in Bandar Sri Subang, Petaling Jaya prohibited African tenants, while another one at Seri Kembangan, Selangor even prohibited visits by African nationals.

Picture Source: Malay Mail Online
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A-REIT to acquire Australian logistics property for S$76.6 million

The proposed acquisition is expected to be completed in the first quarter of 2016, subject to clearance by the Australian Foreign Investment Review Board.

SINGAPORE: Ascendas Real Estate Investment Trust (A-REIT) has announced the proposed acquisition of a logistics property located in Sydney, Australia, for A$76.6 million (S$76.6 million), it said in a press release on Thursday (Dec 24).

The proposed acquisition will be A-REIT’s 10th logistics facility in Sydney and the 27th in Australia, it added. The property – 6-20 Clunies Ross Street – comprises a modern high clearance warehouse (36,220sqm) and a freestanding two-storey office/laboratory facility (2,359sqm) with a total gross floor area of 38,579sqm.

The proposed acquisition is expected to be completed in the first quarter of 2016, subject to clearance by the Australian Foreign Investment Review Board.

Following the acquisition, A-REIT’s weighted average lease term to expiry is expected to increase from 3.83 years to 3.85 years. It will also own a total of 102 properties in Singapore, 27 properties in Australia and two business park properties in China.

A-REIT is managed by Ascendas Funds Management, a wholly-owned subsidiary of the Singapore-based Ascendas Group and a member of the Ascendas-Singbridge Group.

Picture Source: A-REIT is proposing to acquire 6-20 Clunies Ross Street in Australia for A$76.6 million (S$76.6 million). (Photo: A-REIT)
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22 December 2015

S’pore group makes carbon pledge at Paris climate summit

The Singapore Green Building Council (SGBC) has promised to do its part to help the country bring down its carbon emissions by 36 percent by 2030 as compared to the levels seen in 2005, reported The Business Times.

SGBC made this pledge at the ongoing COP21 Climate Conference in Paris, along with other green building councils from other countries.

“All 74 national green building councils support the high level commitment from the World Green Building Council to achieve ‘net zero carbon’ for new buildings and energy efficient refurbishment of the existing building stock by 2050,” said the industry body.

Moreover, the SGBC and 24 other green building councils have announced their intention to train over 127,000 qualified green building professionals, as well as renovate or certify eco-friendly building spaces spanning more than 1.25 billion sqm, which is nearly twice the size of Singapore.

The SGBC promotes eco-friendly building design, practices and technologies in the city-state. It also grades developments based on green features, such as those involving water and energy efficiency.

The group’s founding members include government agencies like the Building and Construction Authority (BCA) and the Housing Board, along with some of Singapore’s biggest property players like Keppel Land, City Developments Limited and CapitaLand.

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TTJ awarded $16 million in contracts

Structural steel specialist TTJ Holdings has clinched new public sector and industrial contracts worth $16 million, bringing its order book to $146 million as at 3 December 2015.

The new projects are expected to be completed between 2016 to 2018, and include the supply, fabrication and installation of structural steelworks for the Singapore LNG Terminal Phase 3, and another civil defence doors project for the Thomson-East Coast Line.

The company’s core business lies in the design, supply, fabrication and erection of structural steelworks for use in the construction of buildings, factories, plants and infrastructure. It also operates one dormitory in Singapore with a total capacity of 5,300 persons.

Commenting, Group Chairman and Managing Director Teo Hock Chwee said: “Securing additional projects for civil defence doors and the Singapore LNG Terminal, for customers whom we have repeatedly delivered works to in the past, speaks volumes of the trust and confidence they have in TTJ.”

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PropertyGuru expands footprint in Indonesia

PropertyGuru is expanding its footprint in Indonesia after acquiring, one of Indonesia’s leading property websites for an undisclosed sum.

Founded by Indonesian Yohanes Aristianto, RumahDijual translates to “house for sale”.

This latest acquisition, coupled with the real estate portal’s site, cements PropertyGuru’s market leadership in Southeast Asia’s most populous country of 256 million people.

In a statement, the group said it sees tremendous upside opportunity in Indonesia, due to its booming population growth, an emerging middle-class, rapid urbanisation, and rise in mobile internet consumption.

According to Frost & Sullivan, Indonesia will have around 1.7 billion connected devices in 2020, with over 470 million mobile subscribers and over 200 million active internet users.

Meanwhile, data from comScore shows that 43 percent of all time spent on property portals in Indonesia is now spent with PropertyGuru. This is double that of its closest competitor.

Currently, and have a combined 5.5 million property seekers viewing over 30 million property pages each month, making Indonesia the group’s second biggest market in terms of traffic.

“Indonesia is strategically important for PropertyGuru because it is the largest, and one of the fastest growing property and digital markets in Southeast Asia,” said Steve Melhuish, Group CEO and co-founder.

“Together with our local partner, Emtek, we have earmarked tens of millions of dollars in the coming years to bring further innovations to the Indonesian market, to help solidify our market leadership.”

Over the past two years, has invested in several innovations such as a recent mobile app refresh, a website revamp in Q3 2015, and the incorporation of a mobile calculator. As a result, consumer visits to the website have grown by 22 percent year-on-year, with mobile traffic growth of 53 percent.

This year, PropertyGuru also acquired ePropertyTrack, a leading project marketing solution, following a S$175 million investment from a consortium.

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Stringent quality checks in place for flats: HDB

Some residents have complained of defects in Build-To-Order flats, but the Housing and Development Board says “surface imperfections” in flats do not compromise the functionality or liveability of homes.

SINGAPORE: The Housing and Development Board (HDB) applies a stringent framework of quality assurance and checks to ensure that “quality flats” are delivered to home buyers, it said in a media release on Sunday (Dec 20).

This framework includes quality standards set out at the start of the project, a list of recommended building materials and equipment suppliers that contractors are required to adhere to and civil and structural audits. It also includes timber mock-ups for toilets, kitchens, air-con ledges and services yards, and the preparation of sample units for different flat types to serve as quality benchmarks.

HDB also said it performs regular inspections of contractors’ work. It deploys a Central Audit Team that performs checks on all projects at different stages of construction, while HDB project directors conduct regular inspections on the quality of work to ensure that work completed is consistent with the approved specifications and work methods.

“In the past few years, HDB has ramped up projects – close to 100,000 flats. This is equivalent to building a new Clementi town,” said Mr Loo Yow Khoon, HDB’s Deputy Director of Building Quality Group.

A “comprehensive” programme is in place to manage quality, said Mr Loo, starting from as early as the design stage to the implementation stage to final checks when the unit is nearly completed by a Building Inspection Team, which combs the entire flat for imperfections or defects.

HDB’s statement comes after questions about the quality of Build-To Order (BTO) flats arose earlier this year. Residents at BTO flats in Punggol for instance, complained about hairline cracks in the walls and that rainwater was flooding their homes. More recently this month, a family who collected the keys to their flat in Sengkang in October claimed to have found up to 156 defects in the unit.


HDB said it recognised that some flats may not meet the expectations of residents and there could be issues to be addressed even after the completion of construction. However, it said that the bulk of feedback received pertained to “surface imperfections” such as hairline cracks, scratches on timber flooring or uneven tile joints. These can be rectified easily and quickly, and do not affect the structural integrity of the building, HDB stated.

It added that since not all construction processes can be fully automated and manual labour is still required, imperfections such as uneven tile joints can arise due to inconsistencies in workmanship of individual workers.

“Real defects that we talk about are things like defective lock sets, hollow tiles or damages to the window panels – those are the common things we receive,” Mr Loo said.

Also, some reports for “defects” turned out to be imperfections arising from the nature of the products or manufacturing processes. For example, some owners complained of colour inconsistencies in timber floors, which are inevitable as timber is a natural organic product. Residents have also complained of minor variations in floor tiles, which may differ slightly from batch to batch according to HDB.

Notwithstanding these “minor variations”, HDB said it would ensure all materials and workmanship comply with industry standards.

Some residents, however, demand repairs or replacement beyond industry standards, it said. It cited a case where more than 100 defects were reported after the flat owner examined his flat for floor and wall imperfections using an LED torch light.

HDB said its checks showed most of the imperfections were “minor, such as paint stains on tiles, and excess sealant and paint stains on the parquet”. Although it had attended to the resident’s feedback numerous times and kept him updated on the progress of rectification works, the resident was not satisfied, it said.

It added that it is not industry practice to scrutinise certain elements such as parquet flooring and floor tiles for scratch marks and inconsistent tile joints, although its contractors have rectified such imperfections out of goodwill.


HDB offers homebuyers a warranty scheme called Assure 3, for all BTO flats launched from 2005. Under this scheme, buyers enjoy a 5-year warranty against external wall seepage and ceiling leakage, and a 10-year warranty against spalling concrete.

It said this was a mark of its commitment to quality, and is complemented by improvements in building technology and methods.

One of these improvements is the use of unplasticized polyvinyl chloride pipes, which are cast together with the floor slabs rather than using mortar, to prevent water seepage. Window frames are also now precast, rather than installed on-site, eliminating the need for joints between the window frames and wall panels that allow water to seep through.

In addition, HDB said it also uses higher grade and denser concrete to provide better protection from carbonation, minimising the occurrence of spalling concrete.


The average Construction Quality Assessment System (CONQUAS) score of HDB flats was 88.6 in 2014, above the current national average of 88.2, the statutory board reiterated.

CONQUAS is an indicator by the Building and Construction Authority which measures the quality of buildings. HDB said the 2014 score puts the quality of HDB flats on par with private housing developments.

Building Service Centres (BSC), which have been set up in all new HDB housing projects since 2005, provide on-site advice and assistance to new flat owners. The BSCs operate for the one-year Defects Liability Period, after which flat owners can still report any defects to the HDB Branches managing their estate.

Reported defects are generally rectified within two weeks, HDB said, unless there are unusual factors such as an unavailability of materials, in which case flat owners are informed of the expected completion date.

HDB conducted surveys among residents of newly completed BTO projects from 2010 to 2014, and the responses showed a high level of overall satisfaction with the BSC’s services, it added.

Picture Source: HDB flats in Singapore. (File photo: Hester Tan)
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Virtual reality gets a toehold in Singapore corporates

The technology has expanded out of theme parks and computer games, and is now increasingly being used here for training or as a marketing tool.

SINGAPORE: Once associated with theme parks and high-end computer games, virtual reality (VR) is making inroads in other business areas, with several companies using the technology for training or as a marketing tool.

For instance, you can now do a “virtual” walkthrough of the Australian city of Cairns and its surroundings, before deciding whether to spend time and money on an actual physical journey.

Travel agency Flight Centre recently introduced the virtual reality walkthroughs at its store at Cecil Street. It plans to make the system available at its other outlets and use the technology in other areas as well.

“It’s a nice way for customers to try before they buy, to get some inspiration,” said Flight Centre Travel Group’s managing director for Singapore Suyin Lee. “We can do a lot with it in terms of virtual tours for different and new experiences that perhaps we haven’t yet introduced in the market; we can use it to test those experiences. We can also use it for virtual tours of hotels and properties, and different types of sightseeing tours.”

Virtual reality involves the use of video and sound to create a 3-D environment that the person is part of. The technology has been around for many years, but has become easier to apply in daily operations, thanks to the introduction of VR headsets from companies such as Samsung, Google and Facebook subsidiary Occulus Rift over the past year. In Singapore, VR headsets can be purchased for less than S$300 a pair.

Other companies that have started using VR include the Shangri-La Group, which has produced immersive 360-degree videos for more than a quarter of its 94 hotels and resorts around the world. Shangri-La said it will use its VR headsets as promotional and educational tools at tradeshows, industry events and sales meetings. There is also great potential for VR use outside travel.

“We have requests to document weddings in 360 degrees,” said TaKanto Virtual Reality’s managing director Ariel Talbi. “We also see the 360 concept catching a lot of momentum in the real estate industry. For example you can see properties in 360 degrees before actually going onsite and seeing them.

“We are definitely having discussions with some of the biggest brands around how 360-degree technology can be utilised for the real estate industry, for entertainment, for conventions and many more.”

German car company Audi meanwhile is rolling out a system that allows customers to customise their cars with the help of a VR headset and browse Audi vehicles from a first-person perspective.

In October, Audi organised an event that lets people “travel” 50 years back in time using VR to immerses them in a 360-degree experience of Singapore’s historic districts in 1965.

Whether for travel and weddings or to preview cars and properties, VR looks set to play a greater role in decision-making for consumers in the coming years. However, there are some companies that think it is still too early to introduce VR in its marketing tools. The head of a hospitality real estate investment trust who declined to be named said the gains from using VR as a market tool appear incremental but the additional costs are substantial.

Picture Source: A man plays a video game on a Samsung mobile phone attached to an Oculus virtual reality headset at the Electronic Entertainment Expo, or E3, in Los Angeles, California, United States, June 16, 2015. REUTERS/Lucy Nicholson
A man tries out the virtual reality walkthrough at Flight Centre. (Photo: Flight Centre)
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18 December 2015

HDB to focus on rejuvenating older towns despite $2.02 billion deficit

With first-timer demand for flats already fulfilled, the Housing Board can now focus on rejuvenating older estates, reported Channel NewsAsia.

HDB manages 26 towns and housing estates, of which some are decades-old, while others are newly-built. But even as new Build-To-Order (BTO) launches are rolled out, the agency remains committed to upgrading existing estates.

In fact, it expanded its upgrading programme during the financial year 2014/2015 to more towns, resulting in the upgrading segment registering a deficit of $574 million, up from $568 million in the previous financial year.

“The theme of estate rejuvenation is going to be an on-going process. The public flats programme has been around (for) more than 40 years. We also have some estates which are ageing, even some of the non-mature estates are also ageing; it’s actually a necessary part of urban renewal,” said SLP International Executive Director Nicholas Mak.

Deficit from homeownership – comprising the gross loss on disbursement of CPF housing grants, the sale of flats as well as the expected loss for flats currently under development – stood at $1.75 billion, down nine percent from the previous year.

Overall, HDB saw its net deficit, before government grants, increase to $2.02 billion from $1.97 billion previously.

Meanwhile, industry watchers have noted that application rates in recent sales exercises indicate that the backlog for first-time applicants has been significantly reduced, which could see HDB re-calibrating its flat allocation.

“They left the majority of the numbers to sell to families – those buying under the family scheme. (As for) the singles, there were flats for them, but application rates for singles were extremely high; because of the limited number of flats made available, the application rate was also quite high,” said Eugene Lim, Key Executive Officer at ERA Realty Network.

“So I think going forward, HDB is likely to recalibrate the number of flats they are putting onstream to cater to these groups which particularly have higher application rates so as to balance the table.”

HDB launched five BTO sales exercises for the financial year ending March 2015, offering nearly 20,000 flats across 27 projects.

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Mortgagee listings set to hit 7-year high: Colliers International

A total of 241 repossessed properties were put up for auction this year, up nearly 52 per cent from a year ago, says the property services firm.

SINGAPORE: Mortgagee listings in Singapore look set to hit a seven-year high by the end of 2015. According to property services firm Colliers International, 241 repossessed properties were put up for auction this year, up by almost 52 per cent from 159 in 2014. This is the highest since 2008.

In a media release on Thursday (Dec 17), Colliers International said there were 555 owner listings in the property auction market, bringing the total auction listings for 2015 to a six-year high of 796. In 2014, there were 529 auction listings.

Colliers said the increase was because borrowers in default faced difficulties in selling their properties. Residential properties formed the bulk of listings at 79.6 per cent.

In terms of segments, mortgagee listings for landed homes more than doubled from 19 in 2014 to 50 this year. For non-landed properties, the number rose from 104 to 142 units year-or-year.

Picture Source: File photo: A general view of residential housing in Singapore. (AFP/Roslan Rahman)
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M&G Real Estate buys remaining stake in Compass Point

The mall in Sengkang is undergoing refurbishment and is expected to reopen next year under a new name and new management, says M&G Real Estate.

SINGAPORE: Real estate fund manager M&G Real Estate will become the sole owner of Compass Point mall in Sengkang, after entering into a deed to buy the remaining 18.99 per cent of shares it does not already own.

M&G said on Wednesday (Dec 16) it will be buying the shares from FCL Centrepoint, a subsidiary of Frasers Centrepoint. The transaction is expected to be completed in February next year, M&G added. FCL Centrepoint will cease management of Compass Point once the transaction is completed.

The mall, located in the heart of Sengkang New Town Centre, is closed for refurbishment and is expected to reopen next year under a new name and new management, M&G said.

The revamped mall is expected to have new shops, more food outlets and an expanded library which will occupy two levels in the building, the company said.

Picture Source: The Compass Point shopping mall in Sengkang. (Photo: TODAY/Daryl Kang)
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‘Great wealth is very volatile’: Billionaires don’t stay rich, say UBS and PwC

56 per cent of the 289 billionaires in 1995 have seen their fortunes shrink over the years due to factors such as death, dilution of wealth and business difficulties, a report from UBS Group and PricewaterhouseCoopers (PwC) says.

SINGAPORE: More than half of the world’s richest have lost their billionaire status over the past 20 years, a report from UBS Group and PricewaterhouseCoopers (PwC) said.

Of the 289 people with at least US$1 billion in net worth in 1995, 56 per cent have seen their fortunes shrink over the years due to factors such as death, dilution of wealth and business difficulties. According to the report, billionaires who made their fortunes from sectors such as industrials, real estate and healthcare were more likely to drop out of the ultra-rich group.

“The billionaire population has changed beyond recognition in the past 20 years… what’s easily overlooked is the volatility of great wealth. The report shows a high attrition rate of billionaires,” a press release from UBS on Tuesday (Dec 15) said.

On the other hand, those who made their mark in the technology, consumer and retail, as well as financial services are more likely to see their wealth last over time, the study which gathered data from 1,300 billionaires globally showed. The ultra-rich from these sectors account for almost two-thirds of the total wealth – around US$1 trillion – accrued by the 126 billionaires who remained on the 1995 list.

Meanwhile, newly-minted billionaires more than replaced those who fell off the rich list, with 1,221 new billionaires created from 1995 to 2014. The total number of billionaires worldwide stands at 1,347 as of last year.

One factor that is changing the demographics of ultra-rich around the world is the rapid rise of female billionaires.

There are nearly seven times more women billionaires than 20 years ago, with an average wealth of US$4.3 billion, the report showed. This figure is higher than the US$4 billion net worth of an average male billionaire.

In particular, Asia is seeing the most impressive growth with 25 female billionaires, up from just 3 in 2005. Female entrepreneurs, mostly hailing from China and Hong Kong, are the key reason for the jump in numbers.

Said Mr Antony Eldridge, financial services leader at PwC Singapore: “We see that females, when given the opportunity to create and lead businesses, are as successful, if not more so, than males. Asia’s female billionaires, whether first-generation entrepreneurs or successors to founding relatives, are taking advantage of the significant growth story in emerging economies.”

“There is a broader and, indeed, critical lesson for all businesses in Asia; whatever the role, if you harness the talent in your female population, greater success will be much more likely,” he added.

However, the rich list remains largely a boys’ club for now. Despite the rise in ranks and wealth, females only account for 11 per cent of the 1,347 billionaires polled.

Picture Source: U.S. one dollar bills blow near the Andalusian capital of Seville in this photo illustration taken on November 16, 2014. REUTERS/Marcelo Del Pozo
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CityDev to inject 3 properties into S$1.1b investment platform

The three properties are Central Mall (Office Tower), 7 & 9 Tampines Grande and Manulife Centre. This move will free up hundreds of millions of dollars in funds for new investments.

SINGAPORE: Real estate giant City Developments (CityDev) will inject three of its office properties into an investment platform, in a move that will free up hundreds of millions of dollars in funds for new investments.

In a statement on Tuesday (Dec 15), CityDev said the three properties are Central Mall (Office Tower), 7 & 9 Tampines Grande and Manulife Centre.

The properties – valued at around S$1.1 billion – will be sold to a joint office investment platform co-owned by CityDev and Alpha Asia Macro Trends Fund II (AAMTF II), which is managed by Keppel’s Alpha Investment Partners.

CityDev Executive Chairman Kwek Leng Beng said: “Over the past two years, we have been advancing our two-pronged diversification strategy of developing new overseas and investment platforms. By building on the success of our first PPS transaction last year, this new initiative allows us to recycle capital for our growth plans.”

CityDev Chief Executive Officer Grant Kelley said: “Fundamentally the intent with the use of proceeds is to recycle capital for our growth plans both domestic and international. Last week we announced the closing of our first Australian investment in several years. In addition to that in the past month we’ve closed two major deals to the west of London.”

“We’ve been fairly clear in our investment objectives which are to find quality assets in five key markets, Australia, China, Japan, the UK and US, which makes sense for our shareholders on a risk adjusted basis,” he added.

PPS is an acronym for Profit Participation Securities, a sort of investment structure that allows a firm to sell future earnings from its properties while retaining control.

According to CityDev, the total aggregated value of the securities issued in the PPS transaction is S$333.5 million, comprising S$133.3 million of securities subscribed by a wholly-owned subsidiary of CityDev and a contribution of S$200.2 million by AAMTF II.

DBS and Oversea-Chinese Banking Corporation (OCBC) will provide S$750.1 million in senior loan facilities.

CityDev did not say how much new funding it will raise from this transaction. It will, however, continue to manage the three office properties, which currently have a strong occupancy of 98 per cent.

The PPS announced by CityDev on Tuesday is the firm’s second. Last year, it partnered with Blackstone’s Tactical Opportunities Fund and CIMB Bank for a S$1.5 billion PPS that invests in the cash flows of its upscale properties in Sentosa Cove, called the Quayside Collection.

Picture Source: Manulife Centre. (File Photo: Calvin Oh)
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14 December 2015

Sydney project sells over A$229m worth of units

Strong sales amounting to over $229 million have been recorded at the launch of DUO, the latest residential development by Frasers Property Australia and Sekisui House Australia at the A$2 billion Central Park urban village in Sydney.

Launched to the Australian market last week, the project comprises a range of one- to three-bedroom apartments, including dual-key units. Prices start from A$625,000 for a one-bedroom suite.

“Apartments were snapped up across the full spectrum of the residential offering,” said Paul Lowe, Frasers Property Sales and Marketing Director.

“One-bedroom suites, one-bedroom + study apartments and two-bedroom apartments were purchased by a mix of owner-occupiers and investors.

“We also experienced strong sales and interest for the three-bedroom dual-key apartments in DUO which were offered for the first time ever at Central Park. Dual-key apartments are a unique product type in the market and have proven to be ideal for investors wanting to stay in one apartment and lease the other one out, as well as growing families who desire space and flexibility in apartment living.

“We’ve now successfully sold over 1,800 apartments across the entire Central Park precinct to-date. The average apartment sales price at the DUO launch was just over A$1 million.”

Central Park is one of Australia’s largest urban renewal projects involving the redevelopment of the former Carlton United Brewery site. Occupying 5.8 hectares in Sydney’s downtown, Central Park will comprise 2,200 apartments upon completion.

The development also includes a major shopping centre, dining districts and open parklands. Educational facilities are also within walking distance.

Picture Source: Artist’s impression of DUO at Central Park, located in Sydney.
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Savills expands into Cambodia

International property consultancy Savills has announced a partnership with Keystone Property Consultants in Cambodia.

The move strengthens Savills presence in South East Asia and allows it to provide advice to businesses looking to participate in the Cambodian real estate resurgence.

This also increases Savills Asia Pacific presence to 58 operations across 17 countries in the region.

Located in Phnom Penh, Keystone is a leading advisor with a strong background in real estate consultancy, valuation and brokerage.

“We have observed increasingly strong growth in our Indochina business, covering all aspects of the property market. This association with Keystone will allow us to leverage their local expertise, further strengthening the Savills brand across this dynamic region,” said Neil MacGregor, Managing Director of Savills Vietnam.

Sunny Soo, Managing Director of Keystone, added: “Savills has an established presence throughout Asia Pacific as well as a substantial global platform and international client base. We are very excited to be working with Savills, which will allow us to continue providing best in class advice and offer our services to clients throughout Cambodia.”

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UOL wins top management award

Property developer UOL Group has picked up the Real Estate Management Team of the Year Award at Singapore Business Review’s inaugural Management Excellence Awards 2015.

The award recognises management who have implemented a strategy or initiative that contributed to the company’s growth.

UOL’s team comprises Group Chief Executive Gwee Lian Kheng, Deputy Group Chief Executive Officer Liam Wee Sin, and Chief Financial Officer Wellington Foo.

Receiving the award at the Shangri-La Hotel last night, Mr Gwee said: “It would not be possible for the Group to grow and become one of the leading developers in Singapore without the hard work and professionalism of all our employees. I would also like to thank Chairman Wee Cho Yaw and the Board of Directors for their guidance, advice and pragmatic approach in building the business all these years.

“The change curve for real estate is getting shorter and the business environment is getting more challenging – but this is not the challenge. What is more important is what leaders are doing to overcome such challenges.”

This year, UOL launched two property developments – Botanique at Bartley, a 797-unit resort-themed condominium, and Principal Garden, a 663-unit development on the fringe of a Good Class Bungalow Area.

According to the developer, these projects have been selling well amidst the challenging real estate market due to their unique design, high-quality finishes, and attractive pricing.

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World’s tallest building set to rise in Iraq

The next tallest building in the world, dubbed The Bride (pictured), is set to rise in Iraq’s Basra Province, reported the Business Insider.

Conceptualised by AMBS architects and commissioned by the Basra government, the complex comprises four 604-storey conjoined towers totalling 16.6 million sq ft. A 616-foot antennae will be placed on top of the tallest tower, which will stand at 3,780 ft.

This makes The Bride significantly taller than both the present record-holder – the 2,723 ft tall Burj Khalifa in Dubai, and the future 3,307 ft Kingdom Tower in Saudi Arabia.

A glazed canopy, or ‘veil’, will also cascade down the towers, providing shade for the ground-floor developments at the complex. These will include parks, hotels, gardens, retail spaces and a rail network specifically for the complex.

The architects aim to make the development ‘net zero’, which means it could generate enough energy for its consumption.

Touted as the world’s first ‘vertical city’, the tower will be built in the middle of the desert in order to preserve the fertile farmland around it and avoid urban sprawl, the architects said.

Locals call Basra ‘the bride of the gulf’, which was the inspiration for the project’s name.

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Jurong Country Club awarded S$89.8m in compensation

The club will make way for the upcoming Kuala Lumpur-Singapore High Speed Rail terminus. The amount is about half of what the club asked for in its claim for compensation.

SINGAPORE: Jurong Country Club (JCC) – which will make way for the upcoming Kuala Lumpur-Singapore High Speed Rail terminus – has been awarded $89.8 million by the Collector of Land Revenue. The amount is about half of what the club asked for in its claim for compensation.

On Nov 25, the club submitted its claim to the authorities for S$168 million.

In a statement on Saturday (Dec 12), the club said it is concerned about the gulf between the two figures, and some members have expressed disappointment.

It added it is taking advice on whether to lodge an appeal, and will be calling an Extraordinary General Meeting of all members in a few weeks’ time.

The club said its claim reflects the true value of the Club and is based on the valuation carried out with the assistance of real estate consultancy Knight Frank.

But the Singapore Land Authority (SLA) said the club was paid the market value of the acquired land, which took into account improvements made to the property and the remaining tenure of the land.

“The valuation was determined by private valuers appointed by SLA, in accordance with the provisions of the Land Acquisition Act. SLA will continue to work closely with the management of JCC to assist the club throughout the acquisition process,” added the SLA spokesman.

SLP International Executive Director of Research and Consultancy Nicholas Mak said if a party is dissatisfied with the valuation, they have the option of appealing to a higher authority.

“The authority may look at the arguments from both sides – like the methods that they used to arrive at their respective valuations and to see if there are merits to either increase one of the valuations, or perhaps to do some adjustments to the other one,” he said.

Picture Source: The upcoming Kuala Lumpur-Singapore High Speed Rail terminus will be built at the site occupied by Jurong Country Club. (Photo: Mugilan Rajasegeran / TODAY)
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12 December 2015

Australia unveils new foreign investment rules

Australia introduced new investment rules yesterday aimed at cracking down on foreigners unlawfully owning residential properties and improving scrutiny on acquisitions of farmland from overseas, reported Reuters.

In May, the government unveiled plans to fine and even jail foreigners who violate rules allowing them to purchase new residential properties, and not existing homes.

Real estate prices have skyrocketed in recent years, especially in Melbourne and Sydney, with growing concerns that affluent foreigners, particularly those from China, have helped inflate the market.

“The government welcomes foreign investment that is not contrary to our national interest,” Treasurer Scott Morrison said. “Without foreign investment, production, employment and income would all be lower. But it is important that foreign investment is appropriately monitored to ensure that it benefits all Australians.”

The new regime will see foreigners illegally buying Australian real estate face up to three years imprisonment or fines of A$135,500 for individuals and A$675,000 for companies.

“New civil penalties supporting divestment orders and ensuring people who break the rules do not profit from their actions also come into effect,” noted Morrison.

“These include forfeiting any capital gains made on divestment of a property and fines for third parties who knowingly assist foreign investors to break the rules.

“Under these new arrangements foreign investors who fail to comply with the foreign investment rules will not be able to profit from doing so,” he added.

For the first time, fees on foreign investment applications will also be levied.

Australia also tightened scrutiny and transparency on foreign ownership of agricultural production amid concerns of valuable assets going into the hands of foreigners.

Morrison revealed that a new agricultural land foreign ownership register had been created with any attempt by a foreigner to take their cumulative farmland investment to over A$15 million (S$15.45 million) to be screened by the national regulator.

Previously, the Australian Foreign Investment Board only screened foreign investment for acquisition of agricultural land over A$252 million.

Direct interests in agribusinesses that are valued at A$55 million and above will also be sent to the Foreign Investment Review Board.

“While foreign investment in agriculture provides important economic benefits, we have acted to improve scrutiny and transparency around foreign ownership of Australia’s agricultural production,” said Morrison.

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Perennial Real Estate CEO to become COO at Wilmar

Mr Pua Seck Guan will become COO and executive director at Wilmar with effect from Jan 1, 2016. He will also retain his positions in Perennial.

SINGAPORE: The Chief Executive Officer of Perennial Real Estate Holdings will take on the additional role of Chief Operating Officer (COO) at agriculture giant Wilmar International, strengthening ties between the two firms.

Announcing this in a statement on Friday (Dec 11), Perennial said Mr Pua Seck Guan will become COO and executive director at Wilmar with effect from Jan 1, 2016.

Mr Pua will retain his positions in Perennial.

“Seck Guan’s roles in Perennial and Wilmar will further strengthen and deepen the relationship between the two companies,” Wilmar Chairman and CEO Mr Kuok Khoon Hong said in a statement.

Mr Pua’s primary responsibility at Wilmar will be to assist Mr Kuok with overseeing and managing the various business divisions and developing new businesses.

Wilmar, one of the world’s largest suppliers of palm oil, holds an effective interest of about 13.1 per cent in Perennial. Mr Kuok, who is Perennial’s chairman, holds a larger effective interest of about 37.1 per cent in Perennial due to his interests in other firms.

Wilmar said current COO and executive director Mr Teo Kim Yong, will be retiring on Dec 31.

Perennial also announced the appointment of Mr Goh Soon Yong as group chief operating officer with effect from Jan 1, 2016. He is currently an advisor of Perennial, having previously been deputy CEO for China at Perennial.

Perennial is a Singapore-based property developer with large integrated projects in China. In Singapore, it manages and is invested in properties such CHIJMES, Capitol Singapore, TripleOne Somerset, AXA Tower and the House of Tan Yeok Nee.

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M&A deals in Singapore almost double in 2015

There were a total of 591 mergers and acquisitions worth a total of US$101.2 billion in Singapore this year, up from US$50.7 billion in 2014, according to corporate finance advisor Duff & Phelps.

SINGAPORE: The value of mergers and acquisitions (M&A) in Singapore jumped to US$101.2 billion (S$142 billion) this year, almost double that of 2014’s US$50.7 billion, according to a report by corporate finance advisor Duff & Phelps.

Including private-equity, venture-capital and initial public offering deals, there were 685 deals in Singapore this year worth a combined US$103.8 billion, nearly twice the US$55.4 billion recorded in 2014.

M&A transactions accounted for 591 of the deals, with 85 per cent of the value coming from outbound acquisitions as Singaporean companies acquire large businesses across the world, the report said.

There were 13 transactions valued at more than US$1 billion, compared with eight of such deals last year. Among the largest deals is the US$37 billion acquisition of US semiconductor maker Broadcom by Singapore and US-based Avago Technologies.

The biggest contributor to M&A deal values in Singapore was the technology sector with 51 per cent, while the real estate sector contributed the most to deal volume with 21.8 per cent.

Private-equity and venture-capital investments in Singapore companies this year have remained relatively stable in value at US$2.2 billion, although the number of deals rose to 81 from 47 last year, the report said.

The Singapore IPO market had a relatively quiet year, with 13 IPOs constituting US$450.7 million raised on the Singapore Exchange, compared with 23 IPOs last year raising US$2.3 billion.

Looking ahead, there are about 50 deals worth almost US$9.1 billion in the pipeline where a buyer is already in discussions for a transaction. These include the proposed buyout of Biosensors International by CITIC Private Equity, the proposed cash acquisition of Neptune Orient Lines by CMA CGM, as well as the potential sale of Asia Square Tower 1 by BlackRock to Norway’s sovereign fund.

“The rationale for such high level of deal activity has been the lower interest rates and the expectations of the same going up, coupled with the pick-up of economic activity in the US and sluggish growth in several other markets driving them towards inorganic growth, where organic growth is limited,” said Ms Srividya Gopalakrishnan, managing director of Duff & Phelps.

“We are also witnessing a considerable increase in the confidence level of Singapore companies as they start viewing the world as their global market and acquire large businesses across the world,” she added.

Picture Source: File photo of the skyline of Singapore’s financial district. (AFP/Simin Wang)
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Accor to buy owner of Swissotel, Fairmont, Raffles Hotel in S$4.1b deal

FRHI Holdings has 155 hotels and resorts, and includes three global luxury hotel brands: Raffles, Fairmont and Swissôtel. The portfolio includes Raffles Hotel and Swissotel The Stamford in Singapore, and The Savoy in London.
SINGAPORE: Europe’s largest hotel operator, Accor, has agreed to a deal to buy FRHI Holdings – the company that owns hotel brands Fairmont, Swissotel and Raffles – in a deal worth about US$2.9 billion (S$4.1 billion) in cash and shares.

FRHI is jointly owned by the Qatar Investment Authority (QIA), Kingdom Holding Company of Saudi Arabia and Oxford Properties, the real estate division of the Ontario Municipal Employees Retirement System.

Paris-based Accor will pay US$840 million in cash for the deal, and issue 46.7 million Accor shares via a reserved capital increase, subject to the approval of shareholders at an extraordinary shareholders’ meeting. The transaction is also subject to regulatory approval by antitrust authorities, said Accor in a press release on Dec 9 (Wednesday).

QIA and Kingdom Holding will each retain minority stakes and have representatives on Accor’s board of directors.

FRHI includes three global luxury hotel brands: Raffles, Fairmont and Swissôtel. It has 155 hotels and resorts – of which 40 are under development – and more than 56,000 rooms, about 13,000 of which are under development. Its portfolio includes Raffles Singapore, The Savoy in London, Shanghai’s Fairmont Peace Hotel, The Plaza Hotel in New York, Le Royal Monceau – Raffles Paris, and Swissôtel The Stamford in Singapore.

FRHI has more than 45,000 employees under its brands, which span 34 countries in five continents.

Accor said it aims to generate around €65 million (S$100 million) in revenue and cost synergies from the combination of brands, the maximisation of hotel earnings, the increased efficiency of marketing, sales and distribution channel initiatives, and the optimisation of support costs. “Significant improvements” will also be made in terms of customer data, said Accor, with the integration of a customer base including 3 million loyalty members, 75 per cent of whom are in North America.

“This is an outstanding opportunity to add three prestigious brands – Fairmont, Raffles and Swissôtel – to our portfolio, and a great step forward for AccorHotels. It offers us robust and global leadership in luxury hotels, a key segment in terms of geographic reach, growth potential and profitability, for long term value creation,” said Accor Chairman and Chief Executive Sebastien Bazin.

Mr Robert McIntosh, executive director for CBRE Hotels Asia-Pacific, described the deal as a “good match” that will enable Accor to raise its profile in the luxury segment.

“Accor have been trying to develop their luxury products, but they didn’t have enough. With the inclusion of Raffles, this will position them well in the five-star market,” he told Channel NewsAsia in a telephone interview.

On the other hand, he added, Fairmont does not have a big global footprint. “Being part of Accor will give them additional access to other developments and opportunities,” he said.

The deal comes on the back of Marriott International’s US$12 billion takeover of Starwood Hotels & Resorts Worldwide last month. The new wave of acquisitions in the sector reflects plans for global expansion among hoteliers, according to Mr McIntosh.

“It is a way of expanding presence globally and quickly to capture opportunities in the market.”

On Friday, CapitaLand issued a statement, clarifying that it is not part of the sale to AccorHotels. The entire Raffles City Singapore – which includes a shopping mall, an office tower, two hotels and a convention centre – is jointly owned by CapitaLand Commercial Trust (CCT) and CapitaLand Mall Trust, it said.

“The two hotels and convention centre are on a long-term lease to RC Hotels, in which FRHI and CapitaLand Limited have a stake. The hotels, which operate under the brand names Fairmont Singapore and Swissôtel The Stamford, are managed by RC Hotels,” said CapitaLand.

“The sale of FRHI to AccorHotels will not change the current ownership structure as the operations of the hotels will continue to be managed by RC Hotels, while the hotel buildings remain jointly owned by CCT and CMT,” it added.

Picture Source: File Photo Raffles Hotel (Photo: Calvin Oh)
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Funan DigitaLife Mall to be closed 3 years for redevelopment

The IT mall will close in the third quarter of 2016, and will become an “experiential creative hub”, said CapitaLand Mall Trust Management.

SINGAPORE: Funan DigitaLife Mall on North Bridge Road – a shopping centre primarily known for shops selling computers and other electronic gadgets – will be closed from the third quarter of 2016, to be redeveloped into a “creative hub”.

The mall will be closed for about three years, said CapitaLand Mall Trust Management in a press release on Thursday (Dec 10).

The real estate investment trust had hinted at such a move in July, when it suggested the mall could be sold or redeveloped.

Funan DigitaLife Mall has utilised 3.861 of its allowable Gross Plot Ratio of 7.0, and currently has an untapped Gross Floor Area (GFA) of about 388,000 square feet, said the trust.

Mr Wilson Tan, CEO of CapitaLand Mall Trust Management, said: “Given its excellent location and the strong potential for an integrated development on this site, we believe that the redevelopment of Funan DigitaLife Mall will create the greatest value for our unitholders.

“The new building on the Funan site will be an aspirational lifestyle destination that will enthrall shoppers and retailers. It will be an experiential creative hub within the city that engages communities to incubate new ideas and passions, and enables shoppers to enjoy retail in a technology-enabled environment. It will serve as a collaborative platform to connect retail, cultural, learning and business opportunities, and play a big part in the rejuvenation of the Civic District.”

More details on the new development will be announced at a later date, added the real estate investment trust, an indirect wholly-owned subsidiary of the Singapore-listed CapitaLand Limited.

Picture Source: Funan DigitaLife Mall. (Photo: CapitalLand Mall Trust)
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08 December 2015

Non-landed home prices down 4.3% in Q3

Prices of non-landed private residential properties in Singapore fell 4.3 percent in the third quarter of 2015 from a year ago, according to the latest Knight Frank Global House Price Index.

Of the 55 housing markets tracked by the index, Singapore was ranked 52nd.

Turkey leads the rankings, with prices up 18.9 percent from last year. Meanwhile, Ukraine has the worst-performing housing market, with prices plunging 14.8 percent year-on-year.

Globally, house prices increased 2.7 percent in the year to September 2015.

Knight Frank noted that the focus now is on when, and how quickly, the Federal Reserve raises the US interest rate. “If analysts’ estimate of December is right, it will be the first time the US has embarked on a policy of monetary tightening since 2004,” said the consultancy.

Kate Everett-Allen, Partner, International Residential Research at Knight Frank, added: “A US rate rise will have repercussions not just for the US housing market, but for those currencies pegged to the US dollar as well as emerging markets globally.”

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Singapore’s public housing a model for social integration

Singapore’s experience with fully-integrated public housing can help other countries struggling to achieve inclusivity and equality, suggested Deputy Prime Minister Tharman Shanmugaratnam.

He made the statement at a specially-convened symposium in Washington that comes at the end of a year of ethnic and racial tensions in various key American cities, reported Channel NewsAsia.

Hosted by The Brookings Institution, the day-long symposium aimed to find ways of improving opportunity and equity in some of the most impoverished and polarised neighbourhoods in the US.

In his keynote address, Mr Tharman shared that Singapore avoided the pitfalls that plagued many other developed countries through careful design of public housing and ongoing rejuvenation.

“The secret sauce is our neighbourhoods, the composition of them and the way they are designed so as to maximise interactions and give us the best chance of achieving an integrated community. They are designed for that purpose.”

Housing assets in the city-state appreciate in value via careful stewardship which does not only promote flats, but also parks, schools and tolerance of all faiths, he said.

Moreover, public housing, which avoids any kind of segregation, can be found at the core of social policies that promote economic vitality and cohesion in Singapore.

Mr Tharman noted that a country such as the US is now paying the price for housing policies which are disconnected from any form of social integration.

“You either do something upstream that is meaningful and provides the right incentives, or you deal with the problems downstream – which are typically more costly to individuals, as well as to the public purse,” he added.

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Far East Organization wins MIPIM Awards

Two luxury condominiums by Far East Organization, Singapore’s largest private property developer, have won silver and bronze awards respectively in the Best Residential Development category of the MIPIM Asia Awards 2015.

The 62-storey, 280-unit Altez in Tanjong Pagar (pictured), and the seafront facing Silversea comprising 383 units, were among 36 finalists shortlisted in 12 award categories, based on votes garnered from the jury panel and MIPIM Asia delegates.

This year’s Awards attracted over 100 entries from 17 countries and regions.

The results were announced during a gala dinner held in Hong Kong on Tuesday, 1 December.

In its ninth edition, the MIPIM Asia Awards recognises outstanding real estate projects in Asia Pacific for their architectural, technical and environmental excellence and innovation.

This year, Far East Organization also clinched four awards in the FIABCI Singapore Property Awards 2015, and seven awards at the South East Asia Property Awards 2015.

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PropertyGuru to hold inaugural investment conference

Leading real estate portal PropertyGuru is organising a two-day Real Estate Investment Conference this weekend, 5 and 6 December, at the Orchard Hotel.

The inaugural conference aims to provide potential investors the opportunity to engage with leading players in Asia’s real estate industry, as well as an outlook for 2016.

The Asian property market continues to attract strong investment interest due to substantial gains seen in 2015.

“Across the board, transactions for a wide spectrum of real estate assets within the region have seen a marked increase, driven by strong investor confidence against the backdrop of sustained economic growth,” revealed PropertyGuru.

Aside from showcasing the latest property developments from across the region, the event will also feature seminars from industry experts on a range of topics, such as forecasts for the Singapore property market, impact of the impending US interest rate hike, as well as predictions for overseas markets like Malaysia, Australia and the UK, among others.

Live screening of the forum discussions and selected seminar sessions will be available on both days.

To register, go to:

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S’pore ranked outside top 5 for real estate prospects

Japan and Australia remain the favourite countries for real estate development and investment, according to the Emerging Trends in Real Estate Asia Pacific 2016 forecast jointly published by the Urban Land Institute (ULI) and PwC.

Tokyo, Sydney, Melbourne and Osaka took four of the top five spots for promising markets in the Asia Pacific. Ho Chi Minh City was rated fifth.

The study, which surveyed 343 real estate professionals, ranked Singapore eleventh for investment prospects and ninth for development out of 22 regional markets.

Specifically, it pointed to a slow residential market here, mainly due to government actions in 2013 to stem soaring home prices.

“Given the current sentiments of Singapore’s property market, we’re seeing local players becoming more involved at a regional and global level as they explore, increase and diversify investments into other major markets such as Japan and Australia,” said Yeow Chee Keong, Real Estate & Hospitality Leader, PwC Singapore.

He added: “The residential market will continue to hope for an increase in the level of transactions, and that will be dependent on whether there will be modifications made to the cooling measures.”

Despite the tepid enthusiasm, the Emerging Trends report noted that “Singapore is always a market where institutions are looking to buy,” adding that a number of major property purchases are expected to be completed before the end of 2015.

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07 December 2015

Completed condo prices creeping up

Prices of completed private non-landed residential properties in Singapore are beginning to creep up, rising 0.1 percent in October 2015, revealed flash estimates of the NUS Singapore Residential Price Index (SRPI).

According to revised figures, prices across the island rose 0.3 percent in the month before.

The highest increase was seen in the central region, where more expensive properties are generally located. Excluding small units, prices climbed 0.3 percent in October compared to a 0.3 percent decline in the previous month.

Prices in the non-central region (excluding small units) remained unchanged, after increasing 0.6 percent in September.

For small units measuring 506 sq ft and below, prices fell 0.6 percent, slightly lower than the previous 0.7 percent drop.

The central region sub-basket comprises properties located in districts 1 to 4 and 9 to 11. Properties located in other districts fall within the non-central region sub-basket.

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Asian investors lose millions in NZ project

A group of Asian investors who purchased apartments in New Zealand lost their deposits amounting to NZ$10 million, after the developer went bankrupt during the global financial crisis, reported The Straits Times.

Comprising mostly Singaporeans and Malaysians, the 109 investors did not only fail in their legal bid to recover their deposits, but also faced a NZ$36 million counter-claim from the firm run by the receivers, for the losses suffered during the market crash. The High Court of New Zealand ruled in February that Kawarau Village Holdings is entitled to deposits as well as the NZ$36 million from the said group of Asian investors.

Between 2006 and 2009, the group invested in the failed NZ$2 billion Kawarau Falls development in the South Island.

Court documents showed that they acquired the off plan units in Lakeside West and Kingston West, which were to be built on the shores of Lake Wakatipu, near Queenstown.

Conceived in 2005, the buildings were supposed to be Stage 1 of a three-stage integrated lakeside resort development – dubbed Kawarau Falls Station – that was expected to become a world-class resort consisting of serviced apartment complexes and 13 hotels.

The buildings were part of an ambitious project by Auckland developer Nigel McKenna and marketed in Asia by Austpac Investment Consultancy.

However, Peninsula Road, the project’s original developer, was placed in receivership in 2010 after going bankrupt the year before.

The investors were then served by the receivers with settlement notices in 2011 for their purchases. None of the investors settled, claiming that Kawarau Village breached the contract.

As such, Kawarau Village cancelled the sales and purchase agreements in March 2012 and forfeited the deposits.

Meanwhile, the group sought a court order for the return of their deposits.

Representing more than 30 investors, lawyer Phil Creagh of Anderson Creagh Lai, revealed that fewer than 10 of the investors had settled with Kawarau Village. The others proceeded with a joint appeal against the judgment that will be heard in August 2016.

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PropertyGuru wins Employer of Choice award

PropertyGuru recently won the Employer of Choice bronze award in the 100 to 500 employees’ category of Human Resources Director’s (HRD) inaugural 2015 Employer Choice Survey.

The survey was conducted in partnership with the Center for Creative Leadership, and polled over 1,300 employees working in 118 companies in Singapore.

It offers insights into the views of employees on their employers, and the elements of their work life which they find important, including remuneration, training and professional development, career progression, gender equality and a work culture that embraces technology.

In addition to the bronze prize, PropertyGuru was named as an engaging employer that recognises the value of work-life balance.

“Our culture includes flexible working hours, providing an environment where employees can enjoy sports and recreational activities such as PlayStation games and Foosball in the office, and where religious holidays and personal values are respected. We are very happy that our Guru culture is being recognised and appreciated by our team members,” said Christine Loo, Chief People and Culture Officer at PropertyGuru Group.

Iain Hopkins, Managing Editor of HRD Magazine added: “In this inaugural survey, HRD Singapore wanted to give Singapore employees the chance to highlight the things they both love and loathe at their places of employment. As a result we now have a list of Singapore’s best employers and insights into the companies that Singaporeans want to work for and are proud to call Employers of Choice. The results also show that Singapore’s employers are doing a lot of the right things in their quest to attract and retain the best talent.”

Started in Singapore, PropertyGuru has grown from a two-person office in 2006 to over 340 staff in four countries, after acquisitions in Malaysia, Thailand and Indonesia in 2011.

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Singapore bank lending declines further in October

Singapore’s total bank lending fell for the second consecutive month in October as loans to general commerce and financial institutions decline, data from the Monetary Authority of Singapore (MAS) revealed Monday (30 November).

According to MAS, loans and advances by domestic banks in the city-state amounted to S$601.7 billion last month, down from S$608.3 billion in September and S$613.5 billion in August, amid slowing economic activity. Bank lending also fell 0.4 percent year on year.

Loans to businesses fell 1.9 percent month-on-month to S$360.2 billion in October, while consumer loans increased 0.2 percent to S$241.5 billion.

Meanwhile, Housing and bridging loans in October rose to S$183.6 billion from S$182.9 billion in September. These loans edged up 4.6 percent from a the S$175.5 billion total in October last year.

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Lower property tax in 2016

Homeowners in Singapore will benefit from paying lower property taxes in 2016 compared to this year, revealed the Inland Revenue Authority of Singapore (IRAS).

This is due to the reduced Annual Values (AVs) of HDB and private homes in line with market rentals.

In a statement, IRAS said the tax savings for HDB flats will range from nine to 24 percent, while over 80 percent of private homeowners will enjoy tax savings of between three and 20 percent.

In particular, all 1- and 2-room HDB flat dwellers and 28,200 3-room HDB flat owners will not have to pay any property taxes.

IRAS reviews the AVs of properties annually to ensure that they reflect prevailing market rentals.

Property tax is a tax on property ownership and it is payable on all properties regardless whether the property is rented out, owner-occupied, or left vacant.

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03 December 2015

Home prices would have risen by a third without cooling measures

If the Singapore government had not introduced a series of cooling measures to control the growth of private home prices following the 2008 Global Financial Crisis, such properties would have been more expensive than the current norm by up to a third, revealed a study conducted by the Monetary Authority of Singapore (MAS), and reported by TODAYonline.

Similarly, the number of private housing deals and the volume of mortgages in the city-state would have risen by a similar level, added the MAS.

The central bank also discovered that tax measures, like the Seller’s Stamp Duty (SSD) and the Additional Buyer’s Stamp Duty (ABSD), had a more significant effect on prices and transaction levels as compared to land supply policies and lending curbs like the loan-to-value (LTV) ceiling and Total Debt Servicing Ratio (TDSR) framework.

“The SSD reduced sub-sales significantly, whereas the ABSD raised the hurdle rate of return for property investors.”

This has led to an exodus of foreign property buyers. In Q4 2011, the share of private residential purchases by this group peaked at nearly 20 percent, but it plummeted after the ABSD was implemented.

As a result, weaker buying activity has dragged down property prices and mortgage lending, noted the MAS.

Meanwhile, the soft drop in home prices signals that Singapore’s housing market is moving to a more sustainable state over time, said the central bank, signifying that the authorities will likely keep the cooling measures in place.

In Q3 2015, private residential prices declined by eight percent from its peak in the third quarter of 2013.

However, MAS is still on the lookout for signs of renewed activity in the market in light of the continuing high prices in particular areas, such as those in the Outside Central Region, where it is still 30 percent above levels seen before the 2008 global economic downturn.

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Strong sales at Potong Pasir condo

Home buyers snapped up nearly 75 percent of the released units at MCC Land’s The Poiz Residences in Meyappa Chettiar Road during its first weekend of sales, reported The Straits Times.

A total of 260 apartments were sold out of the 350 units initially launched under phase one, revealed the project’s developer. Of this, around 33 percent were one-bedroom units, while three- and four-bedders accounted for 36 percent and 31 percent respectively. About 98 percent of the buyers are Singaporeans.

“The sales at our launch weekend were encouraging and we attribute its success to our strategic differentiation of the units into Urban, Habitat and Suites which are each targeted at different market segments,” said MCC Land’s Managing Director Tan Zhiyong.

Another selling point of the 731-unit condominium is its proximity to Potong Pasir MRT station, he added.

The Poiz Residences is the residential component of a mixed-use development, which includes The Poiz Centre mall. Both the condominium and shopping centre are expected to be completed by 2019.

Originally, the developer planned to call the condo The Andrew Residences. But it later decided to rename it after more than 1,000 people complained that the first name would cause a mix-up with a nearby and similarly-named school.

Picture Source: Artist’s impression of The Poiz Residences by MCC Land.
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OKP awarded $94.6m LTA project

Singapore-listed engineering firm OKP Holdings has won a $94.6 million contract by the Land Transport Authority (LTA) to build a viaduct from the Tampines Expressway (TPE) to the Pan Island Expressway (Westbound) and Upper Changi Road East.

The project includes the design and construction of new viaducts, realignment and widening of existing carriageways, recambering/resurfacing of the existing roads, construction of retaining structures, reinstatement works, as well as the construction of other required structures and ancillary works.

Group Managing Director Or Toh Wat said: “We believe that our sound experience in design-and build projects has helped us clinch this contract. We were involved in the design-and-build projects for the interchange at TPE/Sengkang West Road/Seletar Expressway Interchange, which were completed this year. We are currently executing another design-and-build project for the widening of Tanah Merah Coast Road.”

This latest deal means OKP’s total value of contracts secured in 2015 has reached $291.3 million.

Works are expected to be completed by the first quarter of 2020.

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China-based BHG Retail REIT launches Singapore IPO

SINGAPORE: BHG Retail Trust Management has launched an initial public offering (IPO) of units in BHG Retail REIT (real estate investment trust) at an offering price of S$0.80 per unit, announced the China-based group in a press release on Wednesday (Dec 2).

This will make it the first listing on the mainboard of the Singapore Exchange (SGX) this year. The final prospectus of the IPO was filed with the Monetary Authority of Singapore on Wednesday.

According to BHG Retail, the IPO will be the first “pure-play China retail REIT sponsored by an established PRC homegrown retail operator, Beijing Hualian Department Store”. Under the IPO, it will offer 151,169,000 units for sale.

It has set aside at least 8,000,000 units for retail investors, and the rest (a maximum of 143,169,000 units) will be offered by way of an international placement to investors, including institutional and other investors in Singapore.

Application for shares will close at 12pm on Dec 7. Listing and trading of BHG Retail REIT on SGX is expected to start at 2pm on Dec 11.

Separate from the IPO, Beijing Hualian Group (Singapore) International Trading (the Strategic Investor) and Beijing Hualian Department Store (the Sponsor) have entered into separate subscription agreements to subscribe for 148,310,300 units and 24,636,300 units respectively at the Offering Price.

BHG Retail REIT has also secured S$134.9 million worth of commitments from four cornerstone investors: China Life Insurance, China Hi-Tech Holding, China Merchants Bank Asset Management and Dr Chanchai Ruayrungruang, chairman of the board of Reignwood Group and Red Bull Group China.

BHG Retail REIT intends to raise gross proceeds of approximately S$394.2 million from the offering, the issuance of the Sponsor Units, the Strategic Investor Units and the Cornerstone Units.

DBS Bank is the financial adviser, issue manager, bookrunner and underwriter for the IPO. China International Capital Corporation (Singapore) is the lead manager, while Bank of China (Singapore Branch), Industrial and Commercial Bank of China and United Overseas Bank are co-managers for the IPO.

BHG Retail Trust Management is an indirect wholly owned subsidiary of Beijing Hualian Department Store, while Beijing Hualian Department store currently owns and manages several malls in China.

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Time for industry to explore new ways to revitalise equity market: Deloitte

There was a dearth in the SGX mainboard listings in 2015, while the Catalist board saw 12 new listings, mainly from SMEs.

SINGAPORE: It is time for the industry to explore new ways to revitalise the equity market, said Deloitte, following a dearth in the Singapore Exchange (SGX) mainboard listings in 2015, as companies opted to stay on the sidelines due to volatile market conditions.

According to the report on Tuesday (Dec 1), which cited an absence in mainboard listings so far this year, compared to the 11 last year, Deloitte’s Southeast Asia Leader for Global IFRS and Offerings Services, Dr Ernest Kan, said: “IPO aspirants and investors have been jolted by waves of economic headwinds in China and other large developing countries.

“These events have made big ripples in our domestic market and though there is no super pill for cure, it is perhaps time that the industry band together to explore ways to revitalise our equity market.”

Dr Kan added that the sluggish global economy “was largely responsible for the adverse trends in Singapore’s IPO market this year”.

Share valuations at IPO have also remained challenging, compared to perceived stronger valuations elsewhere in the region.

“We have observed that getting a good valuation in Singapore is challenging,” said Dr Kan. “If valuation is believed to be a key factor, this tends to draw IPO aspirants’ decision to list in these other countries a more compelling one. That said, Singapore remains an attractive listing destination for both foreign and local companies.”

Meanwhile, the Catalist board remained active with 12 new listings as of Nov 30, down slightly from the 18 in 2014. The new listings from small and medium enterprises helped raise S$1.49 billion in market cap and S$237 million funds.

Overall though, Singapore’s IPO market has suffered from global economic headwinds.

The Deloitte report showed that there were no deals from the real estate sector and only two from energy and resources, both of which are traditional niches for SGX listings. It said the two sectors have been hurt by prevailing economic conditions and low resource prices.

“When the economy is not doing that well, that will affect pricing, also plus the fact that if you look at the blockbuster IPOs in recent times, there are many coming from the real estate and energy and resource sector,” said Dr Kan.

“Now those two sectors are badly affected by the economy. If they are affected by the economy, low oil prices and all that, all these will result in the perception that the sector … when somebody would like to buy a share in the sector in property, or energy and resource, they are not willing to pay a good price. As a result, the valuation will be affected,” he added.

Earlier in November, new SGX CEO Loh Boon Chye earmarked digital technology as a potential area for growth. However, Singapore will face some tough competition for digital company listings.

This year, at least two local technology companies, Netccentric and CoAssets, opted to list in Australia instead. Still, analysts said the foundation is in place to support future listings of technology companies.

“Going forward, we in Singapore definitely face competition, it’s just a matter of which sector we have to compete with. So we will have our niche in real estate … for digital space, I think we are one step ahead,” said PwC Singapore’s capital markets leader Tham Tuck Seng.

“Our strength will be there because our Catalist board is now quite well-developed. So investors or the sponsors who bring the companies onto Catalist have a certain degree of confidence to raise a certain amount of funds. So we have that one-step advantage,” added Mr Tham.

Looking ahead, Dr Kan is cautiously optimistic for Singapore’s equity market going into 2016.

“The global slowdown can be worse, but I think there are compensating measures in place like China’s One Belt, One Road initiative that will boost business opportunities for Chinese investors into Southeast Asia market,” he said.

In November, SGX’s Catalist board marked its 100th listing since its launch in 2007, with the IPO of Israeli tech incubator Trendlines. Other notable listings this year included Singapore restaurant chain Jumbo.

Picture Source: The Singapore Exchange Centre. (File photo: Calvin Oh)
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01 December 2015

Prime London property faces slow 2016

For years, prime central London has been a popular location for Asian property investors. However, The Wall Street Journal recently reported that the outlook for the market in 2016 does not look rosy. Some experts are even predicting that prime real estate there may see little to no growth in the next few years.

According to Savills, prime London prices will have fallen by two percent before the year ends. Lucian Cook, Director of Savills Residential Research, explained that the prime London market appeared to be overvalued. The consultancy predicts there will be zero growth in prime central London next year, followed by a two percent increase in 2017. Things should pick up by 2018 when five percent growth is expected.

Residential properties priced above £5 million have been affected the most this year. Property firm LonRes noted that demand fell a little less than 60 percent in the third quarter of 2015 compared to the second quarter. The Wall Street Journal also stated that this segment of the market could end up with an oversupply of unsold homes.

“Stock is building up as we speak, and there is a conspicuous oversupply of properties for sale – some of which are thoroughly over-priced,” said Trevor Abrahamsohn, owner of Glentree International estate agents.

Agents also believe that international buyers will come back into the market but not necessarily to look for properties above £5 million. In addition, experts believe that billionaires from India could end up buying prime London property, while the strengthened dollar gives US buyers a better value in the UK than in previous years.

“At the sub-£5 million level, expect Chinese buyers to flock to London due to recently reduced constraints on gaining UK visas for purchasing properties,” said Giles Hannah, Senior Vice President at Christie’s International Real Estate.

This article was first published on, Thailand’s leading property site.

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Residential sales volume up 4.4% in Q3

Singapore saw residential sales volume increase 4.4 percent quarter-on-quarter to 4,153 units in Q3 2015 compared to the 29.9 percent quarter-on-quarter decline seen over the same period last year, revealed a DTZ report.

“This was the highest recorded volume in the year, most of which was buoyed by the primary market,” said the report.

Primary sales transacted climbed 13.9 percent quarter-on-quarter to 2,410 units. The growth in take-up rate is due to the narrowing gap between buyers’ and developers’ price expectations.

Notably, Singaporeans accounted for 78 percent of the residential property buyers in Q3 2015.

“The last time the proportion of Singaporean home purchases reached 78 percent was in Q2 2013, prior to the announcement of the TDSR,” said DTZ.

In absolute terms, the number of Singaporean private home purchases rose 4.1 percent quarter-on-quarter to 3,023 units.

Meanwhile, non-Singaporeans acquired 1,050 units in Q3 2015, or 19 home purchases more than that in Q2 2015, as buyers remain confident of the city-state’s economic and political stability.

Despite their weakening exchange rates to Singapore dollar, Malaysian and Mainland Chinese home buyers remained the top two nationalities among non-Singaporean buyers. Malaysian buyers snapped up 275 homes in Q3 2015, while Mainland Chinese bought 255 private homes.

The report noted that buying activity from these nationalities were highest in the prime districts, as well as districts 19 and 28.

Despite the increase in overall sales, purchasers with HDB addresses fell 12 percent quarter-on-quarter to 1,509 units in Q3 2015.

On a yearly basis, however, the number of buyers with HDB addresses jumped 20.5 percent, of which almost 50 percent were investors.

According to DTZ, buyers with HDB addresses were also drawn to attractively priced private developments such as High Park Residences, Kingsford Waterbay and Botanique at Bartley.

Looking ahead, DTZ expects demand to be mixed in Q4 2015 as buyers continue to seek projects in choice locations. “More launches are expected in October to November, but sales activity may be subdued with the December festivities,” it said.

In 2016, DTZ expects demand “to be weighed down by the likely marginal increase in the Federal interest rates in December, and weakened sentiments of the market.”

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S’pore slides in ranking as one of world’s most liveable cities

Singapore was ranked seventh in the Global Liveable Cities Index, collated by the Asia Competitiveness Institute (ACI) at the National University of Singapore’s (NUS) Lee Kuan Yew School of Public Policy, reported Channel NewsAsia.

A ranking of the most liveable cities in the world, the index determines liveability in five aspects — environmental friendliness and sustainability, economic vibrancy and competitiveness, domestic security and stability, political governance, and socio-cultural conditions. Switzerland’s Geneva and Zurich took the top spots in the list of 64 cities.

Singapore’s position is a drop from its number three ranking in 2012, due to a relatively weak showing in indicators like social equity and environmental sustainability. It performed strongly in domestic security and stability, economic vibrancy and competitiveness, and political governance. It was second in Asia, after Hong Kong, which was listed sixth overall.

The city-state beat Hong Kong in areas like political governance and domestic security and stability, but lagged in areas such as environmental friendliness and sustainability, as well as economic vibrancy and competitiveness.

“Our conditions from 2011 to 2013 were worsening, including income disparity. But since 2013, the government has come in to do a lot of public policy remedies, whether it’s solving public housing shortage, or higher prices in the property sector, and also opening up infrastructure bottlenecks,” shared Associate Professor Tan Khee Giap, co-director of ACI.

“But this kind of improvement probably will be reflected in our next update, because we don’t do this every year. So unfortunately, rankings because of data constraints have some lagging effect. That’s why our liveability index has deteriorated from three to seven.

“But that reflects the situation of Singapore between 2011 and 2013. I’m confident as we move forward, when we update again, Singapore’s liveability will improve again.”

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Bumper launch receives healthy response

The Housing Board’s record launch of 12,411 flats this month witnessed a healthy response, with more Singaporeans benefitting from the various policy changes that took effect, wrote National Development Minister Lawrence Wong in a blog post.

The exercise saw nearly 2,100 families and 220 singles benefit from the higher income ceilings of S$12,000 and S$6,000 respectively.

More lower- and middle-income buyers also benefitted from the enhanced Special CPF Housing Grant (SHG), with around 6,500 families eligible to apply for the said grant, the blog entry said.

Mr Wong noted that two-room Flexi flats received encouraging response, with around 1,400 seniors applying for the 966 two-room Flexi units offered, or an application rate of 2.5.

Meanwhile, the Bidadari flats registered some of the highest application rates–despite prices–“[due to] their central location, presence of two MRT stations and distinctive “Community in the Garden” concept,” he said.

Notably, around one-quarter of those applying for Bidadari flats applied through the Married Child Priority Scheme to live with or near their parents or married child. “This is an example of how we provide more opportunities for families to live closer together for mutual care and support.”

Demand for larger flats was also high, with Build-To-Order (BTO) application rate for three-room or bigger flats at 3.2.

“[Despite] the strong demand, for Singaporeans buying their first home, the good news is that the first-timer application rate in non-mature estates is only around 1.6. Non-mature estate flats are also more affordable and make up 70 percent of the BTO flats launched in this round,” said Mr Wong.

“Taken together, this means that almost all first-timer applicants will stand a good chance of selecting an affordable flat of their choice.”

While the application rates are now stabilising, Mr Wong said they will still keep a close eye on buyer demand and will adjust the BTO supply accordingly.

In fact, he revealed that close to 1,600 Bidadari flats will be offered in the next BTO exercise in February.

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SGX launches suite of 11 equity indices

Called SGX Thematic Indices, the new indices are based on stocks in the Real Estate, Healthcare, Minerals, Oil & Gas and Maritime & Offshore sectors.

SINGAPORE: The Singapore Exchange (SGX) on Tuesday (Dec 1) launched a suite of 11 equity indices in an effort to encourage the formation of exchange traded funds (ETFs) that invest in Singapore stocks.

Called SGX Thematic Indices, the new indices are based on stocks in the Real Estate, Healthcare, Minerals, Oil & Gas and Maritime & Offshore sectors.

“These are sectors that have traditionally featured prominently across the SGX securities market and contribute significantly to the Singapore economy,” SGX said in a statement.

An ETF is a fund that tracks the movement of a stock index by investing in the underlying securities, allowing investors to bet on a particular sector or market.

The new indices come under SGX Index Edge, which was launched in October 2015 to provide index services for issuers, asset managers and investors in Asia.

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30 November 2015

Exploring the hidden costs of overseas property investment

When shopping for property in any location, it is common sense to first establish a budget. However, buyers often end up paying more than the original property price. Always be wary of how much these hidden costs will drive up the final amount you will need to fork out.

As a rule of thumb, do not just look at the price quoted without finding out what it covers.

Here are some tips you can follow in order to get a full picture so you can make an informed decision and sort out proper financing arrangements.

Understand the local taxation system

In establishing how much is needed to purchase an overseas property, the first thing you should examine is the amount of tax payable. Local tax and legal implications in buying, owning and selling a property in some countries can be quite complicated, especially in developing countries where terms and conditions may not be clearly defined. It is just as important to know that taxes are subject to change, and investors must be aware of updated taxes and fees by consulting trusted real estate agents.

There are different types of taxes to be paid when buying an overseas property, and they are included in the total purchase price. They are:

– Registration tax

– Stamp duty fee

– Specific business tax

– Income tax

Be clear on legal and agent costs

Experienced legal experts can assist you in navigating the complex framework of overseas real estate. A lawyer from a reputable firm will be responsible for doing the essential paperwork, and informing you about hidden costs before you finalize your overseas property purchase.

Similarly, if you intend to buy property to rent out, make sure you know how much it will cost to have an agent or similar individual manage the day-to-day running of your property, and organize the rental side of things for you. You will need a good agent to make sure your best interests are always protected, especially if you are not planning to remain in the country the where the property is.

Be aware of maintenance fees

Just like any other property, overseas real estate may require you to foot additional monthly or yearly maintenance charges, especially private condominiums. These fees are then used to maintain the building’s cleanliness and appearance, and cover payment for the facility, management company, and the security. Very often, the amount of maintenance fees per property depends on the location where you purchased it, so it is necessary to do some homework in order to avoid being surprised by a large bill.

Calculating the hassle of travel

This may not be classified as a hidden cost tied to property-buying, but it can substantially raise your overall budget if left unchecked. You should factor in regular travel costs needed to visit your overseas property / area of development when you establish your budget. Keep in mind any extra visits you might have to make occasionally to organize and oversee repairs and renovations as well.

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London Calling

Ask anyone who has lived in London what he thinks of the city, and you will most likely get either a glowing review, or an unenthusiastic response that includes some complaint about the drab weather.

As it happens, the same can be said of the London property market. A recent Savills research report showed that London’s prime housing market values increased by an average of 1.6 percent in the second quarter of this year, but remained 0.7 percent below their level one year before, thanks to higher stamp duty rates and unsold stocks preventing a bounce in values after the election.

Residential property in prime central London saw a negligible net house price growth of 0.3 percent in Q2, signalling a 4.3 percent year-on-year decline. This was mainly because of changes to the stamp duty in the 2014 Autumn Statement, as well as the uncertainty of a mansion tax in the lead-up to the general election.

After the Conservative Party victory, however, there is no longer any threat of such a tax, though the higher stamp duty remains an important consideration for buyers. According to Savills, “this has restricted any significant boost to prices and transaction numbers”.

Dark side of the boom

According to Brett Alegre-Wood, property author and Chairman of YPC Group (a London and UK research and property consultancy specializing in new build and off-plan property), the London and general UK property market “are a mixed bag right now”. He adds: “There’s a lot of negative news about London Zone 1 and 2, and certainly, at the higher end of the market, things are not looking very good.”

The main — or even sole — factor affecting the UK property market is change; specifically, changes in the recent buy-to-let tax charges, which, Alegre-Wood says, “haven’t really hit home as they are so complex to understand”.

Certain change, uncertain market

Generally, people are resistant to change. This is especially true of potential investors in the property market. Apart from the changes to buy-to-let taxes, other changes impacting the UK property market at the moment include property tax changes, non-domicile reforms, and mortgage review.

Alegre-Wood opines: “Change is never good for the property market. People want certainty. And when they’ve got certainty, they act. All these things are playing a part. There’s a lot of change, a lot of uncertainty. And that is affecting the market.

Such changes also give potential investors pause because of increased residential prices. Alegre-Wood offers this example: “When you look, at say, a £6 million property, there’s about £750,000 worth of property fees attached to buying it. That’s not an amount you can borrow; it is money you have to pay out of your pocket.”

Optimism amid the odds

Still, the general outlook amongst analysts is positive, despite London’s prime housing market expected to stay rather subdued for the rest of the year. The market is predicted to recover in the first quarter of 2016, with industry-watchers projecting that values will increase by 22.7 percent over the five-year period of 2015 to 2019.

International real estate consultancy Cluttons predicts moderate house price growth of two to three percent in central London this year, before hitting almost five percent next year and stabilizing at approximately four percent per annum from 2017 to 2019. Subsequently, such growth is expected to result in nearly 18 percent cumulative capital appreciation over the next five years.

Still, a property market boom over the next decade or so is imminent, with production being ramped up across the country. In fact, in Q3, home prices in London shot up 9.6% year-on-year, signalling a market recovery and possibly inspiring more confidence in its Asian investors.

Positivity prevails

Despite the uncertainties brought about by changes in the property market, the negatives are only temporary. The current outlook for Zones 1 and 2 in London may be bleak, but throughout Zones 3 to 9, things are decidedly different.

Alegre-Wood assures us: “A lot of the fears people are talking about are actually unfounded and aren’t being seen on the ground. Overall, things are still quite upbeat, just with many things happening (at the same time).”

At the same time, although the profitability of buy-to-let properties might discourage some landlords, the impact is highly unlikely to be significant enough to see a mass exodus of investors. Furthermore, the buy-to-let market is the UK’s most lucrative property sector.

Faisal Durrani, Head of Research at Cluttons, also has a positive outlook on London’s property market: “There is no doubt that the results of the general election have helped to re-inject confidence into the market, which had receded early on this year.

“Our outlook for the rest of the year is for increased stability in the market, and a return to a more normal state of activity, as buyers and vendors have returned to the market, following a conspicuous absence of activity.”

Bubbling Bath

While London still holds strong appeal for investors, Bath has caught up. According to a research report from Knight Frank, prime property values in Bath have surpassed the UK’s wider prime market in current market conditions.

Knight Frank’s index, which tracks prime property values in Bath, showed that the average price of a residence there saw a 2.8 percent increase in the first half of this year, and a 5.3 percent year-on-year increase.

According to the report, this means values in Bath have “outperformed the wider prime market in the UK, where prices have risen by 1.8 percent so far this year, and by 2.3 percent over the 12 months to the end of June”.

The report also attributes rising property prices in Bath to the shortage of prime properties for sale, as well as great demand for homes in prime urban markets that feature renowned schools and good infrastructure.

Dipping their toes

Knight Frank says the number of people seeking homes in Bath via its website in Q1 this year was 40 percent higher than last year, and this activity shows no signs of ceasing or even slowing down in the near future.

The city’s upcoming regeneration projects could very well boost activity in its residential property market, with the local council planning to increase its economy value by an additional £1 billion by 2026 (an estimated £620 million annually), resulting in about 10,000 new jobs.

Knight Frank says, “Perhaps the notable project is Bath City Riverside Enterprise Area. Covering a total area of 98 hectares, it has the potential to accommodate up to 9,000 new jobs and 3,400 homes along the river corridor, and in central and western Bath.”

Prices and predictions

His scepticism regarding the UK property market notwithstanding, Alegre-Wood concedes that there are upsides and future potential for investors.

Although house prices are still increasing, he believes this rise will be minimal compared to that in previous years. “They’re still going up. Sure, you’re going to have variances, but you’re going to find that actually, house prices won’t go up as much now.

“Why? Because it’s cold; it’s not great weather. People don’t want to go out as much to view properties, so this may mean prices will start to cool off a bit, as we usually expect each year.”

He also predicts an overall rise of around six percent next year, with the market remaining ahead of property markets in Asia. As such, London is expected to continue attracting investors from Singapore and other parts of the region.

This certainly bodes well for London in the long term. As Alegre-Wood says, “Overall, it’s good news, even though there is a little uncertainty now, with various happenings. The question you have to ask is if anything in Asia is going to do better, and it appears for now that’s not on the cards.”



Population: 8.6 million

Total area: 1,583 sq km

Currency: Pound sterling (GBP)

GDP per capita: US$40,968

GDP growth: 2.3 percent

Future transport: Crossrail railway line, due to open in 2018

Home values: Up 9.6 percent in the past year

Distance from Singapore: 10,867km



Royal Wharf (Phase 2)
N Woolwich Rd, London

Type: Condominium Complex

Developer Name: Oxley International Holdings, Ballymore

Tenure: 999–year leasehold

Nearby Key Amenities: London City Airport, Asian Business Park (upcoming)

Nearby Transport: DLR station at Pontoon Dock, Crossrail Station (upcoming)

An upcoming township development in London, Royal Wharf will offer 3,385 residential units. These consist of a variety of apartments and townhouses, ranging from one-bedroom units to a four-bedroom duplex.

The 36.3ha waterfront development, which will also feature 15,000 sq m of office space and 5,000 sq m of retail and F&B spaces, boasts a 500 m south-facing riverside walk along the River Thames. It will offer a lifestyle facility that will include swimming pools, outdoor gym facilities, and a 14,000 sq ft leisure centre, among others.

Royal Wharf offers quick access to central London via the Underground, DLR and the future Crossrail, as well as excellent connectivity via the London City Airport.

Royal Wharf has launched Phase 2 for booking. The development is scheduled for completion by 2017.

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How to protect yourself from rogue property agents

Make sure the agent is licensed and associated with a reputable professional agency

Before dealing with an agent, the first thing to check is whether the person is licensed to work as an agent and if he belongs to a professional property agency. The property industry in Singapore is regulated by the Council for Estate Agencies (CEA), grants licences to agents who are trustworthy and competent, so they can equip consumers with ample knowledge to make informed property investment decisions. All agents who advertise on must have valid CEA license numbers, assuring users they aren’t fly-by-night agents.

Don’t hire an agent out of convenience

Do not hire an agent just because he is a friend, relative or acquaintance, or was recommended by one. While recommendations can be helpful, other people’s experience or relationship with an agent doesn’t equate to a positive experience for you. It is always better to gauge their knowledge on the market and the type of property you are seeking. For example, some agents specialise in a particular area, and others even in a particular condo project. A professional agent is likely to have a good understanding of both the market and his client’s needs.

Document and validate your payments

When you finally decide on engaging an agent, a risk you might be exposed to is having your financials vulnerable to fraudulent schemes. To avoid having your money misused by an agent, document your payment and ask for a receipt.

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Gentrifying Geylang

Geylang’s proximity to the city, MRT links and connection to two major highways should make it a more popular location for property buying than it currently is. However, mention Geylang and most people would inadvertently think of sex work, seedy lorongs, and the eponymous red lanterns hanging outside the doorways of seedy establishments. But that is set to change in the near future, with corrupt activities being zoned out of Geylang.

Zoning out vice

In January of this year, the Urban Redevelopment Authority (URA) asked for public feedback on the rezoning of the areas between Lorong 2 and Lorong 22, as well as Geylang Road and Guillemard Road. Uses in the area would change from residential and institutional, to commercial and institutional. At the time, the URA said this was to “better manage issues arising from conflicting uses”. These changes went into effect without any fanfare on 10 July 2015. While the plot ratio remains the same at 2.80, commercial land generally has higher value than residential, because of the potential income it can generate.

With a popular batch of Build-to-Order (BTO) flats slated to come up in nearby Dakota Crescent, and a slew of condos, including two larger scale developments (Sims Urban Oasis and TRE Residences) being built in the vicinity, there is a potentially strong catchment of retail consumers in the area. This is not inclusive of the 40,000-plus households living in the area already, according to the 2010 Census of Population.

With a supply of older freehold projects like Wing Fong Court and Wing Fong Mansions, and plenty of smaller walkup apartment units in the area, the area is poised for shakeups with potential collective sales. Before rushing in to buy these older condos, however, it should be noted that there are land sites held in reserve in the area, which the state could release for development.

Like almost every other urban area in developed countries undergoing a wave of gentrification, there is incredible real estate potential in Geylang. The question, then, is one of timing — when should one to enter the market?

Dollars and sense

The answer to this question might be “not yet”. Figure 1 shows the movement of transaction volumes and median prices of condo units in Geylang from Q1 2012 to Q3 2015. For the purpose of analysis, landed property in Geylang (including shophouses) have been removed, as their volumes have been less than 10 a quarter for the past eight quarters, yet their much higher prices confound the picture.

Geylang, like the rest of Singapore, saw transaction volumes plummet after Q2 2012, after multiple rounds of cooling measures. However, median psf prices in Geylang continued to rise. It was only after mid-2013, with the introduction of loan curbs in the Total Debt Servicing Ratio (TDSR), that prices began to decline.

Median prices plummeted to a low of $1,198 in Q3 2014, with some lower priced smaller developments hitting the market, before rising 13 percent the next quarter. Prices have started to come down again in the most recent quarter, with a number of smaller developers offering discounts to move units.

The median transaction price at the close of Q3 2015 was $1,322 psf. We believe median PSF prices might continue to dip for the next few quarters, given poor market sentiment and a slowing global economy. The market is likely to become even more favourable for buyers than it already is.

However, median psf prices are only one part of the equation. With the implementation of loan curbs, overall affordability and quantum price become paramount, with the general sweet spot for most buyers somewhere between $500,000 and just over $1 million. Interestingly, while the psf price for Geylang apartments has dipped, quantums have actually been on an upward trend since the start of the year, and are currently hovering around a median $830,000 (refer to Figure 2).

For Geylang, the quantums are a more delicate consideration, as its designation as a vice area leads banks to be far more cautious in their lending. In general, commercial banks are unlikely to approve mortgages for projects on certain streets, or will only set aside a limited quota for annual approval for the area.

Those who wish to enter the market might therefore need to fork out cash, or turn to financial institutions with higher interest rates. Geylang’s rezoning and redevelopment should hopefully lead to commercial banks reconsidering their policies, which, in turn, would increase affordability for buyers.

Private sizes

Aside from the larger projects at the fringes of Geylang that are eligible for commercial bank loans, Geylang’s private housing projects tend to have smaller units. The average size of units transacted over the period of analysis was about 780 sq ft, and dipped to 632 sq ft in Q4 2013. The smaller boutique projects in Geylang tend to have more shoebox units.

The smaller units imply this is not an area raising families. After all, most families would simply not want to live in vice areas, even if the area is known for delicious food, and is convenient. The bulk of the HDB flats in the area are located away from where most of the sex work establishments are, either on or after Sims Drive, or in the Old Airport Road area. Developers might also choose to focus on smaller units due to bank mortgage restrictions, simply to make it more affordable for buyers.

As transformation continues and sex work is pushed out of Geylang, we expect to see larger units move from the fringes of the district to the area’s core.

Ending vice, keeping character

Even as Geylang gets a new coat of paint, it is important to keep the character of the district. The URA did an impressive job, with the Lorong 24A Shophouse Series project, for instance, employing eight local architects and designers to refresh and put a modern spin on eight historic shophouses in the street. Developers entering the market there should bear this in mind, and preserve the character of the area, as it increases the value proposition for buyers.

Gentrification cannot be separated from displacement. The history of restoration highlights that as districts see capital values increase, prices will rise, and the less well-off, who often are part of marginalized groups, become displaced. Even as we run the numbers and see the upsides to Geylang’s transformation, it is necessary to ask: where will sex work, its associated businesses and sex workers end up? As prices in Geylang go up, will another location’s head south, and where will this be?

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Resale prices of private homes continue upward trend in October: SRPI

Overall prices increased 0.1 per cent month-on-month in October, building on the 0.3 per cent growth in September, according to the Singapore Residential Price Index estimates.

SINGAPORE: Resale prices of private homes continued its slow growth last month, according to the Singapore Residential Price Index (SRPI) estimates, which were released on Monday (Nov 30).

The SRPI, compiled by the National University of Singapore’s Institute of Real Estate Studies, showed overall prices increased 0.1 per cent month-on-month in October, building on the 0.3 per cent growth in September.

Prices of home in the central region, excluding small units, were up 0.3 per cent, while Prices of homes in the non-central region, excluding small units, was flat in October.

Prices of small units, which have a floor area of 506sqf or below, showed the biggest drop with its 0.6 per cent decline, according to SRPI.

Picture Source: File photo of a condominium in Singapore. (Photo: TODAY)
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29 November 2015

Eye on Geylang: At a turning point

In a rapidly changing country like Singapore, Geylang is truly a rare find — the area remains relatively untouched. Unlike many other parts of Singapore, you won’t find skyscrapers or megamalls here.

Rather, the streets of Geylang are lined with charming shophouses, some of them home to old Chinese clan associations and traditional Chinese medical shops, while some are occupied by sex shops and massage parlours.

Despite its seedy veneer, Geylang — an area typically associated with prostitution — remains a popular destination among both locals and tourists, thanks to its abundant food choices, affordable hotel rates, and eye-catching architecture.

Foodie paradise

The streets, which are numbered from Lorong 1 to 42 (odd-numbered lorongs run between Geylang Road and Sims Avenue, while even-numbered lorongs run between Geylang Road and Guillemard Road), are peppered with food stalls offering a tasty selection of Peranakan, Indian, Malay and regional Chinese cuisine.

Some of the popular food stalls found here include the Lor 9 Beef Kway Teow, Leong Kee Bak Kut Teh (Lorong 11), Sia Kee Duck Rice (Lorong 35), and People’s Prawn Noodles (Lorong 12). Seafood lovers, on the other hand, should definitely check out Sin Huat Seafood Restaurant (Lorong 35), which was listed on renowned chef Anthony Bourdain’s list of 13 Places to Eat Before You Die in 2011; the highlight here is the Sri Lankan crab bee hoon.

Unique architecture

Another distinctive hallmark of Geylang is no doubt its iconic architecture. Designated conservation areas make for an intriguing blend of past and present, as seen in old temples and traditional trades alongside eclectic cafés, chic restaurants, and boutique design firms.

For those who appreciate architecture, Lorong 24A is a must-visit. Unlike the worn and tired-looking shophouses found on the other streets, the ones here are exceptionally stylish, thanks to a group of local architects who have given new life to eight conservation 1920s shophouses via a collective project: The Lorong 24A Shophouse Series, started and carried out by Pocket Projects, a development consultancy firm specialising in non-mainstream boutique projects.

According to the Urban Redevelopment Authority (URA), the façades of these eight conserved Chinese baroque-style shophouses, built circa the early 1900s, have been respectably restored. Entrusted to different architects, each unit has been given a new lease of life with a distinctive interior that captures the eclectic character of its Geylang neighbourhood.

A thriving business hub

But that is not all Geylang has to offer. Today, it is fast transforming into a bustling town on the city fringe. Its speed of transformation can be seen in the widespread construction work and new property showflats that have sprouted up in the area in recent years. Earlier this year, the URA announced a proposal to rezone parts of Geylang, which, according to analysts, could turn this area into a thriving business hub.

Gerald Tay, founder and coach at CREI Academy Group, says: “The URA proposes to rezone the area bounded by Geylang Road, Lorong 22 Geylang, Guillemard Road and Lorong 4 Geylang, from ‘Residential/Institution’ to a new ‘Commercial/Institution’ zoning, excluding the parcels of land zoned Road, the lots fronting Geylang Road, and the sports field bounded by Talma Road and Lorong 12 Geylang.

“In short, the URA will not approve any more new residential projects in a 14-ha stretch of Geylang from Lorong 4 to Lorong 22 under the proposed rezoning exercise. Existing residential projects may remain as they are. Likewise, new residential projects in the area which have been approved may proceed to be built. Residential use is barred in the new zone.”

The URA believes that with more new residential developments in the area, residents have been growing more dissatisfied with the increasing number of non-residential features there. As such, after consulting with the police and other relevant agencies, the URA assessed that the growth of the residential community between Lorongs 4 and 22 needed to be moderated to minimise friction, and avoid eroding the character of the area.

Tay adds that the government wants to “give small and medium enterprises (SMEs) easy access to the CBD and other nearby business hubs at more affordable rents”, citing “the vision of Jurong Lake District and Woodlands as commercial hubs for SMEs” as good examples of what is in store for areas like Geylang and Paya Lebar.

Wong Xian Yang, Research and Consultancy Manager at OrangeTee, says, “Given Geylang’s close proximity to the CBD, and the commercial hub in Paya Lebar, its location allows it to enjoy the positive spillover effects of these established commercial areas. Businesses supporting the main business activities within those commercial hubs could find themselves settling down within Geylang. Such synergy and collaboration will likely see Geylang through the next phase of gentrification. As such, it is well positioned to develop into a thriving business hub, which would help complement the Paya Lebar regional centre.”

Coming clean, affordably

Wong says, “Rezoning parts of Geylang could be part of the government’s attempt to clean it up and control the vices it houses. While businesses and vices in the area seem to have established mutual reliance, it seems inevitable that Geylang will be cleaned up one day, given its proximity to the CBD and Paya Lebar regional centre. Therefore, the potential upside for this area is significant. However, investors are advised to take a long-term view on this area; even though talks on relocation have been going on for many years, progress seems to be slow.”’

Furthermore, property in Geylang is significantly more affordable than in other parts of the island. Tay says, “In 2003, Geylang properties 2343 priced in the region of S$300 psf. In 2014, prices were below S$1,000 psf for a majority of the older freehold properties in the area. This has made Geylang one of the most affordable places for living and business in Singapore.”

Wong agrees, saying that despite its central location and surrounding amenities, prices in the area remain locked due to the negative perception it gives people. But with the government’s efforts to clean up this area and with the new zoning, industry watchers expect property values and rental incomes to rise sharply in the long run, due to a stronger synergy in the area with nearby business hubs.

Developments to look at

For home buyers and investors looking to own a property in Geylang, here are some launches to look at:
Sims Urban Oasis

Developed by GuocoLand Limited, Sims Urban Oasis is a 99-year leasehold residential development located at 60 Sims Drive (the junction of Sims Drive and Aljunied Road). Upon completion, a total of 1,024 units of various apartment types will cater to multi-generation households, families, young couples, singles, and their diverse lifestyles.

TRE Residences

Located at Geylang East Avenue 1, this 250-unit residential development, which is jointly developed by SL (Serangoon) Pte Ltd and MCC Land, offers residents utmost convenience and accessibility — the development is served by Aljunied MRT and various expressways, and is surrounded by a slew of F&B outlets, retails shops, and good schools.

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Make your home a travel destination

The holiday season is upon us, and many of us are going overseas. But if you’ve ever wanted the look and feel of an exotic destination in your own home, you can find some inspiration on these pages.

European elegance

Interior Designer: One Stop Concept
Location: Luxury residence, St. Regis.

Reminiscent of the old-world charm of 1800s Europe, classic Victorian homes showcase designs that are typically elegant and luxurious.

Easily distinguished by its opulent ambiance and ornate designs, this look can be achieved with rich colours like plum, burgundy, ruby, forest green and navy. Displays of extravagant statement furniture, such as a grand piano as the centrepiece, also help complete the look with just the right amount of elegance.

Japanese zen-spired

Interior Designer: DHOME STUDIO
Location: HDB, Pinnacle @ Duxton

For a minimalist zen look, Japanese-inspired designs focus on simplicity and minimalism, where less is more.

To achieve this look, natural fibre elements such as bamboo, oak, ash wood and the like, as well as organic colours, are used to create a calm and serene environment. Furniture is kept simple and close to the ground — like that in traditional Japanese decorating.

A tip for Japanese-style bedrooms: place mattresses and futons directly on parquet or straw mats.

Modern Mediterranean

Interior Designer: Edge Interior
Location: HDB, Yishun Avenue

A Mediterranean-style house takes its influence from the sunny regions bordering the Mediterranean sea. Incorporating warm, natural bright colours resembling the sea, sky, and sunshine will bring the Mediterranean influence into your home.

Evoke the calming waves of the ocean with blue decorative accents on bright- or light-coloured walls — usually white to allow a diffusion of natural light — just like this Greek-inspired look showcasing the quintessential Santorini palette.

Tropical Balinese

Interior Designer: ID Department
Location: Landed property, Jalan Minggu

A Balinese home is often permeated by an air of calmness and serenity, typically featuring walls in muted, neutral hues, accented by furniture and décor in tropical theme colours.

Incorporating lots of wood elements, tropical greenery, warm colours and earthy details helps create an authentic Balinese ambiance. Antique wooden furniture with intricate details, tropical plants, and plenty of sunlight is paramount in creating the right mood.

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Confidence in humility

First impressions are important. It’s something many of us have heard from our parents, teachers, and bosses — and for good reason, too. A person who carries himself with confidence is far more likely to inspire confidence in others than someone who is perpetually unsure of himself.

The former is exactly the impression I upon meeting Marcus Chu, Chief Operating Officer (COO) of ERA Realty Network. Dressed in a suit and tie, he exudes the confidence of an experienced professional with specific goals in life, and who has seen his fair share of ups and downs.

What is not immediately obvious, however, is his humility. When asked about his achievements, he tends to downplay his part in his own success by acknowledging the help of his colleagues.

Strategic start

With nearly 20 years’ experience in the property industry, Marcus has a wealth of stories and anecdotes to share. He entered the property business in April 1996, after having bought his first home, a new condo, in 1992. Originally meant to be a matrimonial home, he decided to go for his “first pot of gold” by selling it after the price shot up within three years of purchase.

He bought a resale condo afterwards, and somewhere along the way, discovered his passion for property.

The agent for his second property missed out on the opportunity to get him the unit he had originally wanted, but he stuck with Marcus and managed to get him another unit (at the same development).

He recalls: “He could have moved on to another customer instead of serving me; it was so troublesome. But he left a very good impression on me. This inspired me to become an agent and help others.”

When asked to elaborate, he says: “There are different milestones that require different properties: the first matrimonial home, upgrading, investments…property agents play a part in adding value to buyers.

“Something has to happen before you make the decision to buy a house: some are good — new baby, promotions and bonuses, marriage. Some are bad — I have served terminally ill clients who had to plan for the next generation by liquidating their assets. There are also financial problems and divorces; people in these situations require the help of a professional who can help tide them over.”

A real team player

With 6,300 salespeople at the moment, ERA is Singapore’s largest real estate agency in Singapore. This is not lost on Marcus, who, when quizzed about his achievements, prefers to credit his success largely to the support of his ERA team.

“I would attribute my success to the company’s management team. It’s a very strong team with very capable staff, and we have many dedicated departments that help us to function. They form the backbone of any corporate success.”

To drive his point home, he states plainly that he can be replaced easily. “There’s no one person who is so unique and indispensable that the company will stop if he is gone. My success would not exist if ERA was not successful.”

Experience and expertise

Humility aside, there is another reason Marcus readily recognizes his “many talented management staff”, and considers it “a privilege to be here”.

In a word, it’s empathy. He has been there, done that, and has no shortage of respect for those doing what he used to do.

He has been a top salesperson and sales leader in ERA, an achievement that did not come about easily. He says: “I cannot tell you how to climb a mountain if I have not done it before. (Likewise) if I’ve not experienced challenging situations with customers and salespeople, I would not know the hardship many agents go through.”

Against the tides

Speaking about today’s property market, he acknowledges the overall downward sentiment and the challenges it poses to agents. His advice? To stay strong-minded and not to be unduly stressed, as well as to “never doubt yourself in any situation”.

Recalling major events that affected the market, such the government’s anti-speculation curbs in 1996, SARS in 2003, the financial crisis in 2008, 9/11 in 2011, and the current cooling measures, he points out that the property market is constantly undergoing cycles.

He says, “Business is never smooth-sailing. There are good and bad times, and there are good and bad agents”, adding that good agents are not afraid to get their feet wet and look for opportunities even in bad times.

A unique perspective

Unlike many businesses that claim to be innovative, ERA has, according to Marcus, a truly unique modus operandi. He says: “We don’t (simply) do what is expected of us, but there is also no need to always do different things. Instead, we prefer to do things differently (from others).”

For instance, ERA comes up with new products and services every three months. Its Extra Mile programme lets agents earn points for every rental, as well as bonuses and project incentives. “It’s like a mileage programme, where agents can travel to our overseas events and offices or go for training without spending money.”

Proper(ty) lessons

Although Marcus has been with ERA for almost 20 years, there was a time during that period when he left to pursue other positions.

In November 2000, he undertook team-building at another agency, and four years later, became a real estate consultant at yet another company. He even helped the latter triple its turnover, and increased its headcount by five times.

He has no doubt learnt a lot in his career, especially since he is no stranger to starting from scratch. He says, “Starting from zero is not necessarily a bad thing. No one followed me when I left ERA and returned to ERA; I had to start from scratch and build up the business within a year, and I managed to do it.”

Crossing the hurdles

Marcus admits that starting from scratch has taken a lot of determination. “I started in the business with no knowledge, but I persevered. The key is never to doubt yourself after you have made a decision.”

And while success does not happen without sacrifice, for Marcus, that sacrifice was once greater than it was worth: “My health has been affected because I spent too much time working, and I lost time with loved ones.”

These days, he is in a far better place, both professionally and personally. His parting words to me are simple and straightforward: “Work hard, but remember there are others who need your time.”

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Real progress for real estate

Property is often at the forefront of many people’s minds in Singapore, and there is no shortage of real estate agents making a decent living off the high demand for property here.

Of course, as it is with any business, real estate has its good and bad sides. One buyer might have the good fortune of engaging a trustworthy agent, and yet another might, to his detriment, run into a dishonest agent.

Then and now

Before 2010, salespersons needed only licences to sell real estate. They did not need to be registered with any governing body, or obtain industry qualifications before practising. There were also no legal provisions for action against errant salespersons.

Against such a backdrop, there was an increasing trend in the number of complaints against agents and salespersons.

These days, however, buyers can turn to the Council of Estate Agents (CEA) should find themselves dealing with errant agents. Established under the Estate Agents Act on 22 October, 2010, the CEA is a statutory board under the Ministry of National Development (MND) responsible for enforcing a regulatory framework for the property industry.

One of its main aims is to raise the standard of professionalism within the industry through cooperation with property professionals, typically via industry development programmes. At the same time, the CEA acts in the interests of consumers with its target public education schemes.

Strict standards

All practising real estate agents in Singapore are required to be registered with the CEA, but not before meeting its comprehensive list of strict criteria to ensure the quality of their services.

For instance, the duties, business activities and conduct of estate agents and salespersons are fully governed by the Estate Agents Act and Regulations, which include the Code of Practice and the Code of Ethics and Professional Client Care. A Professional Service Manual was also developed to provide a service standard benchmark for the industry. There is also a system for complaint management, dispute resolution, and enforcement. Reported malpractices are thoroughly investigated, and disciplinary action taken against errant estate agents and salespersons.

Overcoming initial challenges

Since its inception, the CEA has helped regulate the property industry and made consumers less vulnerable to the dangers to which they were once highly susceptible.

Still, running the board has not been without its challenges. As a new organization with multiple stakeholders, the CEA had to establish its value to different audiences.

It guided estate agents and salespersons to emphasise the necessity of its licensing and registration processes, and helped them comply with the new requirements. For consumers, its education programmes and investigation into their complaints were all efforts to build trust between the CEA and consumers.

As such, one of its key challenges was to better understand ground issues and help the industry navigate the new regulatory landscape. To facilitate the transition into the new regulatory regime, the industry was given time to make adjustments and prepare for regulatory compliance.

The CEA adopted a light touch in handling early cases of non-compliance by advising the salespersons involved, instead of immediately pursuing enforcement. Its Executive Director, Lee Kwong Weng, says: “Looking back, we believe the open and consultative culture between the CEA and our stakeholders has gone a long way in the successful implementation of the regulatory regime.

“The close engagement and cooperation with the industry continues today, and we hold regular dialogues, focus group discussions and working groups involving industry representatives.”


Despite the aforementioned initial challenges, the CEA has been successfully offering heightened protection of consumer interests. One of the changes for the better was the disallowing of dual representation by salespeople, a common practice in HDB transactions before the CEA was established.

This ensures the interests of buyers and sellers are not compromised. Unlike before, it is now much more difficult for a salesperson to persuade a seller to sell to the buyer who offers him the highest commission, instead of the buyer with the highest offer for the property itself.

At the same time, a salesperson can no longer persuade a buyer to buy a property from the seller who offers him the highest commission, instead of referring the buyer to a property that gives him the best value.

Seah Seng Choon, a CEA member who is Executive Director of the Consumers Association of Singapore (CASE), shares: “There were cases in which salespeople got their clients to sell their houses to the salesperson’s relatives. In such a situation, the salesperson could have engineered the sale of the property to his relatives instead of informing the seller of the highest offer. Conversely, the salesperson could recommend that a buyer buy from his relatives at a price that does not reflect the market value, instead of recommending a property of better value.”

To avoid such situations, salespeople or agents are now required to declare their relationship with buyers and sellers. The purpose of such transparency is to minimise any possible conflict of interest, such as the abovementioned scenarios.

Michael Tan, Key Executive Officer and Executive Director at, concurs, saying that the CEA has managed to correct the misconception of the role of estate agent and salesperson.

“For example, if a landlord withholds the refund of a security deposit to a tenant for whatever reason, the latter may hold the landlord’s salesperson responsible. However, the landlord’s salesperson can only assist his client.

“They will be advised to seek legal consultation as to their rights and obligations according to the Tenancy Agreement, and try to resolve the matter through appropriate channels such as the Small Claims Tribunal.”

Black and white

Contracts are common in property transactions, but the CEA has gone a step further and drawn up a mandatory model contract to make absolutely sure agents offer fair contractual terms to buyers and sellers.

Highlighting the post-CEA improvement where contracts are concerned, Seah says: “Service contracts used to have auto renewal clauses, and sellers would be trapped when selling their property after the duration of the contract. They thought the contract had expired, only to be confronted with a letter of demand from the salesperson for commission. This is one of the many disputes CASE had handled before the CEA was formed.”

All-around progress

Though the board has aided many consumers since its establishment, it has also proven beneficial to businesses. CASE is one such business. Seah says, “CASE deals with many complaints from the real estate industry, including those that the CEA currently deems as (involving) a breach of the law. We can now refer consumers with such complaints to the CEA. As such, we have received fewer complaints over the years.”

He also acknowledges that CASE and the CEA are “partners in educating the consumers”, as both organizations believe it is crucial to ensure consumers are equipped to protect their own rights and interests.

Tan has similarly positive sentiments: “OrangeTee endeavours to adopt best practices wherever possible, which must align with the CEA’s regulatory requirements. This helps to elevate (our level of) professionalism. As such, there is a greater emphasis on providing a high level of service for our clients. The effort eventually pays off, as happy customers are our best ambassadors.”

What is, and what is to be

It’s safe to say that the CEA has had an overall positive impact on the local property industry, both for consumers and professionals. Lee says: “The annual number of consumer complaints against salespersons has declined by two-thirds over the past five years, a result of our effective regulatory enforcement, professional development of salespersons, and consumer education. We have received positive feedback on their conduct, and are grateful to industry stakeholders for working closely with us to effect these changes.”

Despite this marked improvement in the industry, he believes there is room for more growth: “The CEA just turned five last month. It is a young and lean organization that has to regulate about 1,400 real estate agencies and license some 30,000 individuals.”

Over the next five years, the CEA plans to build further on its regulatory framework, focusing more on industry development to enhance its professionalism and customer service.

On its part, the CEA will review its practices to help reduce compliance costs and increase efficiency. For instance, it no longer requires salespersons to display their registration expiry dates on their estate agent card. Consumers can now easily verify a salesperson’s valid registration period on the CEA’s Public Register (both online and via the mobile app).

Lee says, “We recognise that transformation of the industry will take time. After all, five years is a relatively short period to fully transform an industry with 30,000 salespersons.

“There is certainly a need for the CEA to continue to work closely with industry stakeholders and partners, estate agents, and consumers to bring about further improvement. I look forward to this close collaboration in our continuous journey towards the vision of professional and trusted real estate industry for Singapore.”

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Residential site at Siglap Road up for sale

The Urban Redevelopment Authority (URA) on Thursday announced the launch of a residential site at Siglap Road for sale by public tender.

The site is is under the Confirmed List of the second half of the 2015 Government Land Sales (GLS) Programme.

The 19,309.6 sq m site, which sits next to the Victoria School and opposite Mandarin Gardens, comes with a 99-year lease. It has a maximum permissible gross floor area of 67,584 sq m and maximum building height of 90 m.

According to URA, the site can potentially yield about 750 residential units. The land parcel is close to amenities such as Parkway Parade, Marine Parade Town Centre and the upcoming Siglap MRT station, and is easily accessible via the East Coast Parkway (ECP), it added.

Tender for the site will close 14 January 2016.

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28 November 2015

Close to 2.0% growth for S’pore economy this year: MTI

The Ministry of Trade and Industry (MTI) expects the Singapore economy to grow by “close to two percent” in 2015.

In the third quarter, the economy grew by 1.9 percent on a year-on-year basis, marginally lower than the 2.0 percent growth registered during the previous quarter, but exceeds analysts’ expectations and the government’s earlier estimate of 1.4 per cent.

On a quarter-on-quarter seasonally-adjusted annualised basis, the economy grew by 1.9 percent, a reversal of the 2.6 percent contraction seen in Q2.

Notably, growth in the construction sector moderated to 1.6 percent year-on-year, from 2.2 percent in Q2, mainly due to weak public sector construction activities.

“On a quarter-on-quarter basis, the sector contracted at a seasonally-adjusted annualised rate of 1.6 percent, a reversal from the 13 percent growth in the preceding quarter,” said MTI.

Overall, MTI revealed that the global economic conditions remained sluggish, with full-year growth for this year likely to come in weaker than last year.

“In line with the sluggish external environment, the Singapore economy grew at a slower pace of 2.2 percent in the first three quarters of 2015, compared to 3.2 percent over the same period a year ago. Growth was weighed down primarily by the weak performance of the manufacturing sector,” it said.

Looking into 2016, MTI expects global growth to improve next year, “supported by a strengthening of growth in the advanced economies and improvements in the most emerging market and developing economies.”

Despite the expected improvement in global growth, the continued slowdown in the Chinese economy, the services-driven nature of growth in the US as well as the domestically tight labour market may mean that external demand for Singapore and the region may not witness a significant uplift in 2016.

With this, MTI expects the Singapore economy to grow at a modest pace of one to three percent next year.

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Cooling measures may ease amid continued oversupply

Oversupply in Singapore’s residential market is expected to persist well into 2019 as the average net demand of 17,841 units over 2015-2019 remains below the average net supply of 40,990 units, revealed a Credit Suisse report.

This is expected to downward pressure on rents, occupancies and capital values, leading to price declines of between five and 10 percent by end-2016, with a relative preference for the high-end market segment.

“Arguably, such an outcome could then lay the stage for an easing of cooling measures later in the year,” it said.

Credit Suisse said it believes it’s time for an easing of some of the cooling measures, considering that the “intent of these measures has been achieved,” adding that “speculative activities have fallen, foreign demand has been curbed, and income growth has now outpaced home prices.”

“Against rising interest rates, a weakening labour market and persistent oversupply, we think a preemptive re-calibration of measures, rather than ex-post corrective action will better achieve a stable and sustainable property market.”

According to the Swiss financial institution, re-calibration of stamp duty measures such as the Additional Buyer’s Stamp Duty (ABSD) and Seller’s Stamp Duty (SSD) will drive greater transaction volumes as well as increase liquidity within the secondary market.

“An improvement in sentiment would be a critical outcome, with a recalibration of cooling measures being the proverbial “silver bullet”—acting as a key rerating catalyst for developers.”

Regardless of whether there will be a re-calibration of measures, Credit Suisse believes that bottom-up drivers play a far greater role for CapitaLand and City Developments Limited (CDL), considering the greater relevance of the non-Singapore residential segments for these developers.

It noted that CDL and CapitaLand are sufficiently diversified, with Singapore residential accounting for only 24 percent and five percent of their GAV estimates, respectively.

“Assuming residential prices would fall a further 20 percent from our estimates, RNAV for CDL and CAPL will only decline five and two percent, respectively.”

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CapitaLand China to see bumper sales this year

DBS expects FY2015 to be a bumper year for CapitaLand China, which saw residential sales soar to RMB11.6 billion in Q3 – its highest level in four years.

However, local media reports say the property developer is not letting its guard down and plans to roll out more strategies aimed at optimising profitability on its assets in China.

CapitaLand is strengthening its presence within the country by focusing on Tier 1 and Tier 2 cities. DBS noted that there is no dearth in demand given the increasing foreign direct investments, improved connectivity and growing pool of workers.

The company also plans to land-bank mergers and acquisitions as well as enter into joint ventures with partners having access to prime land. It is also open to partnering with local government agencies on urban renewal projects to access prime sites at a discount.

Meanwhile, CapitaLand is keen on keeping its total project costs low by being discerning with land tenders, particularly with the increased land pricing levels. It is also dead set on increasing returns by shortening the development cycle of projects while keeping a scrutinizing eye on costs.

Looking ahead, DBS expects the recently acquired plot of land in Guangzhou to provide long-term earning visibility for CapitaLand.

“In the pipeline the group has over seven million sq m of GFA of which over 2,000 units launch ready in the pipeline in Q4 2015, mainly in the cities of Beijing, Guangzhou and Chengdu, Hangzhou,” said DBS.

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Many of world’s most attractive markets are overvalued: UBS

Majority of the most attractive housing markets in the world are overpriced, according to Mark Haefele, global chief investment officer at UBS.

“Among the 15 international cities we analysed, only Chicago appears undervalued,” he said in a report.

Boston and New York were considered fair-valued, which leaves 12 of the 15 cities surveyed by UBS as overvalued.

Examples of two most extreme overvalued housing markets are Hong Kong and London.

Real estate prices in Hong Kong are almost 200 percent above 2003 levels despite stagnant income and rent while London saw home prices climb 40 percent since 2013 – placing the two cities at risk of a housing bubble.

“Real estate is not only illiquid but also offers poor value in many major global cities … property markets look frothy in many cities of the world,” noted Haefele.

“The results indicate an elevated risk of a significant correction in housing prices in London and Hong Kong to name just two examples.”

Meanwhile, home prices in Zurich, Hong Kong, Vancouver, Singapore, Geneva, London, Paris and Sydney are vulnerable to “sharp corrections”, added the report.

“We have recommended other destinations for money currently earning meager yields in government bonds, such as hedge funds,” shared Haefele.

“An alternative we recommend to clients looking for longer-term investments is exposure to structural trends, such as cancer therapeutics, clean air, or emerging market healthcare.”

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CDL expands UK investments, acquires Stag Brewery site in London

City Developments says the 89,031-square-metre site offers potential for redevelopment.

SINGAPORE: Singapore-listed property firm City Developments Limited (CDL), through its subsidiary Reselton Properties Limited, has entered into a contract to acquire the £158 million (S$334.96 million) freehold Stag Brewery land site in Mortlake, southwest London.

In a news release on Thursday (Nov 26), CDL said completion of the acquisition is expected to be finalised by the first week of December. Stag Brewery is owned by AB InBev, which produces beer for brands including Stella Artois and Hoegaarden.

The site is located beside the River Thames and 200 metres from the rapid overland train link to Central London’s mainline station, Waterloo. CDL said the 89,031-square-metre site offers potential for redevelopment.

Reselton will begin the planning and consultation process for the redevelopment of the Stag Brewery site in early 2016. Planning approval is expected to be granted in the first quarter of 2018, and undertaken in two phases.

CDL’s acquisition of the Stag Brewery land site comes on the back of the completion of its £85 million purchase of the Teddington Studios land site in London.

Mr Kwek Leng Beng, CDL’s executive chairman, said: “This latest acquisition is in line with our plans to step up CDL’s overseas diversification. Greater London is a key focus for our UK real estate platform, which we established in 2013.”

With this latest acquisition, CDL has invested a total of £411 million in eight prime freehold properties in the UK.

Picture Source: Stag Brewery land site in Mortlake. (Photo: CDL)
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25 November 2015

Growing demand for Bidadari BTO flats

Demand for Build-To-Order (BTO) flats in the upcoming Bidadari estate continued to increase, with applications jumping over the weekend, particularly among second-timers.

According to Channel NewsAsia, analysts attribute this to Bidadari flats’ relatively higher price, which may have priced out some younger applicants.

Five-room flats within the upcoming estate were 15 times oversubscribed as of 5pm on Monday, with over 2,400 applications for the 151 units on sale, while the four-room flats were about four times oversubscribed, local media reports.

It is noted that a three-room BTO flat in Bidadari is priced from S$297,000 while prices for a five-room flat start from S$544,000, excluding grants.

Bidadari is already being compared with other mature estates like Clementi even before the first transaction is made. New flats in Clementi witnessed an overall application rate of around 10.8 during a recent sale exercise in June.

“HDB has done a very good job in marketing Bidadari, bearing in mind that not too long ago it was a cemetery,” noted Nicholas Mak, executive director of research and consultancy at SLP International.

“(With) the location of Bidadari and also the fact that it is not too far from two operational MRT lines, I think … at the close of the exercise, the application rate can be as close to that of some of the other mature estates such as Clementi.”

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Effects of cooling measures still lingers in condo market

Singapore’s condominium market is still feeling the effects of the government’s cooling measures as evidenced by the continuous drop in prices, reported SLP International.

In a report by Singapore Business Review, it cited SLP International’s report saying that the rest of central region price index, for instance, fell 9.3 percent from its peak in Q2 2013, while prices in the outside central region dropped 6.7 percent from its peak in Q3 2013.

While the price drops may not be very high, it cannot be used as an accurate barometer of market sentiments, it noted.

“The spectre of further price decline due to the cooling measures weighs heavily on the real estate market and has permeated a sense of gloom which resulted in the further drop in prices and transactions,” said the report.

SLP International further noted that the rental index of mass-market private homes also witnessed the same trend – it peaked in Q1 2013 before it registered a long period of contraction, dropping by an average of 3.4 percent per year.

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Jalan Besar Plaza up for collective sale for S$390mil

Mixed-development Jalan Besar Plaza has been put up for en bloc sale for an estimated price of S$390 million, property agency Huttons announced Monday (23 November).

This price translates to S$2,451 per sq ft based on the freehold property’s 53,043 sq ft site area. The 35-year-old development, which currently houses a 16-storey building inclusive of a three-storey commercial podium, sits on a site zoned for Commercial and Residential uses under the 2014 Master Plan.

According to media reports, the real estate agency recommended that the building be changed into a “full-fledged commercial integrated with offices/medical suites/complementary and alternative medical services”, subject to approval from relevant authorities.

The tender exercise for the property will close 21 January 2016.

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Nassim Road GCB land plots up for sale

Two adjoining freehold Good Class Bungalow (GCB) land plots — a part of the garden land at Eden Hall at Eden Hall — on Nassim Road has been put up for sale by public tender, marketing agent CBRE announced Monday (23 November).

Subject to final approval, the two land plots are offered as two individual plots — Plot A has a site area of approximately 18,620 sq ft (subject to final survey) and comes with approximately 36 metres of Nassim Road frontage, whilst Plot B is approximately 15,634 sq ft. Both site areas subject to final survey.

The sites are zoned for residential use within the designated Good Class Bungalow Area (GCBA) of Nassim Road. According to CBRE, interested parties can bid for either sites, or both sites.

Sammi Lim, Associate Director, Investment Properties at CBRE said: “CBRE has received a fair number of enquiries about the sale of these two plots and we expect a keen level of interest for this very rare investment opportunity. Eden Hall is steeped in history and the sale of the two plots represents a landmark sale in the GCB market.”

The assets are being offered on a freehold vacant site basis that allows buyers flexibility for immediate development.

The guide price for Plot A is at $2,200 per sq ft and Plot B at $2,000 per sq ft.

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Most expensive apartment in Asia sells for S$93.2mil

A 5,444 sq ft apartment in Hong Kong has been snapped for HK$509.6 million (S$93.2 million), making it the most expensive apartment to be sold in Asia.

Situated on the top floor of Opus Hong Kong, the “Presidential Unit” features four en-suite bathrooms, a powder room, a study and two parking spaces. According to developer Swire Properties, the luxury apartment also comes with a private 1,508 sq ft rooftop and a Jacuzzi.

Knight Frank noted that while the apartment is the priciest in Asia, a duplex within the same building— which was sold in June 2015 at HK$95,971 psf (S$17,555 psf)—remains the most expensive unit on a per sq ft basis.

Although Hong Kong is considered as the most expensive cities in the world, it still lags behind New York and London when it comes to singularly expensive properties.

To date, the most expensive apartment in New York is a penthouse within the One57 building on West 57th Street which was acquired by an anonymous buyer for US$100.5 million (S$142 million) early this year, said New York real estate group CityRealty.

Meanwhile, London retains the crown for the most expensive apartment in the world, with the sale of a three-floor penthouse at One Hyde Park to Ukrainian mining magnate Rinat Akhmetov in 2011 for a whooping £136.4 million (S$293 million), said The Guardian.

But when home prices are compared to average income, Hong Kong is ranked as the world’s least affordable city, followed by London, Paris, Singapore and New York, according to UBS.

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24 November 2015

Smaller condo sizes on GLS sites

A new study found that the average size of condominium units on sites acquired through the government has been shrinking, and the trend was most evident in new projects located within the city fringe areas.

According to the report by The Straits Times, average sizes there dropped from 1,051 sq ft at Waterbank in Dakota Crescent in 2010 to 810 sq ft across three new projects launched within the region this year.

Conducted by SLP Research and Consultancy, the study examined condo projects that were launched on Government Land Sales (GLS) sites since 2010. It then derived an average unit size from the site’s maximum allowable gross floor area (GFA) and divided it by the number of houses to be built.

Over at the suburban areas – where majority of GLS condo sites were sold during the last six years – average GFA per unit shrank to 811 sq ft in four condos launched this year from 878 sq ft across six condo launches in 2010.

According to SLP International executive director Nicholas Mak, there are two reasons why a developer turn to building smaller units.

The developer could be trying to boost profit margins by increasing the psf price of the development or the move may have reflected the fact that the purchasing power of most homebuyers was curbed by the various property cooling measures rolled out by the government since 2010.

“The Additional Buyers’ Stamp Duty and Total Debt Servicing Ratio framework have limited the housing budget of many buyers. As a result, the absolute price quantum of the unit has become the primary consideration of a large majority of owners,” said Mak.

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MCC Land opens Potong Pasir condo for preview

MCC Land has opened The Poiz Residences for public preview, with sales set to begin on 28 November, reported The Straits Times.

Located beside Potong Pasir MRT station, the project had previously seen some unwelcome publicity, after several St Andrew’s alumni protested against its original name, The Andrew Residences, for being too similar to the name of the educational institution. MCC Land subsequently changed the name of the property.

Defying predictions of a further slowdown in the property market, the property developer is releasing about 50 percent of the total number of units in its first launch. The 731-unit condominium, situated in Meyappa Chettiar Road, forms part of a mixed-use development that also includes a retail and lifestyle mall, The Poiz Centre.

Over half its units are one- and two-bedders, measuring 420 sq ft and above and priced at around S$1,380 psf on average. The project will also feature 202 three-bedders, 52 four-bedders, and four penthouses. Both the mall and condominium are set to be completed in 2019.

“In spite of Potong Pasir’s rapid development over the years, it seems to lack an iconic central destination that combines major transport infrastructure with retail and recreational amenities, as found in most other residential estates,” said MCC Land managing director Tan Zhiyong. He noted that the commercial project is intended to be Potong Pasir’s definitive landmark.

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D’Leedon among top winners at FIABCI S’pore

This year’s FIABCI Singapore Property Award saw d’Leedon and Twentyone Angullia Park win in the Residential (High-Rise) category, while Senibong Cove clinched an award in the Master Plan and Environmental category.

Developed by CapitaLand, d’Leedon is Singapore’s largest private residential development, designed by renowned architect Zaha Hadid. Located in prime district 10, the 36-storey condominium project features 1,703 apartments, as well as 12 exclusive semi-detached houses.

Offering unobstructed views of the skyline, the development enjoys an excellent location, given its proximity to reputable schools, Dempsey Hill, Holland Village, Orchard Road and the Botanic Gardens.

“We are pleased that CapitaLand’s residential development, d’Leedon, has won a Residential (High-Rise) award at the FIABCI Singapore Property Awards 2015 for all-rounded excellence in architectural design, construction, marketing and contribution to sustainability and community,” said Wen Khai Meng, CEO of CapitaLand Singapore.

“With this award, d’Leedon will qualify for the prestigious FIABCI (The International Real Estate Federation) Prix d’Excellence Awards 2016, which recognise developments that are a cut above the rest in the global real estate sector.”

Another winner was freehold luxury development Twentyone Angullia Park, developed by Anguilla Development Pte Ltd, a subsidiary of China Sonangol Land.

The 36-storey building is situated at the junction of Orchard Boulevard and Paterson Road. Green Mark-certified under BCA requirements, the development features a total of 54 exclusive residences and penthouses. It secured its Temporary Occupation Permit (TOP) in April 2014, and is currently ready for occupation.

Senibong Cove, on the other hand, is developed by Front Concept Sdn Bhd, the Malaysian subsidiary of Australia’s Walker Corporation. Located in the Iskandar Development Region in Johor, the master-planned development spans 208 acres and features different precincts to cater to various residential needs, including apartments, semi-detached houses, and waterfront villas.

Inspired by some of Walker Corporation’s most successful Australian waterfront projects, homes within the development are designed with quintessential tropical features like large roof overhangs, sun-shades, canopies and balconies over the canal, which provide usable outdoor spaces.

“As part of Walker Corporation, we have a longstanding heritage of large-scale developments spanning residential, retail, industrial and commercial, in Australia and globally,” said Quay Chew Keong, Project Director at Senibong Cove.

“To be honoured at FIABCI is a strong validation of our good work, and we will continue to enhance Senibong Cove to best benefit our residents and the community-at-large.”

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Unenthusiastic reception for two-room flexi flats

The new Two-Room Flexi Scheme witnessed modest reception on the first day of sales, with only 364 applicants for the 2,093 units offered as at 5 PM on Tuesday, reported The Straits Times. This works out to a ratio of about one applicant for every five units.

National Development Minister Lawrence Wong noted that two-room flexi units account for nearly 30 percent of flats offered in this Build-To-Order (BTO) exercise. “This will help ensure a broad range of options and locations to meet demand,” he said in a Facebook post.

Despite the muted response, property experts still expect robust demand for the scheme, which has combined and replaced the previous studio apartment and two-room flat schemes.

Available in two sizes, the units are offered on 99-year leases, or short leases of 15 to 45 years for qualified buyers aged 55 and above. Eugene Lim, key executive officer at ERA Realty, expects short leases to be popular, as many older buyers had requested for more flexible leases.

At least 40 percent (subject to a minimum of 100 units) of the two-room flexi BTO flats are reserved for the elderly, with half the quota set aside for buyers of flats near their children or their current home, under the new Senior Priority Scheme.

At the same time, two-room flexi units account for over 20 percent of the 5,350 flats on offer in the concurrent Sale of Balance Flats (SBF) exercise. These include 776 units offered on a short lease only, but come with elderly-friendly fittings, and another 442 that are sold on either a 99-year lease or short lease.

Although singles have been able to purchase two-room flats located in non-mature estates in BTO exercises since July 2013, this is the first time that they can purchase flats in SBF exercises.

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New York developer partners JLL on Manhattan project

New York-based Extell Development Company, a premier real estate development firm, has partnered JLL to market its upcoming luxury residential development, One Manhattan Square, to Asian buyers.

Situated on Manhattan’s Lower East Side, One Manhattan Square is an 823 ft luxury glass tower designed by renowned architectural firm Adamson Associates. The 80-storey tower will feature 815 luxury condominiums, with interiors designed by Meyer Davis Studio, and over 100,000 sq ft of outdoor and indoor amenities.

With a 50-year presence in the Asia Pacific region, JLL has the largest, most powerful sales network in Asia, with over 20,800 sales consultants spread across 62 regional teams.

JLL noted that foreign investment in the US residential market has increased dramatically, from US$39 million in 2009 to US$104 million in 2015. Asians accounted for 35 percent of the international buyers in the US residential market.

The US economy has been showing signs of growth, with its housing market having moved past the sharp post-credit crunch correction and started to rebound. This has created a compelling opportunity for high net worth residential investors for select US markets, particularly Manhattan, where the real estate market is considered the safest and most stabilised markets in both the long and short term, said JLL.

As an acclaimed developer of residential, commercial, retail, hospitality and mixed-use properties, Extell has earned a reputation of developing superior quality properties that are distinguished by sophisticated design, impressive floor plans and first-class amenities. Founded in 1989 by Gary Barnett, Extell has witnessed outstanding growth, with its current portfolio exceeding 20 million sq ft.

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23 November 2015

Record number of flats in biggest HDB launch to date

In its biggest sales exercise ever, the Housing and Development Board (HDB) has launched 12,411 flats for sale under its November 2015 Build-To-Order (BTO) cum Sale of Balance Flats (SBF) exercise. The HDB revealed that the bumper crop includes 7,061 BTO flats and 5,350 balance flats.

The BTO flats are spread across seven projects in the non-mature towns of Choa Chu Kang, Bukit Batok, Punggol, Hougang and Sengkang, and three projects in Toa Payoh’s Bidadari estate. Including grants, prices of the Bidadari flats start from S$267,000 for three-room flats, S$418,000 for four-room flats, and S$534,000 for five-room flats.

The balance flats, on the other hand, are spread across 11 non-mature towns and 14 mature towns/estates. “They comprise 1,218 units of two-room Flexi, 1,064 units of three-room, 2,062 units of four-room, 959 units of five-room, 36 units of 3Gen, and 11 units of executive flats,” said the HDB.

While a majority of the flats offered under the SBF exercise are reserved for first-timer families, eligible first-timer singles may also apply for two-room Flexi flats in non-mature towns, noted the HDB.

Meanwhile, 2,093 two-room Flexi flats will be offered in Bidadari, Choa Chu Kang, Bukit Batok, Sengkang and Punggol in this BTO exercise. First-timer and second-timer families, as well as first-timer singles, will be offered 99-year two-room Flexi flats, while elderly buyers aged 55 and above have the flexibility of choosing the length of lease for their two-room Flexi flats, based on their needs, age and personal preferences.

If eligible, they can opt for a 99-year lease, or a short lease of between 15 and 45 years in five-year increments, as long as it covers them and their spouses up until at least 95 years of age. The two-room Flexi flats will be available in two sizes – 36 sq m and 45 sq m.

At least 40 percent (subject to a minimum of 100 units) of the two-room Flexi flat supply in a BTO project will be made available to elderly buyers. 50 percent of this quota will be set aside for the elderly who apply for a unit near their married children or near their present flat, under a new Senior Priority Scheme.

The application period for the new flats will end on 26 November 2015. HDB noted that applicants can apply for only one flat type in one town, under either the BTO or SBF exercise.

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Chinese retail giant BHG to list REIT in Singapore

BHG Retail REIT plans to sell 150.13 million units to investors at S$0.80 a unit, to raise around S$120 million.

SINGAPORE: Chinese retail giant Beijing Hualian Group (BHG) looks set to be the first mainland company to list a real estate investment trust (REIT) in Singapore, following the filing of a draft prospectus by one of its units.

BHG Retail Trust Management said on Monday (Nov 23) that it has lodged a preliminary prospectus for BHG Retail REIT with the Monetary Authority of Singapore (MAS) for an offering on the main board of the Singapore Exchange (SGX).

BHG Retail REIT plans to sell 150.13 million units to investors at S$0.80 a unit, to raise around S$120 million. Based on the offer price, the REIT will have a market capitalisation of around S$395 million after its listing.

BHG Retail REIT’s initial portfolio will comprise five retail properties in China with an aggregate GFA of approximately 263,688 square metres. DBS is the financial adviser, issue manager, bookrunner and underwriter for the proposed listing, while China International Capital Corporation (CICC) is lead manager.

Beijing Hualian is one of the largest operator of department stores and supermarkets in China. It also runs several department stores in Singapore under the BHG brand name.

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Jalan Besar Plaza put up for en bloc sale, with a S$390 million price tag

The 35-year-old commercial and residential building is being offered at an estimated sale price of S$2,451 per square foot.

SINGAPORE: Jalan Besar Plaza has been put up for collective sale for an estimated sale price of S$390,000,000, real estate group Huttons announced on Monday (Nov 23).

In a press release issued on Monday, Huttons said that the estimated sale price comes up to S$2,451 per square foot for the 35-year-old commercial and residential building.

The 53,043 sq ft building is zoned under Commercial and Residential with a plot ratio of 3.0, under the 2014 Master Plan.

Huttons recommended that the building be changed into a “full-fledged commercial integrated with offices/medical suites/complementary and alternative medical services”. This change would be subject to approval from the relevant authorities.

The closing date for the tender is Jan 21, 2016.

Picture Source: Jalan Besar Plaza. (File Photo: Calvin Oh)
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Singapore REITs to face greater pressures in 2016: Fitch

Singapore-listed real estate investment trusts with stronger balance sheets are expected to become more acquisitive next year as they try to boost earnings growth by capitalising on lower asset valuations, says the ratings agency.

SINGAPORE: Risks for Singapore-listed real estate investment trusts (SREITs) will increase in 2016 because weak economic fundamentals will weigh on demand while new supply is added into most sectors, Fitch Ratings said in a report released on Monday (23 Nov).

The agency expects SREITs with stronger balance sheets to become more acquisitive in 2016 as they try to boost earnings growth by capitalising on lower asset valuations. Sector leverage – as measured by debt to total assets – is likely to increase in 2016 as a result, it added.

On hotel REITs, Fitch said earnings will likely continue declining next year, but at a slower pace, as visitor arrivals into Singapore is expected to recover. Nevertheless growth in hotel room supply in Singapore will continue to outpace demand, leaving operating conditions challenging for the sector.

“We expect ratings of CDL Hospitality Trust (BBB-) and Far East Hospitality Trust (FEHT, BBB-) to remain stable, supported by strong balance sheets, and around 40-50 per cent of income stemming from fixed rent,” Fitch said.

Other hospitality REITs considered in the report include Ascendas Hospitality Trust and OUE Hospitality Trust.

As for REITs that own industrial property, Fitch said pressure on earnings will increase in 2016 due to the weak global economic climate.

“We expect lower-specification industrial assets, such as warehouses and multi-user factories, to see weaker rental reversions than for higher-specification assets, such as business parks. The demand for business parks is stronger, and a significant part of the new supply is pre-leased,” it said.

Singapore-listed industrial trusts include Ascendas REIT, Mapletree Industrial Trust and VIVA Industrial Trust.

Fitch added that the strong performance of healthcare SREITs is likely to continue in 2016, supported by robust demand for medical services and an ageing population in Asia. Healthcare SREITs’ long-term lease structures with a high degree of rental protection and their high proportion of fixed-rate debt will also support earnings growth, it said.

Picture Source: Aerial view of City Hall area, looking eastwards, Oct 22, 2015. (Photo: Kane Cunico)
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Property cooling measures need to ensure a ‘fair fall': PropNex CEO

938LIVE reports: “You cannot have public housing that, after 20 years, has not even kept pace with inflation. Why should the poor become poorer?” says PropNex CEO Mohamad Ismail Gafoor. He goes “On the Record” with 938LIVE’s Bharati Jagdish.

SINGAPORE: In a tough year for the property sector, Mohamad Ismail Gafoor, CEO of PropNex, the Republic’s largest real estate company, claims his firm has achieved a record performance, but is it finally time for property cooling measures to be rolled back? While it would serve his interest that this happens, but he claims to have a more balanced view for good reason.

The road to the success of his property agency, PropNex, was tumultuous one. After building a successful career in the army, Ismail decided in his 30s that he wanted to do something more, something different. However, a falling-out with his business partners in the early years almost brought his progress to a standstill.

Today, PropNex has more than 6,000 salespersons and staff and an annual turnover of S$200 million. His agency has won multiple awards and he himself was recently named the Spirit of Enterprise (SOE) Entrepreneur of the Year.

He spoke with Bharati Jagdish about whether the property market is in need of more cooling, how he keeps his salespeople ethical, what consumers need to do to look out for themselves and how he keeps himself and his children humble and grounded in spite of his wealth.


Mohd Ismail: I come from a family of five boys and my sister is the youngest. My dad was an immigrant. He came to Singapore at a very young age, at about 20 to 21 years old. What drove him to come to Singapore is simply because his family was in such poverty, so much so that when he was young, his mother brought him and his two sisters to a river to drown themselves because they didn’t have enough food or a roof over their head. Fortunately, a fisherman helped them and eventually they stayed in the mosque and that’s how he grew up.

When he came to Singapore, he worked extremely hard, he also became an entrepreneur, and a newsvendor. Therefore my life was simple. From the age of seven, I started waking up at 4am every single day to deliver newspapers. My dad was extremely lucky because the newspaper business was a very labour-intensive job, and he had five boys so he had free labour. That’s grounding that we had. It also gave me discipline, so much so that even today I don’t sleep anything beyond 6am.

Bharati: What did it feel like to be growing up in such circumstances?

Mohd Ismail: I think a lot of responsibility. My dad was not only a newsvendor, he also had a provision shop, and after we delivered newspapers, went to school and came back, we had to do a three-hour-shift in the shop, either in the afternoon or at night. Therefore, we were always focused on helping the family bring home the bread. Our house was a one-bedroom flat. One bedroom for my mom and dad, and the five boys would sleep in the living hall like sardines, but we would bring out the mattresses and we grew up in a very happy and cohesive environment. No doubt we fought every now and then, but our feelings for each other were very much deeper.

Bharati: Did you ever compare yourself to more well-to-do families and wish you could lead their lifestyle?

Mohd Ismail: No, I think when I was young, those things really didn’t impact me. I was just a happy boy doing what I was doing. But it only impacted me when I turned eighteen and I must say, some of my successes today have got to do with my experiences when I was eighteen.

Bharati: What happened?

Mohd Ismail: I was called up for National Service, and I used to take the bus with my buddy. The bus would pass Cavenagh Road, and my buddy told me that his uncle sold a property at Cavenagh Road and made a quarter-million-dollar profit. That was, to me, almost sinful in those days, because we delivered newspapers. Per newspaper, we made 4 cents. I could not imagine how many thousands of papers I needed to deliver to make S$250,000, and I said, “How come the world is like that? People can make so much, but my family was struggling.” But I made a decision that day. When I grow up, I will have four properties. The only reason I thought 4 properties was because it was easier to calculate four times S$250,000 – it would be a million dollars. It was just in the back of my mind, but I just went on in my life as usual.

Bharati: Now, you have more than four. You went to view show-flats regularly and learnt a lot that way I understand. Your first property was a 3-room HDB flat for your family, but I understand you slowly upgraded. You were in the army, your salary wasn’t high, but you were frugal and had the money to make smart investments, one at a time. You even went ahead and bought a landed property in the eighties that people told you not to because they thought it was overpriced, but you ended up making a healthy profit from it. What did you know that other didn’t?

Mohd Ismail: Honest truth? Not much. I’m not expert in the field. In fact, I was a civil servant, but I had one thing that maybe many people dare not do. Whatever I do, it is not about what other people say, but about whether I can hold the property in the long term. I’m not a speculator and I knew from a young age that property investment will appreciate based on inflation in the long term. Speculators, they can get hit very hard. For me, it is a long-term investment.


Bharati: You chose a career in the army first though. It was only much later in life, in your 30s that you made the switch to becoming an entrepreneur and setting up a property firm. What led to that?

Mohd Ismail: That’s interesting, I must say. I was in the army for a good 13 years before I left, and after my eighth year in the armed forces, the army offered me a pensionable service, which is a big deal. I asked my manpower officer, “what does it mean to be a pensionable officer?” He said, “Your career will be secure.” And at the end of the day, I knew when I retired at age 50, I would get close to a million dollars in gratuity. But then, 4 to 5 years down the road, I decided to quit. People thought I had gone nuts!

Bharati: So why did you quit?

Mohd Ismail: It just dawned on me. What is it that I really want? When I started to ask this question over and over again, a hundred times, it became very scary. I mean, please don’t try this. If you ever try this at home, especially in the toilet with the dim light at night and look at your own face and ask a hundred times, “What is it that you really want? What is it that you really want?”, then it becomes so scary that when you go back to sleep, you go into some deeper thinking, “Hey, what am I doing?”

Bharati: But you got an answer that set you on a better path.

Mohd Ismail: It is not that I don’t love the army. In fact, I’m still serving as a Brigade Commander, I’m a Colonel in the armed forces. I enjoy the army duty and the work and the responsibility and the challenges. But what dawned on me as I asked the question was this – Will I be a General one day? Is this what I want? Somehow, there was a softer voice telling me, “Maybe you will not be.” It is not that I’m not being optimistic about it, but the fact is I wasn’t a scholar. I was just a rank-and-file officer. Then I said, “What else can I do?” There was a deep desire within me to be an entrepreneur and do something that could make a difference. And that’s why I threw in the towel, I quit, and that was a very tough decision to make, because I left at the age of 32. Today I’m 52; twenty years ago. It was a very tough decision, but I made up my mind to say, “Let me try. I do not want to regret later.” That’s why I walked out.

Bharati: Were you scared?

Mohd Ismail: Yes, I was a bit scared, and I knew I was definitely scared the day I left, because I left the SAF on 1st July, 1995, and on 4th July, 1995, I was hospitalised for chest pains in the middle of the night at 2am., maybe because my stress level went up to its max. Because, suddenly, I realised, “Did I do the right thing?” I was sweating. I was not comfortable. I was warded for two to three days, and eventually the results showed that everything was okay. I was just a stressed soul.

Bharati: How did you overcome the anxiety of having made this decision?

Mohd Ismail: It also dawned on me that there was no turning back. I couldn’t go back and knock the doors of the SAF to say, “I want to come back.” It really didn’t make sense, neither would they accept that. Therefore, at least it became very clear that “Ismail, you have to move forward.” To tell you the honest truth, I was trying to grab anything that came. I started as an insurance agent and a property agent. I was not focused. I didn’t have a crystal clear plan of my journey. After one to two years, I realised, I’m suited for property simply because there are a lot more people whose lives I could enhance with it. And at that stage my wife and I had accumulated a lot of knowledge because as a married couple, we visited show flats every now and then, and we thought we could make a difference to many people’s lives.

Also, in those days, when the rules and regulations were not so tight, there were many agents or salespeople who were not professional enough. We, on the other hand, knew the challenges of owning multiple properties, we knew what things you need to plan and take into account, and that’s why we thought this would be the right path for us to help people.

Bharati: You talk about helping people, making a difference to people’s lives, but isn’t your chief aim as a businessperson centred on money. It’s all about making money, isn’t it?

Mohd Ismail: Yeah, but of course. Beyond doubt it is about money, but do you enjoy the journey purely for the sake of making money, as in the greater motivation, or do you enjoy the journey of the joy of your friends? I wasn’t dealing with strangers. My clients included my very close friends in the armed forces, I knew their families, I knew their children or their spouse. What I wanted was, “Hey, I have enjoyed and benefited, would you like to learn from me or I can show you the path.” And every time when I do a successful deal, and see the joy in their faces, it really enlightened me and at the same time, I see the income as a reward.

Bharati: You said earlier that you are not a speculator, yet you make your money off speculators.

Mohd Ismail: Yup. I cannot totally deny that. In any cycle of a property market, you will expect to see people taking advantage because speculation means a greater level of activity in the real estate market. Therefore people buy sell, buy sell, and from a salesperson’s perspective –

Bharati: – that’s a good thing.

Mohd Ismail: – that’s a good time. That’s a good time.

Bharati: So how does it feel to be capitalising on people whose investment values you claim not to agree with and behaviour that drives the market to sometimes ridiculous levels?

Mohd Ismail: Yeah. I totally agree. But would you blame the salespeople? Or would you say that the policies, the processes and the market allowed such a thing?

Does the agent take advantage by taking a 1 per cent commission or is the buyer taking advantage by making S$100,000? It is not about who is taking advantage. People are just being creative. Yes, it’s true, but what is interesting here is this: I know such speculative things will not last, because there’s a ceiling. When prices go right to the top, the bubble will burst. And when it bursts, a lot of people get hurt, including companies like ours.


Bharati: So in light of this, how do you feel about the cooling measures currently in place?

Mohd Ismail: I don’t totally disagree to cooling measures, but the fact is the term is “cooling”. So do you cool a market forever, or do you cool for a period of time? It is not permanent. Some policies are structural and I totally support them. For example, TDSR, Total Debt Servicing Ratio which encourages prudence. I think that is something that should be there for the long haul. I’m very, very supportive of it. But there are other cooling measures, such as the Additional Buyer’s Stamp Duty (ABSD) or seller stamp duty. That became a necessity because the market was too hot. Fine. Therefore, it straightaway cooled the market.

But how long should we hold on to such cooling measures? There should come a time when some of these things should be tweaked, and maybe adjusted along the way. It has been three years. Is it timely now? Maybe some it’s worth it. Let me put it this way. For every buyer that enters the market in a year, how many hundred, thousand and million owners are there? Are we being fair to them? Should property prices go lower and lower by as much as 30 to 40 per cent so that the buyers will be happy?

Bharati: But some argue that the fall that we’re seeing now is minuscule compared to the rise that we saw in the years preceding the cooling measures.

Mohd Ismail: I agree with that, and that’s one of the very valid reasons that the authorities and the Government have given for why it’s not time yet. I can accept that. But you must also understand how much of a fall is a fair fall.

Bharati: What do you think is a fair fall?

Mohd Ismail: Public housing today would have come down buy more than 10 per cent in the last four years. Minus the cash-over-valuation, which was also removed, probably even close to 20 per cent in some areas in Singapore. And I think that’s almost a threshold. I think the maximum threshold for public housing is that it shouldn’t go anything lower than 20 percent from the previous peak. We need to ensure a sustainable goal.

Bharati: But you agree that the previous rises were too much?

Mohd Ismail: I think it was beyond logic. We are talking about public housing. This is not an investable product, but a roof over your head.

Bharati: Yet you feel that there needs to be a sustainable appreciation even though some feel that should not be the priority when it comes to public housing.

Mohd Ismail: Yes, it is a home, but the investment angle comes from the perspective that it must be appreciating in a reasonable way, because at the end of the day that is your biggest asset at your retirement. You cannot have public housing that, after 20 years, has not even kept pace with inflation. For most of us, the bulk of our commitment is in subsidised public housing. Do you want this asset to be of zero value after 20 years, versus your friend who could afford to buy a private property that appreciates? Why should the poor become poorer? People shouldn’t speculate, but the product that we buy should keep pace with inflation, with growth, such that you can have options for yourself, when you want to retire, downgrade, so there is a safety net.


Bharati: How are you and your people coping with the measures?

Mohd Ismail: The key thing that drives us is the bonding of the people. It’s beyond doubt. I mean, a lot of people will not believe it. We will announce it and it will be up for scrutiny. 2015 generally has been the worst period for the real estate market. People know that the market has dropped by 30 to 40 per cent. For us however, 2015 has seen a record performance since I started the company in terms of the number of transactions, the highest amount of gross commission brought into the company. How is this possible?

Bharati: How is it?

Mohd Ismail: It is just simply the positive energy among our people. The belief that they think that they’re doing the right thing beyond money. We really cannot measure it by money. But the money will come.

Bharati: So how did you make this happen?

Mohd Ismail: I think it’s very unbelievable, maybe it’s because I’m blessed, and my energy level is extremely high, and I’m excited about the little things. And we’re the only company that does four conventions, and every convention we’re talking about two to three thousand people. And for some of these conventions, I will invite Ministers. For example, Minister Shanmugam and Minister Tan Chuan-Jin came to address 3,000 of my people to explain to them the macro reasons for such policies. We just want to anchor the people and show them it is for the long term good of the society and their children. We also do a huge number of programmes for our employees, boot camps, motivation programmes and training. We spent S$1.5 million last year, and S$1.5 million this year, purely on training. Only a well-trained person who can understand the current market can go out there and add value to their clients.


Bharati: Over the years, a lot has been said about unethical practices within the industry, when it comes to marketing local as well as foreign properties – mis-representation when it comes to ads for property developments and salespeople promising sky-high returns, for example. Before the Council for Estate Agencies was formed, other irregularities when it came to salespeople using pressure tactics with no regard for whether the client can actually afford the property.

Mohd Ismail: I can agree to that. But we must understand the situation has changed in Singapore. Five years ago, prior to the existence of Council for Estate Agencies, the real estate market was really a cowboy town, simply because there were no rules, which again means there will be a tremendous amount of pressure tactics, and unscrupulous salespeople will exist. And who’s to be blamed? It’s because we didn’t have an authority to govern these people, and people were just going for a quick buck.

Bharati: But as a businessperson in the sector, surely you have a responsibility to ensure that your people don’t engage in such practices, with or without a regulatory body to police their actions.

Mohd Ismail: I can talk about the moral values of doing business, but how can I ensure, in a basket of 1,000 to 2,000 salespeople, there are no rotten apples.

Bharati: There’s a regulatory mechanism now, but how do you ensure yourself that your people are behaving ethically?

Mohd Ismail: At the moment, I’ve got more than 6,000 agents. Trust in my brand is at stake. Having 10 agents go and spoil it at the expense of another over 5,000 agents who are doing a good job cannot be justified. Why would I want to support these people? The risk to my brand identity far outweighs this. The only way I can do this is through training, and beyond that, when people cross the line, I will flash their faces in our virtual office, or at our conventions so that other people get the message. This is not the place for you if you’re up to your nonsense, and we have reported some of these agents who have crossed the line to the authorities, even made police reports. Even then, there will be one or two agents who, because of tightness in finances, will try to cut corners, or take deposits from the clients and not put it in the bank. It happens. In any profession, you will have some people who are not up to the mark and they should be dealt with.

Bharati: Before CEA was formed, how bad could it get?

Mohd Ismail: I think in those days there were policies that allowed people who earned barely S$2,000, to take on monthly instalments of S$1,500. The policy allowed people to get a 90 per cent maximum loan. Even if it was public housing, you would just qualify for the loan. There was no tight credit assessment being done. I knew some of the salespeople from across the industry have gone to jail. What they did was they inflated the income of people. For instance, for a client who is earning only three or four thousand dollars, the property agent will find a “job” for him and set up even a…

Bharati: Shell company.

Mohd Ismail: A shell company, and they would issue a payslip of S$5,000 or S$6,000, so that the client can go to the bank and get a bigger loan. Over time, it surfaced because suddenly the HDB realised how come so many people employed by a specific company were buying properties. It made no sense. These people were strictly dealt with and many of them were put in prison. Is it now not happening? I tend to think it is almost minimised, but may be happening without even our knowledge.

Bharati: I’m sure not just unethical agents but buyers and their families have been destroyed by such practices.

Mohd Ismail: We have seen families break up because they committed beyond their means. When you can’t afford, you can’t bring bread to the table, and you are liable for so much other debt, things fall apart. And we’ve seen that in the past.

Bharati: Have you ever been tempted to do such things yourself?

Mohd Ismail: Never. Never in my life. Never. Because I don’t pray to money. I’m never so excited about money. Maybe because of my background, the way I was brought up and I grew up in a one-room HDB flat. Every purchase and every upgrade is an achievement for me. Therefore, I have little attachment to money.


Bharati: But you went into this business because of the value of property investments, because of the money. You mentioned earlier it was your friend telling you about his uncle making a S$250,000 profit that got you interested in this business.

Mohd Ismail: But of course, yes. Because it is the key reason if you want to have a breakthrough from where you were, what your family went through, so you take it as a challenge that you want to achieve those things, but I don’t desire creating wealth by cutting corners. I want to be comfortable, but I want to do it the right way.

Bharati: In 2008, you terminated 2,800 of your 5,000 salespeople at one go because you made it compulsory for all PropNex salespeople to buy professional indemnity insurance and they didn’t want to. Why did you take this step?

Mohd Ismail: Yeah. And eventually, overnight, I wasn’t the largest firm. It was not a very highhanded decision. I tried to lovingly explain to them why we needed professional indemnity insurance. It’s simply because we have to go out there and tell the consumers we are there to protect them. Because it was not regulated, people were so cautious about salespeople, and I wanted to give consumers the assurance that if any of my salespeople didn’t do the right thing, we promise to protect you. I wanted to move in that direction. I think we cannot be too blinded by money, because I know when you’re blinded by money, you will cut corners, and when you cut corners, you will short-change the value proposition to your people.

Bharati: If it isn’t for the money, why do you do it, what excites you the most about your work?

Mohd Ismail: Honestly, solving problems. And I think it doesn’t matter if it’s a small problem, solving it is always an achievement, because it makes me feel that I made a difference today in the process, or in the life, or in the motivation of someone. That drives me and that is the satisfaction I get every day. And when you know you have 6,000 agents and their families’ lives are dependent on your strategies, your penetration of the market, it gives me the energy to make sure that every day when I wake up and come to the office, we always think about how else we can make things better.

Bharati: What do you think needs to happen in the property sector next?

Mohd Ismail: I think one of the key things is transparency. I think we can continue to improve many of the ways in which a consumer can get information, so that he or she doesn’t feel pressured into making a decision. With information, he can make a decision that is for his long-term benefit. When you don’t have enough transparency of information, you rely on limited information, and at times, pressure and emotional desires to attain certain things in a scarcity mind-set environment, will lead you to make decisions that may not be right. A greater clarity of these things will help people moving forward.

Bharati: How can this be done?

Mohd Ismail: I think a fair bit of the younger generation today are getting savvy through the Net, through seminars, and so on. But we must also understand that one of the disadvantage of our real estate market is this. It’s so many policies, regulations, grants and incentives and so on. Even a trained salesperson may not be able to remember and understand everything.

Bharati: So is it a matter of simplifying these or a matter of consumers having to become savvier?

Mohd Ismail: Yes, I think it would be good for consumers to go and understand and do some of your own due diligence. Rely on good professionals. And if you’re not comfortable with that particular professional in your first sitting, get a second opinion. When we are sick, when the surgeon says that you need to be operated on, back in your mind you’ll say because he is going to touch me and cut me, I want a second opinion. Instantaneously most of us think like that. I think it should be the same thing when you buy a property because it affects your life in the long-term.


Bharati: You lead a comfortable lifestyle now, you live in a nice house, own several properties and you drive a nice car. How do you keep yourself grounded?

Mohd Ismail: I think these are things that you deserve, but I think you should also be very sensible. You shouldn’t flash your money to show off just because you have that money. You can have money today, but one day, you may not have it anymore. So prudence in terms of how you manage your funds and how people look at you is equally important too.

Bharati: You grew up in difficult circumstances, so maybe you have some perspective. What about your children though? How do you keep them humble?

Mohd Ismail: It’s a big challenge. We spend a lot of time talking to them and I’ve always made it very clear to my children that daddy’s money won’t automatically go to you. I’m prepared to give half or more of my assets to charity. We don’t really give the children whatever they ask, or be too spendthrift. We still want to inculcate good habits. I learnt it the hard way. But they don’t need to go through having to wake up 4am to deliver newspapers. Their lives are so comfortable, but they must know the value of money. In fact, it was very touching when I took my children to the place I grew up – the flat with just bedroom and one hall. The flat still exists. Last year, I took them there and we found a family renting the place. I knocked the door, and I asked them to allow me to come in, because when I was young I lived in this house. I wanted my children to know this was where I grew up.

Bharati: How did they react?

Mohd Ismail: I think I could see a little bit of shock, because I told them it wasn’t just me, but me and all my siblings who lived there. Now, each of them have got a room of their own. We spend time when we go for our dinners and so on, and we talk. I just want to connect with my children emotionally to help them understand that they should not take things for granted.

Bharati: What’s next for you?

Mohd Ismail: I just want to be happy. I want to prepare the next team of my people and I’m very happy that I have got a very strong team that is ready to take over. I think my marathon is also coming to an end soon.

Bharati: Why?

Mohd Ismail: I’m 52. How long do I want to push this energy? Yep. I think the right time should be when I hit 55. The next team should be coming in and I should be guiding them, and I could still remain in the business, but in a different capacity as a chairman. Come 60, I choose to be irrelevant just because I think the next generation must take the lead. Life is not all about work in my view. I want to take a step back and I want to see other things that make sense in life.

Bharati: And what do you think that would be?

Mohd Ismail: I want to be very close to nature and see a lot of greenery. I don’t mind having a hundred sheep and looking after them, clearing their poo and so on. I think it will give me greater sanity than having to drive and drive and drive things.

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20 November 2015

Alexandra View site awarded to Tang Skyline

A residential with site with first-storey commercial space at Alexandra View has been awarded to Tang Skyline Pte Ltd, after it submitted the highest bid of S$376.9 million.

A subsidiary of Far East Consortium International, Tang Skyline beat 10 other bidders, with its bid working out to S$9,158 per square metre on the gross floor area (psm/GFA).

The 99-year leasehold site was launched for sale on 30 September 2015. It is situated next to Redhill MRT Station and could yield around 400 residential units.

The 8,398.5 sq m site is close to Tiong Bahru Plaza, Queensway Shopping Centre and IKEA Alexandra. Nearby schools include Crescent Girls’ School and Gan Eng Seng Primary and Secondary Schools.

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Private home sales up 60.1% in October

Developers sold 546 private homes in October, up 60.1 percent from September but a 30.4 percent decline year-on-year, said JLL. Developers launched 434 units, an 11 percent increase from the previous month but a 35.8 percent decrease year-on-year.

“Compared to the same period last year, the private home market is at a slower momentum. Market sentiment and buyer interest appear to have softened as economic and business conditions have become more difficult compared to a year ago,” noted JLL.

Despite the challenging environment, two new projects were launched for sale during the period. With a total of 663 units, Principal Garden at Prince Charles Crescent sold 113 of the 200 units launched at a median price of S$1,633 psf, while the 288-unit Thomson Impressions sold 80 of the 150 units launched at a median price of S$1,399 psf.

Other top-selling projects were Sims Urban Oasis, which sold 46 units, The Panorama (39 units) and High Park Residences (33 units).

Meanwhile, the executive condominium (EC) market registered some activity in October, with the launch of The Criterion. The project launched all of its 505 units and found buyers for 41 units at a median price of S$805 psf.

“Notwithstanding the slight improvement in private home sales in October over the previous month, the market generally remains subdued as the effects of the cooling measures have been compounded by the economic slowdown and impending interest rate hike in the US,” said Ong Teck Hui, National Director, Research & Consultancy at JLL.

“Market sentiments will remain soft through the year end, so we may expect muted market activity in the remaining two months when the holiday season begins. Using developer sales of 653 units in November and December 2014 as a guide, new private home sales in the last two months of 2015 are likely to taper. With 6,383 units sold in the first 10 months of 2015, the full year figure is likely to be below last year’s 7,316 units,” he added.

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Call for review of property curbs increasingly insistent

Singapore’s second-biggest property developer, City Developments, has been calling on the government to ease the property cooling measures “as soon as possible”, reported the Singapore Business Review.

The company saw its profit fall 16 percent in Q3, on the back of lower contributions from its property development unit. “The Group continues to hold the view that the property cooling measures need to be reviewed as soon as possible, given that the home ownership rate in Singapore is over 90 percent. Timing is the most important factor to achieve a healthy and sustainable property market,” it said in a statement.

Notably, the quarterly Real Estate Sentiment Index released by the Real Estate Developers’ Association of Singapore (REDAS) and the National University of Singapore (NUS) earlier this month showed that market sentiment among property developers had fallen further in Q3 2015. “The sentiment in the market continued to weaken in Q3 2015,” said NUS associate professor Sing Tien Foo.

As such, more respondents called for the removal of “some of the cooling measures, such as ABSD and SSD to arrest the worsening market condition”.

In fact, 83.1 percent of the respondents believed the government should tweak or lift the cooling measures in the next six months. 56.7 percent of them felt the sellers’ stamp duty (SSD) should be lifted, while 60.8 percent said the additional buyers’ stamp duty (ABSD) should be removed.

“ABSD should be removed due to the tight supply of housing in the market. It should not be a permanent policy, as it creates inefficient market equilibrium. Furthermore, it does not encourage financial prudence. MSR and TDSR are based on ratios and percentages; percentages only address the issues of the average category, and could be too harsh or too lenient,” noted one survey respondent.

“The ABSD should be lifted as private residential property prices dropped by about eight percent in Q2 2015, compared to the third quarter of 2013. However, the TDSR Ratio should be retained,” said another respondent.

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Developers offering fewer indirect discounts

Once popular with private homebuyers, indirect discounts like furniture vouchers and cash rebates have become less prevalent, reported The Business Times.

In fact, only three percent of some 3,850 non-landed private homes sold by developers since 25 May had indirect discounts, with an average discount of 1.7 percent of the transacted price. The units were from 18 of the 132 projects that saw sales since 25 May, according to an analysis of developers’ new sales data.

Notably, legislative amendments requiring developers to submit detailed transaction data to the Controller of Housing every week took effect on 25 May this year. The said data is then published by the Urban Redevelopment Authority (URA).

Aside from the transacted prices of units, developers are also required to declare the value of benefits given to buyers, such as rental guarantees, cash rebates, furniture vouchers, and the absorption of legal fees or stamp duties, which would otherwise conceal the actual value of the units sold.

“There was a season when discounts, rebates and other perks were dangled as carrots to attract buyers. However, these may be relatively passé today,” said Tan Tee Khoon, managing director of KF Property Network, a Knight Frank subsidiary.

This is because developers may find it pointless to give out cash rebates now that such data has become public information, said Savills research head Alan Cheong., As such, developers who need to urgently clear their stock in order to meet the Additional Buyer’s Stamp Duty (ABSD) and Qualifying Certificate (QC) requirements are more likely to lower prices directly.

The QC rule requires developers to pay extension fees for condominium units sold within two years of the project’s completion. Since December 2011, housing developers were also required to develop residential sites acquired and sell all the units within five years to qualify for an ABSD remission on land cost.

Projects offering indirect discounts since May to qualify for the remission of ABSD include The Venue Residences, Jewel @ Buangkok, Pollen & Bleu and The Glades. Those unaffected by ABSD or QC include Keppel Land’s Corals at Keppel Bay, City Developments Ltd’s D’Nest and Coco Palms, and Far East Organization’s The Seawind.

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Strong demand expected for new Bidadari flats

Property watchers expect strong demand for the first batch of Build-To-Order (BTO) flats in Bidadari, reported Channel NewsAsia.

The BTO flats will be go on sale this month, with over 50 percent of the 2,139 units available being four-room flats. Another 567 will be three-room flats, 192 will be two-room units under the Flexi scheme, and 151 will be five-room flats. The HDB revealed that the said flats will be progressively completed from Q3 2019.

Situated within Singapore’s central region, the new Bidadari estate will have four districts — Alkaff, Woodleigh, Park Edge and Bartley Heights. The first three housing projects to be launched in this month’s BTO exercise will be in Alkaff district, which is the biggest in the estate. Alkaff Vista, the first project, is expected to be ready by Q3 2019, Alkaff LakeView in Q4 2019, and Alkaff Courtview in Q2 2020.

The HDB noted that the new estate, which is envisioned to be a “community in a garden”, will feature a 10-hectare park and a greenbelt that passes through the estate from Bartley Road to Upper Serangoon Road. It will also have social and commercial facilities, as well as cycling and pedestrian networks.

“We hope to encourage residents to take on walking and cycling as an alternative form of transport and moving around, rather than (driving) a car. We have also planned to have more bike-sharing and car-sharing within the estates, so it will be easier for residents who do not own cars to be able to move around as well,” said Lim Shu Ying, Director of Urban Planning at HDB.

The flats in Bidadari will be part of the 7,000 BTO flats to be launched this month, alongside other flats in Bukit Batok, Punggol Northshore, Hougang, Choa Chu Kang and Sengkang.

As the first BTO launch after the income ceiling was raised to S$12,000, Eugene Lim, key executive officer at ERA Realty, believes “a lot of buyers have actually been holding back, waiting for Bidadari launch”.

“We will expect the take up to be very, very hot,” he said. He predicts that a majority of the buyers to be families, as well as those planning to start a family. The flats are also expected to attract those with young children, given that the estate is near reputable schools.

“Even though this was previously a cemetery, there is already a success story in the case of Bishan, where the flats are among the most highly priced in Singapore and are highly sought after,” said Lim.

Chris Koh, director of estate agency Chris International, also expect buyers to pay a premium for the flats due to their central location. According to him, prices will likely be 10 percent higher than that of flats in Sengkang and Punggol.

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19 November 2015

Storage wars heating up in Tampines

A battle for users of self-storage space is emerging in Tampines, Singapore’s largest housing estate, with the latest opening of Lock+Store’s new facility this month.

Located on Tampines Street 92, the self-storage facility is on the same stretch as its competitor StorHub, which operates two facilities along the same road.

However, both companies insist they are not fighting for the same customers.

Helen Ng, CEO of General Storage Company, which operates Lock+Store, said population density and income levels were the main reasons for establishing a presence in the area.

“Tampines is a fast-growing area with a high population density and more middle-income households.”

With the addition of Lock+Store, Tampines will have the highest concentration of self-storage facilities in Singapore, with a total gross floor area (GFA) of about 180,000 sq ft, Ng noted.

Currently, there are 20 self-storage operators in the local market. StorHub is the biggest, with 11 facilities covering a GFA of 1.4 million sq ft island-wide, while Lock+Store revealed it is the number three player.

Meanwhile, over 95 percent of wine storage units at Lock+Store’s flagship Chai Chee facility are already taken up, and it plans to offer wine storage space in Tampines.

“There is a rising trend of both private and business storers keeping artisanal wines at our Chai Chee facility for their personal consumption or distribution and retail purposes,” said Ng.

“Despite the keen competition and the entry of specialised wine storage providers in Singapore, the demand for climate-controlled storage outstrips supply. This has led us to dedicate a customised space for wine storage at our Tampines facility.”

Aside from wine collectors, the Tampines facility is also targeting e-commerce retailers by offering the onsite sale of SmartPacs and stamps. “SmartPac is a postage-paid postal service for delivery anywhere in Singapore, the next working day for a fixed price,” said Lock+Store, adding that SmartPacs are convenient for e-commerce retailers with products that can fit into a box measuring 300mm (l) x 190mm (w) x 70mm (h).

Meanwhile, Heng Tze Kiang, General Manager of StorHub Management, revealed that its customer base is varied, with the bulk of them being individuals who are renovating their homes and hobbyists storing their collectible items at the facility.

“We have businesses that store their goods in our facilities to meet seasonal demand, as well as those that rent our units on a longer-term basis to store their excess stock,” he said.

“Our storage solutions offer businesses the flexibility to upsize/ downsize/ terminate the service without the usual penalties of traditional warehouse rental.”

When asked if the entry of Lock+Store could cause a price war, Heng stated that pricing is only one component of marketing.

“In addition to offering value-for-money storage solutions, StorHub prides itself on its strong product offerings and warm, personalised customer service that we believe keeps us at the forefront of the self-storage industry.”

Picture Source: Lock+Store’s new facility in Tampines, which is on the same road as StorHub’s two existing facilities.
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Redhill site draws 10 bids

The tender for a 0.84-hectare residential site with first storey commercial site at Alexandra View (pictured) in Redhill closed on Thursday after attracting 10 bids, said the Urban Redevelopment Authority (URA).

Launched for sale on 30 September 2015 under the confirmed list, the highest bid of $376.9 million was submitted by Tang Skyline, a subsidiary of Far East Consortium International, which translates to $9,158 per square metre on the gross floor area (psm/GFA). The lowest bidder was IOI Consolidated (Singapore) with a $250 million offer, or $6,075 psm/GFA.

The 99-year leasehold site is located next to Redhill MRT station and could yield around 400 housing units.

The future development is close to Tiong Bahru Plaza, Queensway Shopping Centre and IKEA Alexandra, as well as established schools.

The URA said a decision on the award of the tender will be made after the bids have been evaluated.

Picture Source: Map of the Alexandra View site. Source: URA
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UOL profit down 2% in Q3

Property developer UOL Group reported that net profit for the third quarter ended 30 September 2015 fell two percent year-on-year to $100.8 million.

Revenue declined 18 percent to $354 million over the same period last year when revenue was lifted by the completion of a project in Tianjin.

In a statement, UOL revealed that revenue from property development was mainly contributed by Singapore projects such as Botanique at Bartley and Riverbank@Fernvale.

The group expects buying sentiment in the local residential market “to remain muted with interest concentrated on new launches”.

Meanwhile, the 663-unit Principal Garden condominium witnessed strong interest during its initial launch last month.

“The development, with an exceptional 80:20 ‘garden-living’ concept where the extensive landscape of lush gardens and ground occupy 80 percent of the site, offers buyers a rare opportunity to own a luxury development on the fringe of a Good Class Bungalow area,” said UOL.

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Regional currency turmoil: Boom or bust for the property market

Currency volatility has become the new norm. Shifts in the global financial markets come as a result of structural changes in the economy, achieving record high asset prices in some countries while others have seen dramatic declines. Gone are the heady days of dynamic global growth; on the whole, economic slowdown is set to remain in the short term, diminishing the fundamentals underpinning high and stable asset prices seen in the past years (refer to Figure 1).

Indeed, a brief study of markets today does reveal that important developing countries such China face slowing growth. Emerging markets in the Asian region in particular – such as Malaysia and Indonesia – have experienced a rapid depreciation against the U.S. dollar as well.

It is anticipated that systemic volatility will remain high with risk management set to become increasingly complex. Japan, India and other emerging South-East Asian economies are predicted to continue experiencing mild currency devaluation within the next three years.

The resulting doubt over potential returns is likely to have a slightly negative effect on demand from international investors in these markets. Moreover, Central Bank intervention, such as that from the U.S. Federal Reserve, will create further uncertainty – whatever decision the Fed makes over its interest rates will certainly have a profound impact globally.

All is not gloom and doom though. It is possible for currency volatility to open up new areas of growth for an investor’s portfolio, especially so when it concerns cross-border investments. For one, cheaper currencies support potential real estate opportunities in the tourism, retail and export industries.

For countries with relatively strong currencies such as Hong Kong and Singapore, cheaper currencies carries added advantages by providing domestic investors from these countries to leverage on acquire assets abroad on account of their stronger purchasing power. As such, many savvy Singaporean investors are capitalising on current trends to focus their attention on overseas property as a form of investment diversification.

Figure 1: Global currency trends (YOY comparison from 9th November 2014 – 2015). Each currency is compared to the USD. These currencies also represent some of the most popular countries for property investment for Singaporeans.

What does it mean for Singaporean investors?

Many countries in the world, including developed countries such as the United States, Europe and Japan combat inflation by managing their interest rate policy. On the other hand, Singapore adopts an exchange rate policy. MAS monitors the Nominal Effecting Exchange Rate (S$NEER) of the Singapore Dollar (SGD), which is a non-disclosed, weighted basket comprised by Singapore’s main trade partners.

This is because Singapore is an island nation with no natural resources. Virtually all the resources we consume has to be imported from another nation. Hence, by maintaining a strong currency, inflation can be combatted more effectively. Figure 2 shows a snapshot of Singapore dollar movements against a basket of other currencies, while Figure 3 shows how the US dollar has made further gains against the Singapore dollar since the beginning of the year.

Over the past 10 years, while the Sing Dollar (SGD) seems to have outperformed most of the currencies in the basket of comparison except for the Chinese Yuan, it has not been a straight line appreciation. Although Singapore’s growth seems to be slowing down, her currency continues to remain more resilient compared to the others. In fact, the SGD reached a record time high of 3.1207 and 10,366 against both the Malaysian Ringgit (MYR) and the Indonesian Rupiah (IDR) respectively in 2015.

While a strong Singapore currency does have its advantages, it is not necessarily ideal to let it gain unhindered from an economic standpoint. While a stronger currency would mean cheaper imports of raw materials, other nations would find Singaporean goods more expensive to consume, resulting in a worsening trade balance. This is because domestic consumption is inadequate to absorb all of the goods and services produced locally. As such Singapore needs a balanced currency policy to keep our economy going.

Because of the Singapore dollars’ resilience and the balanced stance of Singapore’s Central Bank, it makes sense for foreigners to hold on to our currency, especially those who want to hedge against their own currencies potential depreciation. When considering long term, high value investments like real estate, this makes even more sense.

For example, let us take a look at an Indonesian investor who had invested in Singapore property between January 1996 to January 2015. In January 1996, one Singapore dollar would have changed for 1,631.90 Rupiah. In January 2015 however, one Singapore dollar would have changed 9,414.97 Rupiah. The SGD has appreciated by 477 percent against the Rupiah. If the property was purchased with leverage of 70% financing, the Indonesian investor would have made a return on capital of 2,065 percent.

What about Singaporean investors who invested in Malaysian property from 2001 to 2011? A local Malaysian who purchased property on leverage of 70 percent financing would have made a return on capital of 176 percent. However, for the Singaporean, he would have made a lesser return on capital of 95 percent. This is due to the Ringgit depreciating by 16 percent against the SGD during the same period.

Investing in overseas properties for Singaporeans can be a double-edged knife when you factor in exchange rates. While there are opportunities if you get in at the right cycle, you also need to factor in the risks. Head down to PropertyGuru’s inaugural Real Estate Investment Conference on 5th and 6th of December, 10am – 7pm at Orchard Hotel, Level 2 Conference Centre to find out more about how to optimize your currency strategies for successful foreign real estate investments! Sign up today at

Picture Source: Bloomberg,MAS & Dow Jones Market Data
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BIG Hotel sold to Hong Kong-based group for S$203m

The new owner of the property is Gaw Capital Partners, which purchased the InterContinental Hong Kong for US$938 million earlier this year.

SINGAPORE: The BIG Hotel at Middle Road has been sold to a Hong Kong-based real estate investment group for S$203 million, property services firm JLL said on Wednesday (Nov 18).

Originally an office building, the 308-room BIG hotel was converted by ERC Unicampus, and it opened in 2013. Facilities include a restaurant, bar, gym, car park and convenience store. JLL advised ERC Unicampus on the sale.

The new owner of the property is Gaw Capital Partners, which purchased the InterContinental Hong Kong for US$938 million (S$1.33 billion) earlier this year.

Mr Anthony Barr, regional director of JLL Capital Markets Singapore, said: “Singapore’s appeal as an investment destination remains strong with its stable political landscape and strong economic fundamentals. For this reason, we are seeing an increasing demand for Singapore properties from investors around the region, particularly those in Hong Kong.”

Picture Source: BIG Hotel. (File Photo: Calvin Oh)
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18 November 2015

How to tell if a property has good potential for capital appreciation

1. Check the Masterplan

Our government is quite transparent with planning information, and most of it is publicly accessible. The latest revision to the URA Masterplan was in 2014, and details the changes planned for decentralized CBDs around Singapore, including Paya Lebar, Woodlands and Jurong. These changes suggest an influx of infrastructure, amenities and facilities that would definitely increase property prices in the area.

2. En-bloc potential

Those looking for properties that could potentially be en-bloc should look out for changes in plot-ratio in the Masterplan. This means that developers will be able to build more units on that piece of land than they previously could. Developers could make more money re-developing the land, and would therefore be interested to collectively buy over the units. Don’t restrict yourself to residential property for this — a lot of plot ratio changes are for both residential and commercial properties.

3. New transport links.

Our rail system has changed dramatically since the late ‘80s, with the first MRT trains. By 2030, the system is set to transform even further, with the planned Thomson-East Coast Line, Cross-Island Line, and the completion of construction for the Circle and Downtown lines. The convenience of train links will cause property prices to rise, so keep an eye on news of where upcoming stations will be located.

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Six things to know before investing Down Under

1. Re-selling to locals only

Investors who are familiar with the rules of investing in Australian properties are well aware that foreigners can only buy “new homes” in the country. When you sell property, the buyers have to be either Australian citizens, permanent residents or holders of a valid visa that allows them to purchase Australian property. Many foreign purchasers are concerned about this, and some are even deterred from investing in Australia because of this. More important is the type of property one should invest in, its location, and what properties locals are searching for, which brings us to the next ‘mistake’.

2. Understanding the lifestyle

It is common for investors to use their local cultural beliefs to influence their overseas property purchases. For instance, there are many Asian investors who will not buy East facing properties because they want to avoid the morning sun. However, most Australians love the sunshine. In Melbourne, many people look forward to sunny days, especially during winter, as the weather can be quite cold and gloomy.

3. FIRB approval

Many buyers always ask: “What if I can’t get FIRB (Foreign Investment Review Board) approval after signing the contract?” As long as the development satisfies the ‘New Dealing’ criteria and is marketed overseas, this means that foreigners are allowed to make a purchase. They just need to apply to the board to inform them of their intention. Records show that nearly 100 percent of applications are usually approved.

4. Rental guarantee / Incentives

Do not be easily persuaded to make a purchase if the property you are considering offers a rental guarantee or other incentives like free stamp duty, etc. Potential buyers must recognise if it’s a genuine incentive. Projects that do not offer any incentives are often a much better investment.

5. Think outside the CBD

Very often, Asian buyers are only willing to invest within the central business district (CBD). Distance from the city centre should not always be used as a gauge when it comes to investing. The area’s infrastructure, as well as proximity to schools, employment centres and transportation that can affect the value and rental price should be taken into consideration. Australia is a large country, and the majority of Australians live in the suburbs. Much of their daily activities revolve in and around their neighbourhoods. Some residents visit the city just a few times a year. Data also shows that some of the suburbs yield very attractive returns compared to the city and city fringe areas. Very often, it is the suburbs which top the charts for growth or returns, and not the CBD.

6. Cheap doesn’t mean good

Cheap is not always good. Many investors are attracted to properties that are priced too low. Very often, such units have compromised on quality, design, and functionality, which will greatly affect your return, growth and resale value.

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Melbourne: Investing in the world’s most liveable city

If you happen to flip through the newspaper, you would have noticed many advertisements marketing residential properties in Australia, particularly in Melbourne.

The high demand for housing units in Australia’s biggest-growing city comes from the increasing number of Singaporeans residing there.

This is primarily due to the close geographical proximity and English-speaking environment of both countries, said Philip Tan, Chief Business Development Officer at Australian firm Auswell Group.

Dan Toh, Chief Executive Officer of property consultancy RunningStream International, said: “The large contingent of Asian migrants also means many Singaporeans have relatives, if not friends, who have migrated to Melbourne, and Asian culture is alive and celebrated (there).

“But if I had to pick one reason why Singaporeans are more focussed on Melbourne than other Australian cities, it simply comes down to marketing.”

Best place to live

Melbourne prides itself as having been the most liveable city five years in a row, according to the Economist Intelligence Unit’s (EIU) Global Liveability Index, which is a strong endorsement of its “world-class education, healthcare, transportation connectivity, and most importantly, a balanced lifestyle that allows youth to maximise their creative energy within a conducive environment”, according to Tan.

Property assets in Melbourne have also been growing steadily over the last 50 years, and the city has braved the storms of the last Global Financial Crisis, he noted.

In addition, property financing in Australia is relatively easy to obtain, as all four major Australian banks (ANZ, Westpac, NAB, and CBA) have offices in Singapore, noted Toh.

“Local banks such as OCBC and UOB, as well as offshore banks such as Citibank, HSBC and Stanchart, all lend on Australian properties to varying degrees and with different conditions.”

He shared that most banks limit lending for locations in the city to between 50 and 65 percent, while lending in the outer suburbs range from 70 to 80 percent.

Shift in supply

Real estate consultancy Charter Keck Cramer expects newly completed apartments in Melbourne to rise from about 116,000 units this year to almost 164,000 units in 2018, with 70 percent of that supply located in the city.

“To put that into perspective, the current resident population in the Melbourne city precinct stands at 122,207, and the number of resident dwellings was 58,395 in 2012 (latest figures available). The population of greater Melbourne is about 4.4 million, staying in about 1.8 million homes.”

As such, more apartments are “starting to come up in the inner and middle suburbs (20km from the city), particularly in the south-eastern region, where houses are commanding a significant premium.”

By 2018, around 53,200 apartments are expected to be completed in the inner and middle suburbs, while 106,100 new apartments will be completed in the city and city fringe areas, added Toh.

On housing costs in Melbourne, Tan noted that prices have increased 52.3 percent since the Global Financial Crisis. Data from Domain Group shows that median home prices climbed 2.2 percent to A$638,445 in March and to A$707,415 in September this year.

The continued strong growth is “partly contributed by the low interest rate and favourable exchange rate. Overseas demand, especially from Singapore, has been strong as the Sing dollar is on par with the Aussie dollar, and that certainly increases the sales of off-plan properties,” he said.

Rise of the suburbs

Growth has occurred mainly in the eastern and inner south suburbs. These include places such as Malvern, Glen Waverley, Prahran, Elwood, Toorak, Hawthorn and Doncaster.

“Inner city prices experienced a 4.6 percent surge in the June quarter, but shrank 0.3 percent to average A$434,436.

“I am of the opinion that such growth in the city is not sustainable, given the supply glut to come. While the city does offer higher yields, it has always been challenged when it comes to capital growth,” said Toh.

Meanwhile, the rental market across Melbourne has also been on the downtrend, as rents struggle to keep pace with price growth.

“While in 2006 / 2007 we were seeing rental yields of above six percent, it is down to four percent for apartments in the city and three percent for houses these days,” stated Toh.

Data from SQM Research shows the vacancy rate in Melbourne’s central business district stands at 4.4 percent, three percent in Docklands, 3.5 percent in Southbank, and 3.3 percent in South Yarra. Outside the city, vacancy in Richmond stands at 1.8 percent, St Kilda East (1.9 percent) and Bentleigh (2.6 percent).

“With significantly more projects completing over the next three to five years, we do expect the vacancy rate in and around the city to worsen, and the suburban market to hold its ground well,” shared Toh.

Spot the hotspots

As for which hotspots investors should look at, Tan points to Box Hill, Balwyn, Richmond, Bundoora, Malvern East, Cranborne, Werribee and Tarinet.

Aside from offering good educational institutions, these areas attract high demand from local and overseas property buyers.

Toh, on the other hand, picked the eastern stretch between the city and Glen Waverley, such as Hawthorn, Kew and Doncaster. “We are also bullish about the south-eastern corridor, with suburbs such as Bentleigh, Moorabbin, Mentone, Highett and Cheltenham.

“These are great bayside suburbs with good public transportation, highways, and amenities within short walking distance.”

Meanwhile, areas like Footscray, Sunshine and Maribyrnong could surprise the market in the next five years, added Toh.


Population: 4.4 million

Total area: 9,990 sq km

Currency: Australian dollar

GDP per capita: US$39,441

GDP growth: 1.7 percent

Future transport: Melbourne Metro Rail Project to finish in 2026

Home values: Up almost eight percent in the past year

Distance from Singapore: 6,028 km

Summary of major property related issues and taxes associated with real estate investment in Melbourne:



Australians consider housing cost, as well as peace and quiet their top priorities for choosing a suburb in which to live. We’ve picked two projects that meet the criteria.

The Cooper
2 Ambrose Treacy Drive, Bundoora

Type: Townhouse
Developer: Auswell Group International
Tenure: Freehold
Nearby Key Amenities: RMIT, La Trobe University, Northland Shopping Centre, Northpark Private Hospital, Indoor Sports Centre
Nearby Transport: 86 Tram, Metropolitan Ring Road
Starting Price: AUD725,000

The Cooper is located in Bundoora, a green and spacious family-friendly suburb that is only 14km from Melbourne city centre.

It comprises a community of 27 townhouses designed to provide generous, large open plan living with ample space available on the second and third levels.

Each home comes with double sinks in the main bathroom, wool carpeting, and stone benchtops in the kitchen, details not often found in family homes.

The freehold development is close to RMIT and La Trobe University, and is easily accessible via trams, buses and major freeways.

805 Berwick Cranbourne Road, Cranbourne North

Type: Landed house
Developer: Burbank
Tenure: Freehold
Nearby Key Amenities: Monash University’s Berwick Campus, Eden Rise Village Shopping Centre, Berwick Village, Cranbourne Golf Course
Nearby Transport: Berwick Railway Station, M1 Freeway, South Gippsland Highway
Starting Price: AUD512,000

Tulliallan is a contemporary master-planned residential community located on elevated land, with many of the lots offering unblocked views of the nearby Dandenong Ranges.

Buyers can choose a plot of land, and then select the type of property they want to build. Each house will be built using carefully created design guidelines and building covenants, to ensure the highest standards.

Set amidst heritage-listed elm trees and expansive parkland, complete with walking and bike trails, the freehold project is close to educational facilities, shops and the Berwick train station.

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The Tamarind – set in the place that has it all!


A high-end luxurious sanctuary by Eastern and Oriental Bhd in Penang

Penang Island is one of Malaysia’s most sought-after property destinations due to its natural beauty, tropical setting and historical richness, with its well-preserved capital George Town earning the merit of being a UNESCO World Heritage Site. The island is experiencing strong growth and rapidly rising standards of living with international agencies rating it among Asia’s most liveable cities.

Seri Tanjung Pinang, a well-recognised masterplanned seafront neighbourhood in Penang, is developed by premier lifestyle property developer, Eastern & Oriental Berhad (E&O). It is a cosmopolitan residential enclave that is located along the same stretch to the tourist hub of Batu Ferringhi and the famed Gurney Drive.

“Offering a range of homes with distinctive designs that pay homage to the Penang’s Straits-eclectic architecture coupled with convenient lifestyle amenities, Seri Tanjung Pinang is today home to Penangites and more than 20 nationalities,” says E&O head of marketing and sales for Penang, Christina Lau.

Aspirational living at The Tamarind

The latest offering from E&O is The Tamarind executive apartments in Seri Tanjung Pinang which presents a unique opportunity for young executives and families to own a competitively priced desired property that bears E&O’s hallmarks of innovation and style.

This two-tower apartment has a 90% take-up rate prior to the launch of Tower A in June 2015 prompting the second tower to be launched soon. Tower A and B consist of 33 storeys each and 552 units respectively with a built-up ranging between 1,047 and 1,772 sq ft. Priced from RM750 psf, it is scheduled for completion by 2019.

The Tamarind occupies 6.9-acres of freehold land with many world-class facilities such as a gymnasium and yoga centre, al fresco function area, signature swimming pool, wading pool, beach pool, kids’ outdoor play area and others.

Excellent connectivity, great amenities

Residents at The Tamarind will enjoy the convenience of excellent connectivity with many amenities. Just a 5-minute walk from it is a Tesco hypermarket and the Straits Quay festive retail marina, which offers a wide variety of F&B, retail outlets as well as the Performing Arts Centre of Penang. Across the road, there is a 4.5-acre public park called Strait Green maintained by E&O which is perfect for recreational activities.

The Tamarind is well-connected to amenities such as schools, medical centres and shopping malls. The 102 Rapid Penang bus connects the residents from Seri Tanjung Pinang to the airport, Komtar Bus Terminal, Batu Ferringhi, Bayan Lepas and Georgetown, to name a few. The Penang Bridge that provides road access to the rest of Malaysia is about a 30-minute drive away.

The face behind the success

The E&O Group is a listed company on Bursa Malaysia that has established a reputation as the premier lifestyle property developer of exclusive addresses for the discerning. Within Malaysia, its projects span across the most prime and prestigious neighbourhoods in Kuala Lumpur and Penang; in its expansion overseas, E&O’s international foray into real estate investment and development is focused within prime locations in London.

Picture Source: Artist’s Impression of The Tamarind Tower B with Waterscape.
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Perpetual debt the new equity for landlords in Singapore

TODAY reports: With the Monetary Authority of Singapore capping borrowings of REITs from next year, debt that can be considered equity offers landlords a way of complying with the stricter rules.

SINGAPORE: Landlords in Singapore are loading up on bonds masked as equity to get around new rules curbing their debt amid a property slump, with data from Fitch Ratings showing real estate investment trusts (REITs) having issued a record S$700 million of perpetual notes with no set maturity date thus far this year.

The Monetary Authority of Singapore is capping borrowings of REITs at 45 per cent of assets from next year, and debt that can be considered equity offers landlords a way of complying with the stricter rules.

Falling values, rents and occupancies for debt-backed properties could tip Singapore’s economy into further trouble amid the slowest growth in three years.

Office rents may fall as much as 7 per cent this year and another 8 per cent next year as demand slows, according to property consultancy DTZ, while home prices keep declining as a result of cooling measures and loan curbs.


“With the lower leverage threshold, there might be more Singapore REITs who will look to tap this source of funding, given it is still treated as equity instead of debt,” said Mr Tim Gibson, co-head of global property equities at Henderson Global Investors in Singapore. His firm manages about US$123 billion (S$175 billion) worldwide. “Investors continue to seek yield in this environment,” he added.

Mr Neel Gopalakrishnan, an emerging-markets fixed income analyst at Credit Suisse’s private banking and wealth management unit in Singapore, said: “Most Singapore-listed REITs have good credit quality. Hence, there is likely to be good demand (for their perpetuals).”

Singapore’s listed REITs had an average debt-to-asset ratio of 34.6 per cent at the end of September, versus 32.8 per cent from a year earlier, according to data compiled by Bloomberg.

The new cap on borrowings takes effect from Jan 1 and the REITs could issue as much as S$12.5 billion of traditional debt without breaching the new threshold, said Mr Hasira De Silva, a Singapore-based analyst at Fitch Ratings.

That leeway narrows to S$7.5 billion if their S$110 billion of assets suffer a 10 per cent depreciation, he said.


On Oct 26, office landlord Keppel REIT sold S$150 million of perpetual debt without a so-called step-up coupon, a gradually rising interest rate that is usually a feature of such bonds. It sold the notes at 4.98 per cent, 183 basis points more than seven-year debt it sold in February.

In the same month, business park owner Ascendas REIT raised S$300 million issuing similar notes, while serviced apartments specialist Ascott Residence Trust issued S$250 million of them in June.

Global non-financial companies seeking to cut their leverage have issued more than US$50 billion of perpetual debt this year.

Under global accounting rules, bonds with no fixed maturity that allow the deferral of coupon payments may be treated as equity.

The value of Singapore’s office buildings fell 0.1 per cent in the quarter ending Sept 30 from the previous three months, while shop prices declined 0.3 per cent, according to data from the Urban Redevelopment Authority.

Home prices dropped 1.3 per cent, the most since the second quarter of 2009, according to data compiled by Bloomberg.

The FTSE Straits Times Real Estate Investment Trust Index has dropped 11.4 per cent this year, on course for its worst annual performance since 2011.

Picture Source: File photo of private housing in Singapore. (Photo: TODAY)
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17 November 2015

Aspirational assets