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20 February 2016

HK to increase housing supply

Hong Kong Chief Executive Leung Chun Ying has pledged to increase the supply of new homes in the territory, while dismissing calls by developers to ease property curbs as prices are still too high, reported Bloomberg.

“We should continue to tackle the housing problem head-on and must not concede,” said Leung in his annual policy speech to lawmakers, adding that rentals and prices are “still beyond what people can afford”.

Notably, the target for new public housing supply has been raised to 97,100 units in the next five years from 77,100 previously. Private developers, on the other hand, are expected to release 87,000 new units over the next three to four years.

During the last three years, the Hong Kong government has doubled stamp duties, tightened mortgage requirements at banks and introduced a special tax on non-resident buyers following a surge in property prices. The city saw prices peak in September 2015, increasing by 160 percent from December 2008 – making it the most expensive place to own a home in the world.

With concerns of rising interest rates and the slowing economy sapping demand, prices began to fall in Q4 2015, dropping by 7.5 percent. CLSA Ltd Head of Property Research, Nicole Wong, expects the price decline to accelerate to eight percent this quarter as developers engage in a price war.

But she expects Leung to change the policy within six months if prices fall by 15 percent.

“Any correction should not destabilise society,” said Wong. “If prices fall 15 percent in six months, the government would have to start a policy action.”

The Hang Seng Properties Index, which tracks the performance of 10 real estate firms, has fallen 8.3 percent in the year to date.

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2016/1/114971/hk-to-increase-housing-supply

Analyst: Private home prices may fall up to 10%

With Singapore ‘half-way through the residential down-cycle’, BNP Paribas expects private home prices to drop by another seven to 10 percent over the next two years, reported The Business Times.

Chong Kang-Ho, Research Head for Singapore, Malaysia and Indonesia as well as Asean Property Research, noted that this could be a slow bottoming-out process due in part to the resilience of developers when it comes to price cuts, owing to their strong holding power and higher land costs.

“The implication of a slow bottoming-out process is that policy relaxation could be delayed,” said Chong.

Latest flash estimates from the Urban Redevelopment Authority (URA) shows that private home prices dropped by 8.4 percent in Q4 2015 from the peak in Q3 2013.

Chong’s projection, on the other hand, implies a 15 to 20 percent fall from the 2013 peak. He also expects vacancies to increase to 10 percent by 2018.

Nonetheless, Chong sees a greater likelihood of stabilisation within the high-end segment, which witnessed price premium over the mass-market segment narrow. In fact, the price premium of luxury homes in Hong Kong versus luxury homes in Singapore’s districts 9 and 10 has widened since 2010.

“If I’m an international investor, it is a better time to look at Singapore because prices have plunged so much,” he said.

However, the rental market is expected to remain weak. Chong warned that lifting the property cooling measures in 2017 will not stem out the weakness unless the government relaxes immigration rules.

“Even if the government relaxes immigration rules, we don’t know if foreigners will come in now that the financial institutions are not hiring,” he added.

With interest rates on the rise and net rental yield falling to two to three percent, Chong does not rule out negative carry over the coming quarters, or the cost of holding the property exceeding the return earned.

He believes that a policy reversal may take the form of an increased loan-to-value or tweaks to the mortgage servicing ratio (MSR), additional buyer’s stamp duty (ABSD) and seller’s stamp duty (SSD).

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2016/1/114900/home-prices-may-fall-by-another-10-says-analyst

PropertyGuru acquires Ensign Media’s real estate businesses

PropertyGuru on Wednesday (13 January) announced its latest acquisition following the purchase of Ensign Media’s real estate media businesses, Property Report and Asia Property Awards.

Ensign Media — which owns Property Report, a regional luxury property and lifestyle magazine and website, and Asia Property Awards, the region’s biggest property industry awards that are held in nine countries annually — is headquartered in Singapore.

PropertyGuru has 14 million users while Property Report has 70,000 online and offline readers. Following this acquisition, these users will have combined access to PropertyGuru’s 600 monthly research and news articles published in three languages across four markets, and Property Report’s 100 plus online features per month.

“The latest acquisition strengthens [PropertyGuru’s] content, geographic reach and services we provide to real estate developers regionally,” said Steve Melhuish, PropertyGuru co-founder and group CEO.

The group also said the acquisition will strengthen its integrated property media capability — combining the company’s leading online property sites and its property shows with a leading print and online publication and a highly successful and prestigious property industry awards platform in Asia.

“The Asia Property Awards are already the region’s largest and most respected real estate awards,” said Ensign founder Terry Blackburn, “now with PropertyGuru’s support, [Asia Property Awards] will be even bigger in 2016 and the years ahead.”

With this full asset purchase, Ensign Media’s existing staff will be absorbed into PropertyGuru, the group said in a press release.

Source copied from: http://www.propertyguru.com.sg/property-management-news/2016/1/114836/propertyguru-acquires-ensign-media

Indonesia allows foreigners to own homes for 80 years

In a bid to attract more foreign home buyers and investors, Indonesia will allow foreigners to own landed homes for up to 80 years, reported Reuters.

This comes after President Joko Widodo signed a government regulation in late 2015 giving foreigners the right to purchase a landed home for 30 years, which could be extended for another 50 years, said the Cabinet Secretariat.

It noted that foreigners should live, work or invest in Indonesia, as well as “provide benefit” to the country for them to become eligible.

Previously, foreigners were allowed to purchase homes for 25 years, with an extension of another 25 years.

As for apartments, Indonesia has allowed foreigners to acquire units worth more than 10 billion rupiah (S$1.03 million).

Picture Source: Jakarta city centre. (Photo from Wikipedia)
Source copied from: http://www.propertyguru.com.sg/property-management-news/2016/1/114887/indonesia-allows-foreigners-to-own-landed-homes-for-80-years

19 February 2016

Mortgagee auctions on the rise

Mortgagee listings at property auctions are expected to increase further this year, reported The Business Times.

“From our experience, a key factor for growth of such listings is foreigners defaulting on loans for their purchase of high-end investment properties. Typically these borrowers do not live in Singapore,” said a banker.

Data from Colliers International showed that mortgagee listings at auctions reached a seven-year high of 241 in 2015, with residential properties accounting for nearly 80 percent of such listings.

The banker explained that putting a property up for auction is a last-resort measure.

“Typically when a borrower defaults – that is, he cannot meet the monthly loan instalments – we call the customer to try and restructure the loan, lengthening the repayment period,” noted the banker.

“Alternatively, we may ask the borrower to try and sell their property on their own – because once the bank steps in, buyers will hope for a fire sale.”

Meanwhile, the eight new listings at Knight Frank’s upcoming auction on Wednesday include an owner’s sale of a four-bedroom apartment with a utility room at The Sovereign in Meyer Road. Sold with tenancy, the freehold property has an indicative price of between $4 million and $4.2 million.

Also set to go under the hammer is the estate sale of a three-storey semi-detached home at Jalan Emas Urai within the Chestnut/Dairy Farm area. Nestled on 2,725 sq ft of land, the 999-year leasehold property spans three storeys and comes with a lift and an open roof terrace. Featuring four bedrooms and a maid’s room, the property has an indicative price of between $3.6 million and $3.8 million.

Separately, Colliers International’s auction on 27 January will include the mortgagee sale of a two-bedroom apartment at The Interlace in Depot Road. The 807 sq ft unit has a price tag of $1.2 million.

JLL’s auction on 28 January will feature two mortgagee sale apartments – a 1,130 sq ft two-bedroom plus study unit on the seventh floor of the freehold Jardin along Dunearn Road and a 1,259 sq ft unit on the fourth floor of The Bayshore. The Jardin unit has a guide price of between $1.8 million to $1.9 million, while The Bayshore apartment has an indicative price of between $1.15 million to $1.2 million.

Although the total number of properties put up for auction (including owner sales and factoring in re-listings) soared to a six-year high last year at 796, only 33 were sold, which translates to a success rate of just 4.1 percent.

Colliers Deputy Managing Director, Grace Ng, attributed the low success rate to the continuing mismatch between buyers’ and sellers’ expectations.

“While banks are guided by valuations in setting their reserve price, buyers often expect a steeper discount in light of falling property prices, the mounting supply of private home completions, rising interest rates and the government’s cooling measures,” said Ng.

To be held at Amara Hotel, all three auctions will start at 2:30pm during their scheduled days.

Source copied from: http://www.propertyguru.com.sg/property-management-news/2016/1/114772/mortgagee-auctions-on-the-rise

JLL wins award for world’s best property consultancy

JLL has been named ‘World’s Best’ in the Property Consultancy category at the International Property Awards Final 2015.

The firm also won the title of ‘Best in Asia Pacific’ in the regional category for Property Consultancy at the event, held in London in December.

Commenting, Alastair Hughes, Asia Pacific CEO at JLL, said: “It makes us immensely proud to be recognised in the International Property Awards as the World’s Best Property Consultancy, as well as the best in Asia Pacific. This is testament to the hard work of our teams around the world in delivering the highest quality of service to our clients.”

The Awards are judged by an independent panel of 70 industry experts who focus on quality of service and dedication to the industry. Last year, more than 2,000 entries were received from over 110 countries.

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2016/1/114752/jll-wins-award-for-worlds-best-property-consultancy

Deal-making in Asia’s hotel sector set to cool to US$8.5b in 2016: JLL

Transaction volumes in Asia-Pacific’s hotel industry is likely to fall 8 per cent from the previous year to US$8.5 billion in 2016, says global real estate consultancy Jones Lang LaSalle (JLL).

SINGAPORE: After a year of explosive growth, deal-making in Asia-Pacific’s hotel industry looks set to cool modestly in 2016, with global real estate consultancy Jones Lang LaSalle (JLL) tipping transaction volumes to reach US$8.5 billion.

This marks an 8 per cent decline from the previous year, where hotel transactions in the region totalled US$9.2 billion after more than 33,000 hotel rooms changed hands last year.

“In 2015, the headlines featured blockbuster acquisitions of high-profile, gateway market hotels by investors from mainland China, Hong Kong and the Middle East. We also saw a high volume of hotel deals in Japan with increasing interest from foreign investors,” Mr Scott Hetherington, CEO of JLL Hotels & Hospitality for Asia, said in a press release on Feb 10. “This year, we expect transaction activity across the region (to) slow somewhat.”

In particular, hotel transaction volumes in Hong Kong are likely to have reached its peak following a record year in 2015, which witnessed the blockbuster transaction of InterContinental Hong Kong for US$938 million in July. Investors eyeing the Hong Kong market will adopt a “wait and see” approach in 2016, according to JLL.

Deals in Singapore’s tightly-held hotel sector is also likely to be “few and far between” amid a lack of available assets, the report added.

Among the brighter spots in the region, Japan will likely continue to see high volumes of transactions on the back of strong demand from domestic investors and US private equity funds. In addition, industry experts are seeing rising appetite from Chinese investors for hotels in second-tier Japanese markets.

Australia is also poised for a rosy year, with offshore interest expected to continue in the months ahead especially for the coveted Sydney and Melbourne markets. Overseas investors have been pouring cash into the hotel sector down under, with one of the largest deals being the sale of Westin Sydney for US$314.14 million to a joint venture between Singapore developer Far East Land and Hong Kong-based Sino Land last May.

In India, a change in the country’s hotel landscape and improvements in operations will provide the impetus for more acquisition and consolidation in some cities, according to JLL. Secondary markets in Southeast Asia and the Indian Ocean will also come under the radar of investors as interesting opportunities surface in Thailand, the Maldives and Mauritius, the real estate consultancy added.

Meanwhile, the trend of consolidation will likely persist across Asia-Pacific after a string of deals, namely Marriott International’s acquisition of Starwood Hotels & Resorts Worldwide for US$12.2 billion and the purchase of Fairmont Raffles Hotels International Holdings (FRHI) by Europe’s largest hotel operator Accor for US$2.9 billion, shook up the industry in 2015.

Both deals will have a huge impact on the hotel operating landscape in Asia Pacific, JLL said.

“Hotel brands are on a never-ending quest to bolster their pipeline and with the natural attrition in properties and limits to new supply growth, the surest way is often by acquiring operators with strategic management or franchise contracts,” said Mark Wynne Smith, Global CEO of JLL’s Hotels & Hospitality Group.

GLOBAL OUTLOOK

Beyond Asia, the volume of global hotel transactions is expected to hit US$70 billion this year, lower than 2015’s US$85 billion.

JLL predicts hotel transaction volume in the Americas to fall 20 per cent to US$37 billion in 2016, while the market of Europe, the Middle East and Africa (EMEA) is set to see US$25 billion worth of hotel trades, down 15 per cent from the prior year.

“We expect 2016 to be another strong year, although investors’ desire to buy is more measured,” said JLL’s report, which noted that the recent turmoil in global stock markets could weigh on investor sentiment.

“Investors are starting to consider what holding assets through a down cycle will look like and making more careful considerations around financing structures … but the underlying hotel market fundamentals remain positive.”

Picture Source: French hotel and services group Accor bought Fairmont Raffles Hotels International Holdings (FRHI) for US$2.9 billion last December. (AFP/Loic Venance)
Source copied from: http://www.channelnewsasia.com/news/business/international/deal-making-in-asia-s/2502938.html

Private home sales fall in January with fewer property launches

Property developers sold 322 new private residential units in January, down from 384 in December, according to data released by the Urban Redevelopment Authority

SINGAPORE: Sales of private homes fell 16 per cent in January from the previous month as developers scaled back property launches.

Excluding executive condominiums (ECs), developers sold 322 new units last month, down from the 384 units sold in December, data from the Urban Redevelopment Authority showed on Monday (Feb 15). Including ECs, 478 new units were sold last month, down from 508 units.

The fall in sales came as developers held back from launching new units, with 146 hitting the market last month, down from the 173 launched in December.

Commenting on the numbers, Eugene Lim, Key Executive Officer at ERA Real Estate, said that the current downturn in the stock market has had an impact on buyer sentiment, with property sales “somewhat affected”.

“Also, there were no major launches as the market was gearing up for the Lunar New Year festivities,” he said.

Picture Source: File photo of private housing in Singapore. (Photo: TODAY)
Source copied from: http://www.channelnewsasia.com/news/business/singapore/private-home-sales-fall/2516020.html

Rupert Murdoch’s REA Group completes acquisition of Malaysia’s iProperty

“This move is a game changer for our industry,” REA Group’s chief operating officer said of the company’s successful acquisition of Malaysia-based iProperty Group.

SINGAPORE: Australian real estate website company REA Group completed the acquisition of Malaysia-based iProperty Group on Wednesday (Feb 17), in a deal that it described as being a “game changer” for the industry.

REA, which is 62 per cent owned by media magnate Rupert Murdoch’s News Corp, first announced in Nov 2015 its decision to buy the rest of iProperty Group that it did not already own for A$578 million (S$576 million). The deal valued iProperty, a real estate portal listed on the Australian Securities Exchange since 2009, at about A$750.8 million.

Prior to the acquisition, Melbourne-based REA owned about 22.7 per cent of iProperty

“This move is a game changer for our industry,” Arthur Charlaftis, chief operating officer for International and Developer at REA Group, said at a media launch in Malaysia. “The iProperty Group’s local market expertise is second to none and our teams will be working closely together to tap into the needs of buyers throughout the region.”

The deal will add iProperty’s property portals in Malaysia, Hong Kong, Thailand and Indonesia to REA’s stable, giving the latter exposure to a rapidly-growing Southeast Asian market.

According to figures by REA, average property prices in Singapore and Hong Kong have surpassed those in Australia. Southeast Asia is also home to more than a million property transactions per year, a number that exceeds the volumes in REA’s home market.

“These factors have driven our interest in the South East Asian market,” said Mr Charlaftis. “We know that consumers in South East Asia are online and connected. We would therefore expect that the advertising spend will migrate rapidly towards online channels to mirror consumer media consumption.”

“The iProperty Group provides us with exposure to new geographies where we can apply our experience and know-how from existing markets,” added Mr Charlaftis. He also said that the acquisition underscored REA’s “commitment to international expansion” and marked “the next step” in the company’s growth strategy.

According to iProperty’s chief executive officer Georg Chmiel, the firm will retain its name and “continue operations and business as normal”.

“We have strong synergies with REA Group and this acquisition is a major accelerator as this significantly enhances the growth profile for both companies, while giving our customers, property buyers and investors the opportunity to tap into a wider market,” Mr Chmiel added.

iProperty was founded in 2007 by Patrick Grove, a Singapore-born serial entrepreneur and co-founder of Kuala Lumpur-based tech investment firm Catcha Group.

On Wednesday, shares of REA Group closed down 0.23 per cent at A$50.96, tracking a 0.57 per cent decline in the broader S&P ASX 200 index.

Picture Source: Headquartered in Kuala Lumpur, iProperty Group is a company that owns online property portal websites in Asia.
Source copied from: http://www.channelnewsasia.com/news/business/international/rupert-murdoch-s-rea/2522804.html

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
Source copied from: http://www.propertyguru.com.sg/property-management-news/2016/1/114629/10m-for-owners-affected-by-mrt-line

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.

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2016/1/114657/thailand-property-to-see-growth-in-2016

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.

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2016/1/114547/nearly-230-babies-born-to-couples-living-in-pphs-flats

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
Source copied from: http://www.propertyguru.com.sg/property-management-news/2016/1/114523/vietnam-condo-to-go-on-sale-in-singapore

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
Source copied from: http://www.propertyguru.com.sg/property-management-news/2016/1/114519/residential-site-close-to-tanah-merah-mrt-triggered-for-sale

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.

Source copied from: http://www.propertyguru.com.sg/property-management-news/2016/1/114469/location-pricing-still-key-to-attracting-buyers

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
Source copied from: http://www.propertyguru.com.sg/property-management-news/2016/1/114458/bca-looks-to-raise-productivity-of-tunnelling-projects

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!

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2016/1/114358/16-tips-on-buying-overseas-property-in-2016

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: www.facebook.com/SGHilife/?fref=ts

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2016/1/114408/new-survey-to-seek-input-on-smart-homes

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.

Source copied from: http://www.propertyguru.com.sg/property-management-news/2016/1/114389/property-agents-turn-to-uber-amidst-chilly-housing-market

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.

Picture Source: knight frank research
Source copied from: http://www.propertyguru.com.sg/property-management-news/2016/1/114381/luxury-home-prices-to-slide-further-in-2016

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.

Source copied from: http://www.propertyguru.com.sg/property-management-news/2016/1/114322/colliers-singapore-appoints-new-business-leaders

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..?

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2016/1/114347/6-resolutions-for-homeowners-in-2016

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
Source copied from: http://www.propertyguru.com.sg/property-management-news/2016/1/114253/grim-2016-for-private-housing-market

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.

Source copied from: http://www.channelnewsasia.com/news/business/singapore/perennial-hints-at/2491836.html

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.

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2016/1/114220/hdb-resale-prices-to-be-flat-in-2016

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.

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2016/1/114233/spore-gdp-beats-expectations-up-2-1-in-2015

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”.

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2016/1/114223/singapore-still-discussing-hsr-services-with-malaysia

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.

Picture Source: URA
Source copied from: http://www.propertyguru.com.sg/property-management-news/2016/1/114127/private-home-prices-down-3-7-in-2015

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
Source copied from: http://www.propertyguru.com.sg/property-management-news/2016/1/114134/hdb-resale-prices-down-1-5-in-2015

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.

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2016/1/114153/new-flats-are-still-affordable-hdb

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.”

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2016/1/114149/gcb-sales-on-the-rise

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.

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/114011/indonesia-struggles-with-13-5m-housing-backlog

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)
Source copied from: http://www.channelnewsasia.com/news/business/singapore/empty-offices-and-falling/2476470.html

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.

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/114007/hong-kong-to-exceed-housing-supply-target

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.

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/113906/18000-new-flats-to-be-launched-in-2016

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
Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/113887/hdb-launches-tenders-for-ec-sites-at-yio-chu-kang-road-sumang-walk

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.

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/113899/experts-forecast-lower-loan-growth

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.

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/113893/london-buyers-fazed-by-higher-stamp-duty

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.

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/113783/tougher-times-ahead-for-housing-market

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.
Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/113811/non-landed-home-prices-down-0-6

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.

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/113806/uk-tax-hike-to-impact-overseas-property-buyers

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.

Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/113735/hdb-scheme-benefits-74000-elderly-households

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.

Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/113634/2016-will-be-the-worst-year-for-malaysian-property-says-expert

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.

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/113626/asias-most-expensive-apartment-sells-for-s106-86m

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.

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/113621/us-new-home-sales-up-4-3-in-november

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.

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/113446/spore-rental-prices-fall-4-3-from-last-year

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.”

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/113482/an-opportune-time-to-ease-cooling-measures-analysts

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.

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/113463/majority-support-demolition-of-lkys-house

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.

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/113343/singapores-housing-market-still-struggling

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.

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/113340/property-auction-sales-value-hits-5-year-high

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.

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/113322/bca-unveils-vr-tech-equipped-training-facility

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

Source copied from: http://www.channelnewsasia.com/news/singapore/2-singapore-firms-hit-top/2444936.html

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.”

ANALYSTS STILL CAUTIOUSLY OPTIMISTIC

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.

SOME DEVELOPERS “CHOOSING TO WAIT”

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)
Source copied from: http://www.channelnewsasia.com/news/business/singapore/high-end-property-market/2444750.html

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.

Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/113215/asia-still-alluring-for-foreign-developers

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.
Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/113201/keppel-land-m1-make-a-smarter-condo

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Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/113152/data-journalism-small-data-for-big-impact

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.

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/113162/3-month-sibor-slightly-edges-up-after-fed-rate-hike

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.

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/113166/mortgagee-listings-reach-7-year-high

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
Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/113157/worlds-most-expensive-property-sold-for-s462m

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
Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/113110/federal-reserve-increases-interest-rates-first-since-2006

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 https://www.ura.gov.sg/uol/media-room/news/2015/dec/pr15-66a.aspx

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/113096/govt-announces-land-sales-programme-for-first-half-of-2016

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.

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/113106/sporeans-more-cautious-on-buying-overseas-property

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.

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/113122/average-manhattan-apartment-prices-surpass-us1m-mark

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.

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/113057/more-help-for-public-rental-families-to-own-a-home

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.

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/113060/new-private-home-sales-up-39-

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 DOWN, BUT OCCUPANCY STILL HEALTHY

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)
Source copied from: http://www.channelnewsasia.com/news/business/singapore/rents-expected-to-dip/2421894.html

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.”

TURMOIL IN CHINESE MARKETS

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.”

BENEFITING FROM OTHER DEVELOPMENTS

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.

COMBATING ISLAMIC STATE

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.”

SOUTH CHINA SEA DISPUTES

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.

Source copied from: http://www.channelnewsasia.com/news/business/singapore/overall-outlook-for-asean/2419094.html

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)
Source copied from: http://www.channelnewsasia.com/news/business/singapore/confidence-levels-among/2418172.html

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.

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/113063/global-boost-in-construction-activity

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.

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/112982/analysts-forecast-property-rebound-in-mid-2016

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.

Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/112962/meet-2015-s-property-person-of-the-year

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.

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/112752/5-lessons-we-learnt-about-renovations-this-year

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.

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/112909/all-eyes-on-vietnam

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.

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/112900/trio-clinch-singapore-s-top-design-award

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
Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/112808/clementi-site-awarded-to-highest-bidder

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″.

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/112773/s-pore-may-ease-cooling-measures-in-second-half-of

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.
Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/112788/red-house-project-sells-majority-of-units

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.

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/112795/singapore-among-asia-s-most-expensive-cities-for-e

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.”

CITY FAST FACTS
(HONG KONG)

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

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/112708/hong-kong-top-of-the-peak

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
Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/112677/from-homes-to-hotels

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.

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/112734/better-to-rent-than-buy-

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)
Source copied from: http://www.channelnewsasia.com/news/business/singapore/gic-enters-joint-venture/2398458.html

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.”

Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/112740/diagnosing-the-health-of-the-real-estate-market-in

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.

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/112676/how-to-know-if-you-are-eligible-for-the-pphs

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 OrangeTee.com, 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.”

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/112723/small-town-big-potential

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. Roomorama.com 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.”

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2015/12/112683/calls-to-legalise-home-sharing

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