I am no expert when it comes to investing in property, but as I have invested in numerous properties over the last decade, I have gained some valuable experience.

I made money from some and lost money from others. Some say you need luck to make money in real estate, but I believe there are some fundamentals that one can use as a guide to make as infallible a decision as possible.

1 Good location

In property selection, particularly for investment purposes, the key is location. For owner-occupied properties, location may be less significant as individuals have different preferences. Some like

quieter locations away from commercial activities while others choose to be close to specific amenities.

Proximity and accessibility to schools, transport lines, shopping centres, factories and specific suburbs are some important factors to consider.

Even for an owner-occupied property, it is important to consider how other people would view the location should you decide to sell it one day. In short, try to be as objective as possible when it comes to location.

2 Good site

Is the property in a good site? Is it next to an MRT station, bus stop, monsoon drain or power cables? Or is it at a T-junction? There is nothing technically wrong with T-junctions, but some people believe it obstructs the flow of good luck in one’s life.

Is the site prone to flash floods and so on? Many people like to live near MRT stations, but some foreigners prefer to avoid the constant noise of the trains. They may prefer quieter areas.

When choosing the site of the property, consider the points that will appeal to your potential buyers in the future.

3 Good layout

Do you like the layout of the apartment or house? Many people prefer their living rooms to feel spacious. Are there many angles and nooks in the house? Some people may consider them bad fengshui.

A more practical consideration is whether the living room and bedrooms are irregularly shaped, with lots of unusable space. A good, clean layout will save you the time, effort and money that you otherwise would have to spend on redesigning around oddly shaped and oddly positioned living areas.

4 Good address

Securing a good address without paying a premium for it is like a windfall. It may not matter much to you now but a good address, such as a nice sounding road name or an auspicious sounding unit number like #08-08, may attract more interest and demand in the property and also a higher price when it is time to sell.

5 Good history

Many potential buyers like to know the background of the property they are buying. Who are the current owners? Why are they selling? Who built the property and how old is it? Is the property owner-occupied or rented out? These things matter in the making of personal and economic decisions.

If the property is for investment, then the purchaser should look into two other areas:

6 Good rental yield

What is the expected rental yield for the property? Is this an acceptable level for you? What is the median rent for properties in that area?

7 Good potential for capital appreciation

What is the median price for property prices in that area? What is the highest and lowest price for properties in that area over the last three, five and 10 years?

The writer is managing director of mortgage consultant Global Creatif Financial. The views expressed are her own.

Lucky numbers

Securing a good address without paying a premium for it is like a windfall…A good address, such as an auspicious unit number, may attract more interest and a higher price when it is time to sell.

Source: Sunday Times, 28 Feb 2010

It must be tempting to splash out a bit now that the worst of the recession – and the belt-tightening that it forced on us – is over.

After all, some firms have started restoring pay cuts to employees and year-end bonuses have been paid.

With the mood improving, the urge to snap up that big-ticket item with cash or a loan is getting stronger.

Using cash is one thing, but excessive borrowing can lead to financial trouble.

‘Loans can help us to purchase high-value items or essentials that we do not have the savings or the full amount for at the moment – but it should be something we can afford in the long run,’ said GE Money Singapore’s president and chief executive, Mr Rahul Gupta.

And the same principle should apply, whether for a home loan, a car loan, a home renovation loan, one for education, or even one for a holiday.

‘Consumers need to ensure that loans taken are well within their means,’ said Mr Gupta.

Here are eight things to consider when taking out a loan:

1 A need or a want?

Before taking a loan, ask yourself if the item or service is meant to satisfy a need or a want.

Ms Tan Huey Min, assistant director at Credit Counselling Singapore, suggests that if it is a ‘want’ – not necessary and just for consumption – perhaps it would be better to save for it rather than to pay a ‘premium’ price (that is, the interest cost of borrowing). For instance, don’t borrow to pay for a vacation or a new kitchen appliance.

Take time to consider if there is an alternative to borrowing now or borrow a smaller amount instead. Better still, don’t buy it at all if it is unnecessary.

However, if the purchase is for investment purposes, then perhaps it is okay to get a loan. This could be for renovations that add value to your home, or enhancing your future income earning ability via training and education.

2 Interest cost of borrowing

Consumers should be aware of the type of interest rate that is stated in the loan agreement or marketing material.

And when considering loan options, compare like with like, said Mr Gupta.

Some loans use the annual percentage rate (APR), which reflects the actual interest cost of borrowing, while others refer to the simple interest rate. Shop around for the lowest APR.

The simple interest rate is calculated by applying a flat rate on the original principal amount for the entire loan tenure.

The APR is interest calculated based on the declining principal balance over the tenure of the loan.

As the borrower makes monthly repayments, the principal is reduced every month, so the interest payable on the principal also reduces each month.

Sometimes a loan comes with a zero per cent interest cost if it’s paid via a credit card. Make sure you pay off the debt before the interest starts to build up. If you miss a payment, you may be automatically bumped up to the highest annual interest rate of 24 per cent.

3 Current debt service ratio

Before taking the loan, calculate your debt service ratio. It is the percentage of your monthly income needed to service long-term liabilities.

It provides a useful guide to how much of your take-home pay – that is gross pay less 20 per cent employee CPF contribution and personal income taxes – is used to pay debts.

Debt payments are monthly expenses like mortgage, car loans, personal loans or even credit card debts. A healthy debt servicing ratio – debt divided by income – should be 35 per cent or less.

To put it another way, out of every $1,000 of after-tax and CPF income, you should spend $350 or less on debt repayments.

Ms Tan cautions that if the consumer already has a high amount of outstanding debt to service, it is best to pay down existing debt first before incurring more.

And even if your debt service ratio is less than 35 per cent, it is prudent to consider if you have surplus funds to take on another loan repayment after paying monthly living expenses.

Make sure you know your cash inflow and outflow before taking on another loan.

4 Loan tenure

It is worth considering the optimal loan tenure as it affects monthly repayments and interest paid.

Generally a longer loan tenure means smaller monthly repayments but a shorter loan tenure may lead to lower interest paid, says GE Money.

For example, Mr Mark Tan takes a $10,000 loan for a period of five years at an APR of 18per cent per annum (pa).

His monthly repayment is $254 so the total interest he will pay over the five-year loan tenure is $5,236, over and above the $10,000 loan amount.

If he takes a loan period of three years at an APR of 18 per cent pa, his monthly repayment will be $362 but the total interest paid over three years will be $3,015.

So to minimise the interest payable, a shorter loan tenure may be an option, but the repayments will be higher.

Some financial experts suggest you make the highest repayments you can manage so that you clear the debt in the shortest possible time.

When deciding on a loan tenure, consider your monthly commitments and take the appropriate loan tenure based on your monthly cash flow.

5 Early payment options

Not all loans allow customers to settle early, so read and understand the terms and conditions of the loan before signing up.

An early settlement fee is usually imposed if a loan is paid off early.

For example, if you redeem your GE Money personal loan before the full term expires, an early redemption fee of 3 per cent to 5 per cent of the outstanding amount at the time will apply.

Home loan customers are urged to look beyond interest rates and consider factors such as the lock-in period and penalty fees.

Another potential cost is the loan cancellation fee. An investor who buys a property on speculation and then applies for a loan might be hit with a cancellation fee if the property is sold before the loan is disbursed.

Cancellation fees can range between 0.75per cent and 1.5per cent of the loan amount, and can be quite substantial. For example, if the loan amount is $1million, the cancellation fee works out to $15,000.

6 Late payment fees

Most loans stipulate late payment fees. These are over and above the interest charged for late payment, so go through the terms and conditions of loan agreements thoroughly to ensure you understand them clearly.

Pay special attention to fees incurred for late payment.

For instance, credit cards typically charge a one-time administrative fee of $50 to $80 for late payment. This is besides the 24per cent interest charged on the sum that is rolled over.

So keep track of the payment dates and remember to pay before the due date. Try to have fewer loans or credit facilities and avoid having multiple sources of credit. In order not to incur interest and penalty fees, pay your outstanding credit in full.

7 Payment flexibility

Avoid defaulting on loan repayments as it will hurt your credit history. However, a typical loan tenure is for at least a year, and sometimes it is hard to predict what will happen so far into the future.

You might hit cash flow difficulties at some point, so it is worth looking for loans that offer some payment flexibility and provide rewards for prompt payment.

For example, Mr Gupta says that GE Money’s James personal loan, which caters to people earning $30,000 and above, offers several flexible payment options. They include allowing customers to defer two payments a year, paying only the interest component or paying higher or lower instalments at the start, or end of their loans.

Such features offer flexibility in managing your cash flow, particularly during unforeseen circumstances. GE Money customers are also rewarded for prompt payment by having part of their interest component, or their last instalment amount of the loan, waived.

For those who can’t meet their monthly payments, experts suggest that they approach their lender first for assistance to restructure a loan. Financial institutions will usually review such requests on a case by case basis. A responsible lender will work with its customers to provide a solution.

8 Other loan terms and conditions

Make sure you understand the key fees and charges stipulated by a loan agreement. This makes you aware of what to expect when a loan is taken and reduces any surprises after it has commenced.

If you are acting as a guarantor for a loan, be clear about the terms and conditions of the agreement, especially those related to your obligations as a guarantor.

Ms Tan says: ‘In the eyes of the creditor, the guarantor is the ’same’ as the borrower, meaning, both the borrower and the guarantor are jointly and severely liable for the loan.’

This means that even if you are willing to act as a guarantor, you should also consider your own ability to make repayments in case the principal borrower fails to repay.

She recalled a case in which a person (let’s call him John) became a guarantor for a stranger (Jim), who wanted to buy a car, in return for a fee.

When Jim defaulted on his car loan, the car financier pursued legal action against both people.

Jim could not repay and became a bankrupt. In the end, John assumed the balance of the loan, which was $30,000, after the car was sold and makes regular payment to avoid being made a bankrupt by the car financier.

Source: Sunday Times, 28 Feb 2010

HOUSING is a perennial hot topic of discussion, especially in Singapore where it touches almost every segment of society – from the low to middle income in public housing to the middle and higher income aspiring to upgrade to private property.

The recent spikes in both public and private housing prices have added fuel to the debate on affordability. Analysts and experts have attributed the price increase to a rise in demand, especially from foreigners and permanent residents.

What is clear is that housing demand changes constantly, which means that government policies seeking to offer decent and affordable homes have to keep changing too.

The International Housing Conference last month, organised by the Housing and Development Board (HDB) to mark its 50th anniversary, gave the housing authorities a platform to share ideas and strategies.

Even with the best of intentions, it is often hard to give people equal access to affordable housing because of uncertainty about the number who need it as well as an inelastic housing supply.

This commentary aims to compare the housing situation in Singapore, Hong Kong, London and Sydney.

As with most countries, Singapore’s housing provision system is rooted in its historical and political background. During the initial years of independence, the Government adopted a subsidised rent system to resolve an urgent housing shortage.

However, by 1964, it was decided that home ownership was a better strategy as it was thought that citizens would be more likely to sink their roots in the country if they owned a stake in it. This marks the first deviation from public housing systems in countries with a strong welfare focus, such as the United Kingdom and the Netherlands. By the late 1970s, when many welfare countries were starting to revamp their public housing systems due to economic reasons, public home ownership was thriving in Singapore because of the development of the resale market for public housing.

Over the last few decades, the HDB has become the dominant housing provider, accounting for the homes of 82 per cent of the population. Table 1 shows the key differences between the housing systems in four major cities, including Singapore. It provides a broad picture of the composition of public and private housing and the proportion of rental and ownership for each category.

Table 1 makes two key points: One, these cities differ from Singapore in that most of their housing is provided by the private sector. This is also the case in most countries.

Two, only Singapore has a significant proportion of ownership when it comes to public sector housing. In fact, public housing in London and Sydney is solely rental, while Hong Kong has 35 per cent public housing ownership as compared with more than 95 per cent here.

Clearly, housing systems in different countries are shaped by their respective history, economy and the cultural and social needs of their people. Each system has its own merits and limitations; what matters is whether it can offer decent and affordable housing. We assess these two criteria in terms of living space, ratio of income to housing price as well as housing options. Table 2 compares the population density, ratio of median housing price to median annual household income and the average living space per person in Singapore, Hong Kong and London.

Table 2 shows that it is not meaningful to rate housing systems based on one factor alone. Take population density, for example. While Singapore scores the highest of the three, much of Hong Kong’s land area is unbuildable because of the terrain, which means that the living space per person in the territory is less than half of that in Singapore. In fact, living space per person in Singapore compares favourably to that in London, where land supply is not a constraint.

In terms of affordability, Singapore has achieved a lower housing price to income ratio. On the whole, the figures reveal that the housing system here does deliver comfortable and affordable housing to the majority of Singaporeans.

As for housing options, some countries offer greater diversity. In London, for example, if a family is unable to buy or rent a good home from the open market, a range of affordable options is available, including public housing from the local authorities at a subsidised rent. There is also the possibility of buying a home through shared ownership, a part-buy, part-rent scheme from one of the independent, non-profit associations providing low-cost housing.

In Singapore, the HDB has diversified its housing types over the years through design, construction and technology. For example, besides the bulk of build-to-order flats, it also engages private developers to build public housing under the Design, Build and Sell Scheme.

While housing systems vary from country to country, what is important is the ease with which people can live in quality homes, defined as housing with water, sewerage and electricity.

In Singapore, all this – together with estate maintenance and neighbourhood amenities – has been achieved by the HDB over a relatively short history of 50 years.

Perhaps the success has also raised expectations. Each spike in house prices – fluctuations in prices will likely increase, given Singapore’s open economy and rapidly changing global economic climate – will heighten the anxiety of potential buyers, despite the empirical evidence that housing in Singapore is still very much affordable by any standard.

The writers are from the Department of Real Estate, National University of Singapore.

In terms of affordability, Singapore has achieved a lower housing price to income ratio. On the whole, the figures reveal that the housing system here does deliver comfortable and affordable housing to the majority of Singaporeans.

Source: Straits Times, 27 Feb 2010

As last year drew to an end, so, finally, did my patience with my 786 sq ft ‘dollhouse’ apartment.

The single bathroom was just too small, the pretty-but-useless balcony too big, and the desire to move too overwhelming to ignore any longer.

And so began the arduous search for a new ‘Goldilocks’ house that was just right.

It didn’t take long for it to, ahem, hit home that that was a fairy tale. At least, for those of us who don’t rule a kingdom full of geese that lay golden eggs.

While a peasant like me can’t be much of a chooser, it soon became evident that there were still dozens of choices to be made in finding a new home.

That may sound like it’s stating the obvious, but it wasn’t all that apparent to my husband and me when we bought our first home two years ago, as a starry-eyed, idealistic young couple.

We simply set a budget, found a location we liked, and happily mapped out our future life based on a floor plan.

Now we knew better. We had Preferences. Priorities. Prejudices.

And every single one of them, as it turned out, was a reflection on the kind of adults we were becoming.

As a home-buyer, your self-definition process starts from the very minute you choose a category to peruse in the classified ads.

Young couples who buy Housing Board flats, for instance, are on the guaranteed track to riches and wealth one day.

Not just because these are the cheapest accommodations available, allowing them to invest the rest of their money elsewhere, but also because Minister Mentor Lee Kuan Yew has publicly decreed that flat prices will keep rising as long as the economy grows.

Those who buy HDB flats and then rent them out and continue living at home with their parents will be even richer – because they clearly know their way around the rules.

As for first-time home-seekers who manage to afford private property in Singapore, a few conclusions can be drawn about them too.

They can safely be assumed to already own a kingdom, be on the way to inheriting one, or be working feverishly to usurp the nearest viable throne – or their boss’ seat.

Then there’s the tenure test.

Young buyers who insist on freehold condos and refuse to consider anything else tend to turn into adults who always take the safe, conservative path in life.

They will minimise risk, equate price with quality, and pat themselves on the back for their ‘good investments’.

Those who opt for leasehold homes tell themselves they won’t be around for another 99 years anyway. They will forever live in the moment, on the edge, and under constant stress from the big ticking time bomb they imagine is built into their leasehold walls.

And the select few who snap up really old apartments with less than 30 years left on the lease are the true daredevils of our society. They are likely to be firemen, deep-sea divers and opposition politicians.

As we discovered with our first home, size is also, well, a huge factor in house hunting.

Anyone who thinks he can live comfortably in a few hundred square feet usually grew up with even less space – or just simply does not have any imagination.

At the other extreme, young adults who buy generously sized first homes are probably not very well-acquainted with the concept of housework.

Of course, there is a whole variety of other housing judgments to be made, in more than one sense of the word.

People who buy flats on high floors believe in obtaining only the best in life; those who stay on the second floor are the epitome of cost-conscious pragmatism.

But as every Singaporean knows, the most important part of choosing a home is deciding on its location.

This is not just a matter of rental profitability or resale value. It’s also a question of your fundamental, lifelong happiness.

According to Cornell economist Robert Frank, while people adjust quickly to a big house and start taking the space for granted, they never get used to a long and tedious commute to work.

The heavy traffic – whether vehicle or human – that they suffer through every day takes the same toll on their mood by the time they reach their destination, no matter how many times they have done it before. In fact, their irritation only gets worse with time.

And so the happiest people are not necessarily those who stay in the biggest houses, but those who live closest to where they work.

With that in mind, my husband and I set a budget, found a location we liked, made sure it was big enough for all our junk, and are currently happily mapping out our renovation plans.

Home may be where the heart is but, at least, now we have plenty of space for all our other organs as well.

Source: Sunday Times, 21 Feb 2010

In a day and age where home owners move house whenever possible for a variety of reasons – to be near schools and grandparents, to make their money work for them – retiree Yang Zheng Cai is a rarity.

He may just outlive the house he has lived in for 50 years. At 73, he is hale and hearty, looking in better shape than the two-storey terrace house in Upper Boon Keng Road, where the lease will expire in about 10 years’ time.

His home is one of about 250 terrace houses in what is believed to be one of Singapore’s cheapest private housing estate because the land, which had an original lease of 60 years, will return to the Government in 2020.

The area, on which the decades clearly have taken its toll, has been zoned for residential use under the Urban Redevelopment Authority’s Master Plan 2008.

Mr Eric Cheng, chief executive of ECG Property, says these homes with built-up areas of about 1,300 sq ft, cost only about $170,000 to $180,000 each.

That amount cannot buy even a resale four-room HDB flat in many places.

Should the area be turned into condominium homes, he says homes there can fetch from $900 to $1,050 per square foot because it is close to town and the Boon Keng MRT station. For units on higher floors, residents can enjoy unblocked views of the city. This estimate is based on the price of nearby condominiums such as The Waterina.

Other residential areas with less than 40 years left on their leasehold include a stretch of homes near Rail Mall in Upper Bukit Timah, Jalan Chempaka Kuning in Bedok and in the Rifle Range Road area.

A spokesman for the Singapore Land Authority says: ‘The Government’s policy is to allow leases to expire without extension. In land-scarce Singapore, we need to recover land upon lease expiry to re-allocate it to meet fast-changing socio-economic needs.’

Is there any value at all in property in these places? Yes, says Mr Cheng.

‘Those with cash for investment can consider getting a unit in Upper Boon Keng as the rental yield is high,’ he says. Given the short lease, banks are not likely to grant loans.

Owners can rent out the units for about $3,000 a month, so they could make up to $360,000 in the remaining time before the lease expires.

At its peak in 2007, a unit sold for $200,000.

Mr Yang did not consider selling his house, even when it could have fetched such prices – not least because of his emotional attachment to it.

The home owner, the fourth of six children, inherited the intermediate terrace property from his late father. He has two sisters living along the same street.

Now he lives with his wife, a housewife who wants to be known only as Madam Chen, and their three grandchildren aged 13 to 21. Madam Chen, 72, moved in 50 years ago when the couple got married. They have three children.

The area used to be a kampung and MrYang’s family then lived in an attap house which his father rented.

After a fire destroyed the kampung, the Government in 1960 built homes for the kampung residents and Mr Yang’s family bought one for about $5,000 – a high price then but his businessman father could afford it when he made a tidy sum.

Mr Yang, who used to own a timber company, recalls playing with his friends after school and catching crabs nearby.

In the early days, most of the residents in the area were Chinese and they often looked out for one another. Front gates and doors were often left unlocked as the area was so safe.

Today, most houses have been converted into temples or rented out to contractors to use as dormitories for foreign workers. High-rise HDB flats and flatted factories have also popped up.

Only about 10 per cent of the homes are occupied by home owners, who are mostly retirees.

To anyone walking through the estate, it is clear that most of the homes have seen better days, although owners have renovated them through the years, turning their backyards into bigger kitchens and front yards into porches.

Mr Yang says it has been 20 years since he last renovated his home, and he cannot remember how much he spent and exactly what he did.

The predominance of foreign workers in the area does not bother him. ‘I have no problems with them living next door as they leave for work early and come back late. We do not get any disturbances and the area is peaceful and very safe.’

Mr Cheong Hiong Yau, 92, a former coffee-shop owner, is another long-time resident in the estate.

He has been living here for the past 75 years, currently with his wife, Mrs Cheong Siao Ngor, 83, and their maid in their double-storey terrace house.

He says he likes living here because of its convenient location. The Upper Boon Keng wet market is a five-minute walk away and there is a supermarket nearby too. He often takes his dog for walks around the quiet neighbourhood.

In previous years, he says there would be lion dances in the neighbourhood during Chinese New Year. ‘There still are now, but not as many troupes come by.’

Although he does not like heights, he will ‘move in to live with one of my sons in his apartment in Jalan Besar’ when the lease on his current home ends.

Mr Yang’s plans are similar, insofar as he has made any at all. He takes comfort in knowing that his son is living in an HDB flat a three-minute walk away. ‘Perhaps I will move in with him so it feels as if I have not left this place,’ he says.

Source: Straits Times, 13 Feb 2010

As a youngster living in a tiny flat with six others in one of the world’s most densely populated cities, Hong Kong architect Gary Chang has been obsessed by living space, or rather a chronic lack of it.

After three decades in the same boxy, 32-square-metre dwelling he grew up in, Mr Chang has come up with an innovative answer to the increasingly cramped lives of many urban dwellers – the science fiction-like ‘domestic transformer’.

‘The idea is everything is moving. This is my laundry space,’ Mr Chang said, sliding away a wall filled with CDs to reveal a washing machine and dryer.

By sliding another track-mounted metal wall that bears a plasma TV, a kitchen materialised. Beside that, there is a luxurious 1.9-metre bathtub that itself turns into a guest bed.

While people in other teeming cities such as Tokyo resort to drop-down beds and foldable futons, the award-winning Mr Chang has taken the concept of space-saving to the extreme.

His tiny rectangular apartment, tucked into the bowels of an old, nondescript tenement building, has polished chrome walls that bear 24 configurations, each suiting a specific need.

The space available becomes a home theatre, spa, kitchen, bedroom, chill-out zone rigged up with a hammock, depending on what Mr Chang needs at any moment.

‘The high intensity of use makes (it) more like a large home appliance than a dwelling,’ wrote Mr Chang in his book 32 metre square apartment – a 30-year transformation that chronicles the origins of his innovative abode, which has undergone numerous facelifts through the years.

Mr Chang, who runs his own design and architectural firm, describes an empty space as a ‘luxury’ and once built a ‘Suitcase House’ in Beijing blurring the boundaries between public and private space.

‘The only enclosed space is the toilet, and again, it’s bigger than usual,’ said Mr Chang, whose flat is surrounded by the highways and skyscrapers that embody Hong Kong’s rampant urban development that have made spacious flats a pipedream for many.

At a cost of HK$1.8 million (S$329,600), Mr Chang hopes his dwelling offers a viable, life-enhancing alternative for Hong Kongers who can’t afford anything bigger.

‘The idea is to tune your home closer to what you really want instead of being dictated by the market or by the space allocated,’ said the designer who says he’s now in talks with property developers to replicate his flat in other space-starved, costly cities across Asia and Europe, including Paris.

Source: Business Times, 9 Feb 2010

The late Ng Teng Fong, billed as Singapore’s richest man by Forbes Asia magazine last September, rose from humble beginnings.

He was just six years old when his family migrated to Singapore from Putian, a village in China’s Fujian province. His father set up a soya sauce factory and had a grocery shop in the Jalan Besar area stocking dried goods, preserved and specialty foods from their village.

Mr Ng was inducted at a young age to help out in the family business and did not acquire much formal education in Singapore, according to a short biography of the property tycoon released yesterday by his Singapore-based Far East Organization.

As the eldest of 11 children in the family, expectations were high that Mr Ng should carry on the family business. But he disappointed his father when he decided to strike out on his own in the 1950s, when he was in his 20s.

Mr Ng’s first property project back in 1962 was a 72-unit terrace housing development at Jalan Pachelli in the Serangoon Gardens area. In 1969, he developed Watten Estate in the Bukit Timah area. In the 1970s, Mr Ng developed Far East Shopping Centre and Lucky Plaza along Orchard Road, followed by Far East Plaza on Scotts Road in the early 1980s. Since then, the group has developed Orchard Parksuites serviced residences and Orchard Central.

Mr Ng’s Far East Organization group is the biggest private property developer in Singapore today. It comprises over 180 private companies and two listed entities – Orchard Parade Holdings and Yeo Hiap Seng.

In the 1970s, Mr Ng entered the Hong Kong property market. Today, the business there is under the Sino Group, which includes public-listed Tsim Sha Tsui Properties, Sino Land and Sino Hotels. Mr Ng was the only Singaporean businessman invited to the historic signing of the Sino-British Joint Declaration by Margaret Thatcher and Zhao Ziyang in December 1984.

Mr Ng’s property empire today comprises not only property trading (such as developing apartments for sale) but a sizeable property investment business (comprising completed properties held for recurring rental income).

For instance, Far East is the largest owner-operator of serviced residences and corporate housing in Singapore with 2,400 apartments in its inventory. Far East and Sino have a dozen hotels here and in Hong Kong with over 4,700 rooms. The flagship is The Fullerton Hotel Singapore.

Those who knew Mr Ng recall his industrious streak. ‘He was a man who worked extremely hard – day and night,’ says Hong Leong Group executive chairman Kwek Leng Beng.

Back in the 1980s when the two men were active in the Real Estate Developers Association of Singapore (Redas), ‘we used to study the property market together at his office . . . more often than not, we would find that we were still deep in discussion long after the official Redas meetings were over and everyone else had left’, Mr Kwek said.

CB Richard Ellis chairman (Asia) Willy Shee said: ‘Mr Ng didn’t speak much English but was very sharp and his mind was on property all the time. Even at functions, he did not engage much in social talk but always wanted to know more about the property market and trends. There was never an idle moment for him.’

Another veteran property consultant, Knight Frank chairman Tan Tiong Cheng, reminisces about his first meeting with Mr Ng around 1981. ‘He was carrying a worn-out black book in which he was copying notes, doing his calculations,’ Mr Tan said.

‘He was always focused on property. Even when he bought into Yeo Hiap Seng, he had in mind the land bank it offered rather than just the food and beverage business,’ he added.

Source: Business Times, 3 Feb 2010

Property tycoon Ng Teng Fong’s passing yesterday marks the end of an era of larger-than-life property titans.

He was one of the earliest to develop shopping centres on Orchard Road and until today, his Far East Organization group here is probably the largest property owner in the island’s prime shopping belt. In Hong Kong, he made inroads into one of the world’s most competitive property markets, battling local tycoons to establish his Sino Group as one of the biggest developers there.

Market players yesterday recalled the tenacity and resilience of a man who rose from humble beginnings to build a property empire over the past five decades, bouncing back from setbacks along the way, especially the mid-1980s property slump.

Today, Far East Organization and sister outfit Sino Group have a combined annual turnover of US$5.5 billion and total assets of over US$40 billion, according to information on Far East’s website. Last September, the Forbes Asia magazine ranked the late Mr Ng as Singapore’s richest person, with a fortune said to be US$8 billion (S$11.3 billion).

The 82-year-old suffered a brain haemorrhage on Jan 23 and underwent an operation before he died peacefully yesterday morning, a statement from Far East Organization said. He leaves behind his wife and eight children.

While Mr Ng still kept a keen interest in his business until recently – including determining prices of property launches and land bids – he had handed over the running of his business empire some time ago to his two sons. Elder son Robert is in charge of Sino Group in Hong Kong and younger son Philip oversees the Far East Organization group in Singapore.

Philip Ng, who holds degrees in civil and geotechnical engineering as well as city planning, has over the past decade or so spruced up the company in Singapore and hired many professionals. The group has developed many award-winning buildings.

Mr Ng’s wake is being held at Ng’s Mansion at 2 Watten Estate, with a nightly service at 8pm. The funeral will be on Saturday.

Many in property circles yesterday mourned the loss of Mr Ng, who they said, together with Kwek Hong Png, the late founder of the Hong Leong Group, was the pioneer of the private property market in Singapore. Mr Kwek died in 1994. His elder son Leng Beng yesterday said Mr Ng’s passing was ‘an immense loss for the industry and for Singapore’.

‘He was a doyen of the property sector. He was a proven authority with a deep understanding of real estate and an innate talent of looking at the property market in a different way.’

United Overseas Bank Group chairman Wee Cho Yaw described Mr Ng as ‘an old friend of more than 50 years’ who had ‘an intuitive flair for reading property cycles’.

CapitaLand Group president and CEO Liew Mun Leong highlighted Mr Ng’s successful entry into Hong Kong, ‘a very mature and competitive market, decades ahead of others in Singapore’.

‘Even the largest property companies in Hong Kong take their hats off to his company in Hong Kong, where it enjoys a high standing,’ Mr Liew added.

Redas president Simon Cheong said no other foreign player has entered the Hong Kong market like Mr Ng did. He said Mr Ng’s ‘master stroke’ in Tsim Sha Tsui a few decades ago, mopping up a whole stretch of properties in the district, ‘is still being talked about among market players today’.

Mr Ng entered the Hong Kong property market in the 1970s and continued to build his business there in the early 1980s when confidence in Hong Kong was shaken due to disputes on its future between the British government and China.

Admiring the late Mr Ng’s acumen, Redas CEO Steven Choo said: ‘He saw the enormous prospects for real estate in land-scarce prosperous cities like Singapore and Hong Kong. In Singapore, one of his most enduring legacies is that he laid down the foundation for Singapore’s modern shopping street – Orchard Road. We can see the Far East emblem everywhere in Orchard/Scotts roads. Some of his projects were visionary at the time.’

Dr Choo noted that ‘Far East has also helped establish condominium living in Singapore, through its continued participation in Government Land Sale tenders’.

Source: Business Times, 3 Feb 2010

The wait lasted nearly half a year.

Since I exercised the option to buy my first new home some time last August, I had eagerly awaited the day I could move in, pop open a bottle of champagne and bask in the smell of my freshly painted walls.

That day finally arrived just in time for New Year’s Day – the beginning of a whole new decade – and I was understandably excited.

But just before and after The Big Move, I was besieged by a phenomenon I had never thought about: post-purchase cognitive dissonance (PPCD).

I’m not making it up, really. Cognitive dissonance is defined as a condition of conflict or anxiety resulting from one’s actions. And PPCD is when, after buying something, you feel that an alternative would have been preferable.

In fact, you go through a rationalisation process in your head, questioning all the factors that made you decide to buy the said thing, and wonder if it was all one big mistake.

You see, in my quest for a spacious, affordable home somewhere in the suburbs, I had bought a 99-year leasehold apartment.

I surprised myself because I have traditionally been on the side of freehold property in the freehold versus leasehold debate.

I know the typical arguments for both sides of the case but I never gave it much thought till I became a home buyer and the cold, hard, facts were staring me in the face.

I had started off looking at freehold properties but, when it came down to dollars and cents, I realised that the difference between a freehold and leasehold apartment of the size I wanted was more than $150,000 and it made a big difference.

I took the plunge.

Today, my 1,650 sq ft property has 85 years left on its lease. After spending every penny my other half and I had on renovations and furnishings, we were thrilled the day we moved in.

Everything was gleaming and it felt good that we owned everything we saw.

But this lasted only a few days.

Acutely aware of the new depths my bank accounts had plunged to, I was overcome by an attack of PPCD during lunch with my mother one day while shopping for cutlery.

Mum, I asked, did I make a bad move sinking all my money into a property that will take me 30 years to pay off? And at the end of 99 years, would be worth absolutely nothing?

Also, given the price I’d paid for the property, is it likely that I could even break even on costs if I wanted to sell my apartment a few years later?

I was panicking, and convinced that nobody would buy my apartment when I want to sell it. I would incur a huge loss on it – something I wouldn’t be able to live down as a property reporter.

In an attempt to alleviate the symptoms of my PPCD, I spoke to some property analysts for an objective assessment of my choice to invest in a leasehold home.

This is the list of factors to consider that I eventually came up with:

1. Affordability

The major advantage of a leasehold property is that it is cheaper and offers a first-time home buyer a good opportunity to get on the property ladder without financial stress.

2. Yield

Leasehold homes also typically give you a higher yield compared to a similar freehold property as you can command the same rent but your capital outlay is lower.

3. Depreciation, and factors that will compensate for this

The main drawback is that the value of your property depreciates with age. I have now come to accept this fact, but there are some factors that can influence the rate of depreciation, such as location, quality of amenities and transport network.

For those contemplating a leasehold home, is it near an MRT station? Is your estate slated for major upgrading?

Thankfully, I thought, my new home will benefit from the upcoming Bukit Timah MRT line.

4. Collective sales

Leasehold properties typically receive less proceeds as developers have to pay the Government a fee to top up the lease, unlike for freehold properties.

I’m personally not one for collective sales. But it is comforting to know that even an old leasehold estate such as Farrer Court could command a premium of $2.15 million per home when it went en bloc.

5. Historic figures

Looking at property cycles in the last decade, analysts say the rate of appreciation of freehold homes does not always outperform that of leasehold homes.

In general, the numbers show that in an upswing, leasehold properties tend to gain more, although in a downturn, they also fall more rapidly – meaning prices are more volatile.

So if you buy a leasehold property and intend to hold on to your home for some time, you could easily choose to sell in an upswing instead of a downturn.

All in all, I felt my anxieties dissolve when I realised that my leasehold home was affordable, will give me a reasonable yield if I choose to rent it out, and would likely appreciate – or hold – in value when transport networks are improved.

Analysts say there is no conclusive evidence to show one is definitely better than the other, and that the decision you make depends mainly on budget and preference.

I now realise that my home, which I love because it has four bedrooms and is surrounded by four different nature parks, was really the best choice for me, given what I could afford.

My mum, in her infinite wisdom, said: ‘If history is anything to go by, you’ll be fine.’

My parents recently sold an HDB flat in Jurong after my grandmother who lived there passed away. It had aged 20 years since they bought it, yet they sold it at a price far higher than what they paid for it.

See? Why worry so much, my mum chided, HDB flats are also leasehold and their values go up every year.

It was a good point. I decided then I would just enjoy my first home, day by day.

Source: Sunday Times, 31 Jan 2010