NUS index registers 1% gain in April, biggest since Jan’s cooling measures

RESALE property prices mirrored the buoyant mood in the new homes market and inched up higher last month, according to an index that tracks prices.

Home prices were up 1 per cent last month – the biggest monthly rise since January’s cooling measures – and the increase follows a 0.2 per cent rise in March.

Prices for the central region rose 0.8 per cent, while those in non-central areas added 1.1 per cent.

The increases were recorded by the Singapore Residential Price Index, which the National University of Singapore compiles by monitoring the transactions of non-landed completed projects.

Experts say the index’s 1 per cent increase reflects the expansive market mood, with buyers out in such force last month that developers shifted 1,788 new homes – a five-month high.

Cushman & Wakefield’s senior manager of Asia-Pacific research, Mr Ong Kah Seng, said the good mood in the new sales market has spilled over to resales, now that buyers on all fronts have had time to digest the cooling measures.

Mr Ong said the 1 per cent price increase follows consecutive months of subdued price gains and does not indicate that the measures have not worked.

Ms Chia Siew Chuin, director of research and advisory at Colliers International, added that buyers could have entered the resale market for fear of missing the boat, with prices generally rising further.

This is especially so for affordably priced units in completed developments with good attributes, she noted.

Experts forecast that market sentiment will be mixed in coming months, although prices are expected to continue inching upwards.

Colliers’ Ms Chia said some potential buyers might wait for clearer directions from the Government on housing policy.

‘On the other hand, another group may choose to enter the market sooner in view of policy risks and the likely impact on the market,’ she added.

‘Nonetheless, prices are still expected to continue to strengthen gradually in the coming months.’

Cushman’s Mr Ong agreed, saying that non-landed resale prices are expected to hold steady, or rise less than 1 per cent a month.

‘(This) reflects the effect of economic strength and positive, genuine owner-occupier home buyer interest,’ he noted.

SLP International research head Nicholas Mak said price gains in non-central areas are likely to outpace those in central areas this year, due to the strong demand for affordable homes from locals and permanent residents.

While foreign interest in centrally located homes is returning, it is still not as strong as that in 2007, he noted.

Source: Straits Times, 31st May 2011

Investors will think twice and developers are expected to delay launches
THE property cooling measures announced yesterday will effectively halt buying activity from property investors across the private market – at least for the time being.

Market analysts that The Straits Times spoke to said the drastic measures will make investors reassess their finances and think twice before signing on the dotted line.

Developers are also widely expected to postpone their property launches and may lower their prices to lure buyers back to the market in the coming months.

Yesterday’s measures, which included raising the seller’s stamp duty to a hefty maximum of 16 per cent of the purchase price, and lowering the amount banks can loan home buyers for a second property to 60 per cent of the property’s value, were described as ‘punitive’ by analysts.

Property consultancy International Property Advisor’s (IPA) chief executive Ku Swee Yong said the move was a ‘sledgehammer’ that came as a surprise to the industry.

‘Many of our clients who are genuine investors are now re-assessing their loans situation. The market will be frozen stiff for a while,’ he said.

And for sellers who buy a private property from today onwards but genuinely need to dispose of their properties in the short-term, such as those who have suffered losses in business or who have fallen critically ill, the stamp duty will ‘cripple them completely’, he added.

Property investor S.K. Cheah, 42, who is self-employed and already owns a few investment properties, said that genuine investors will find it hard to come up with the 40 per cent downpayment for new investments.

But he conceded that in the long run, this may be healthy for the market as there are many investors out there who may be heavily leveraged and may get into financial trouble when interest rates start climbing.

Mr Colin Tan, research and consultancy director of Chesterton Suntec International, said that the industry had somewhat anticipated another round of measures – but not so soon.

The last round of measures, which tightened ownership rules and restricted financing, was announced last August and the market was still reacting to that, he said.

Demand will most certainly be dampened, added Mr Tan, but he noted that investors who are ‘comfortably well off’ will not have problems forking out a higher amount upfront for investment homes.

Foreign capital inflows into Singapore – a well-known destination for property investment on the international property circuit – could still create demand in the market, he added.

All eyes are on developers now for their next move.

CapitaLand, for example, was expected to launch around 1,700 new homes this year across some projects such as The Nassim, Urban Resort Condominium, The Interlace and d’Leedon.

City Developments and Far East Organization also had new launches slated for the next few months. When contacted, all three developers declined to comment.

Mr Tan said he expects a knee-jerk reaction from developers, who will now most likely postpone these launches.

Mr Lim Yew Soon, managing director of EL Development, said he is mulling over the effect of the measures on his company’s Skysuites 17 at Balestier, which is slated for launch in March.

‘If the market takes it lightly, our pricing will still meet market expectations. But if the market reacts drastically, based on upcoming launches, we may decide to hold off the launch by three months or so,’ he said.

IPA’s Mr Ku said developers may have to reduce their asking prices, and may drop them by 1 to 2 per cent initially to test the market.

Although yesterday’s measures did not directly address the public housing market, analysts say the measures could also have a trickle-down effect on HDB resale flat prices.

Mr Ku noted that if mass market home prices started declining to the level of sought-after HDB resale flats in good locations, resale flat prices could weaken as buyers look to buy private property instead.

First-time home buyers such as Ms Yvonne Koh, 26, a bank executive, said the prospect of falling prices is music to her ears. ‘I just started looking for a home and was deciding between a private apartment and a resale HDB flat. Hopefully the measures will bring prices down to a more affordable level so I can buy sooner rather than later,’ she said.

Source: Straits Times, 14 Jan 2011

THE Housing Board has launched 1,010 eco-friendly Build-to-Order (BTO) flats near Punggol Reservoir, bringing the total number of BTO flats launched this year to nearly 18,000.

Property experts expect healthy demand for the Punggol Topaz development since the prices of four- and five-room flats in the project are up to 25 per cent lower than current resale prices.

The BTO project launched yesterday will comprise 12 17-storey blocks featuring three-, four- and five-room standard flats. More than half of these will be four-room flats of 1,001 sq ft each. They will cost between $267,000 and $329,000.

Also on offer will be 284 five-room flats of 1,216 sq ft each, costing between $335,000 and $406,000. There will be 184 three-room flats of 731 sq ft, priced at between $166,000 and $207,000.

Up to 95 per cent of the flats will be reserved for first-time buyers.

PropNex corporate communications manager Adam Tan expects the flats to be oversubscribed four times, thanks to the project’s appeal to young couples with plans to start a family.

‘There are many schools in the vicinity, all of which are easily accessible by the LRT network,’ he said. ‘Punggol is a fast-maturing estate. Its image is now of a waterfront town with an exciting future.’

In line with the Housing Board’s plans to turn Punggol into Singapore’s first eco-town, Punggol Topaz will be specially designed. Units and blocks in the estate will face away from the sun to minimise heat. It will feature rain gardens and dry ponds to collect rainwater and prevent soil erosion.

The project is located in Punggol Central and will be next to Soo Teck LRT station. It will be a stone’s throw from the newly completed Punggol Reservoir.

Source: Straits Times, 23 Dec 2010

BT 23 Sep 10 Househunt 2010

BROKERS and remisiers were flat out yesterday dealing with a huge surge in the number of shares traded – but the market itself barely moved.

Volumes jumped to 3.47 billion shares – the highest since Aug 25 last year and more than one billion shares over last week’s average of 2.35 billion.

The session’s bumper volumes were the continuation of the past two weeks, which have seen trades rising solidly on positive United States economic news.

It has led to strong market rises, with punters entering the market with the hope of making a quick buck.

Some dealers say the rebalancing of stock portfolios by institutions in the light of new economic data could have added to yesterday’s trades.

Remisier Desmond Leong said: ‘We haven’t seen (daily volumes of) three billion shares for a long time now. But the market feels more speculative rather than focused on fundamentals. It’s about people picking a stock on the day, then getting out quickly.’

Another stock broker said: ‘A lot of retail players jumped in and out on the day. They rushed in in the morning, and by around 3pm these traders were selling. Since the morning I have been very busy answering calls, buying and selling.’

Yet the flurry of activity failed to excite the market much. Analysts say the there is not much more room to go north given the market’s recent strong run, which has made valuations look less attractive.

After opening lower, the benchmark Straits Times Index (STI) moved rapidly into positive territory on hopes that the US Federal Reserve would print more money to stimulate the economy, after the Fed had indicated overnight that core inflation was lower than desired.

But the STI failed to hold on to the gains and slid in the afternoon as day traders unloaded their holdings. A poor European opening also dampened sentiment as the benchmark closed at 3,096.1, up just 0.71 point or 0.02 per cent.

The most active stock was rubber supplier GMG Global, which gained 3.5 cents or 14.9 per cent to 27 cents on volumes of 214.6 million shares. It also hit an intra-day high of 30 cents, which was an all-time peak.

The firm responded to a Singapore Exchange (SGX) query on its trading activity by announcing it was in talks to acquire a rubber processing and trading firm in South-east Asia. It added it was embarking on a new rubber-related project in Africa. Other market players said a rise in rubber prices and fears of a global shortage helped to boost the counter’s price.

Also actively traded was PT Berlian Laju Tanker, up half a cent to four cents on 145.9 million shares. JES International backtracked three cents to 33 cents on 86.6 million shares after strong rises on Tuesday.

Soilbuild rose eight cents to 78.5 cents. Dolphin Acquisitions is looking to take the firm private and is offering shareholders 80 cents a share.

SGX rose 20 cents to $8.70. It had recently announced a host of new products, including introducing American Depositary Receipts here and offering bond trading to retail investors.

Source: Strait Times 23 September 2010

PRIVATE home prices are set to dip marginally as a result of the Government’s recent cooling measures, according to CapitaLand president and chief executive Liew Mun Leong.

Mr Liew predicted yesterday that private home prices were on course to fall ‘a little’ in response to the measures intended to dampen speculation – although he did not expect anything ‘severe’.

Speaking to reporters at a Mid-Autumn Festival lunch, he declined to project the extent of any possible fall, adding that the rules introduced on Aug 30 would not affect the high-end residential market.

Industry sources reckon that developers do not need to lower prices for existing projects. However, they are likely to moderate their price expectations for new launches.

The Real Estate Developers’ Association of Singapore (Redas) said at the event that the requirement for a higher upfront cash component could impact buyers’ affordability, but that this would not deter genuine home buyers.

Redas also reckoned that private homes are still well within the reach of first-time buyers. Its affordability ratio – which measures the proportion of monthly mortgage cost to monthly household income – currently stands at 36 per cent for this segment, below the 40 per cent norm where buying becomes less affordable.

The Government’s latest set of market calming measures include tighter lending rules for homeowners with mortgages who are looking to buy another property.

They can now borrow up to only 70 per cent of the property value, rather than the 80 per cent which previously applied. And at least 10 per cent of their downpayment has to be in cash, up from 5 per cent.

First-time buyers are not affected, given that those without an outstanding housing loan can continue to borrow up to 80 per cent of the property’s price, and pay a 5 per cent downpayment.

Frasers Centrepoint chief executive Lim Ee Seng reported that the latest set of rules was already ‘taking effect’ and if prices were to fall ‘just 5 per cent to 10 per cent in the next year’ it would be ‘good enough’.

He said developers who are buying land at relatively cheaper prices now will launch projects at lower prices within the next 12 months.

Developers attending the lunch – including Mr Liew and Mr Lim – noted that demand for property remained buoyant.

Mr Liew said buying interest in Singapore was strong because of its liquidity, demographic and low interest rates.

Even the secondary market was robust, he said, with CapitaLand ‘still seeing demand’ for its Orchard Turn and The Interlace projects.

The interest level for Frasers Centrepoint’s 573-unit Esparina Residences executive condominium project in Sengkang is said to be healthy, and there is talk that when it is launched next month, it will be priced at between $700 and $780 per sq ft.

Source: Straits Times 23 September 2010

THE Housing Board has been recognised by the United Nations Human Settlements Programme (UN-Habitat) for ‘providing one of Asia’s and the world’s greenest, cleanest and most socially conscious housing programmes’.

The 2010 UN-Habitat Scroll of Honour Award, the most prestigious award of its kind, has been given to acknowledge the HDB’s role in playing an integral part in nation building and housing 80 per cent of Singapore’s population.

The aim of the award, started in 1989, is to recognise initiatives which have made outstanding contributions such as shelter provision, leadership in post-conflict reconstruction, developing and improving human settlements, and the quality of urban life.

Ms Jane Nyakairu, chief of information services at UN-Habitat, said the committee received about 50 applications from all over the world.

Singapore and HDB stood out for being global pioneers when it came to catering to the housing needs of various sectors of society, such as young couples, the elderly and the disabled.

‘It’s really quite impressive for a country to provide adequate shelter and home ownership for so many. It won for being such an excellent example that other countries can learn from,’ said Ms Nyakairu.

In a press statement released by the HDB, National Development Minister Mah Bow Tan congratulated the HDB and attributed its success to its staff’s hard work.

He said: ‘This is an international recognition of HDB’s achievements in housing a nation. Singapore is proud of what HDB has achieved over the past 50 years. No other country in the world has a public housing system like ours, where 95 per cent of residents own the flat they live in.’

Mr Yu Shi-Ming, head of the National University of Singapore’s Department of Real Estate, said the award justified the HDB’s initiatives such as the Ethnic Integration Policy, which aims to promote racial integration by ensuring a balanced ethnic mix in HDB estates. Such policies may not have satisfied everybody, but have achieved the greater good, he said.

Mr Elgen Kua, 36, who owns a five-room unit in Pinnacle@Duxton, which was recently named Asia and Australasia’s ‘Best Tall Building’ by the Chicago-based Council on Tall Buildings and Urban Habitat, said the HDB had stayed in tune with what Singaporeans want – affordable, yet world-class, housing.

This is not the first time the HDB has been recognised for its work. In 2008, it won the UN Public Service Award for its home ownership programme which aims to provide Singaporeans with affordable flats.

And in 1992, the World Habitat Award was conferred on Tampines Town for providing high-rise housing while retaining socially cohesive communities.

The award will also be presented to five other winners during the Global Observance of World Habitat Day in Shanghai on Oct 4.

They are Austria’s Vienna Sustainable Urban Renewal Programme, China’s Kunshan Municipal People’s Government, Colombia’s City of Medellin, Morocco’s Ministry of Housing and Urban Development, and South Africa’s Johannesburg Social Housing Company.

Source:Strait Time 24 September 2010

Surprisingly weak data gives rise to fears of double-dip recession

WASHINGTON: Sales of resale homes in the United States last month fell to their lowest pace in 15 years, suggesting further loss of momentum in the economic recovery.

As the National Association of Realtors issued the report, Chicago Federal Reserve president Charles Evans warned that the risk of a double-dip recession was higher than six months ago.

But he did not think output would contract, describing the recovery as ongoing but modest.

The surprisingly weak US housing figures hit Wall Street, with the Dow Jones Industrial Average briefly dropping below 10,000 for the first time since early July.

An hour and a half into trading yesterday, the Dow was 103.08 points, or 1 per cent, lower at 10,071.33.

Existing home sales last month dropped a record 27.2 per cent from June to an annual rate of 3.83 million units, the lowest since May 1995.

June’s sales pace was revised down to 5.26 million units from a previously reported 5.37 million.

Analysts polled by Reuters had expected sales to fall 12 per cent to a rate of 4.7 million units last month.

‘This is a worrisome report and while it reflects the volatility caused by the end of the (homebuyer) tax credits, it also indicates a deterioration in the underlying trend for housing demand,’ said Bank of America Merrill Lynch senior US economist Michelle Meyer.

‘For the overall economy, the dangerous link to housing is home prices and this report signifies home prices falling considerably faster, which could tip the economy back into a recession. We are, however, not quite there yet, but this is a worrisome report.’

The housing market has been mired in weakness following the end of a homebuyer tax credit in April, which pulled forward sales and building activity.

The surprisingly weak home sales data added to signs that the US economic recovery was rapidly losing strength, even though the drop may have been exaggerated by the end of the popular housing tax credit.

‘It really is a self-fulfilling prophecy,’ said Mr Aaron Zapata, a real estate agent in Brea, California. ‘If all buyers perceive that home prices are coming down, then they will stop making offers – and home prices will come down.’

Stubbornly high unemployment has burdened the recovery from the longest and deepest recession since the Great Depression in the 1930s.

The US government is expected on Friday to revise downwards growth in second-quarter gross domestic product to an annual pace of 1.4 per cent from 2.4 per cent, according to a Reuters survey.

The recovery, which started in the second half of last year, has largely been driven by government stimulus and manufacturing, as businesses replenish depleted inventories.

With home sales tumbling, the inventory of previously owned homes for sale rose 2.5 per cent to 3.98 million units from June, representing a supply of 12.5 months – the highest since at least 1999 and up from June’s 8.9 months.

The jump in the supply of homes was almost double the six to seven months’ supply considered to be a healthy level.

Last month, foreclosed properties accounted for 22 per cent of sales, while short sales made up 10 per cent. First-time buyers accounted for 38 per cent of transactions, the lowest in 12 months.

The national median home price rose 0.7 per cent from July last year to $182,600 (S$248,400).

REUTERS, ASSOCIATED PRESS

Source: Straits Times, 25 Aug 2010

HOME buyers have snapped up eight units at Waterfront Key and six at Waterfront Gold in the Bedok Reservoir area in the days since last week’s news that an MRT station will be built nearby.

Developer Frasers Centrepoint Homes said the units have been sold since the Government announced details of Stage 3 of the MRT Downtown Line last Friday.

The firm will also officially launch Waterfront Gold this Saturday.

Waterfront Gold, Waterfront Key and the fully sold Waterfront Waves are near the planned Bedok Reservoir station on the newest stage of the Downtown Line.

Experts say projects near this line should experience stronger demand, as with other projects located near MRT stations.

Stage 3 of the Downtown Line stretches from Singapore Expo in the east to Liang Court in River Valley in the south. A total of 16 stops are planned, including Tampines East, Upper Changi, Kampong Ubi and Kaki Bukit.

Ms Christine Sun, senior manager at Savills Research & Consultancy, noted that quite a number of MRT stations on this line are located within commercial and industrial areas, particularly in the North-east and Eastern regions.

This line will boost transport links to suburban commercial sites in Ubi, Kaki Bukit, MacPherson and Singapore Expo, she said.

The Paya Lebar Industrial Park, where 15ha are to be developed under the Masterplan 2008, will be a definite beneficiary.

Ms Sun said more businesses may relocate their offices from the city fringes and downtown areas to the park, and a positive impact on industrial property prices in these areas can be expected.

Residential properties near the Bedok Reservoir, Tampines, Pasir Ris and Upper Changi areas could see higher demand down the road, she added.

Residents in these areas will be able to transfer to the East-West Line stations via the new Downtown Line instead of using bus transfers, she said.

‘For now, owner-occupiers may show more interest than investors in the projects near the new Downtown Line because these are mostly suburban areas.’

Also, the timeframe for the completion of the Downtown Line may be too long for some investors, she said.

Savills Residential director Phylicia Ang concurred that new and existing residential projects near the upcoming Downtown Line should attract demand but said not all investors will be eager to jump in now.

They will have to wait a few years for the line to be ready in order to reap the benefits, she said.

Price is also a key factor as developers and individual sellers may raise their prices, she said.

Stage 3 of the Downtown Line is scheduled for completion in 2017.

Source: Straits Times, 25 Aug 2010

Some return to home and hearth. Mr Robert Crivelli returns to his home and berth.

His family of four lives on the Melivia, a 21m-long houseboat berthed at ONE?15 Marina Club.

Mr Crivelli, 44, senior director at a private bank, was inspired by friends who lived on boats in Hong Kong’s Discovery Bay.

The Swiss was hooked after going to a boat show at ONE?15 Marina Club in 2007.

The family was then living in a $7,500-a-month rented house in Bukit Timah.

His wife, Rakia, 44, and two children Bruno, 15, and Dounia, 11, like their new lifestyle too.

The houseboat has four bedrooms, four bathrooms, a living room, a dining room, a terrace, a kitchen and a laundry room. It has about 2,500 sq ft of living space.

Melivia cost less than $1.5 million and took six months to build in Zhuhai, China, before being delivered to Singapore in early 2008. The family moved in soon after.

‘Some friends could not imagine life on a boat. But after visiting us, they agree it doesn’t move and you don’t really feel like you are on water,’ Mr Crivelli said.

A Sunday Times check with marinas and clubs found that at least a dozen expatriates – mostly from the United States, Germany, Britain and Australia – live on boats here. Some do so with family members.

Software architect Kris Beevers, 29, came to Singapore in September 2008. The New Yorker decided he would move onto a boat after six months of living on land.

His housing agent laughed and told him ‘it was impossible and too expensive’, he said.

Mr Beevers had always wanted to live on a boat but the cold weather in New York was a problem.

Last month, the bachelor finally found a second-hand 12m sloop in Phuket, Thailand which he bought for US$60,000 (S$84,000).

‘There aren’t many affordable boats for sale in Singapore. It’s a bit laborious to fly out to see boats but the difficulties are surmountable.’

His boat, Oia, will arrive here at the end of the month. It will berth at the Republic of Singapore Yacht Club.

Mr Beevers’ decision to live on a boat took into account the property prices in Singapore.

‘At $700,000, a two-bedroom apartment here is the cost of a mansion in many other places,’ he said, adding that living on a boat is generally cheaper, with owners paying about $2,000 a month for berthing and utilities.

‘Buying a boat and living on it is cheaper than paying rent for the same period. And after that, it just gets cheaper and cheaper,’ he said.

There is a bonus too.

‘When I need a break, I can sail my home off to a secluded island and relax for a few days,’ he said.

Source: Sunday Times, 21 Mar 2010