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30 May 2016

Experts share suggestions for Fresh Start Housing Scheme

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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21 May 2016

Temasek overtakes GIC as Singapore’s biggest property firm

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

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

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

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

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

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

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

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

Read the full list here.

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

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

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

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

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

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

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Pinnacle@Duxton prices unlikely to climb much higher

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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JLL remains top in the region, data shows

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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218 HDB flats were sold before MOP in 2015

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Eye on Yishun: Ward of the north

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

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

Drawn to the north

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

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

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

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

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

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

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

Essentially complete

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

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

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

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

Reputable residences

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

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

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

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

Where and how much

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

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

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

Positive prospects

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

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

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

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

Special Advertising Feature

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

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

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

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

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

Smart living

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

Spaces to relax and retreat

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

A host of amenities and conveniences

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

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

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

Great investment potential

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Small island, big plans

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

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

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

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

From regiments to residences

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

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

Service-oriented strategy

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

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

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

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

Uniqueness amid commonality

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

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

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

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

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

Looking to the future

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

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

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

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

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

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

Lessons and challenges

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

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

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Phnom Penh: Asia’s next top city

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

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

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

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

Outperforming the neighbours

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

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

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

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

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

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

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

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

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

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

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

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

Foreign property firms move in

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

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

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

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

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

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

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

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

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

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


Population: Approximately 2.2 million

Total area: 678.5 sq km

Currency: Cambodian Riel

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

GDP growth: 7.5 percent (2016)

Future transport: Public train service by 2020

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

Distance from Singapore: Approximately 1,140 km

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


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


The Gateway
Russian Boulevard, Phnom Penh

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

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

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

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

The Peak
Samdech Hun Sen Road, Phnom Penh

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

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

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

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

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

1. Determine your type

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

2. A buyer’s duty

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

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

3. Doing up your living space

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

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

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Rental woes in our residential market

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

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

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

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

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

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

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

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

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

Explaining the numbers

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

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

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

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

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

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

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

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

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

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

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

What can landlords do?

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

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

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

Quick tips for investors

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

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

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

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

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

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

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

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

However, Singapore is considered more expensive in other categories.

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

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

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

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

Read the full report here.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Read the full report here.

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

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

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

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

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

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

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

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

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

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

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Prime properties now more affordable: JLL

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Read the full report here.

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

NParks seeks design ideas for Jurong Lake Gardens

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

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

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

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

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

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

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

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

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

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HK home sales plunge 70% from last year

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

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

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

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

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

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

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

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

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Ascott to open serviced apartment in one-north

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Strong Indonesian interest for Cairnhill Nine

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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20% of HDB loan applicants asked for larger loans

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

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

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

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

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

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Completed condo prices up 0.1%

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Wandervale will open for sales booking on 5 March 2016.

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

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Median household income on the rise

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

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

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

Household income from work includes employer CPF contributions.

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

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

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

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

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

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

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Tanah Merah site awarded

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

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

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

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

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

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

5 tips when navigating Singapore’s property market in 2016

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

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

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

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

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

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

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

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

Of this, 6,744 EC units remain unsold.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Tenants will rule the HDB market in 2016.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Special Advertising Feature

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

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

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

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

Raising the bar on outdoor facilities

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

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

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

Seamless connectivity

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

Endless amenities at your doorstep

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

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

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

Strong investment potential

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ECs offer good profits: report

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The next BTO exercise will take place in May, with around 4,070 new flats in Ang Mo Kio, Bedok, Bukit Merah, Bukit Panjang and Sembawang being offered for sale. In addition, 5,000 balance flats will be released in a concurrent Sale of Balance Flats (SBF) exercise.

Picture Source: Artist’s impression of the Anchorvale Plains BTO project in Sengkang. Source: HDB
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Australia is the favourite among S’porean property investors

Australia, the UK and Japan have emerged as the top three destinations for Singaporeans looking to invest in overseas property, according to a survey commissioned by property investment firm IP Global.

Australia topped the list with 32 percent of respondents saying they would consider investing there. This was followed by the UK (16 percent) and Japan (13 percent).

These countries are considered favourable for investment due to their political stability, strong rule of law and ease of access. “Property prices in these countries have also been rising, making them an attractive destination for investors looking at medium to long term capital gains,” said Alex Bellingham, Director of IP Global.

For instance, the Australian cities of Melbourne and Canberra recorded the highest annual house price growth in six years during Q4 2015. In the UK, the average residential price increased by 7.7 percent year-on-year in November 2015, with prices in London up 9.8 percent, according to the Office of National Statistics. As for Japan, prices of condos have soared by over 20 percent since 2013, based on data from Japan Macro Advisors.

Moreover, the strengthening of the Singapore dollar against other currencies has been a key factor for many investors seeking out overseas assets, noted Bellingham. Over the past 12 months, it has strengthened against the Australian Dollar, British Pound and the Japanese Yen, making it more affordable for Singaporean investors to purchase properties in these countries.

The Singapore dollar has risen by nearly 30 percent versus the Australian Dollar and more than 14 percent against the Japanese Yen since the start of 2013. It has been rising steadily against the British Pound, gaining eight percent in just the past five months.

The online survey, which was carried out from 12 to 20 January 2016, involved 1,041 respondents from Singapore.

Picture Source: Melbourne’s city skyline.
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S’pore still top for safety, quality of life in Asia

Singapore has retained its position as the safest Asian city and for offering the best quality of life within the region for expatriates, according to Mercer’s 18th Annual Quality of Living Survey, which ranked 230 cities worldwide.

Globally, the city-state remained in 26th spot for quality of living, beating out its Japanese rivals Tokyo (44th), Kobe (46th), Yokohama (49th) and Osaka (58th).

Singapore also surpassed other Southeast Asian cities like Kuala Lumpur (86th), Bangkok (129th), Manila (136th) and Jakarta (142th), as well as Chinese cities such as Hong Kong (70th), Taipei (84th), Shanghai (101th) and Beijing (118th).

Meanwhile, the top five cities with the best living standards are Vienna, Zurich, Auckland, Munich and Vancouver. On the other hand, Khartoum in Sudan, Haiti’s Port-au-Prince, Sana’a in Yemen, the Central African Republic’s Bangul and Baghdad landed in the bottom five on the list.

The data was largely analysed between September and November 2015.

According to Mercer, a global human resources consulting firm, personnel safety is a key factor in determining expats’ quality of life. Ensuring that workers of multinational firms are safe is also an essential part of talent retention and recruitment strategies of these companies.

“Managing safety and health issues is of utmost importance, especially for employees who relocate with a family,” said Slagin Parakatil, Principal at Mercer, who is also responsible for the quality-of-living research.

“Other elements that add to safety costs in the host location are obtaining suitable and well secured accommodations; having an in-house comprehensive expatriate security programme and providing access to reputable professional evacuation services and medical support firms, and finally, providing security training and guarded office premises,” he added.

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Top bid of $419.4m for Tanah Merah site

The tender for a 2.4ha residential site at New Upper Changi Road/Bedok South Avenue 3 (Parcel B) closed on Tuesday (23 Feb), after attracting eight bids from property developers, revealed the Urban Redevelopment Authority (URA).

Launched for sale on 20 January this year, the site was originally on the reserve list of the Government Land Sales (GLS) Programme. The URA had, on 7 January, accepted a successful application for the site to be triggered for sale.

The highest bid of $419.38 million was submitted by CEL Residential Development, a subsidiary of Chip Eng Seng Corporation. This translates to around $761 psf on the gross floor area.

Offered on a 99-year lease, the land parcel could yield about 570 housing units.

“The plot benefits from its proximity to the Tanah Merah MRT station in a relatively mature and established estate,” said Desmond Sim, CBRE Research Head, Singapore and South East Asia.

“That the site was triggered from the reserve list indicates developers still maintain healthy interest in sites, especially in sites with a relatively palatable quantum and with time on their side. Some developers are diversifying their risk by entering joint ventures, which some of the bidders have done in this tender,” he added.

A number of condominium developments such as Stratford Court, East Meadows, Casa Merah, Optima@Tanah Merah, and the upcoming The Glades are located in the vicinity.

A decision on the award of the tender will be made after the bids have been evaluated, said the URA.

Picture Source: Map of the Tanah Merah residential site. Source: URA
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Singapore homes seriously unaffordable: report

Singapore’s market cooling measures have been effective in reducing the prices of HDB flats and private homes over the past few years, but housing costs here are still seen as too high, revealed findings published by a global report last month.

According to the 12th Annual Demographia International Housing Affordability Survey, Singapore has a “seriously unaffordable” rating of 5.0, no change from last year’s survey.

The report used the median multiple indicator, which is the median house price divided by gross annual median household income, to rate housing affordability across 367 cities in nine countries.

A grade of 3.0 and below is considered affordable, 3.1 to 4.0 (moderately unaffordable), 4.1 to 5.0 (seriously unaffordable) and 5.1 and over (severely unaffordable).

Despite being seen as expensive, the report noted that “Singapore has been far more successful in controlling housing affordability than in markets that have followed the British urban containment model”.

Specifically, the HDB was recognized for ramping up the supply of new flats and reducing new home prices.

“One strategy has been to increase what are effectively “across the board” subsidies for all new houses (not counting special grants, such as for first home buyers).

“Should the present policy continue, it is likely that resale house prices will rise slower or even fall in the future, improving Singapore’s housing affordability,” said Demographia.

Eligible first-time buyers of new HDB flats currently enjoy up to $80,000 in housing grants, comprising up to $40,000 in Special CPF Housing Grants and up to $40,000 in Additional CPF Housing Grants.

Meanwhile, Hong Kong has the least affordable housing in the world, with a median multiple of 19.0. This rating is also the highest recorded in the 12 years of the Demographia Survey.

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CapitaLand to launch integrated project in Orchard

UPDATED: CapitaLand will launch an integrated development consisting of residential apartments and serviced residences in the Orchard Road district to the public next month.

At 122 metres tall, it is set to become one of the tallest buildings in the area, and will be directly linked to Paragon via a covered link-bridge.

Located at Cairnhill Road, the 30-storey Cairnhill Nine is the first condominium to launch in the Orchard area in the last three years, and features 268 one, two and four-bedroom apartments and penthouses.

Unit sizes range from 591 sq ft to 3,864 sq ft, with prices starting from $1.35 million for a one-bedder, $2.49 million for a two-bedder, and $3.68 million for a four-bedder. The project’s average price of around $2,500 psf was benchmarked against neighbouring projects.

“Cairnhill Nine is targeted at young professionals, families and foreign buyers who enjoy living amidst the buzz of Singapore’s world-renowned shopping belt,” said Wen Khai Meng, CEO of CapitaLand Singapore.

“We have identified the profiles and lifestyle choices of potential buyers after conducting extensive research on the preferences of those seeking homes in the heart of Orchard Road.”

Last weekend, the property developer held a roadshow in Jakarta targeting Indonesians, as the Orchard area has traditionally been popular with this group of buyers, shared Wen.

Aside from premium finishings, quality fittings and built-in storage systems, the units will also incorporate smart home technologies.

“We will provide our home buyers a smart home starter kit which allows them to remotely control Internet-of-Things (IOT)-enabled home devices such as the air-conditioning system, digital lock with biometric access, and security camera,” noted Wen.

The 99-year leasehold project is close to the Orchard and Somerset MRT stations, as well as shopping malls, established schools and medical facilities. It is expected to be completed at the end of this year.

A VIP preview of Cairnhill Nine will be held at the project’s showflat at Indus Road this Saturday (27 Feb), while viewings by appointment will start next weekend.

Adjoined to Cairnhill Nine is the 20-storey Ascott Orchard Singapore. The serviced residence will feature 220 luxury apartments ranging from studios to two-bedroom units and penthouses. Scheduled to open early next year, the property will offer short- and long-term stays.

CapitaLand’s other integrated development in the vicinity, ION Orchard shopping mall and The Orchard Residences condominium, was completed in phases from 2009. During the launch of the first phase, 98 of the 175 residential units were sold for an average of $3,213 psf.

Picture Source: Artist’s impression of CapitaLand’s latest development at Cairnhill.
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Pound hits 2.5-year low against the Sing dollar

Amidst rising fears that the UK will leave the European Union (EU), the pound sterling dropped to a two-and-a-half year low against the Singapore dollar on Monday (22 Feb), after a prominent politician announced his support for Britain to exit from the 28-nation bloc, reported TODAYonline.

London Mayor Boris Johnson pledged to back the ‘Brexit’ campaign in opposition to Prime Minister David Cameron, who wants the country to remain within the EU.

“The fact that prominent members of the Conservative Party announced they will campaign for Britain to leave the EU likely underscored investors’ concerns that Brexit risks could increase,” said Valentin Marinov, Head of Group-of-10 currency strategy at Credit Agricole.

According to Bloomberg data, the pound fell to S$1.972 early Monday morning – the lowest level since 30 August 2013, when the exchange rate sank to S$1.9702. So far this year, the British currency has dropped by 5.5 percent against the Singapore dollar.

Its exchange rate versus the US dollar also declined to US$1.4067, the weakest since February 2009. This erased the gain made on Friday when Mr Cameron secured a deal on membership terms with EU leaders in Brussels.

Earlier this month, Goldman Sachs projected that the pound may slump to US$1.15 to US$1.20, the lowest levels last witnessed in 1985, if it leaves the EU. On the other hand, the currency may rise to US$1.60 by year-end if the UK remains a member, stated HSBC in a forecast last month.

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Over 400 applications for Wandervale EC

The Wandervale executive condominium (EC) by Sim Lian Group has received more than 400 e-applications since its launch on Thursday (18 Feb), sources told PropertyGuru.

This figure accounts for more than 75 percent of the 534 units at the 99-year leasehold project, which sits on a large land parcel measuring about 205,138 sq ft.

Crowds were seen streaming into the showflat located at Choa Chu Kang Avenue 3 when PropertyGuru visited the site on Sunday afternoon (21 Feb).

The EC consists of 130 three-bedroom, 322 three-bedroom premium, and 82 four-bedroom units, ranging from 958 sq ft to 1,249 sq ft, across nine residential blocks.

Wandervale is within proximity to the Choa Chu Kang MRT station and bus interchange, Bukit Panjang MRT station on the newly opened Downtown Line 2 (DTL2), Lot One Shoppers’ Mall, and South View Primary School. The project is expected to obtain its TOP by 2019.

Jointly marketed by OrangeTee and ERA, the project is priced at approximately $750 psf to $770 psf on average. The actual prices of the units will be released two days before the sales booking, which starts on 5 March.

PropertyGuru understands that the larger three-bedroom premium and four-bedroom units were more popular with buyers.

According to Doris Ong, ERA’s Chief Operating Officer, the response has been better than expected.

“We’ve seen a good level of interest from first-time buyers and HDB upgraders living nearby, as well as those working in this part of Singapore.”

She noted that the spacious layout of the units is a key selling point.

Calvin Fobrogo, a prospective buyer, said he was drawn to the project’s location and price, and was considering upgrading from a five-room HDB flat and moving his family into a four-bedroom unit.

“This EC is near my house and the price is lower than the Sol Acres EC,” noted the 39-year-old engineer.

A recent Credit Suisse report revealed that MCL Land’s Sol Acres project in Choa Chu Kang has sold 28 percent of its 1,327 units at an average price of $800 psf.

Notably, HDB upgraders have to pay a resale levy of up to $50,000 for EC units bought directly from a developer, where the land sale was launched on or after 9 December 2013, when the ruling took effect.

More Singaporean couples are now eligible to buy ECs after the income ceiling cap was raised to $14,000 in August 2015. First-time buyers are also eligible for CPF Housing Grants of up to $30,000.

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15 April 2016

Larger resale condos selling for less than $1m

With the various property cooling measures in effect, buyers are spotting homes in the private resale market for $1 million or less, reported The Straits Times.

And these homes are not all shoebox-size. Some of the bigger units in good locations like Bayshore Road have been going for this amount.

“In 2010 to 2012, $1 million was a sort of standard or expected price to pay, and it was unlikely buyers could get something good for less than that,” said R’ST Research Director Ong Kah Seng.

“Now, opportunistic buyers are referencing it as a ceiling price. They are scouring for properties significantly lower than $1 million. It is still not easy to get these deals, but definitely much easier than before.”

In fact, the proportion of freehold or 999-year leasehold homes resold at this price range climbed to 17 percent from 2014 to this month, from just six percent from 2010 to end-2013.

Aside from the resale market, bargains are also being seen in the auction market, where mortgagee sales are taking place.

Since the start of Q4 2015, units on auction with opening prices of below $1 million included the mortgagee sale of a 790 sq ft apartment in Tiong Bahru and an owner’s sale of a 527 sq ft unit at Dunearn Suites, revealed data from Colliers International.

In 2016, mortgagee sales are expected to be on a stable uptrend, potentially exceeding 270 in number, which is more than what was recorded during the 2008 Global Financial Crisis, noted Grace Ng, Deputy Managing Director at Colliers.

“The rising interest rate will add further strain on borrowers, particularly for those holding multiple properties. However, the numbers are not expected to spike as the employment rate in Singapore remains high, enabling most owners to service their mortgage loans,” she said.

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S’pore property investments up sharply in Q4

Property investment volumes in Singapore’s residential sector rose 14.8 percent to $1.69 billion in Q4 2015 from $1.47 billion in the previous quarter, revealed a Colliers International report.

“The $999.98 million transacted from the sale of three public residential state land parcels helped sustain the overall investment sales value for the residential sector during the final quarter, enabling it to claim its second top spot on the quarter’s sales chart with a market share of 28.4 percent.”

The total value of property investments in Singapore stood at $5.96 billion in Q4 2015, up 39.3 percent from Q4 2014.

In the private residential market, investment sales amounted to $688.83 million in the last three months of 2015. The good class bungalow (GCB) segment led the activity in this sector, with nine GCB transactions worth $160.67 million recorded during the period under review.

“Overall, the transactions involving large landed homes (with each worth above $5 million) contributed 70.1 percent of the $662.75 million accumulated in the private residential sector.”

Colliers noted that the most significant transaction was a two-storey freehold GCB at 61 Dalvey Road. Sold for $26 million, the bungalow is situated on an elevated plot opposite the Israeli Embassy and features five bedrooms and a swimming pool.

Meanwhile, no collective sales were recorded in Q4 2015 as tighter regulations softened end-user demand.

“Collective home sellers, on the other hand, are generally still holding on to their high asking prices. This mismatch in price expectation will likely stall the collective sales market in 2016.”

The consultancy expects public land sales this year to fall below 2015’s level as the government cuts back on public land supply.

“Given that a lower supply of land is available through the Government Land Sales (GLS) programme, the public sector’s contribution to the total investment sales value in 2016 is likely to fall below the $5.27 billion concluded in 2015.”

Picture Source: A good class bungalow in Singapore.
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Landmark launch in Singapore

Landmark Place, the latest UK development, is hoping to attract buyers from Singapore with a property exhibition being held here next weekend (27 to 28 February) at the Four Seasons Hotel, revealed marketing agent Knight Frank.

Located within the prime London city district, the 165-unit development consists of two interconnected buildings, one of nine storeys and the other eleven storeys, which appear to be wrapped in glass. The project gets its name from three landmarks bounding the buildings – the Thames, the Tower of London and Tower Bridge.

A mix of one- to three-bedroom apartments and penthouses are available, with prices ranging from around £650,000 (S$1.3 million) for a one-bedroom suite to £10 million (S$20.14 million) for a penthouse.

Landmark Place is served by the Tower Hill, Fenchurch Street and Cannon Street tube stations, as well as the Thames Clipper commuter and other leisure river services.

Linda Chern, Director, International Project Marketing, Knight Frank Singapore, said: “The UK remains one of the preferred foreign investment destinations for Singapore investors. Within close proximity to amenities, the development (Landmark Place) is easily accessible to the city and the financial district.”

UK property portal Rightmove recently revealed that London home prices rose 5.4 percent month-on-month in February 2016, bringing the average price to £643,843 (S$1.3 million). Prices in inner London climbed almost eight percent to £848,000 (S$1.7 million) during the period.

Picture Source: Artist’s impression of Landmark Place in London. Source: Knight Frank
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Developers call for cooling measures review amid hefty $100m charges

Real Estate Developers’ Association of Singapore (Redas) President Augustine Tan has urged the government to review the property cooling measures as developers face potential charges of $100 million for unsold private residential units, reported TODAYonline.

“The real estate market is reeling from the compounding effects of an oversupply situation, rising vacancy rates, weak demand and increasing interest rates,” said Tan at the association’s Spring Festival Lunch.

“There is therefore an urgent need for action to bring stability and ensure a soft landing to prevent further damage to the fragile economy,” he added, citing turmoil in financial markets, Singapore’s own restructuring journey and weak global growth as risks to the economy.

As at end-2015, there is a supply of more than 60,000 units in the pipeline and a record 25,000 vacant units, noted Tan, who also serves as Far East Organization’s Executive Director for Property Sales.

Aside from the mounting supply, developers also face pressures from measures like the Qualifying Certificate (QC) and Additional Buyer’s Stamp Duty (ABSD).

First introduced in 2011 and revised in 2013, the ABSD is a tax imposed on both developers and individual property buyers.

The amount paid by individuals depends on the number of properties they own and residency status, while developers have to pay 10 to 15 percent of the land cost unless they complete and sell all the units within five years from the date of land acquisition.

Developers with foreign holdings will also have to meet the QC rules, in which they are required to complete the project in five years of acquiring the land and sell all units within the next two years. Those who need more time to meet the requirements can pay extension charges that are pro-rated according to the proportion of unsold units. Land sold on Sentosa Cove and through the Government Land Sales (GLS) Programme do not need QC.

In 2016, Tan estimates that around 700 unsold residential units across 13 developments will be affected by the QC, with charges amounting to almost $100 million.

Moreover, the ABSD remission clawback for projects with unsold units will kick in by end-2016, putting further pressure on prices. He revealed that around 6,000 unsold units in 33 developments will be affected by the ABSD remission clawback in 2017 and 2018.

As a result, several developers have been lobbying for the removal of the ABSD, arguing that the Total Debt Servicing Ratio (TDSR) framework will help ensure that buyers stay prudent with their acquisitions even without the ABSD.

“Since 2009, the successive introduction of the government’s property measures has cooled the market, bringing down transactions and prices. With safeguards in place such as the continuation of the prudent TDSR measures together with the current economic situation, property prices will be kept in check,” said Tan.

“It is therefore timely to consider a calibration of the cooling measures.”

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Too many malls in Singapore?

According to the latest data from the government, Singapore currently has over one hundred shopping malls spread across the island. Just along Orchard Road—the country’s world-famous shopping belt—are at least 40 retail malls, with many standing side-by-side along the 2.2 kilometre shopping boulevard.

For a country known as one of the hottest shopping destinations in Asia, the number of malls currently operating in the Republic might be an indicator of how the retail property market has performed over the years. However, as always, there is a flip side to everything, a common observation among locals and tourists alike is that there are a lot, if not too many malls in Singapore already.

In fact, RHB Research reported in September 2015 that the Republic has 1.08 sqm of retail space per capita. That’s one mall for every 53,000 people.

It also stated that the city-state has the highest level of retail space per capita among ASEAN countries – significantly above Bangkok which has 0.8 sqm per capita, and nearby Kuala Lumpur with 0.71 sqm per capita.

But what does this mean for the local retail market? What are the implications to mall operators, tenants and consumers?

Here, there, everywhere

While almost half of the country’s retail supply can be found in the downtown Orchard area, a number of malls have also started sprouting up outside the shopping enclave in recent years.

As reported previously in Issue 91 of PropertyGuru News & Views, mall decentralisation in Singapore has started to pick up, and the market is seeing more retail malls dominating some areas.

Jurong East, for example, has changed dramatically in recent times. Just in the last five years, Jurong East saw the opening of four shopping malls—JCube (2012), Jem (2013), Westgate (2013) and BIGBOX (2014)—that feature specifications that are typically only seen in those located in Orchard Road.

It can be observed that these malls are situated quite close to, if not side-by-side each other, and just like those in Orchard, allow seamless connectivity to other malls around the area. Specifically, JCube, near Jurong East MRT station, is connected to it via a pedestrian crossing. Just across the station is the 7-storey mall Westgate, which provides a covered link—J-Walk—to Lend Lease’s mixed-use development, Jem.

From Jem, consumers can access Singapore’s warehouse shopping mall, BIGBOX, via a link bridge. Also in Jurong is the outlet mall IMM Building, which provides patrons shuttle services to and from Westgate and JCube, and via a link bridge to the train station.

It is noted that these malls—JCube, Westgate and IMM Building—are owned and operated by CapitaLand Malls.

Responding to an enquiry by PropertyGuru, CapitaLand discussed how they tackle the challenges of remaining relevant to consumers and how they keep their malls competitive among other malls.

“We position our malls differently to cater to different shopper segments, even though they may be located near one another,” shared Teresa Teow, Head of Retail Management for Singapore at CapitaLand Mall Asia.

“To illustrate, the three CapitaLand malls in Jurong Gateway are positioned differently to complement one another. Westgate is the premier lifestyle and family mall, offering the best of downtown shopping with brands that in the past were found only in malls along Orchard Road.

“JCube is the leisure and entertainment hub… IMM Building nearby is Singapore’s largest outlet mall which has 85 outlet stores,” Teow said, adding that these three malls “offer the equivalent of a three-in-one mega mall” forming a retail destination where there is “something to offer every shopper.”

Experts said having many malls in one location is not entirely a bad thing. “The more diversity, the more vibrant the shopping scene,” said Sulian Tan-Wijaya, executive director of retail and lifestyle at Savills Singapore.

“The upside (of having many malls) is the ability to create a critical mass and large enough cluster of shopping and lifestyle experiences for a shopping destination. This is how Orchard Road helped position Singapore as a shopping capital, where global retail giants coexist with independent, eclectic small retailers to complete the shopping experience,” she added.

However, the property consultancy also warned of the downside with an oversupply of malls. “(There is) a dilution of tenant mix, and duplication of brands. Landlords compete for the same tenants and too many retailers compete for the same pool of shoppers,” she said.

Too many, too similar

And because a lot of the malls here target the same consumers, it has resulted in a market with too many malls that are too similar.

Last year, a number of retail groups, particularly those in the fashion line, announced shop closures and consolidations. One of them is Al-Futtaim Group which manages Robinsons, John Little and Marks & Spencer in Singapore.

The group announced the closure of some of Singapore’s best-loved department stores last March, saying it’s the group’s “ongoing business strategy to ensure the long-term sustainability of our businesses”.

“There is not enough differentiation in the store,” said the group’s head of business in Asia, Kesri Kapur, as quoted in TODAY. “For such a small market, if it’s to be viable in the longer-term and sustainable, there has to be some differentiation (among) the stores.”

Among the over 100 malls in Singapore, many overlap in terms of tenant mix and offer the same brands, services and entertainment to consumers. However, there are still a number of shopping malls that stand out when it comes to their tenant mix and concept. These include Funan DigitaLife Mall at North Bridge Road, which mainly houses shops selling computers and other electronic merchandise, and Velocity in Novena, which offers an extensive range of active-lifestyle stores.

All ahead

With the current economic conditions here and overseas resulting in slower retail sales from both locals and tourists, coupled with other existing challenges such as the manpower crunch and rising business costs, analysts say that for malls to survive these challenges here, the key is to ensure competitiveness.

“Landlords will find it harder to attract tenants to their mall and will be competing amongst themselves for the same tenants. An over-supply can also lead to downward pressure on rents without increase in demand from new retailers,” Savills said. “If they are willing to lower their rents to attract the right concept for the mall, they will eventually regain their higher rents when the market recovers.”

Savills added that mall operators should be quick in “spotting new trends, customer preferences and consumption behaviours”.

“The slowdown in retail sales, competition from online retail and over-supply of malls in some areas are all negative near-term factors for malls in these locations,” said Tan-Wijaya, adding that only if these malls are responsive and receptive enough to changes emerging in the retail landscape will they be able to “strengthen their competitive position in the long term and enjoy the fruits of their efforts during the difficult times.”

CapitaLand Malls agrees with this sentiment and looks to ensure that its malls meet the needs and aspirations of consumers. “To this end, we continually reinvent our malls to ensure that they stay relevant and attractive to shoppers. This includes asset enhancement initiatives to optimize the retail offerings and refreshing the tenancy mix, as well as carrying out attractive promotions to draw shoppers to our malls.”

Looking ahead, Savills believes that the current number of well-managed retail malls here “will remain proactive in managing their tenant mix”, and expects these malls to replace weaker tenants with newer concepts or better-performing retail brands.

And while there could be some businesses that are casualties of the growing number of retail malls here, analysts believe that “the clear winner” in this scenario is the consumers as they will continue to be spoilt for choice for retail options.

Meanwhile, Knight Frank’s Q3 2015 report estimates that 4.2 million sq ft of retail space of net lettable retail space will come on-stream in Singapore until 2019 (Table). However, JLL said the retail supply in the republic, not including Jewel @ Changi Airport, would be at a 10-year low from 2016 to 2018. This comes after the government disapproved the initiation of new retail space since 2013, the property consultancy said in its 2016 market outlook.

Picture Source: REALIS,Knight Frank Research
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Commercial property outlook 2016

A year ago, the commercial market was a lot more optimistic and buoyant, on the back of tight supply, and rising rents, especially in the tight CBD area. Coupled with the outflow of capital from a residential property market seized up by 13 rounds of cooling measures, the commercial property market seemed like a bright spot in Singapore’s frigid real estate market.

In the space of a year, this optimism has become a lot more muted, with the tumbling of oil prices, a bearish Mainland Chinese economy and a weakening Eurozone. It’s time to take a good hard look at the commercial sector, and see what we can expect in the coming year.

Office Space

As an open economy that’s a regional financial hub for several companies in banking, financial services and commodities, the various crises have taken their toll on the office segment.

In 2015, high profile layoffs in companies such as Standard Chartered, Royal Bank of Scotland and Morgan Stanley made headlines. In the coming weeks and months, Barclays and Credit Suisse, amongst several others, are also expected to announce job redundancies.

With many financial institutions cutting back on overhead costs to stay buoyant, rents are taking a pummeling. Figure 1 shows the Urban Redevelopment Authority’s (URA) Office Rental Index, for both the Central and Fringe Areas. Between Q2 and Q4 of 2015, rents in the Central area fell 9.1 percent, while those in the Fringe fell 8.3 percent over the course of 2015.

With overall pessimism leading to lowered demand for office space, rent prices are likely to continue falling over the course of 2016. However, the sub-segment most likely to be affected by the economic turmoil is likely to be office spaces in the city fringe.

Figure 2 shows the different vacancy rates across the key office areas of the island, including the prime Downtown Core and Orchard Areas, as well as the Rest of Central and Fringe areas. From Q4 2014, the vacancy rate in Fringe areas have remained consistently high, around 13 percent, suggesting that more than one in 10 of completed stock is unoccupied or untenanted.

In contrast, vacancy rates for the Downtown Core and Orchard Areas have been on a decline over the course of 2015. Real estate consultancy CBRE suggests that this is a “flight to quality,” with corporate tenants taking advantage of lowered rents to move their operations into more prime areas. This is in contrast to past years, where tight supply and high rents in the prime areas led banks to move their back room operations into regional centers and business parks.

Supply in the fringe-CBD saw a boost in the second half of 2015 with the earlier than expected completion of South Beach. It is likely to increase in 2016 with Guoco Tower, part of the integrated Tanjong Pagar Center, and Duo at Beach Road, completing construction and entering the supply pool. These developments will likely continue to apply pressure on office rents outside the city fringes.


The industrial property sector is facing strong headwinds, buffeted on almost all sides. The global economic uncertainty translated to declines in manufacturing output in Singapore, with the Purchasing Managers Index (PMI) dipping to a 49.0 in January 2016. In fact, for most of 2015, the PMI stayed mostly below the 50.0 mark, suggesting an overall lack of confidence.

With output on the decline, demand for industrial property space is falling as manufacturers scaling back operations. This is exacerbated by an oversupply of industrial property space. Between 2013 to the end of 2015, JTC Corporation and URA, sold 61 sites, totaling over 583,000 sq metres of land, for both B1 (light industrial) and B2 (heavy industrial) purposes. This fi gure does not include some of the smaller industrial buildings that were collectively sold over the past two years.

URA predicts that by the end of 2016, a total of 2.2M sq metres of factory space is likely to be completed. Because this is currently beyond what the market can absorb, URA has also tapered down the supply, with a much lowered 789,000 sq metres of factory space to be completed in 2017, and then another 623,000 sq metres in 2018.

The combination of weak sentiment and oversupply has led to a vacancy rate of just over 10 percent and 6 percent for privately owned industrial property and government leased industrial property respectively (refer to Figure 3). From the charts, it is quite clear that the vacancy rate for both segments are on an upward trajectory.

Weak manufacturing sentiment and a slowing global economy will reduce demand for industrial space, suggesting that the vast upcoming supply will find it difficult to be absorbed. We might see vacancy rates increase to around 12 percent or even higher, for factory space by the end of 2016.

This has also negatively aff ected the sale prices and rentals of industrial property. Over the course of 2015, both the sale price index and rental price index of industrial properties have seen quarterly declines, ending the year at 105 and 100.6 respectively (refer to Figure 4).

These prices are likely going to tumble even further as 2016 progresses, and will be a buyers’ and tenants’ market. Investors who fl ocked to this segment, and who do not have adequate holding power, or are dependent on rents to repay their loans, are likely going to have to slash rental or sale prices.

Picture Source: A worm’s eye view of CBD buildings.
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Malaysia: Down, but not out

With the Malaysian ringgit falling 30 percent against the Singapore dollar, an uncertain economy, and the political scandal affecting Prime Minister Najib Razak, many Singaporeans are left wondering whether this is the right time to enter Malaysia’s property market, or whether they should adopt a wait-and-see attitude.

According to Ryan Khoo, Founder and Director of real estate consultancy Alpha Marketing, the current bearishness on Malaysia stems from oil price drops and the fallout from the 1MDB crisis.

But despite all the negative news reports about Malaysia, the country has been registering a GDP growth of four to 4.5 percent in the last few years, said Khoo. “Even with the recent oil price drops, GDP growth rate forecasts for 2016 are still at four percent. Compared to Singapore, which narrowly escaped a technical recession in 2015, I think Malaysia as an economy is quite vibrant and often misperceived.”

For prospective investors looking to buy Malaysian property for their own use, retirement, or passive income, Khoo explained that the sliding ringgit has made property across the causeway much cheaper and therefore, more attractive.

However, currency alone is not enough to make a buying decision, he said. “For investors today, they are generally more concerned about other factors, such as politics and oil prices, which may impact the ringgit further.

“If you want to buy Malaysian property, you must have a five- to 10-year view of how a particular location, local economy and type of property will fare, not just look at currency.”

A time to buy

Khalil Adis, founder of Khalil Adis Consultancy and brand ambassador for Iskandar Malaysia, believes that it is a good time to invest if you’re looking at fundamentals.

“Under investment fundamentals, you buy at a low,” said Adis, adding that there is still some demand for housing units and people are still renting.

“Foreigners don’t live there, so they’re spooked by the political situation, particularly the 1MDB saga. But there are good investment opportunities, such as hotel suites in areas like Malacca and Kuala Lumpur, which see many tourists but not enough hotel rooms.”

Khoo stated that contrary to popular belief, there is still a healthy rental market in Malaysia. “It’s always about location, pricing, furnishing and how you market your property. Many buyers from Singapore have to take note that managing property from a distance is not easy unless you have someone managing it for you.

“Some property types will rent faster than others. It is also becoming more popular in Malaysia to rent properties on a short-term basis via platforms such as Airbnb, as yields are higher.”

In general, high-rise properties can fetch rental yields of five to six percent at current prices, while rental yields for landed properties are in the range of four to five percent, noted Khoo.

He feels that Malaysian properties will always be on the radar of investors here due to the proximity and the fact that both countries are closely linked, culturally and economically.

His advice for investors is to look at commercial property, which has more upside potential than residential property. “Industrial property prices are at a low base, just above S$100 psf, so it’s difficult to see it dropping lower.”

He cited Iskandar Malaysia as one area that has been seeing record investments in manufacturing over the past three years that have translated into demand.

Optimism remains despite oversupply

Although the threat of an oversupply of homes in Iskandar continues to weigh heavily on the minds of investors, CapitaLand, South East Asia’s biggest property developer, remains optimistic about the potential of the region.

The Singapore-based developer is moving forward with plans to build a premier waterfront residential community on A2 Island in Danga Bay, comprising high-rise apartments, landed homes and other supporting amenities and facilities.

A statement released by the company last year said: “CapitaLand takes a long-term view of this project and is confident of the long-term prospects of Iskandar Malaysia. The development will be paced and executed in phases over a period of 10 to 12 years according to market conditions, as originally envisaged.”

During a parliamentary session in May 2015, then Minister for Culture, Community and Youth, Lawrence Wong, warned of a future housing glut in Iskandar that could devalue homes.

“Based on data from Malaysia’s National Property Information Centre (Napic), there are around 336,000 new private residential units in the pipeline — more than the total number of private homes in Singapore,” said Wong.

He added that buyers have become more cautious, with surveys showing that the number of Malaysian properties purchased through local property agencies plunged from 2,609 units in 2013 to 838 in 2014.

Adis has also observed that many Singaporeans are still waiting on the sidelines. “They are attending a lot of seminars but not purchasing property. In my opinion, they are doing their research first and waiting for the market to bottom out before jumping in.”

The HSR effect

In addition, with construction work expected to start in the next two years on the high-speed rail (HSR) link between Kuala Lumpur and Singapore, and the rapid transit system link between Johor Bahru and Singapore, Khoo believes that confidence will grow and buyers will return in huge numbers.

“Property prices in Iskandar Malaysia are still a fraction of Singapore’s, and the rail links will remove all the bottlenecks that plague the Causeway and Second Link.”

As such, “picking the right properties should ensure that you get the first choice of buyers or tenants, and that separates an average investor from a good one,” he noted.

Meanwhile, Adis reckons that Kuala Lumpur is another area worth looking at, with several upcoming mega projects, such as three MRT lines and Tun Razak Exchange. The latter is touted as Malaysia’s new financial hub, set to boost property values in the city.

Financing not an issue

For buyers looking to obtain financing, Khoo noted that while banks in both Malaysia and Singapore are tightening their lending standards for home loans, he does not see it as a major issue for overseas buyers of Malaysian property.

“Singaporeans and Malaysians earning Singapore dollars have a much easier time getting a loan, as the currency exchange is considered when factoring your repayment capability.”

But Adis thinks it is easier to get financing in Malaysia, as the banks there do not check the Total Debt Servicing Ratio (TDSR) of borrowers. Introduced by the Singapore government in June 2013, the TDSR limits the amount of a borrower’s gross monthly income that can be spent on debt repayments to 60 percent. In addition, Singaporeans buying property in Malaysia can obtain financing of 70 to 80 percent on the property’s value.

To get financing, Khoo explained that Malaysian banks require copies of the last three months of payslips, copies of bank account statements for the last three months, and past two years of IRAS tax notices.

For those who want to know more about Malaysian property investments, PropertyGuru will be hosting its first Malaysia Property Show for 2016 at the Marriott Hotel in Singapore on the weekend of 5 to 6 March. The two-day property exhibition will feature several new project launches and seminar speakers, including Adis, who will be providing insights on Malaysia’s commercial property market.

Pre-registration for the show is recommended, and those interested can do so at:


Population: 30.5 million

Total area: 329,847 sq km

Currency: Ringgit

GDP per capita: US$25,833 (2015)

GDP growth: 4.9 percent (2015)

Future transport: High-speed rail (HSR) link between Kuala Lumpur and Singapore

Average house price: US$72,519 (Q3 2015)

Distance between Singapore and Kuala Lumpur: 354 km

Summary of major property related issues and taxes associated with real estate investment in Malaysia:


Our picks of residential properties in Malaysia prospective buyers should consider.


Estuari Gardens
Estuari, Nusajaya, Johor

Type: Strata landed homes
Developer: UEM Sunrise Berhad
Tenure: Freehold
Facilities: 24-hour security, children’s playground, exercise area, cycling path
Nearby Key Amenities: Legoland Malaysia, Sanrio Hello Kitty Town, Horizon Hills Golf & Country Club
Nearest Transport: Malaysia-Singapore Second Link, Puteri Harbour International Ferry Terminal
Starting Price: RM1.39 million (approx. S$468,200)

Launched in April 2015, the freehold Estuari Gardens is a gated community consisting of 350 units of two-storey super-link houses with luxurious and spacious built-up areas ranging from 2,708 sq ft to 3,780 sq ft.

Scheduled for completion in 2017, the project’s facilities include 24-hour security, a children’s playground, exercise area and walkways/cycling path. Located in Puteri Harbour, Estuari Gardens is the first phase of the sprawling 390-acre Estuari development, which has a total gross development value of RM7.4 billion.

Branded as an eco-living community, it will comprise 2,858 residential units of mixed landed and high-rise strata properties.

Opus Kuala Lumpur
Jalan Maharaja Lela, Kuala Lumpur

Type: Serviced apartment
Developer: Bina Puri Properties Sdn Bhd
Tenure: Freehold
Facilities: Infinity pool, Jacuzzi, gymnasium, F&B services, concierge
Nearby Key Amenities: KL Sentral, Midvalley, Pavillion, KLCC
Nearest Transport: Maharaja Lela and Hang Tuah monorail stations
Starting Price: RM943,500 (approx. S$317,800)

Construction work has already started on this freehold serviced apartment project. Developed by Bina Puri Properties Sdn Bhd, it is expected to be completed by early 2019 and will comprise two high-rise tower blocks of 357 units.

The units range in size from 692 sq ft to 1,071 sq ft, and come furnished with Calvin Klein furniture. Residents will also enjoy a slew of facilities such as an infinity pool, Jacuzzi and gymnasium.

Located in the Jalan Maharaja Lela area, the development is just next to the upcoming KL118 tower, which is set to become the second-tallest building in the world when completed in 2020.

Picture Source: Landed homes in Malaysia.
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Eye on Ang Mo Kio: In the red

Singapore has no shortage of residential estates, what with more than 80 percent of its population living in HDB flats. In this regard, Ang Mo Kio is no exception.

A brief history

Unlike many other mature estates in Singapore, however, Ang Mo Kio as we know it today remained largely undeveloped till the late 20th century, after being mostly uninhabited in the 19th century. It wasn’t till the beginning of the 20th century that settlers started arriving in Ang Mo Kio because of its rubber plantations. This also meant it was called Ang Mo Kio Forest Reserve back then.

The name “Ang Mo Kio” came about only after land was cleared in the area to make way for a village, with the largely Hokkien Chinese immigrants there involved in rubber-planting and tapping. In fact, Ang Mo Kio New Town was once called Cheng San Village, which was a massive rubber plantation.

In the decade between 1922 and 1932, market gardening, as well as pig and poultry farming, became more common in Ang Mo Kio, thanks to the drop in world rubber prices. This proved useful during the second World War, when the Japanese Occupation caused many to move to the estate to take up farming as a form of livelihood.

Steady progress

Like most other mature estates in Singapore, Ang Mo Kio has flourished and is today a thriving residential estate of approximately 200,000 residents, as well as a satellite town and urban planning area. It is perhaps best known as a PAP Group Representative Constituency (GRC) under Prime Minister Lee Hsien Loong.

Its development started only in 1973, making it the seventh new town to be built in Singapore (the estate also has seven neighbourhoods). Just a decade later, the town’s design won the Singapore Institute of Architects (SIA) Outstanding Buildings Award. Three years later, the tetrahedral skylight feature at the Avenue 1 swimming complex won it the 1986 SIA Architectural Award.

As a mature estate, Ang Mo Kio today not only is home to HDB flats but also private residential projects, with certain pockets of land having been cleared to make way for new housing developments.

Everything at your doorstep

With one bus interchange, one hospital, one park, two MRT stations, four shopping malls and over 20 schools, Ang Mo Kio is undoubtedly a highly convenient estate in which to live.

Agnes Goh, Executive Adviser at Knight Frank Property Network, says: “In my opinion, Ang Mo Kio is attractive because of its mature infrastructure: a wide range of school choices, ranging from primary to tertiary education, including reputable primary schools like CHIJ St Nicholas Girls’ School, Ai Tong School and Catholic High School.

“It also has a well-established transport network connecting to all parts of Singapore — two MRT stations (Ang Mo Kio and Yio Chu Kang), and a fully air-conditioned bus interchange directly connected to the MRT station and a large shopping mall, AMK Hub. Ang Mo Kio is also within close proximity to a few expressways, which means its residents can travel to other parts of Singapore conveniently. Its central location also allows residents a fast commute to town, as well as to Woodlands for visits across the causeway.”

In addition to the aforementioned features, Ang Mo Kio has plenty of amenities catering to residents’ convenience and well-being: Thye Hua Kwan Hospital, Ang Mo Kio Polyclinic and Bishan-Ang Mo Kio Park. There are a large number of markets and food centres as well, and three other malls besides AMK Hub: Djitsun Mall, Broadway Plaza and Jubilee Square.

At the same time, Ang Mo Kio is rather close to a few international schools, such as Lycée Français de Singapour (Ang Mo Kio Avenue 3), the Australian International School (Lorong Chuan) and the Singapore American School (Woodlands), making the area attractive to expatriates who have school-going children.

New and next

In addition to the Ang Mo Kio and Yio Chu Kang MRT stations already serving the estate, Ang Mo Kio will see two more stations, Lentor and Mayflower, both on the Thomson-East Coast Line (TEL). This means residents can enjoy direct commute to key employment nodes like Shenton Way, Maxwell and Orchard.

A new North-South Expressway will also cut travelling time from Ang Mo Kio to the city, and a 20 km cycling path, the longest in any residential estate in Singapore, is to be in place by 2018.

Furthermore, three Integrated Programme (IP) schools will form a new junior college in Ang Mo Kio in 2017, and a brand new Ang Mo Kio Polyclinic is scheduled for service in 2018.

Fair warning

Though its existing and upcoming developments make Ang Mo Kio a generally attractive place to live in, Goh warns: “Do expect some inconvenience due to construction works for the upcoming infrastructure. However, given the benefits and convenience which residents can enjoy for years to come, I believe it will add value to Ang Mo Kio and the properties in the estate.”

Bright future

The outlook for the estate is generally positive, due to the existing amenities that already makes life relatively easy for its residents, as well as its upcoming infrastructure that promises to make day-to-day living even more comfortable and convenient.

Goh says, “Personally, I feel that the value of the private residential sector in Ang Mo Kio has potential for even better growth, given the limited supply within the mature estate. There hasn’t been any new property launch or land release within Ang Mo Kio for the past year, while neighbouring estates like Yishun have seen only a few.

“Property values in Ang Mo Kio are likely to remain stable, with positive, steady growth, thanks to its well-established infrastructure. The major new developments coming its way will also strengthen the property value in Ang Mo Kio.”

Picture Source: Bishan-Ang Mo Kio Park is one of the largest urban parks in central Singapore. (Photo: Atelierdreiseitl, Wikimedia Commons), PropertyGuru Analytics,URA
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Where will the Malaysian Ringgit head in 2016?

Will the Ringgit continue to slide in 2016?

Most, if not all, currencies in the world are currently Fiat currencies. This mean that the value of a currency is backed by the country, and its value is based on the confidence people have in the country. Malaysia’s currency, the Ringgit, is no different. It is also based on confidence, which stems from political stability, production capability, fiscal condition, export competitiveness and military power.

Malaysia itself has decent fundamentals. Its Gross Domestic Product (GDP) is growing at a healthy 4.7 percent (as of Q3, 2015). Malaysia is also registering fairly consistent trade surpluses on its books.

But Malaysia has also seen its fair share of problems in recent years. Its household debt levels are about 146 percent of GDP (according to McKinsey’s Q2 2015 figures), which is very high. The housing market’s prices are also elevated, providing ample fuel for a potential crisis. It is also running a budget deficit which stands at 3.5 percent of GDP.

Politically, Malaysia is also in a period of uncertainty, with its leadership currently facing allegations of scandal and corruption. Economic growth is also slowing down.

Fortunately, the value of a currency does not immediately impact the production capability of a nation. My opinion is that the currency devaluation of Malaysia is not justified, and is a form of price distortion. Did Malaysia, all of a sudden, become less competitive? I would say no.

Explaining the Ringgit’s decline

47 percent of Malaysia’s exports are technological goods, such as electrical machinery, office equipment, and telecoms apparatuses. While there have been numerous reports focusing on Malaysia’s fiscal weaknesses due to crude oil prices, these do not provide the full picture. Natural gas, petroleum and petroleum products account for only 14 percent of Malaysia’s exports. If we were to include palm oil, which accounts for approximately seven percent, these products would still only make up 21 percent of the country’s total exports.

At the same time, Malaysia also imports petroleum products to the tune of 17 percent of all its imports. The effect of lowered crude oil prices and revenues also results in lower import prices for Malaysia.

It is my opinion therefore, that the weakened Ringgit is largely a function of speculative forces at play, coupled with the near perfect timing of political uncertainty, slowing economic growth, weakening palm oil and crude oil prices, as well as an impending credit rating downgrade by the rating agencies.

A history lesson

During the 1997/1998 financial crisis, then Prime Minister Dr. Mahathir imposed currency controls, by pegging the Ringgit to the US dollar, at the rate of USD1 to RM3.80. That stabilized the ringgit within one to two years and foreign reserves recovered.

In the post mortem of the 1997/1998 financial crisis, some researchers have pointed out that portfolio funds (holdings by fund managers) invested in the capital markets (stock markets) led the way in capital outflows. Portfolio funds sold their holdings in the stock markets in large quantities, then exchanged their Ringgit for US dollars, leading to a rapid devaluation of the Ringgit and a series of financial crises.

If portfolio funds really wanted to preserve the value of their holdings upon exit for maximum gains, they should have done it gradually, without causing a stock market crash. Hence the rapid rate of exit could potentially point to some mischief.

After the crisis of the late nineties, Ringgit trading can only be done onshore, a practice still maintained today. This has reduced some level of currency speculation.

Trying to rob Malaysia

Speculators have plenty of leverage to “long” or “short” a country’s market or currency. These anonymous speculators often include the major banks’ proprietary trading desks, with access to hundreds of billions of dollars and some say even in the low trillions of dollars. They have the ability to bring down a country through currency manipulation. The currency controls implemented by Dr Mahathir were therefore a prudent measure to curb rampant speculation.

However there is still another mechanism available to currency speculators – the forward markets. Forward markets are meant for exporters and importers to hedge their risks, but have become a haven for speculators. A deliverable forward contract is an agreement by two parties to buy or sell currency at a specified future date, but agreeing on the rates today. For instance, this could be a bank agreeing today, to deliver to an exporter the Ringgit on 10 Dec 2016 at the rate of RM4.2 to USD1. This allows an exporter a little more surety, knowing that their goods would not suddenly lose value due to sudden movement in the currency markets.

However, for less internationally circulated currencies, there is another mechanism to speculate the Ringgit, offshore away from Malaysia. This is the Non-Deliverable Forward (NDF), which is traded in international financial centers like Singapore, London and New York. Unlike a deliverable forward, no actual currency is exchanged.

Currencies are deemed overvalued or undervalued against the USD using the implied NDF yield spread. A yield spread of greater than 1 percent indicates weakness against the USD. Banks of financial institutions in international as well as domestic Malaysian markets can then execute these trades. Through this indirect mechanism, speculators can drive down the Ringgit in the NDF market that hurts the Ringgit valuation.

While this might be technical and a little difficult to take in, the bottom line is that this points to the Ringgit being under speculative attacks.

Should I invest in Malaysia?

With the USD growing in strength from capital in-flows and US interest rate hikes, the Ringgit and many emerging economies will come under threat from the withdrawal of funds. This might last two to three years, as a US economic cycle usually lasts three to four years.

Malaysia needs to find its own steady and safe path. It has a lot of natural resources and food production. After weathering one round of financial crisis, it should have already developed better immunity against speculators this time round.

For foreign investors of Malaysian assets, it is a selective buy as the Ringgit may continue to be attacked. At some stage, currency controls may be re-imposed. Investors should take a five to 10 year view of their investment, when they could possibly be sitting on a recovering Ringgit. It would be good to pick up hard assets such as production capabilities and daily staple related plantations which can better withstand currency fluctuations.

For those holding Singapore dollars, they need to weigh SGD trends against ringgit so as to ensure that they will not lose money after currency conversion.

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Corporate entity versus individual: Differences in property ownership

1. Private versus public

While individual property owners can own both private and HDB housing, businesses are limited to private property. Married couples, as well as singles above the age of 35, qualify for HDB flats (so long as they are citizens or PRs), while condominiums and landed homes are available for both individual buyers of any age, as well as corporate entities.

2. Doing your duty

Do bear in mind that regardless of your status, stamp duties still apply. If you are an individual buyer, you are subject to a Buyer’s Stamp Duty (BSD) of one percent of the first $180,000 of the property’s purchase price or its market value (whichever is higher), two percent of the next $180,000 and three percent of the remaining amount. This is regardless of whether a HDB or private property is bought.

The next type of stamp duty is the Additional Buyer’s Stamp Duty (ABSD). This applies to Singapore citizens buying their second property onwards, with the ABSD at seven percent for the second property and 10 percent for the third. Singapore PRs, however, have to pay the ABSD from their first property purchase, at a respective five and 10 percent for the first and second property. If you are a foreigner or part of a corporate entity, this translates to 15 percent for any property purchase.

3. Lease after death

What happens after one of the property owners passes away? If the ownership is a joint tenancy, the deceased’s interest in the property is automatically transferred to the surviving owners. Under a
tenancy-in-common, the fate of the deceased’s interest in the property depends on his will; in the absence of a will, this interest falls into the hands of the law.

In the case of individual HDB owners, the property automatically passes to the surviving spouse or children. If the deceased does not have a surviving spouse or children, the flat is returned to the HDB.

If a corporate entity owns a residential property and one of the owners passes on, what happens to his interest in the property depends on the contract he had signed as part of the corporate entity. The entity’s property ownership is otherwise unaffected.

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Yio Chu Kang EC site draws 10 bids

The tender for an executive condominium (EC) site at Yio Chu Kang Road closed on Thursday (18 Feb), after attracting 10 bids, according to the Housing and Development Board (HDB).

Launched for sale on 29 December 2015 under the confirmed list of the second half 2015 Government Land Sales (GLS) Programme, the approximately 198,302 sq ft site has a maximum gross floor area (GFA) of about 555,267 sq ft.

Property developer Hoi Hup Realty submitted the top bid of $183.8 million, which translates to about $331 psf on the GFA. Offered on a 99-year lease, the site is expected to yield around 520 EC units.

Desmond Sim, CBRE Research Head, Singapore and South East Asia, said: “It has been some time since an EC plot has been put up for sale in the Hougang and Yio Chu Kang area in the north-eastern part of Singapore. The site is located in a mature residential estate and is relatively close to the city. These attributes probably account for the high rate of participation and the competitive bids garnered for the plot.

“Its close proximity to Rosyth School gives developers further confidence that demand might stem from young couples planning to enrol their children in the school. These factors will contribute to the selling points of the future project.”

Other nearby amenities include the Hougang 1 shopping mall, Hougang Sports Centre and Nanyang Polytechnic. The area is served by the Hougang, Buangkok and Kovan MRT stations.

The HDB said a decision on the award of the tender will be announced at a later date after the bids have been evaluated.

Picture Source: Map of the Yio Chu Kang Road residential site. Source: HDB
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Mortgagee listings surge on the back of staff cuts: DTZ

The economic slowdown and soft leasing market has led to staff cuts, which caused some affected homeowners to have difficulty financing their mortgages, revealed a DTZ Research report.

This has prompted new auction listings for mortgagee sales to soar 85 percent to 87 units in 2015 from 47 units in the year before, stated the report.

The number of auction listings for owners’ sale also surged to 135 properties last year from 77 properties in 2014.

“Given that properties that command higher price quantum tend to move slower in a quiet market, owners use auctions as an avenue to hasten disposal, so as to release their housing equity,” said DTZ.

Moreover, the report noted that more landed properties and large apartments were put up for auction in the year.

The number of landed properties listed for auction climbed to 53 units in 2015 from 39 units previously, while the number of apartments with a strata area above 2,000 sq ft rose from 17 units to 40.

DTZ expects more choice homes to enter the auction market, given the recent equity sell-off in response to signals of an economic slowdown in Japan and China.

“Sudden shocks in the equity markets tend to be a precursor for more auction listings, as owners need to adjust their financial position. This will offer prospective home buyers a window of opportunity to acquire homes at reasonable prices,” said Dr Lee Nai Jia, DTZ’s Head of SEA Research.

In fact, DTZ’s upcoming auction on 25 February will showcase several luxury homes, including a 4,219 sq ft cluster bungalow in District 21 and two adjacent penthouses in District 15.

Other listings include two split penthouses at the five-storey Veranda apartment development. Located along Lorong K Telok Kurau, just off East Coast Road, each unit has an indicative valuation of between $1.3 million and $1.6 million.

“Under current market conditions, it is difficult to acquire a good quality home through private treaty as the price gap between buyers and sellers tend to be wide due to mismatch of expectations. There are fewer good units available too as owners of such units will wait for the market to rebound first. Hence, auctions this year offer buyers a window of opportunity to seek choice homes at reasonable prices,” said Joy Tan, DTZ’s Head of Auction.

Picture Source: One of the properties being put up for auction. (Photo: DTZ)
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US housing starts down 3.8% in January

Housing starts in the US, which refers to the number of new private homes built during a given month, fell 3.8 percent to a 1.1 million annualised rate in January this year, from a 1.14 million pace in December 2015, according to Commerce Department data and reported Bloomberg.

The median forecast of 76 economists polled by Bloomberg stood at 1.17 million.

Although all four regions of the US witnessed a drop in construction, a winter storm in the East Coast probably deepend the setback at the end of last month.

The National Oceanic and Atmospheric Administration noted that the winter storm was rated as the fourth-most impactful storm since 1950, given the accumulation as well as the concentration of residents within its path.

“This is January, so seasonal adjustment could be a factor and weather could be a factor,” said Scott Brown, Chief Economist at Raymond James Financial, Inc. in St Petersburg, Florida. Moreover, “people are a little shell-shocked – buyers might be a little reluctant to step in still.”

In the Bloomberg survey, economists’ estimates for new home construction ranged between 1.1 million and 1.23 million.

Meanwhile, permits dipped 0.2 percent to a 1.2 million annualised rate, implying little scope for a rebound in February.

Last month’s drop in starts was led by a 3.9 percent decline in construction of single-family homes to a 731,000 rate.

Regionally, the Midwest registered the largest fall last month at 12.8 percent. The Northeast saw housing starts drop 3.7 percent, while starts in the South and West slipped 2.9 percent and 0.4 percent respectively.

Picture Source: A new housing development in San Jose, California. (Photo: Sean O’Flaherty/Wikimedia Commons)
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Sexy homes pricier than lovely homes

An analysis of close to 1.6 million real estate listings shows that homes with ‘seductive’ and ‘sexy’ in their property descriptions cost much more than those with ‘love’ in their descriptions, reported The Wall Street Journal.

“Love is basic,” said Economic Researcher Javier Vivas. “It’s a pre-canned pitch to generically describe something beautiful.”

Looking at homes for sale as at 1 February 2016, searched for terms of endearment used by property agents to list the properties. It then calculated the median asking price of homes that were described using sentimental words. Homes listed with the word ‘sexy’ had a median asking price of US$620,000 (S$872,177), those described as ‘seductive’ had a median price of US$640,000 (S$900,206), while those with the word ‘romance’ had a median price of US$820,000 (S$1.15 million).

“When you talk about extreme wealth, you’ll see terms like ‘sexy’ bandied about,” regardless of the product, noted Adam Alter, an Associate Professor of Marketing at New York University’s Stern School of Business. And with luxury products striving for uniqueness, it makes sense that salespeople employ impassioned language in order to set their brand apart, he said.

Meanwhile, love and its variations were used in one out of 10 listings, with the words most commonly used for low-priced homes.

In fact, homes with ‘love’ and ‘lovely’ had a median asking price of US$250,000 (S$351,626) and US$264,000 (S$90,020) respectively. Homes with ‘loving’ descriptions were listed for US$195,000 (S$274,279).

A waterfront home in North Bethany, Delaware, that was described as ‘a modern romance’ with ‘luscious views and seductive spaces’ was listed for US$2.5 million (S$3.5 million).

“The type of verbiage definitely changes a little bit once you get to that price point,” explained marketing manager Chelsea Brown, with the Debbie Reed team at Re/Max Realty, which listed the home.

On the other hand, she noted that she would use words such as ‘love’ in the same category as ‘quaint’ and ‘charming’ – terms that are usually reserved for more modest homes.

Picture Source: Luxury homes at Sentosa Cove.
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CapitaLand registers lower profit

Property giant CapitaLand reported a profit after tax and minority interests (PATMI) drop of 39.5 percent to $247.7 million in Q4 2015, compared to $409.4 million in Q4 2014.

The group’s operating PATMI also fell 12.1 percent to $249.2 million, while revenue rose 14.6 percent to $1.74 billion during the quarter.

In a statement, the Singapore-based developer noted that higher revenue was driven mainly by development projects in China and higher rental revenue from its serviced residence business.

On a yearly basis, CapitaLand’s PATMI fell 8.2 percent to $1.07 billion in 2015 from $1.16 billion in the previous year, which was boosted by a one-off gain of $123.5 million from the sale of Westgate Tower.

Operating PATMI stood at $823.6 million, up 16.8 percent from the $705.3 million registered in 2014. Revenue also increased 21.3 percent to $4.76 billion.

“CapitaLand remains focused on growth in our core markets of Singapore and China. For longer term diversification and balance, we will continue to expand in growth markets such as Vietnam and Indonesia,” said CapitaLand President and Group CEO Lim Ming Yan.

“In China, we achieved our highest residential sales value of RMB15.4 billion in 2015, and we expect residential sales in the market to continue to perform steadily this year. Our new Raffles City developments are also on-track for completion over the next few years and we expect strong demand for these projects.”

CapitaLand Group Chairman Ng Kee Choe added: “In line with CapitaLand’s policy to pay dividends on a sustainable basis, the Board is pleased to propose a dividend of nine Singapore cents a share for FY 2015.”

Picture Source: Sky Habitat by CapitaLand.
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02 April 2016

10 years on, Iskandar is struggling

Iskandar’s housing market continues to struggle, as evidenced by the drop in new launches and sales transactions last year, reported The Straits Times recently.

In fact, the number of high-rise residential projects launched last year fell to about a dozen, from 24 in 2014 and 49 in 2013, revealed property consultancy Savills.

Data from the National Property Information Centre (Napic) showed that sales of apartments and condo units for the first three quarters of 2015 dropped 23 percent year-on-year to 1,368 units.

Christopher Boyd, Executive Chairman at Savills Malaysia, noted that the drop in launches can be attributed to developers exercising self-regulation and restraint. In addition, some may be struggling to secure financing.

The slowdown first hit the market in mid-2014 following reports of rising property prices and oversupply concerns. The introduction of the goods and services tax, cooling measures, and the country’s turbulent political scene inevitably affected market confidence.

Fears of a glut were also stoked by the aggressive marketing of mega projects by Chinese developers.

The instability of the ringgit and the general economic slowdown saw most investors adopting a wait-and-see approach, said Landserve (Johor) Executive Director Wee Soon Chit.

Iskandar, which has entered its 10-year mark since its development plan was unveiled, still lacks proper industrialisation, whereby more business activity could help spur demand for property. In fact, people are only buying houses there to use as second homes.

Nonetheless, developers and property consultants remain confident about the region’s prospects.

“We are encouraged by the massive infrastructure improvements in Iskandar, as well as the investment that has gone into job-creating industries. This, and the logic of the location, guarantees substantial future demand for housing,” said Boyd.

“Sure, some developers jumped the gun, but it is only a matter of time before the market takes off again, and, at some time in the future, house prices in Iskandar could easily become the highest in the country.”

Picture Source: View of Johor Bahru.
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Wandervale EC to open for applications amid oversupply worries

Applications for the 534-unit Wandervale executive condominium (EC) at Choa Chu Kang Avenue 3, the first major property launch for 2016, will open this Thursday (18 Feb).

Developed by Sim Lian Land, the 99-year leasehold project is located close to Choa Chu Kang MRT station and the newly opened Downtown Line 2 (DTL2). Scheduled to open for sales booking in March, Wandervale will feature a range of three-bedroom, three-bedroom premium and four-bedroom units, from 958 sq ft to 1,249 sq ft.

The approximately 205,138.6 sq ft site was awarded to Sim Lian for $207.4 million in September 2014.

According to a Credit Suisse report, the project will have an average indicative price of $750 psf to $770 psf. “This is likely to place further stress on MCL Land’s Sol Acres EC in Choa Chu Kang, which has only sold 28 percent of its 1,327 units at an average price of $800 psf.”

The report stated that the future launch of Qingjian Realty’s EC project at Choa Chu Kang Avenue 5 is likely to add further oversupply concerns within the vicinity.

In January 2016, sales of new EC units improved 26 percent month-on-month to 156 units, lifted mostly by The Amore, CDL’s The Brownstone, and The Vales, which together accounted for around 40 percent of total EC sales, revealed Credit Suisse, citing data from the Urban Redevelopment Authority (URA).

“Oversupply in the EC market, however, will likely persist, as 50 percent or more of these projects and several others remain unsold, which could weigh down capital values in the mass market segment,” added the report.

Picture Source: Artist’s impression of Wandervale EC in Choa Chu Kang.
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Foreign investors zoom in on Cambodia

Cambodia’s property market has been attracting much interest in recent years, particularly among foreign investors, following the passing of legislation in April 2010 allowing foreigners to own property in the country.

Under the Foreign Ownership Property Law, foreigners can own upper floor units, not ground floor units, and up to 70 percent of a condominium project.

This restriction has little impact on foreign buyers considering that apartments are usually not built on the ground floor, according to property consultancy CBRE.

As a result, more residential developments from the kingdom are being launched to overseas buyers, including Singaporeans.

Among them is Axis Residences in Phnom Penh. The 566-unit project saw over 60 percent of its residential units pre-booked prior to the public launch in March 2015.

In January this year, Singapore-listed HLH Group launched the ground-breaking ceremony for its maiden project in Cambodia, dubbed D’Seaview.

The seafront development saw over 80 percent of the 300 units in Phase 1 subscribed by both local and foreign buyers.

“The strong response to our D’Seaview project underscores the rising demand for good quality and affordable homes among Cambodians in the country’s key cities. The majority of the buyers are young professionals and businessmen who see good value in owning these homes while the foreign buyers are keen to invest in real estate now in view of Cambodia’s rapidly growing economy,” said HLH Group CEO and Deputy Chairman Dato Johnny Ong.

“In fact, Cambodia’s GDP growth is among the highest in Asia. The World Bank has projected 2015 and 2016 economic growth for Cambodia at about 6.9 percent, which is really robust compared to other Asian countries. This will herald healthy demand for quality housing in the coming years,” he added.

CBRE noted that Cambodia’s condominium market offers great potential. The consultancy’s local branch has seen the number of condo units in Phnom Penh increase from just 178 in 2009 to 2,095 in 2014. It expects over 9,000 units to enter the market between 2015 and 2018.

Meanwhile, investors have been recording rental returns of between five and seven percent and capital growth of between five and 7.5 percent per annum.

As the residential market heats up, more property agencies are also expanding into Cambodia to support marketing efforts. US-based Century 21 opened a representative office in Phnom Penh in 2014, while international property firm Savills joined forces with Cambodia’s Keystone Property Consultants in 2015.

In what could be a sign of the country’s status as a rapidly emerging real estate market, nominees for the inaugural Cambodia Property Awards 2016, presented by PropertyGuru, were recently announced.

To be held on 25 February, the event will present a total of 13 awards, divided into the highly competitive Developer, Development and Design sections.

“The Cambodia Property Awards will present the top winners a tremendous opportunity to showcase their most outstanding projects on a regional stage at the South East Asia Property Awards grand finale to be held in Singapore later this year,” said Terry Blackburn, Managing Director, Property Awards and Publications, PropertyGuru.

“While Cambodia is still a small market, it is quickly emerging and definitely deserving of international recognition, and that’s why we’re delighted to hold Cambodia’s first national event in 2016.”

For more information on the inaugural Cambodia Property Awards, go to:

Picture Source: Phnom Penh, the capital of Cambodia.
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In the mood for romance

Just in case you forgot, February 14th is this Sunday, and is Valentine’s Day. And if you really did forget to do something special over the weekend, Chinese Valentine’s Day (Yuan Xiao), is on Feb 22.

Besides the usual flowers and candlelight dinner, why not impress your lover further with a nicely decorated bedroom that underscores your passion? The best part? It will cost you way less than your flower bouquets and fancy dinners, yet score big for effort and surprise element.

You will be surprised how your bedroom can be transformed in just seconds with the right items, such as candles, rose petals, and even a simple change of bedsheets.

Here are our 3 suggestions:

1. The Die-hard Romantic

A scented, candlelit room is a foolproof way to lift up the atmosphere and give it a sensual ambiance. Go for those scented candles with aphrodisiac properties such as ylang ylang, sandalwood, rosemary, bergamot or geranium, for a great night of romance! You can purchase reasonably priced scented candles from Spotlight or Ikea.

To spice things up further, scatter loose rose petals on the bedsheet. For a stronger visual impact, spell “I love you” or your partner’s name with them. While bouquet prices skyrocket during this period, the price for loose petals is still pretty reasonable. You can save a few more bucks by purchasing them from your neighbourhood heartland florists instead of heading to the malls.

If you are good with words, write a stack of heart-shaped post-it notes (you can get them easily from the stationery store) for your loved one. Imagine the look on her face when she walk into the house and find a trail of pink hearts with words like “You complete me”, “You are the best” written on them, from the doorway all the way to the bedroom door. Not to mention the pleasant surprise you have prepared for her behind that door! This will definitely be one memorable Valentine’s Day for both of you.

2. The Textile Lover

If scented candles and rose petals are not your thing, go for a textile makeover instead. Change your curtains and bedsheets to a soft pink or those pretty heart prints to freshen up the look, and give it a more romantic feel.

You can get them for a fraction of the cost from Spotlight and Ikea, and while you are there shopping, pick up some cutesy heart-shaped cushions, potpourri and wall decals for an additional touch too.

Instead of buying candles, you can also re-purpose those Christmas lights in the storeroom, and string them around your headboard to turn up the romance factor. To keep the lighting soft and not overly festive (this is not Christmas’ Day after all), you can wrap those tiny bulbs with coloured cellophane paper.

3. The DIY Master

Love to DIY? What better time to display your talents than on Valentine’s Day itself! Print out your favourite couple memories, and frame them up on the bedroom wall, with strings of handmade paper heart garlands. Alternatively, you can cut the photos into hearts, thread them together and hang them like a banner above the headboard.

One of our favourite tricks involves recycling condensed milk tin cans. After you have washed them clean, pierce a heart-shaped pattern on the outer surface with a hammer and nail. Once done, place a lit candle in it, adjust the projected heart-shaped design on the wall accordingly, and voila!

Learn how to fold paper flowers from those online origami tutorial videos, and impress your date further with a bed full of them. Not forgetting some soft romantic music playing in the background to end your Valentine’s Day on a good note.

Picture Source: Champagne and mood-lighting are just the start for a romantic bedroom
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6 skyline-changing buildings in Singapore

Worries about an economic slowdown haven’t dampened Singapore’s building boom, with a number of star architects designing stunning new projects that have not only won international awards, but are set to alter the city’s skyline. One example is the soon-to-be completed Tanjong Pagar Centre, Singapore’s tallest tower. We take a closer look at six famous buildings everyone’s talking about.

South Beach

Completed at the end of 2015, the South Beach mega mixed-use development on Beach Road comprises two towers and four conserved military buildings that have been refurbished into a fine dining and nightlife destination.

Jointly developed by CDL and the Malaysia-based IOI Group, the project was slated for completion in 2012, but was delayed due to the global financial crisis.

The 34-storey North Tower offers 500,000 sq ft of Grade A office space, with the anchor tenant being Facebook. The 45-storey South Tower is home to The South Beach, a luxury hotel offering 654 guestrooms.

Located on the 23rd to 45th levels of the South Tower is South Beach Residences, an ultra-posh project of 190 units that’s expected to launch when market conditions are more favourable. Earlier indicative prices for the apartments were in the range of a whopping $4,000 psf.

South Beach is easily accessible via two MRT stations – Esplanade MRT on the Circle Line and City Hall MRT interchange on the North-South and East-West lines.

Tanjong Pagar Centre

At 290 metres high, Tanjong Pagar Centre will be the tallest building in Singapore once completed in mid-2016. Property developer GuocoLand recently topped out the $3.2 billion integrated mixed-use project located above Tanjong Pagar MRT station, one of Singapore’s busiest MRT stations.

Designed by world-renowned architectural firm Skidmore, Owings & Merrill (SOM), the building will integrate 890,000 sq ft of Grade A office space at Guoco Tower, a 100,000 sq ft lifestyle and F&B component, 181 luxury homes at Wallich Residence, the 222-room Sofitel Singapore City Centre and a 150,000 sq ft landscaped Urban Park that can accommodate up to 2,000 people in a sheltered event space.

Wallich Residence gets its name from the location of the development, Number 3 Wallich Street. It will house Singapore’s tallest and largest penthouse – a three-storey duplex on levels 62 to 64, measuring 21,000 sq ft. Only 16 units have been sold so far, at an average price of $3,200 psf.

Marina One

Marina One is the largest integrated development to launch in Marina Bay, Singapore’s new downtown. Set to be completed in 2017, the 3.67 million sq ft complex is being developed by M+S, a joint venture between Malaysia’s strategic investment fund, Khazanah Nasional Berhad and Singapore’s investment company, Temasek Holdings.

It will comprise luxury condominium units, branded retail stores and prime Grade A offices, and will offer scenic views of the city skyline and the sea. A lush oasis of greenery and waterfalls will form the heart of the development.

The 34-storey residential tower, dubbed Marina One Residences, will comprise 1,042 one- to four-bedroom apartments, as well as penthouses ranging from 700 sq ft for a one-bedder to 8,568 sq ft for a penthouse. So far, 362 of the 401 units launched for sale have found buyers, with prices starting from $1.67 million.

Located close to iconic tourist attractions such as Marina Bay Sands and Gardens by the Bay, the development will be connected underground to four MRT lines: North-South, Downtown, Circle and the upcoming Thomson Line.


Another integrated development by M+S is DUO, located in Bugis, a trendy and vibrant enclave at the fringe of the business district. Scheduled for completion in 2017, it was designed by world-famous architect Ole Scheeren, the man behind the iconic CCTV Headquarters in Beijing.

DUO comprises 660 premium residences, the 5-star Andaz Singapore hotel, a boutique retail gallery and Grade A offices, all set within a park-like environment. Managed by Hyatt Hotels & Resorts, Andaz Singapore will have more than 340 guestrooms overlooking the city centre and the sea.

Meanwhile, the 49-storey DUO Residences consists of studio apartments and one- to four-bedroom units and penthouses. Sales have been brisk, with 621 units already sold at an average price of about $2,000 psf.

DUO will be connected via an underground link to the Bugis MRT station, which serves two major MRT lines – the East-West Line and Downtown Line. Bugis Junction, Singapore’s first glass-covered, air-conditioned shopping street, is also a short walk away.

The Crest

Developed by a Wing Tai-led consortium, this sprawling 469-unit residential development is currently under construction and comprises four blocks of five-storey island villas and three towers of 23-storey apartments.

Designed by Toyo Ito, one of the world’s most revered architects, the three tower blocks resemble flowers in bloom. Residents living on the higher floors will enjoy unobstructed views of Sentosa on a clear day.

Comprising a mix of one- to five-bedroom units, around 100 units have found buyers, out of the 132 launched to date. In December 2015, four units were sold at a median price of $1,749 psf.

Located at Prince Charles Crescent near Redhill and bordering the Alexandra Canal, this project is nestled within the established Good Class Bungalow (GCB) areas of Chatsworth and Bishopsgate, and across the road from HDB estates.

Scheduled to obtain TOP in mid-2018, The Crest is close to Redhill MRT station and the Orchard Road shopping belt.

Project Jewel

This upcoming mixed-use development is located on a 3.5ha site at Changi Airport Terminal 1, formerly an open-air car park, and is being developed by Changi Airport Group and CapitaMalls Asia at a cost of about $1.47 billion.

Currently under construction, Project Jewel was designed by a team of architects led by the world-renowned Moshe Safdie, who was behind the design of Marina Bay Sands. With its distinctive dome-shaped façade made of glass and steel, it is expected to become an iconic landmark in Singapore.

Jewel will comprise facilities for airport operations, leisure attractions (including a large-scale, lush indoor garden with a 40-metre high central waterfall), retail and food outlets, hotel facilities and a car park, all under one roof.

Scheduled to open by the end of 2018, the project will also enhance connectivity between Terminals 1, 2 and 3, and the Changi Airport MRT station.

Picture Source: Christopher Chitty/View of the recently completed South Beach development. /Artist’s impression of Tanjong Pagar Centre, Singapore’s tallest building./Architect’s perspective of Marina One./Aerial view of DUO by Ole Scheeren./Artist’s impression of The Crest.Artist’s impression of Changi Airport’s Project Jewel expansion.
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Hotel extension project uses Lego-like building blocks

OUE Limited, the developer of the new Crowne Plaza Changi Airport hotel extension, will only need one month to finish the top eight storeys of the project as the rooms are merely stacked together like building blocks, reported My Paper.

The rooms, which come complete with lighting, carpeting and even bathtubs, were shipped over from a Shanghai factory to be assembled on site.

With this Prefabricated Pre-finished Volumetric Construction (PPVC) method, OUE has already installed 112 of the 252 modules.

Irene Meta, Senior Vice President of Development & Projects at OUE Limited, revealed that the PPVC method has helped the firm overcome building site constraints.

The site is small, while access is limited, with delivery traffic to the worksite allowed only from 10pm to 5am.

However, the PPVC method requires fewer vehicle trips, at just 300 compared with 1,250 for conventional building methods.

The small site has also become less of an issue since less work is needed on-site.

“So we felt that, overall, this project was very suitable for the use of PPVC,” said Meta.

Featuring 243 rooms, the 10-storey extension will add significant capacity to the existing hotel.

While it took the developer about 10 months to finish the first stage of construction – which covered the foundation to the second storey, it will only take them one month to install the individual modules for the remaining floors.

Hence, the time taken to complete the remaining eight storeys has been cut from 12 months to four months.

The PPVC method also required less manpower, down from 60 workers to 36.

National Development Minister Lawrence Wong noted that such productive technology is crucial for the future of the city-state’s construction industry.

“We cannot possibly build our future infrastructure using the old ways of relying on more and more foreign workers,” he said after visiting the site.

Meanwhile, John Keung, Chief Executive Officer of the Building and Construction Authority (BCA), hopes that the hotel extension project will serve as an example to show the industry what the PPVC method can achieve.

“We hope we can build up the expertise here, whether it’s architects or contractors or developers, to give this technology a big push,” he said.

Picture Source: Crowne Plaza Changi Airport. (Photo: Katmorro/Wikimedia Commons)
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Frasers Property acquires Queensland site

Frasers Centrepoint, via its Australian unit Frasers Property Australia, has acquired a 135ha site in South East Queensland with an end value of S$270 million.

Located at Bahrs Scrub near Beenleigh, half way between Brisbane and the Gold Coast, the site will provide affordable and much-needed housing in the Logan growth corridor.

In a statement, Frasers noted that the “master-planned Bahrs Scrub site – which has not yet been named – provides for 1,350 detached housing lots which will become home to more than 3,000 residents, with natural waterway corridors and an abundance of green space providing panoramic views of the region.”

There will also be a retail hub measuring around 6,000 to 7,000 sqm and various recreational green spaces.

“Our decision to further invest in the Logan community aligns with Frasers Property’s broader strategy for growth and underlines our commitment to South East Queensland,” said Anthony Boyd, Executive General Manager Residential, Frasers Property Australia.

“A site of this scale in such a central location is a rarity. The site also has development approval in place, allowing for the project to be brought to market in Spring 2016.”

Meanwhile, Logan City Mayor Pam Parker noted that Frasers Property Australia’s decision to invest further in the city will encourage future development and improve the area’s appeal to visitors, residents and the wider community.

“This development will offer a range of affordable living options and will build on existing amenities with more community facilities and recreational venues. It will also provide more strength to the City of Logan’s economy which is currently unmatched for growth opportunity in Australia,” she added.

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Profits galore for Boon Keng flat owners

Despite the bleak property market, City View @ Boon Keng saw at least 14 flats sold even though it only entered the resale market this year, according to a recent Straits Times report.

In fact, flat owners at the premium public housing project have been reaping big profits.

Housing Board data shows that three- to five-room flats there were sold from $560,000 to $900,000, far exceeding the project’s launch prices of between $349,000 and $727,000, as well as HDB prices within the vicinity.

Century 21 Chief Executive Ku Swee Yong attributed the high prices to the project’s design and recent completion in 2011.

“It’s the newest in the neighbourhood. As a Design, Build and Sell Scheme (DBSS) project, it also has high-quality design and fittings.”

The second DBSS project after The Premiere @ Tampines, the 714-unit City View @ Boon Keng comprises three 40-storey blocks and was developed by Hoi Hup Sunway.

Although owners at City View are only allowed to sell their units from this year, following the end of their five-year minimum occupation period, 10 units were sold earlier.

This came after the HDB granted the said owners special approval. Property agents who helped sell the properties revealed that some of the reasons included emigration and divorce.

ERA agent Brandon Zheng, for instance, handled the $820,000 sale of an eighth floor five-room unit, whose owners moved to Australia.

Looking ahead, Ku expects the units at City View to go for more, given the project’s proximity to the city.

“I wouldn’t be surprised if the top-floor units exceed $1 million,” he said.

Picture Source: Public housing in Singapore. (Photo: Lionel Leo/Wikimedia Commons)
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New accreditation for renovation businesses

A new voluntary accreditation scheme was recently launched to give homeowners more assurance when securing the services of renovation contractors, reported The Straits Times.

The CaseTrust-RCMA joint accreditation scheme was developed by the Singapore Renovation Contractors and Material Suppliers Association (RCMA) and the Consumers Association of Singapore (Case) following an agreement signed in August 2014.

But unlike the previous CaseTrust scheme, the new one also protects the deposits of homeowners in the event the contractor disappears or closes shop.

Both schemes require firms to have proper and clear dispute-resolution mechanisms, on-site workmanship assessment, trained staff and clear policies on fees and refunds.

Five renovation contractors have already been accredited under the new scheme, while 12 are still in the process of being accredited.

“It gives customers confidence in us, and it also helps us to really bring up our standard,” said Rezt and Relax Interior Executive Director Wilson Teh.

Other firms that were accredited are Ciseern by Designer Furnishings, Add Space Design, Vegas Interior Design and Sky Creation Design.

The CaseTrust-RCMA accredited firms should offer a deposit performance bond which covers the deposits of customers – up to 20 percent of the contract value, if the contractor goes bust and leaves the renovation works unfinished or cannot be contacted for 30 days. The firms are also required to use a CaseTrust Standard Renovation Contract in order to ensure cost accountability and transparency.

The contractor industry is one of the top 10 industries in which Case receives the most number of complaints.

“For consumers who want peace of mind, I urge you to consider supporting businesses which have taken this additional step of being CaseTrust accredited and have committed themselves to fair trading practices,” said Case President Lim Biow Chuan.

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Balestier Point may go en bloc

Balestier Point (pictured), a mixed-use freehold development, may be put up for collective sale for approximately $250 million to $350 million, or around $1,337 to $1,872 per sq ft per plot ratio (psf ppr), reported The Straits Times.

The property’s owners appointed an eight-member collective sale committee in October 2015 and ERA Realty as the marketing agent in January this year. However, they have yet to set the date for an extraordinary general meeting to obtain the owners’ approval.

Completed in 1986, the 62,315 sq ft property comprises an 18-storey residential block and a two-storey retail podium with basement. The site is zoned commercial and residential under the 2014 Master Plan, with a building height limit of 30 to 36 storeys and a plot ratio of 3.0.

Owners may be motivated to sell considering the above-market premium for the said property. Last month, a 1,119 sq ft apartment located on the ninth floor was sold for around $1 million or $900 psf.

They are also banking on the fact that the Balestier area has been undergoing rejuvenation, with the completion of the integrated hotel-park complex comprising Zhongsan Park, Zhongsan Mall and the Days and Ramada hotels in 2014.

“It is within the Novena medical hub area and we are exploring the possibility of applying for change of use, subject to approval by the authorities,” said ERA Realty agent Stanley Koo.

Property consultancy CBRE noted that the most recent collective sale within the area was Skysuites 17, formerly Diamond Tower, for around $49.6 million or $582 psf ppr in April 2010.

“Due to the cutback on residential land offered through the Government Land Sales programme, developers may want to look at collective sales as an alternative source of land. At the end of the day, the most important thing is to bridge sellers’ and buyers’ expectations,” said Desmond Sim, Head, CBRE Research, Singapore and South East Asia.

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01 April 2016

Over 3,000 rental tenants bought first flats since 2011

The Housing and Development Board (HDB) revealed that over 3,000 rental tenants have purchased their first flat in the Build-To-Order (BTO) or Sale of Balance Flats (SBF) exercises since 2011, reported Channel NewsAsia.

Around 19 percent of them purchased a flat under the Tenants Priority Scheme (TPS), said the HDB in a statement. Under this scheme, 10 percent of the three-room and two-room Flexi flat supply in the BTO or SBF sales exercises are set aside for public rental families who are buying their first home.

Meanwhile, 73 percent of these first-time owners purchased a three-room or smaller HDB flat, noted the HDB.

About 84 percent of the rental tenants bought their flat with the help of the Special CPF Housing Grant (SHG) or the Additional CPF Housing Grant (AHG) or both. The HDB said around 12 percent received the maximum SHG and AHG of $60,000, or the maximum grant prevailing during the time they picked their unit.

To date, around 1,300 rental tenants have moved into their new flats.

The HDB noted that its Public Rental Scheme supports families who are not financially ready to buy a flat. In fact, their rental rates are heavily subsidized, with each rental term good for two years.

“Thereafter, HDB will review and assess the tenancy renewal. Tenants who are financially stable will be encouraged to consider buying a flat,” it said, noting that it now offers housing grants of up to $80,000 for eligible flat buyers – up to $40,000 for the SHG and $40,000 for the AHG.

During last year’s National Day Rally, Prime Minister Lee Hsien Loong unveiled the Fresh Start Housing Scheme, which aims to help second-timer public rental households with young children own a flat again.

“MND and HDB are studying the option of offering eligible tenants a new housing grant to buy a two-room Flexi flat on shorter lease and with stricter resale conditions,” added the Housing Board.

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SEA’s weak currency a boon for foreign investors

Falling currencies in some of Southeast Asia’s most popular real estate markets, including Thailand, has created opportunities for overseas investors to reap significant savings if those purchasing property are willing to accept some of the uncertainties, reported The Wall Street Journal.

Property in Thailand is now ten to 15 percent lower than it was at the beginning of 2015 as the value of the Thai baht has sunk, property agency Engel & Volkers Phuket explained. The Thai baht has fallen 10.5 percent against the US dollar since May 2014.

Barry King, Managing Director at Prime Real Estate Phuket, said that price declines for inland villas has helped him to sell about 20 percent more properties priced at US$3 million or higher during 2015.

At the same time, Andrew Hunter, Managing Director at Hunter Sotheby’s International Realty in Phuket, noted that inquiries for properties priced above US$2 million have increased in the past 12 months, but actual sales have been soft as investors are waiting to see how the current political situation and economic instability plays out.

However, property agents said that the military junta has not created significant upheaval in daily life and it is business as usual throughout the country, including the island of Phuket. The government is also making significant investments in the region’s infrastructure to help enhance the area.

“The tourism sector has benefited from the relative political calm since the military took over,” noted Krystal Tan, Asia Economist at research firm Capital Economics. Tourist arrivals rose 19 percent in 2015 from the previous year, even with the Bangkok bombing. Many analysts believe that tourist arrivals are often a precursor to an increase in foreign buying of property.

Bali in Indonesia along with Malaysia are two other locations experiencing the same currency devaluations that are leading to more foreign interest in property. The Indonesian rupiah dropped 11.3 percent against the US dollar in the past year while the Malaysian ringgit fell over 22.7 percent against the US dollar. This has created some opportunities in the luxury housing market in both countries along with Thailand.

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5 tips to help you organize and declutter your closet

Every start of the year, we make a resolution to start de-cluttering our closets, and by the time, Chinese New Year and the annual Spring Cleaning rolls around, we’re almost ready to raise the white flag.

Yes, it can be daunting, but there is relief in sight. A good closet organizational system should not only keep your items neat, it should also make it easy to find what you need so that you don’t end up tearing the place apart next time you need to find a tie or a dress you wear only for special occasions. Here are some tips for when you find yourself at a cleaning impasse.

#1 Installing a modular closet system

A modular closet system is a great organizational tool, and can be found at popular big furniture retailers and closet solutions providers. They use different organizational tools, such as shelves, storage bins, hanging spaces and drawers, to help you keep your clothes organized and easy to find. Because it is modular, you can customize it to your exact needs, such as longer hanging spaces for dresses and suits.

To get started, think about what you own, and how you would like to store it. For instance, some prefer to hang their t-shirts, rather than fold them. Then think about about how much you’re going to need for each different module. Remember, modular systems allow you to maximize vertical space, so don’t be afraid of making your closet taller if you have the ceiling height for it.

#2 Use shelf dividers to hold folded clothes

Most of us fold our clothes to put them away, and end up having to play clothes-Jenga each time we want to retrieve something from the middle or the bottom of the pile. Often, we’ll see our neat piles start sliding into one another, and then we’ll end up re-folding them.

A handy solution is shelf-dividers. Available online, or at closet solutions providers, shelf dividers are handy partitions that clip onto the edge of your shelves, and help you to create separate compartments for different clothes. In a pinch, bookends work as well.

#3 Going over the door

An over-the-door solution, such as over the door hooks, are great for accessories – scarves, caps, belts and bags. You can use them anywhere you have a door, such as the bathroom or home office. They also come in different styles so you can definitely find one that suits your decor style.

#4 Put a light in your closet

Visit any condo showflat, and you’ll realize that this is a common feature that many have included. A light will help you to keep things organized and make it easier to find what you need quickly. If you have the time and money, the best solution would be to install a lighting system that automatically comes on each time you open the door. However, most big hardware stores also sell attachable, battery powered LED lights, which you can turn on with a quick tap.

#5 Give away what you don’t need anymore

This article is not just about organization, but decluttering as well. Decluttering means making choices about what stays and what goes, even when its tough.

You might love that pair of jeans, and they still look practically brand new, but it might have been years since you wore them because you can’t fit into them anymore. We’ve all got a couple of such pieces in the closet. Instead of hanging on to them, donate them to the thrift store so that someone else can get more use out of it.

Of course, you should only donate what is still usable. Undergarments and torn items should be thrown away. Remember, it’s really inauspicious to wear torn undergarments during the Lunar New Year.

To start, take your clothes out and sort them into three piles – keep, donate, and throw. It might be difficult to start, but once you get into the groove of things, it does get easier.

Picture Source: Walk in closets are an organizational dream, if we can find the room for it. Source: Wikimedia, Wjablow/If you have an extra room. try turning it into an open, organized closet! Source:
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Home buyers must set realistic aspirations: Shanmugam

While the government will continue to help Singaporeans own homes and have put measures in place to protect first-time buyers from a hot housing market, “they must have a realistic pathway to achieving their aspirations”, said Home Affairs and Law Minister K. Shanmugam.

During a dialogue session with over 2,000 property agents from ERA Realty on Wednesday (3 Feb), the minister recalled how a 28-year-old President’s Scholar had lamented to him about not being able to afford a private property in Katong, despite his many achievements.

“These are unrealistic aspirations for someone who’s only in his 20s,” said the minister. He noted that Singaporeans can afford to purchase property based on income levels, and have the option of buying private property, “but they need to start somewhere”, he said in reference to those eager to move up the property ladder.

Properties in Tanjong Katong are generally more expensive compared to other areas in the East, due to their prime location and accessibility to good amenities.

One of the more recent project launches in the neighbourhood is Amber Skye, a 109-unit condominium which was relaunched in March 2015 at an indicative price range of $1,680 psf to $2,500 psf.

Owning a condominium in Singapore is seen as a dream among many Singaporeans, as it is one of the 5Cs, with the other aspirations being a car, country club membership, cash and credit cards.

Despite this, Eugene Lim, Key Executive Officer at ERA Realty, has observed that fewer HDB dwellers are now jumping straight into buying private property.

Instead, he is seeing a trend of a “fair amount of buyers upgrading to larger flat types since the second half of last year”. For instance, there are more four-room HDB flat owners shifting to five-room flats and executive flats.

“The trend of moving to larger private properties is constrained by the Total Debt Servicing Ratio (TDSR),” he said.

Introduced in June 2013, the TDSR limits the amount of a borrower’s gross monthly income that can be spent on debt repayments to 60 percent.

This has severely impacted private property sales in recent years, with transactions down to about 14,000 units in 2015 compared to around 38,000 in 2012 before the measure was introduced, revealed statistics from the Urban Redevelopment Authority (URA).

Picture Source: Condominiums in Singapore.
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Expats now living in Phuket, working in Singapore

Expatriates in Southeast Asia are relocating their families to Phuket and commuting to work in major cities nearby such as Singapore, Hong Kong, Kuala Lumpur and Bangkok during the week, before returning to the tropical island on weekends, reported the Phuket Gazette.

According to the article, Phuket’s international airport has made it easier for them to do this.

Kevin Hodges, the North Branch and Investments Manager for Siam Real Estate, said that living standards, cost of living expenses and infrastructure in Phuket are a major draw for families who would otherwise be living in much smaller and more expensive properties. This is especially true in cities like Singapore and Hong Kong.

The article stated that it is possible for a family to own or rent a four-plus bedroom villa with a private pool and other amenities in Phuket at close to the same price of a two-bedroom condo in Singapore. This is a major factor to consider for families who need additional space and amenities, as well as privacy.

Phuket has a number of international-standard medical facilities, improving infrastructure, beaches, numerous leisure activities, a low cost of living and a growing expat community that is making it more feasible for people to live there and work further afield, noted Hodges.

Another draw for families relocating to Phuket is the growing number of international schools found on the island. The newspaper reported that there are now 13 such schools on the island, with 10 established in the past decade. Demand for places in international schools from both expats and Thai families is greater than ever before and a number of these schools are expanding.

With the ASEAN Economic Community going into effect soon, more expats and possibly even Thais could choose Phuket as the place to move their families to while working in Bangkok or other cities in Southeast Asia.

Picture Source: Luxury villas in Phuket, Thailand.
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HK property sales down 12% in 2015

Property transactions in Hong Kong dropped 12 percent last year, underscoring concerns of an economic slowdown in one of Asia’s major financial centres, reported Reuters.

The total number of local sale and purchase agreements received by the Land Registry fell 12.3 percent to 55,982 in 2015, with total consideration for those transactions down 3.9 percent to US$417 billion, according to data from Hong Kong’s Rating and Valuation Department.

The Land Registry had earlier reported that sales transactions for January plunged by more than 60 percent.

A major component of individual wealth, property-related businesses account for almost a fifth of Hong Kong’s economic output, said global ratings agency Fitch.

“The middle class is aware that the economic downturn will affect their income,” said Wong Leung Sing, Senior Associate Research Director at Centaline Property Agency.

“The significant case is HSBC, which stopped increasing salaries. Other big companies will follow so the middle class cut their expenses.

“They move from high rent to lower rent or negotiate with their landlords,” noted Wong, who does not expect any near-term improvement. “They don’t want to buy, even if they already had plans to buy.”

A major employer in Hong Kong, HSBC imposed a hiring and pay freeze across the bank globally this year in line with an annual cost savings plan of up to US$5 billion by 2017.

Meanwhile, the slower property sales is being reflected in company results.

Hang Lung Properties, for instance, reported that it only sold 63 apartments and several car parking spaces in 2015. As a result, the company saw its profit slump 57 percent.

Investment bank UBS forecasted last month that home prices in Hong Kong will fall by as much as 25 percent by end-2017.

Last week, the Hong Kong Monetary Authority (HKMA) said that a regular survey it conducts showed residential mortgage loans with negative equity, a first since September 2014.

As at end-December, there were 95 loans with negative equity of a combined HK$418 million, of which HK$12 million was unsecured.

Nonetheless, Hong Kong mortgage rates are still stable even as the Hong Kong dollar is pegged to the US dollar and the Fed increased US rates by 0.25 percent late last year.

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Govt won’t let property market crash: Shanmugam

The government has a “rough idea” on when to revise the property cooling measures, “but that doesn’t mean that we announce it”, said Home Affairs and Law Minister K. Shanmugam.

Speaking to over 2,000 property agents at an ERA Realty conference on Wednesday (3 Feb), the minister said such a decision would be made by the National Development and Finance ministers when they assess the risks to be “less or manageable”.

He was responding to questions on when the Additional Buyer’s Stamp Duty (ABSD) would be removed.

He explained that the measures were put in place by the government to protect Singaporeans, and they have managed to avert the disaster of an overheated property market.

He noted that while some people are worried that the property market could go the other way, the government will ensure this doesn’t happen.

“We cannot have a healthy economy if the property market has crashed. So it’s not in anybody’s interest to see it crash.”

First introduced in December 2011, the ABSD was revised upwards in January 2013 to rein in Singapore’s escalating residential property prices.

Singaporeans are required to pay an ABSD of seven percent for a second property, and 10 percent for a third and subsequent property. However, foreigners are required to pay an ABSD of 15 percent for their first and subsequent property purchases.

Eugene Lim, Key Executive Officer at ERA Realty, believes that the government is watching the market closely and will tweak the property measures in due time.

“The question is when, and many analysts have tried to set a target of how much prices will come down before the government removes the measures, but I do not think that is the case. The government is concerned about Singaporeans over-leveraging themselves as there are many potential buyers waiting on the sidelines.

“Right now, we’re not sure how quickly prices will rebound if one of the measures is removed, and I think that is the litmus test for the government. They don’t want to remove something and cause prices to rebound, derailing the measures.

“They are looking at market stability rather than a target price. When the time comes, they will make the decision to reverse the measures, which will be a quick and easy process.”

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How do stock market losses affect property?

Recent declines in the Singapore stock market could signal a further property price correction in the coming months, according to JLL.

This comes as stock market movement typically leads property market movement by one to two quarters.

“Looking back into the past, the residential market for example, corrected by four to six percent a quarter in some instances. Should the market lose footing, it is not impossible to expect a recessionary correction of this magnitude,” said Dr Chua Yang Liang, JLL’s Research Head for South East Asia.

“If this scenario pans out and threatens the stability of the property market and wider economy, it may prompt the government to re-visit its property cooling measures and other macro-economic policies including economic stimulus packages.”

The sharp correction in the stock market was triggered primarily by the slowdown in the Chinese economy, said JLL. Should the economic conditions in China deteriorate further, a more severe correction in the Singapore property market cannot be ruled out.

In fact, the Asian Financial Crisis (AFC) in 1998 clearly illustrated the disruptive effects of a stock market crash on the property market, although the economic reasons for the crash were different, the report noted.

In 1998, the currency and financial crisis in Thailand resulted in an Asian currency meltdown, which also affected the city-state.

“Stock market losses, sharply rising interest rates and a severe credit crunch arising from its proximity to the epicentre of the crisis, and rising unemployment drove Singapore property prices lower by between 35 percent and 44 percent during the crisis, after the property bubble burst across Asia in 1998,” said JLL.

Moving forward, the consultancy expects stock market volatility to persist in 2016.

“The lack of clarity and transparency over the policy road map ahead to manage the slowdown in China will increase downside risk in the stock market.

“Considering that current debt levels in several Asian countries, including China, Malaysia, Thailand and South Korea, are higher than they were before the AFC, these economies are more vulnerable to a global economic slowdown,” added the report.

As for Singapore, downside risks in the local economy “from external shocks, leading to higher unemployment levels, a weaker Singapore dollar and rising domestic interest rates, similar to the AFC conditions, could lead to a sharper than desirable price correction in the property market.”

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Singapore still 2nd for economic freedom

Singapore is still the world’s second freest economy in the 2016 Index of Economic Freedom, although the city-state saw a 1.6-point drop in its Index score from the previous year.

“Economic growth has slowed in Singapore, but the city’s openness to global trade and investment continues to provide a solid basis for economic dynamism,” wrote the editors of the report, which tracked the performance of 178 countries.

Rival Hong Kong remains in top spot due to its open markets, strong property rights and highly competitive fiscal policies.

New Zealand, Switzerland and Australia round out the top five rankings on the Index, which is published annually by The Heritage Foundation and The Wall Street Journal.

The 2016 Index shows a third consecutive year of improvement in the Asia-Pacific. Of the 42 regional countries monitored, the scores of 22 increased, 19 declined, and one stayed the same.

Although the region has four of the world’s five freest economies, it is also home to eight of the most repressed, including Timor-Leste, Turkmenistan and North Korea, the report noted.

Meanwhile, India and China are ranked 123rd and 144th respectively in the world. Both remain “unfree”.

“Over the past year, China’s economy has undergone a period of financial market volatility and economic slowdown.

“Deep-seated structural problems, including continued over-reliance on public investment and exports for growth, a state-controlled financial sector, and regulatory inefficiency, have become more acute,” added the report.

Picture Source: The Heritage Foundation
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DBSS flat sold for $855,000

A five-room flat at City View @ Boon Keng has been resold for $855,000, making it the first unit to be sold at the Design, Build and Sell Scheme (DBSS) project, reported My Paper, citing Housing Board records.

Situated on the 24th floor, the 109 sqm flat was sold a few months before homeowners at the project are allowed to sell their units.

The HDB had given the owners, a young couple with two children, special approval to sell the unit even before the five-year minimum occupation period (MOP) for the project ends in April.

They purchased the unit for $627,000 back in 2008 during the launch of the project.

Prices for the three- to five-room units ranged between $349,000 and $727,000, prompting concerns that the units were overpriced by public housing standards.

The average price of $520 psf was wedged between those of 99-year leasehold private condos and resale HDB flats within the area.

However, property experts believe that investment into the project will pay off.

Commenting on the said transaction, Chris Koh, Director of property consultancy Chris International, said: “Despite having paid a premium, the fact that they can walk away with a profit of one-third the launch price in today’s sluggish resale market is not bad.”

The sellers revealed that they had initially asked for $950,000 for the unit.

“We realised it was unrealistic, especially given the current market,” shared the 34-year old wife, who declined to be named. “But we still think we made a reasonable profit.”

Comprising three 40-storey blocks of 714 flats, City View @ Boon Keng is close to Kallang Community Club and the Boon Keng and Bendemeer MRT stations.

And with more units expected to enter the market soon, PropNex agent James Lim expects resale prices for the project to breach the million-dollar mark, much like at Pinnacle@Duxton, partly due to its city-fringe location.

“There are a lot of low-lying buildings around the area, especially on the side facing Lavender and Jalan Besar, so the view is unblocked.”

Picture Source: Public housing in Singapore. (Photo: Lionel Leo/Wikimedia Commons)
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26 March 2016

Former Longhouse gets new lease of life

A new mixed-use development located along Upper Thomson Road on the site of the former Longhouse food court could launch as early as this month.

Dubbed 183 Longhaus, the four-storey project will comprise 40 residential apartments, 10 commercial units on the ground floor, facilities such as a Jacuzzi and gymnasium, and basement carparks.

Jonathan Phua, CEO and Executive Director of TEE Land, the developer behind the project, said they wanted to retain some semblance of the original name, due to the site’s colourful history.

The property had been an A&W fast food outlet in the 1980s before being leased to the Kopitiam Group for two years. It was subsequently abandoned for a decade before Longhouse took over in 2000 and converted it into a popular eatery.

In January 2014, TEE Land purchased the approximately 16,960 sq ft site for $45.2 million. There had been plans to acquire an adjacent plot that houses a Shell petrol station in order to amalgamate both sites and build a larger project, but the deal fell through, said Phua.

While the Urban Redevelopment Authority (URA) has yet to approve the launch of the units for sale, the showflat has been open since late January 2016.

It is understood that there have been more than 200 walk-ins from potential buyers, most of whom stay in the Thomson area. Property agency Huttons Asia is marketing the project.

One reason for the strong interest could be the freehold tenure of the property. “This is the last pocket of freehold land in Thomson,” Phua noted.

Meanwhile, the residential component will feature a mix of two- to four-bedroom apartments with sizes ranging from 529 sq ft for a two-bedder to a 1,238 sq ft penthouse.

Phua stated that prices of the apartments have not yet been finalised, but they will not be too high. “The units will be priced competitively within market expectations and at an affordable quantum.”

Early indications are that prices will start from below $900,000 for a two-bedroom unit.

As for the commercial spaces, he revealed that they are in talks with a few potential tenants. “At this point, we haven’t decided whether to sell or lease the units, but we are looking for upmarket tenants.”

Situated within an established landed housing estate, 183 Longhaus is close to Thomson Plaza and popular eateries along Thomson Road. Marymount MRT station, the future Upper Thomson MRT station on the Thomson-East Coast Line and MacRitchie Reservoir are also nearby.

Construction is expected to begin in June and the project is scheduled to obtain TOP in 2019.

Separately, TEE Land is also marketing Hilbre 28, a 999-year leasehold residential development in Kovan. Launched last year, close to 50 percent of the 28 units have already been sold at an average price of $1,219 psf.

Commenting on prospects for the Singapore property market in 2016, Phua admitted that “home seekers have become more cautious and would rather hold on to their money for now”.

Despite this, TEE Land will continue to be on the lookout for good sites to build boutique projects of up to 100 units each, he added.

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1 in 3 Singaporeans are in debt

Around 33 percent, or one in three Singaporean investors are in debt, revealed the latest Manulife Investor Sentiment Index and reported Channel NewsAsia.

This places the city-state behind Malaysia (68 percent) and the Philippines (41 percent), but ahead of Taiwan and China (both 32 percent). Examples of debt include student loans, personal loans and credit card debts. Mortgages were not included.

Manulife found that 46 percent of indebted investors here owe $10,000 or more, and 44 percent expect to take over one and a half years to pay off their debt. Daily living expenses, like food, transportation and utilities emerged as the top contributor to investors’ debt, followed by discretionary expenses like travel, clothes and entertainment.

Fewer female investors were in debt compared to their male counterparts, at 28 percent compared to 37 percent respectively. Moreover, men held a significantly higher average debt at $40,985 compared with $25,502 for women.

Meanwhile, 69 percent of Singapore investors regret not planning their investments better, the survey showed.

When asked the reasons for their regrets, 27 percent said they were not proactive when they reviewed their portfolio, while 26 percent cited holding on to too much cash rather than making more investments.

“Singapore investors are taking steps in the right direction by working hard to keep track of their expenses and save for retirement. However, their debt burdens may be holding them back from achieving their financial goals,” said Naveen Irshad, President and CEO of Manulife Singapore.

“We encourage Singaporeans to look at planning their finances holistically, from making the most of their savings to protecting their wealth and securing a comfortable retirement.”

The Index is a half-yearly survey which tracks and measures investors’ views across eight markets within the region. Manulife noted that the findings are based on 500 online interviews in each market, namely Singapore, Hong Kong, Taiwan, China, Indonesia, Malaysia, Japan and the Philippines.

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Property investment sales lowest since 2009

Property investment sales in Singapore plunged 15 percent year-on-year to $16 billion in 2015, the lowest sales volume in six years, according to a DTZ Research report.

Property sales by government agencies fell 13 percent to $5.8 billion while private investment sales dropped eight percent to $10.3 billion.

The report stated that the decline in investment sales was largely due to the mismatch of price expectations between buyers and sellers, and the slowdown in launches of new sites from the Government Land Sales (GLS) programme.

Sales were also affected by the uncertainty in global markets, as local investors seek to diversify their portfolio by growing their asset pool overseas.

Notwithstanding, there was still much interest for Singaporean properties in 2015 given the country’s good governance and dynamic economic environment, said DTZ.

The biggest deal completed last year was the sale of a site in Paya Lebar for $1.67 billion to Abu Dhabi Investment Authority and Lend Lease. The developers plan to build a mixed development that will have 91,340 sqm gross floor area of office space, 43,740 sqm of retail space and 429 apartments.

Meanwhile, the sale of a land parcel at Dundee Road in Queenstown was the most expensive residential site sold in 2015 via the GLS programme, fetching the highest price of $483 million. Awarded to Hao Yuan Investment, the site also saw the highest residential price per square foot per plot ratio (psf ppr) in the year at $871 psf ppr. The breakeven price for the proposed development is expected to be at least $1,240 psf, noted DTZ.

The consultancy added that investors are willing to bid for leasehold projects that are priced reasonably and have redevelopment potential.

For instance, The Verge, which was sold for $317 million in Q4 2015, can be redeveloped into a mixed-use development.

Going forward, DTZ expects the real estate investment market in Singapore to present interesting opportunities to investors.

“2016 is expected to be a rocky year for the commodities and stock market, so real estate will become an attractive asset class for investors. Additionally, in a populous, land-scarce Singapore, the economic conditions are favourable for long-term property appreciation, so real estate with good specifications and location will still be in demand,” said Swee Shou Fern, DTZ’s Senior Director of Investment Advisory Services.

Picture Source: Photo: William Cho/Wikimedia Commons
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TDSR doing its job, stats show

The impact of the Total Debt Servicing Ratio (TDSR) framework is being felt, with less than 10 percent of existing borrowers having a TDSR of more than 60 percent, reported The Business Times, citing statistics from the Monetary Authority of Singapore (MAS).

In fact, the prevalence of highly leveraged borrowers has declined for new housing loans, said the MAS.

“Almost all new housing loans are below the 60 percent TDSR threshold, with a significant proportion of new borrowers having TDSRs of less than 40 percent.”

Moreover, borrowers are now taking out fewer mortgages. Borrowers with more than one loan accounted for 20 percent of all new housing loans in Q3 2015, down from the 30 percent seen in 2011.

With this, the MAS is encouraging households to prepay their home loans in order to avoid monthly repayments and higher interest costs.

Banks also noticed that households have improved the risk profile of their home loans by paring down their mortgages.

Tok Geok Peng, DBS Bank’s Executive Director of Secured Lending, believes that the property cooling measures have helped homeowners to downsize their loan commitment via debt consolidation, capital repayment and other means.

Sherry Leong, Head of Secured Finance Solutions at Citibank Singapore, added: “We do not foresee any impact to (borrowers) with respect to the transition period, which should be sufficient for them to make any changes to their refinancing arrangement if required.”

The MAS revealed that the purpose of the three-year transition period is to encourage highly leveraged borrowers to “right-size their loans as early as possible”.

In February 2014, the central bank introduced a concession which broadened the exemption of the TDSR to include homeowners who breached the 60 percent limit but were hoping to refinance the loan on the property that they live in.

As for investment homes, the MAS allows a grace period until 30 June 2017 for refinancing, should the borrower agree to pay down a portion (usually at least three percent) of the outstanding loan.

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Singapore developers more pessimistic: survey

Business sentiment among property developers in Singapore fell further in Q4 2015, reported The Business Times, citing a survey by the Real Estate Developers’ Association of Singapore (Redas) and the National University of Singapore (NUS).

The Current Sentiment Index, which monitors changes in sentiment during the last six months, dipped to 3.6 in Q4 from 3.7 in the previous quarter.

On the other hand, the Future Sentiment Index, which monitors sentiment in the next six months, dropped to 3.4 in Q4 from 3.7 in the quarter before.

As a result, the Composite Sentiment Index slid to 3.5 from 3.7 previously. A score of less than five indicates deteriorating market conditions while a score of more than five implies improving conditions.

Conducted among senior executives of Redas’ member firms, the quarterly survey showed that nine in 10 developers expect the global economy to slow down, with three in four expecting the increase in interest rates and inflation to affect market sentiment over the next six months.

“Job losses, decline in domestic economy, excessive supply of new property launches are other potential risks that will adversely impact the market sentiment,” the report said.

Meanwhile, seven in 10 of the respondents expect new launches to moderately increase, while more than a fifth of the developers said they will launch relatively fewer units.

On price changes, six in 10 expect residential property prices to drop moderately in the next six months.

As for the impact of the cut in supply of the first half 2016 Government Land Sales (GLS) programme, around six in 10 anticipate minimal impact on demand in the commercial and residential property sectors.

One developer noted that a lack of new launches may see buyers revisiting the secondary market. “The lower GLS supply will provide support for prices, which lead to lower new developer sales. Some buyers will revisit unsold and resale units in existing projects.”

Picture Source: Photo: Someformofhuman/Wikimedia Commons
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Singapore property costs lower, but taxes can be a killer

The cost of buying, holding and selling a mass market private home in Singapore is significantly lower compared to that in London and Sydney, but tax costs are much higher, revealed Knight Frank’s first-ever Global Tax Report.

The report studied the property and taxation costs in 15 key cities worldwide for foreigners purchasing a unit in their own name as an investment, and renting it out over a five-year period from 2015 to 2020.

Property costs in Singapore amounted to 4.3 percent for a US$1 million property, compared to 7.8 percent and 9.8 percent for London and Sydney respectively. However, tax costs in the city-state were higher at 19 percent, while London and Sydney were 11.3 percent and 18 percent respectively.

Despite this, tax costs for luxury properties here are more favourable, the findings showed.

For a US$10 million home, property costs were at 2.8 percent, compared to 5.4 percent in London and 5.9 percent in Sydney. In addition, tax costs in Singapore were at 20.5 percent, lower than London (20.8 percent) and Sydney (26 percent).

“Taxes can sometimes make or break a deal. But at the highest end of the market, the study shows that even accounting for tax, value has emerged for Singapore residential in comparison with other key cities,” said Kah-Poh Tay, Executive Director of Residential Services, Knight Frank Singapore.

The largest tax costs in Singapore are the stamp duties, namely the Buyer’s Stamp Duty (BSD) and the Additional Buyer’s Stamp Duty (ABSD), payable upon purchase of the property.

In the past year, there have been a growing number of calls from developers for the government to tweak the property taxes, as many are unable to sell all their units. However, the government has repeatedly rejected such appeals to adjust the measures.

Alice Tan, Research Head at Knight Frank Singapore, believes there will be no changes introduced in the next three to six months, given that the government’s key objective is to ensure that housing remains affordable.

However, she thinks that Singaporean buyers will find high-end homes more appealing now, due to declining prices.

“Compared to UK and Australia, Singapore offers lower prices on an average psf basis for ultra-luxury non-landed homes. Currency shifts have also made property prices in Singapore more attractive.”

Prices of prime non-landed residential properties in Singapore fell 7.9 percent in Q3 2015 from the previous year, according to Knight Frank’s latest Prime Global Cities Index. Prices in London and Sydney rose 1.3 percent and 13.7 percent respectively during the same period.

Picture Source: Condominium building in Singapore. (Photo: ProjectManhattan / Wikimedia Commons)
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Staging your house for sale

With rents expected to drop further this year and resale property prices stabilizing, some sellers and landlords have turned to home staging to make their property stand out in a buyer’s market, reported The Straits Times.

This decorating idea is said to have originated in the US, and refers to transforming a lived-in house to make it more appealing to buyers. It usually involves repainting walls, cleaning up and re-arranging furniture, and even baking bread during viewings to create a welcoming atmosphere.

For landlords, home staging may involve renting new furniture for the apartment instead of leaving it empty for viewings.

In Singapore, only a handful of professionals offer home staging services. These include styling studio paper+white, which upcycles existing furniture, and Asian Professional Organisers, which specializes in interior design and space management.

There are also several furniture rental companies such as Singapore Furniture Rental, which leases out furniture and home accessories like cutlery and carpets, and WTP The Furniture Company, which rents out furniture for a minimum of three months.

Packages start from $1,400 per month to furnish a studio apartment. At Singapore Furniture Rental, the cost usually includes photography and transportation, as well as the services of a stylist who will arrange the furniture.

Some property agents also offer home staging services.

For instance, Vestor Realty Vice-President Lawrence Poh goes to great lengths just to decorate a property he is putting on the market.

He brings in various cutlery, potted plants and throw pillows before taking a picture of the house or hosting a viewing. He would sometimes change the bedsheets of homeowners to fit the theme.

He may even serve wine or use home scents during viewings.

While many baulk at the idea of spending money to sell a house, home stagers reckon it’s worth it.

“Elsewhere, homeowners understand that they can spend a five-figure sum to home stage, but they can get back that amount and an even bigger profit because their house has attracted buyers willing to bid high for a good-looking house. The difference can be enormous,” said Davina Stanley, Founder and Creative Director at paper+white.

Eugene Lim, ERA Realty Key Executive Officer, noted that buyers are more likely to go for a spruced-up home over a messy home, even if it is priced a little higher.

“A cluttered house is visually not appealing and stays on the market longer. The longer the house stays on the market, the more likely it will sell at a lower price.”

Picture Source: Staging a living room. Photo: Flickr
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Habibie to build US$1 billion Batam project

Pollux Habibie International, the company of Indonesia’s former president BJ Habibie, is set to build luxury apartments in Batam in an attempt to woo foreign buyers, especially Singaporeans, reported The Jakarta Post.

Called Meisterstadt, the US$1 billion (S$1.4 billion) project will be developed on a nine-hectare site, and will consist of 11 towers of apartments, hotel rooms, offices and a hospital.

Ilham Akbar Habibie, son of President Habibie and commissioner of Pollux Habibie International, revealed that the mega project will be built in four stages, with works set to begin in the middle of this year.

“Initially, the plan to construct a hospital in the superblock was in the last will and testament of my mum (the late Ainun Habibie). It will be implemented in the third stage of this superblock’s construction,” he said during the project’s launch on Saturday (30 Jan).

Ilham noted that the property market in Batam is promising due to its close proximity to Singapore. He hopes that Singaporeans will be the main buyers of the apartments.

“Singapore now has five million residents and it has continued to grow. We hope that we can benefit the country’s population, particularly in the property sector,” he said.

“It happened in Hong Kong in the 1950s, during which the region’s population had flown to several provinces of the Chinese mainland near Hong Kong. We’ve now seen a similar situation in Guangdong, in which industries and businesses from Hong Kong have flown to the city.

“Such an effect will happen between Singapore and Batam.”

The developer hopes to sell a third of the apartments to foreigners while the rest will be marketed to local buyers.

In fact, 1,575 apartments in two of the towers have already been booked by potential buyers holding VVIP pass cards during the launch. A total of 1,874 VVIP pass cards were released for the event.

To be built during the first stage of construction, the apartments come in three different sizes – 24.82 sqm, 42.51 sqm and 51.59 sqm. Unit prices start from Rp 400 million (S$41,618).

Picture Source: Artist’s impression of Meisterstadt, Batam.
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Myanmar relaxes foreign ownership laws

In a sign that Myanmar is further opening up to the world, its parliament recently passed a draft law allowing foreigners to own up to 40 percent of condominium units, reported Property Report.

In Myanmar, a condominium building must be at least six-storeys high and located on a site exceeding 20,000 sq ft.

While this is welcome news for overseas buyers looking to buy property in emerging markets, the law does not allow foreigners to “manage” condo units, which raises the question whether they can rent out the units.

Existing laws also prevent foreigners from owning land in Myanmar.

The Ministry of Construction is expected to announce further details of the Condominium Law at a later date.

Picture Source: Aerial view of Yangon city. Photo: Flickr
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Majority successful in BTO flat applications: Wong

National Development Minister Lawrence Wong revealed that around nine in 10 first-timer families and seven in 10 second-timer families had successfully applied for Build-To-Order (BTO) flats in non-mature estates from 2013 to 2015, reported Channel NewsAsia.

Responding to a parliamentary query from MP Alex Yam, Wong said that most flat applicants who were unsuccessful in their multiple applications had applied for flats that are in high demand but are limited in supply, like those located in mature estates and balance flats.

He stated that the Housing Board had tapered the BTO supply to 15,100 flats in 2015 from 22,400 in 2014 after the demand-supply balance was restored.

In 2016, the HDB is looking to release around 18,000 BTO units in order to meet the new demand arising from recent policy changes such as the enhanced Special CPF Housing Grant and higher income ceilings, the Minister said.

“We will continue to monitor the market closely and adjust the supply when necessary, in line with our broader plan to keep supply at a sustainable level over the long-term,” added Wong.

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18 March 2016

Lift upgrading to benefit 33,000 HDB households

National Development Minister Lawrence Wong on Thursday (28 Jan), said that the Housing and Development Board (HDB) has been working with the town councils to replace old lifts under the Selective Lift Replacement Programme (SLRP), reported Channel NewsAsia.

He noted that the outcomes are being monitored by the Ministry of National Development (MND), which will decide on the next course of action.

Wong said this in response to MP Tin Pei Ling’s query on whether a new upgrading programme can be implemented to replace aging lifts in HDB estates which are seeing frequent breakdowns.

The Minister revealed that the SLRP was introduced in September 2014 to replace around 750 old lifts with modern ones that come with better security and safety features. He added that the new features will benefit around 33,000 households.

Responding to Aljunied GRC MP Pritam Singh’s question on the programme’s selection criteria, Wong explained that lifts under the SLRP are selected based on the date of original installation.

He added that it is the statutory responsibility of the town councils to carry out the lifts’ maintenance and cyclical replacements, which they are doing so now.

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Istanbul named a city to watch

Istanbul has outranked London and Edinburgh as one of the top European cities for investment and development prospects, according to a report from PwC and the Urban Land Institute.

In fact, Turkey’s largest city climbed six places from last year’s listings, the report showed.

Despite the recent political uncertainty, these findings suggest that Istanbul’s young demographic, coupled with the influx of new-build property, will continue to drive investment.

According to Cushman & Wakefield research, by Q2 2015 there were 1.9 million sqm of space under construction in Istanbul, and this increasing demand for property looks set to continue.

Adil Yaman, Director of Universal 21, the largest management company based in the city, said: “Istanbul has made great advances in recent years, especially in relation to its real estate market and its ability to attract overseas investors. Property in Istanbul is still in high demand.

“We would expect 2016 to be another successful year for Istanbul’s housing market and PwC and the Urban Land Institute’s latest findings only confirm its place amongst key European cities with the best investment and development prospects.”

Turkey’s Prime Minister, Ahmet Davutoğlu, recently expressed his own confidence in the country’s future. Writing for The Wall Street Journal, he suggested that “Turkey’s economy has become synonymous with stability and success”, and one that will continue to appeal to both domestic and international investors.

He added: “The success of the past decade hasn’t weakened our resolve to go even further”.

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All boxed up

Paper might be thin but we accumulate so much of it over time. What’s precious, of course, is what’s on it. Our school notes from all those years ago are still in their folders at the back of the shelf. We’re not going to throw them out because we worked so hard over them, even if we’ll never need to remember what dy over dx, or the Periodic table is. Our favourite books from when we were younger that we know we’ll read again, one day when we have the time.

These items are great memories, but they also take up too much space. An easy way to create some space at home, and still have these items available for when you need them is to use a storage service.

Box up clothes and shoes you rarely use

Let’s be honest. How many of the clothes we keep in our closet do we wear in a month, or even a year? What about the cute little onesies the baby has outgrown? The wedding gown. That favourite dress from five years ago that we know we can fit into again if we just diet a little. Those pretty heels that we’ll only wear for the most special occasions. They’re still in the closet, making it hard to put away the clothes that we wear to work almost every week.Clothes not only take up space, but can end up being quite heavy. Fortunately, there are services that not only store these bulky items for us, but also collect it from our homes.

Clothes not only take up space, but can end up being quite heavy. Fortunately, there are services that not only store these bulky items for us, but also collect it from our homes.

Get rid of bulky items

We’ve all got that really big suitcase we bought for those shopping holidays. Nothing is more fun than hitting those overseas factory outlets or summer sales. But let’s face facts. We might only go on such a holiday once every few years. And all that time, this massive suitcase is taking up space in our store room or bomb shelter.

Storage facilities can accommodate these bulky and even odd-sized items. It would be a lot more practical to use such a service and then retrieve them only when needed. Best of all, they even deliver the item to your house when you need it!

Storage solution

Work+Store Valet Storage offers easy, affordable solutions to help you store these precious items and memories away for when you need them again.

Order a storage box online, and have it sent to you for free. Pack your items, take a photo, and use the handy system to keep track of what you’re putting in storage. Schedule a pick up online, and a team member will pick it up from your home. Now all you have to do is sit back, and think about how to use all the space you’ve freed up.

Whenever you need an item, just schedule a delivery, and have it sent straight to you.

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Buying property as a corporate entity

It is not just individuals and families who buy homes in Singapore. Sometimes, a corporate entity may purchase a residential property for investment purposes. If you and your business partners are considering doing so, here’s what you need to know.

1) You can buy only private property

HDB flats are meant for owner-occupiers (especially families, married couples and senior citizens), HDB tenants and tenants of non-corporate landlords. The HDB does not permit corporate entities to purchase its flats for investment purposes. Condominiums and landed homes, however are legally permitted for corporate entities to purchase.

2) Consensus is compulsory

The corporate entity involved in the purchase should engage a lawyer to draw up a contract which is mutually agreed upon by all buying parties. All parties must then sign the contract and transfer documents individually before the sale of the property can proceed. Details like each party’s share of ownership in the property and the purpose of the property must be determined and stated in the
contract. If the purpose of the purchase is to lease the property, all parties must also sign the tenancy agreement to lease it.

3) Your share of ownership of the property is not necessarily equivalent to your share in the company

It all depends on the contract, whose terms must be discussed thoroughly among all involved parties. You may have a straightforward situation whereby your share in the company reflects your share of ownership of the property, or it could be that your contractual terms are more complex than that. It is vital to determine amongst all relevant parties what works best before drawing up a
contract and signing it. However, a private limited company is seen as a separate legal entity from its shareholders, and the extent of each shareholder’s liability is limited to his stake in the company.

4) Death has no power here

Unlike in a tenancy-in-common or joint tenancy agreement, the death of any of the owners of a residential property held by a corporate entity will not affect the company, property-wise. If a shareholder wants to relinquish his ownership, this is subject to the company’s Memorandum & Articles of Association (M&AA). He can then sell his shares to either his fellow shareholders or to a third party.

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Hokkaido: Snow City

Although interest in ski resort properties cooled following the 2008 Global Financial Crisis, investor reluctance appears to be thawing, as many global high-net-worth individuals (HNWIs) are now looking to own alpine homes, which have become a status symbol.

According to a 2014 (Knight Frank) survey of wealth advisors representing 30,000 ultra-rich individuals, around 25 percent of those polled in China and 11 percent in Singapore were interested in owning a ski home, especially ski-in ski-out accommodation where the ski slopes are right outside your door.

With the renewed interest, prime property prices in major ski resorts worldwide rose by 5.9 percent in the year to June 2014, revealed data from the consultancy. The price index reached its lowest point in June 2009, but had since risen by 14.9 percent.

Asia’s own Aspen

In Asia alone, there are hundreds of ski resorts, but very few can compare to Niseko in Hokkaido. Dubbed the “Aspen of Asia”, the small town is famous for its fine, powder-like snow.

“Considered one of the snowiest places in the world, Hokkaido has been bestowed with the finest snow which falls consistently every year, thus attracting many ski enthusiasts from all over Asia Pacific,” said Low Su Ming, Executive Director of Low Yat Group, a major Malaysian player in Niseko.

Aside from Niseko’s rugged beauty, she noted that the shorter travelling time compared to long flights to Europe and the Americas has also contributed to the rising number of wealthy Asian investors looking at ski resort properties in Hokkaido.

In addition, the area is easily accessible by train and bus services, while Japanese food and culture appeals greatly to many Asians.

Meanwhile, the Japanese Yen has fallen from ¥77.50 = US$1 in November 2011 to ¥122.54 = US$1 in November 2015, making the country more attractive to potential investors, noted Low.

Aussie connection

Despite the Yen being at a low point, sources told PropertyGuru that Hokkaido’s economy, which is based mainly on food production, has remained stable. But after the discovery of Niseko’s good quality snow some years ago, Australian skiers started investing and creating a community of their own. Since then, more tourists have been flocking there.

As Hokkaido’s popularity is still in its infancy, Low believes many investors will see growth opportunities in the area.

“Hokkaido is similar to Bali or Phuket when it was first discovered. There is a huge potential for growth here. As for tourism, it is becoming an all-season destination. There are plenty of things to do in Hokkaido that are still new to visitors from Asia and elsewhere.”

In a blog post on 360niseko, a website dedicated to information about the town, Keith Rodgers, President of Niseko-based Taiga Real Estate and Project Management, wrote that it is witnessing “the best tourism numbers since 2007”. According to the Niseko Tourism Board, visitor numbers soared by 103 percent during the 2011 and 2012 seasons.

While Niseko’s property market had been dominated by Australian and Hong Kong buyers in the past, nowadays they are coming from Singapore, Malaysia, and increasingly, from Indonesia, Thailand and Taiwan, said Rodgers.

Holiday home

So what are they looking to buy in this snowy location? In the case of Low Yat Group’s Shiki Niseko project, the majority of investors are interested in lifestyle investments, specifically a vacation home, shared Low.

Shiki comprises 68 luxurious apartments on a one acre plot and includes 10,000 sq ft of retail space and restaurants. Its unique location means that all the residential units offer breathtaking views of either Mt. Yotei or the steep slopes of the Grand Hirafu Ski Resort on Mt. Annupuri.

“Most of the units are on leaseback arrangement. Owners enjoy a duration of stay during the year whilst the hospitality arm manages the property based on a pool revenue sharing system at other times of the year. Hence, they receive returns in the months that they aren’t occupying the unit.

“These types of properties are gaining popularity, and Shiki Niseko was the first luxury property to start this type of investment.”

When asked to name one hotspot in Niseko, Low points to Hirafu Village and Kutchan, which are the town centres located close to ski lifts. “There are plenty of ski activities to be found here, while restaurants, cafés and shops are all within walking distance.”

Money matters

Borrowers looking to get a loan for Japanese properties outside of Tokyo will find it tough to do so in Singapore, but the process is much easier through Malaysian banks, according to Low.

In Japan, home loan interest rates are around 1.8 percent to two percent and savvy investors will usually seek the best rates and packages available in the market before making a purchase.

Low reckons that now is a good time to buy a ski resort property, as housing and land prices have already tripled over the last two years. At the same time, Hokkaido has seen many developers entering the market to build new resorts. Right now, rental yields are in the range of two to five percent, depending on the property type and the level of service.

She added: “Demand for accommodation within the area has also increased, especially during the winter season. This comes as the number of tourists flocking to the area rapidly increases every year.”

In fact, most of the resorts and apartment units were fully booked last winter, and tourists found it difficult to secure accommodation even three months before, said a source.


Population: Around 5.6 million

Total area: 83,457 sq km

Currency: Yen

GDP per capita: US$33,896

GDP growth: 0.1 percent

Future transport: Extension of the Hokkaido Shinkansen (bullet train)

Ski resort prices: Up three times over the last two years

Distance from Singapore: 5,940 km


Niseko is home to some of the world’s top ski resorts, which see high demand from wealthy travellers. Here are two new developments you should check out.


Shiki Niseko
Abuta District, Niseko

Type: Condotel
Developer: AP Land Berhad
Tenure: Freehold
Facilities: Housekeeping services, fully equipped kitchen, ski equipment storage, drying rooms
Nearby Key Amenities: Michelin Star restaurant, gourmet food store, coffee bar, car rental services
Nearby Transport: Shuttle buses, Kutchan railway station
Starting Price: Approx. S$968,000

This luxury landmark condotel is located in the village of Hirafu, comprising 68 units of one- to three-bedroom apartments with amazing mountain views.

Boasting a contemporary Japanese aesthetic, the hotel-style condominium was completed in 2012 and is operational all year round.

First-class facilities include housekeeping services, a fully-equipped kitchen, storage spaces for ski equipment and drying rooms for skiers.

An exquisite Michelin Star-rated restaurant, gourmet store with fresh local produce, and an inviting coffee bar are also available for guests.

Abuta District, Niseko

Type: Luxury apartments
Developer: Niseko Resorts Group
Tenure: Freehold
Facilities: Concierge service
Nearby Key Amenities: Japanese restaurants, bars
Nearby Transport: Shuttle bus service, Kutchan railway station
Starting Price: Approx. S$488,000

Situated in the heart of Hirafu village in Niseko, which has been dubbed the “Aspen of Asia”, this development features 25 fully-furnished apartments.

Units range from studios to two-bedroom units up to 956 sq ft, with a spacious four-bedroom penthouse at 1,560 sq ft.

Completed in 2013, Akazora is an eye-catching building that blends Western and Japanese design elements.

The boutique project is just a stone’s throw away from Niseko’s famous ski slopes, popular restaurants and bars. It is also conveniently located near a ski shuttle service.

Picture Source: Hokkaido is famous for its quaint towns and powder snow.
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Eye on Chinatown: Cultural evolution

Chinatown — there’s one in (almost) every country, yet perhaps, none as diverse as Singapore’s.

Comprising the precincts of Ann Siang Hill, Bukit Pasoh, Kreta Ayer, Tanjong Pagar and Telok Ayer, Chinatown is a mish-mash of the old and the new. While the place certainly lives up to its name, what with its iconic Chinese Buddhist temple, multiple restaurants offering a range of Chinese cuisines (from Hong Kong and Taiwan to mainland China), shops selling traditional Chinese wear and an endless variety of Oriental trinkets, its diversity also makes it unique.

There is no shortage of local delicacies for which Singapore is well known, or even European cuisine. Bars, pubs and clubs catering to the non-Chinese crowd also abound — though mostly in the nearby Tanjong Pagar area — and it is not uncommon to see locals and tourists alike enjoying the sights and sounds Chinatown. There is also a Hindu temple in the estate.

Once upon a time

Needless to say, the Chinatown we know today was not always the vibrant, diverse hive of activity it is now. In Singapore’s early days, migrants from China arrived in the country in great numbers, prompting Sir Stamford Raffles and colony engineer Lieutenant Philip Jackson to begin drawing up the plan for Singapore to ensure organized growth.

The different ethnic groups were subsequently settled into enclaves along the Singapore river; the Chinese, who made up 70 percent of the migrant population, were allotted the entire region southwest of the river. Each dialect group even had its own enclave within the region: the Teochew around Fort Canning and along Clarke Quay, the Hakka and Cantonese in Kreta Ayer, and the Hokkien in Telok Ayer. The Hainanese were the last to arrive and settled wherever they could.

The dialect segregation and challenging environment led to clan associations being formed as a way to provide community support when it came to employment, funerals, and legal matters. However, under the guise of aid and support, kongsi (secret societies that were actually violent street gangs) also arose; opium, prostitution and gambling were their industries of choice. Finally, in 1889, the Suppression of Secret Societies Ordinance cracked down on them.

Chinatown still had to endure the ordeal that was the Japanese Occupation during WWII. As the area was crowded and devoid of air shelters, Japanese air raids claimed up to 2,000 lives daily.

But Chinatown survived and eventually flourished. Food, apparel, markets, street-side Chinese wayang, Chinese medicinal halls, fortune-telling and festival celebrations sprang up all over the estate, marking the beginning of its transformation to Chinatown as we know it today.

Convenience in tradition

Today, Chinatown is considered by a good number of Singaporeans to be a “tourist trap”, abounding in souvenirs and tourist-centric services whose prices are grossly inflated (just ask anyone who has ever been on a trishaw ride in Singapore). But while that much rings true, it still has much to offer.

One cannot deny that it is rich in history and culturally significant. The narrow, cramped walkways littered with food stalls and street hawkers selling a large selection of food from Hokkien mee to satay, are remnants of Chinatown’s past that are highly unlikely to go away any time soon.

Though the place has been cleaned up and offers modern conveniences such as free Wi-Fi, the trademark crowded streets, cluttered shops selling all sorts of things from Chinese fans to cheongsams, and Chinese medicinal halls are still a common sight in Chinatown.

Needless to say, the festivities are always in full swing come the Lunar New Year, and one would be hard-pressed to walk anywhere in Chinatown without having to squeeze his way past the throngs of shoppers patronizing the stores that stay open late into the night during this period.

Still, modern advances have given rise to a mall (Chinatown Point), numerous hotels, and improved connectivity between Chinatown and the rest of the island.

Large sections of it are governed by the Urban Redevelopment Authority’s (URA) conservation act, and being in the Outram planning area, it is in the heart of the central region. The central business district (CBD) is within walking distance, and the Central Expressway (CTE) is located nearby.

Apart from the CTE, the three MRT lines serving the area — the Northeast, East-West and Downtown lines — help to maximize its accessibility. Connectivity will be enhanced even more in the near future thanks to the upcoming Thomson East line, which will pass through the existing Outram Park MRT station and a new station at Maxwell.

The long haul for old homes

When it comes to residential property in the area, buyers and investors should note that most of the housing projects there are relatively old, and take this into account when looking at housing in Chinatown.

Wong Xian Yang, Senior Manager (Research & Consultancy) at, says: “Many of the developments, such as People’s Park Complex, People’s Park Centre, Fook Hai Building and Pearl Bank Apartments were completed in the 1970s. As they are quite old, there is an incentive to try for collective sales.

“Investors who are interested in purchasing them in anticipation of en bloc sales could look at some of the older developments. However, they should know that the current measures in place, such as the ABSD (additional buyers’ stamp duty) have bogged down the en bloc market.

“Moreover, there is still a gap in expectations between buyers and sellers, especially in the current lacklustre market. As such, investors would be well advised to view (such purchases) as long-term investments.”

Pearl Bank Apartments is one such example. The multiple attempts so far to put it up for en bloc sale have been unsuccessful. At the moment, its owners are trying to list the development as a conservation project.

Furthermore, older buildings tend to incur higher maintenance fees, which lead to relatively higher holding costs, something buyers and investors should be aware if before making any commitments.

However, residential property in Chinatown is not limited to old apartments. Wong assures buyers and investors: “For buyers who are keen to tap into the convenience of Chinatown and who desire newer housing, there are developments such as Dorsett Residences.”

Completed in 2013, Dorsett Residences is a 99-year leasehold condominium on New Bridge Road, near Dorsett Hotel. It is one of the more recent residential developments in the area, and offers good prospects for both buyers and investors.

Of Chinatown’s property market prospects, Wong says, “In view of area’s connectivity, central location and limited available land, there may be significant interest for collective sales when the en bloc market picks up.”

Picture Source: URA,PropertyGuru Analytics
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HDB outlook for 2016

While condo transactions continue to be scrutinized by most market watchers, often due to the aspirational nature of the property class, it is necessary to keep an eye on HDB resales. To Singaporeans, HDB has always been a very bread and butter issue, with a large majority of families living in them.

Furthermore, for those looking to upgrade from public housing, they would need to sell their HDB starter homes, hopefully with a decent upside, to be able to afford the move to condominiums, or executive condominiums (ECs). The health of the HDB resale market, therefore, affects the private market as well.

We take a closer look at the ups and downs of the HDB market in 2015 to make some predictions for where this market segment will head in 2016.

Overall HDB market

What then, was the pulse of the HDB market in 2015?

In the space of the 12 months of 2015, 19,015 HDB resale units exchanged hands, a 10 percent increase from 2014’s 17,318 (refer to Figure 1). This translates to an average of around 4,700 units transacted per quarter of the year, with the second quarter seeing a high of 5,286 units. This is comparable to the numbers that were seen in 2012 and 2013, before cooling measures froze the market and reduced transactions to a mere trickle.

While the number of transactions increased, prices dipped 1.6 percent. This decline is a far milder than the 6.1 percent dip seen in 2014, suggesting that the fall in prices might be coming to a trough. A burgeoning sign of promise was that prices actually saw a small 0.2 percent bump in the final quarter of the year, according to the HDB resale price index. However, most market watchers caution that it is far too early to call it the start of a recovery, and that more sustained signs of recovery must be seen.

The two key cooling measures that have brought about this fall in prices in the HDB resale market are the Mortgage Servicing Ratio (MSR), and the removal of Cash-Over-Valuation (COV). MSR caps the payable monthly mortgage 30 percent of one’s monthly income. Buyers therefore have to look at what the bank tells them they can afford, instead of what they think they can afford.

The removal of COV was a welcome move as well, because sellers often focused on COV to determine their asking price. This meant that buyers were paying more than the fair valuation price, and had to pay premiums to buy a unit. Furthermore, sellers often set higher and higher COVs, based on what they heard their neighbours had sold for, creating a system of escalating quantums. Removing COV, therefore, put some sense back into the system.

It might be better therefore, to see where HDB prices have gone, not so much as a downturn, but rather, as some kind of sensibility entering the market, with sellers making more rational decisions around the pricing and the actual value of their homes.

Breaking down the numbers

Despite prices falling across the board, the picture gets more complex once we delve into the details.

In general, flats in mature housing estates have held up better in terms of prices than their non-mature counterparts. For instance, the top five performing estates in terms of median prices for four-room flats were Serangoon, Bukit Merah, Geylang, Kallang / Whampoa, and Queenstown. Geylang’s prices showed a 15.3 percent increment, an incredible jump, given the market. However, due to the relatively small size of the estate, it did not move the overall market needle.

Meanwhile, the top five performing estates for five-room flats were also mature estates. Geylang again took the crown, with Toa Payoh, Ang Mo Kio, Bishan and Yishun coming in below it, all showing more moderate increases below two percent.

With the distribution and buildup of resources across the island, it is likely that the reason mature estates do better is due to the greater number of amenities available. Rather, all the mature estates that performed well in 2015 were located within a 20-minute MRT ride to the city, or even closer. Furthermore, Bukit Merah, Queenstown and Kallang / Whampoa are receiving a lot of attention from affluent, younger couples who are drawn to the revivification of those estates with hipster cafés, bars and shops.

Supply is likely to play a part as well. Aside from Ang Mo Kio and Toa Payoh, these are all smaller, early estates. The supply of resale flats within these areas is unlikely to be high, and many of the older blocks could have already been earmarked for HDB’s Selective Enbloc Redevelopment Scheme (SERS), which would discourage people from buying them, only to face the hassle of relocation in the future. This lowered supply then, continues to support elevated prices.

Record busters

In 2015, 110 HDB units sold for prices above $900,000.

Out of these, 53 were units at Pinnacle at Duxton, where record prices continue to be set for HDB flats. In fact, the highest price ever recorded for a four-room flat took place at Pinnacle at Duxton this year, for $990,000. However, even though over 50 units were sold for above $900,000, only nine managed to cross the psychological one million dollar mark, all of which were five-room units.

Three other flats sold in 2015 also managed to cross this threshold. These flats were located in Toa Payoh, Toh Yi Drive and Jalan Ma’mor. The Jalan Ma’mor flat is particularly interesting, because it is also a rare jumbo unit at 3,014 square feet, and sold for $1,060,000. Its size, rarity and location close to Balestier and Novena were factors that contributed to its higher prices.

While we are all used to Bishan’s million dollar maisonettes, it might be surprising to some that Toh Yi Drive also saw seven duplex units move at prices over $900,000, with one unit going for a million on the dot. The proximity to the Bukit Timah school stretch, and the newly opened Beauty World MRT on the Downtown Line likely contributed to those prices. Marine Parade also saw three flats that went for over $900,000. All three were located in point blocks, within walking distance to the beach, and also to the ever-popular Tao Nan School.

These unit types – jumbo flats, point blocks and executive maisonettes – are no longer built, which has definitely made them scarcer. For those looking to live in such units, therefore, and want the conveniences of amenities, popular schools and transport links, there is definitely a premium price to be paid.

Market insiders revealed that buyers of these record breaking flats were unlikely to be regular HDB upgraders. Often, these were owners of private property, who had cashed out of their homes with really decent capital appreciation, and were willing to pay top dollar to purchase a home in a location they desired. They are therefore the exception, rather than the rule.

Public rentals

On the surface, the HDB rental market looks like it is doing quite well. The number of transactions in 2015 was 13 percent more than 2014’s, with 41,109 rental contracts reported to HDB. Five-room units are the most popular, with a 22 percent increase year-on-year (refer to Figure 2).

The pricing story, however, is a lot more depressing for landlords and homeowners. Overall, the year saw a four percent dip in median prices from 2014. Some of the sharpest drops year-on-year came from popular locations. For instance, Marine Parade saw median four-room rental prices drop by a rather steep 11 percent, while Bukit Merah saw prices for the same sub-type decline seven percent.

As such, those who have suggested that the HDB rental market is recovering have actually called it in error. In places like Marine Parade, for instance, tenants could easily threaten to move to a rental condo instead of sticking with a HDB, because declines have also brought down rents in the private market. Most landlords would rather capitulate than lose a tenant and have the unit sit empty.

The reason for the higher number of rental contracts signed is not because tenants have increased. Rather, it is because the frequency of contracts being signed have increased, because tenants are opting for one- instead of two-year contracts, negotiating for further concessions from landlords, be it rental price reductions, new furniture, or subsidized utilities.

Ball gazing

So where is the market likely to move in the next 12 months?

For HDB resale transactions, our house view is that transactions will gain further momentum, even as prices continue to fall. With a bumper crop of 28,000 new Build-to-Order (BTO) flat owners receiving their keys this year, we will likely see an increase in resale flats hitting the market, as upgraders will need to move their existing units within six months. We think that sales volume is likely going to be between 4,200 and 5,400 per quarter, with 2016 closing with under 20,000 units exchanging hands. Given seasonal fluctuations, resale prices are likely to vary about 1.5 percent up or down each quarter. We think that the year is likely to end with overall prices falling between 0.3 and 0.8 percent.

The prognosis of the rental market is more dismal. While volumes might climb moderately, we are likely to see a sharper decline in prices. With a projected global economic slowdown, as well as the political climate on foreign labour remaining negative, there are fewer demand drivers for the rental market.

With a bumper crop of over 50,000 dwelling units hitting the market, there will be a supply glut in the market. HDB rentals are likely going to find themselves competing with investment units in suburban condos, as they race to the bottom dollar to find tenants.

Furthermore, those upgrading from HDBs to condominiums might decide to hold on to their flats and rent them out for income while waiting for prices to further appreciate, exacerbating the supply issue. As such, our house view is that rental prices for HDBs are going decline further by five to eight percent.

Picture Source: HDB, PropertyGuru Analytics
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Government measures fail to boost EC market

In August 2015, Prime Minister Lee Hsien Loong announced during his National Day Rally speech a slew of new measures meant to impact the real estate market. This included raising the income ceiling for couples buying executive condominium (EC) units from $12,000 to $14,000. As such, higher-income households (making up another six percent of the population) could now qualify for subsidised housing, and would not have to overstretch themselves to buy private property.

At the time, analysts felt the changes would reverse the slump in the EC market, which had seen the number of unsold units rise to an unprecedented 5,200 units as of July 2015, according to figures from CBRE.

It didn’t help that launch prices for most EC projects were hovering around $800 psf for seven quarters before the income ceiling was raised, while the private residential property index fell by 7.2 percent during the period.

But five months after the policy kicked in, the EC market seems suppressed rather than stimulated. Only 124 units were sold by developers in December 2015, down by about 33 percent from the previous month, revealed a JLL report citing data from the Urban Redevelopment Authority (URA).

The report stated that for the entire year, an estimated 2,562 new EC units were sold, compared to the 3,750 units launched.

Further exacerbating the supply glut is the recent launch of two EC sites, one at Yio Chu Kang Road under the confirmed list of the second half 2015 Government Land Sales (GLS) Programme, and the other at Sumang Walk in Punggol under the reserve list. Both are expected to yield a total of 1,300 housing units.

Great expectations

Ong Teck Hui, National Director, Research & Consultancy at JLL, said: “One of the reasons why EC sales have remained slow despite the income ceiling hike is the mismatch between prices and buyers’ expectations.

“Many new ECs are currently marketed at around $800 psf on average, about 15 percent higher than in 2011. With falling private residential prices, some potential EC buyers would be mulling over the possibility of buying private homes instead of ECs, especially with the narrowing price gap between the two.”

The mortgage servicing ratio (MSR) cap of 30 percent for ECs has also led to softening demand, with one developer telling PropertyGuru that the MSR limit for ECs should not be the same as HDB flats, because ECs are a public-private housing hybrid, and therefore, the MSR should be capped at 45 percent.

PropNex agent Edmund Ee agrees that this measure should be tweaked to help homeowners looking for a bigger place.

“With the MSR at 30 percent, HDB upgraders who want bigger units are being limited by the loan amount and are deciding to hold off on their purchases, since upgrading to an EC would mean a smaller living space.

“If the MSR is at 45 percent, it’s definitely good news for eligible buyers, as they will be able to buy a bigger unit.”

But Ong explained that the current MSR rate is a policy consideration and should be kept in place.

“With a lower MSR, buyers will borrow less, which means that EC units will have to be priced accordingly. It is part of the overall plan to keep housing prices in check, maintain affordability and prevent excessive borrowing.”

Another concern among HDB upgraders is the resale levy of up to $50,000 for EC units bought directly from developers, but Ee reckons that buyers will probably consider projects where the land sales were launched before 9 December 2013, when the ruling took effect.

With EC buyers becoming more price-sensitive, Ong does not foresee a pick-up in transactions in the coming months.

“Under current market conditions, a strong sales take-up at launch is quite unlikely, so new EC projects are just trying to achieve gradual and steady sales progress in the months after launching.”

Housing the sandwich class

Despite what the figures show, Ee has observed more first-time buyers from the “sandwich class” (within the $12,000 to $14,000 income bracket) visiting EC showflats since the income ceiling was raised. “They prefer ECs as the room sizes are generally bigger than private condominiums,” he said.

URA data revealed that the top-selling EC projects in December were The Brownstone in Sembawang, which sold 20 units at a median price of $814 psf, The Terrace at Punggol (15 units at a median price of $788 psf), and Sol Acres in Choa Chu Kang (14 units at a median price of $796 psf).

Ee believes these projects reported better sales due to their proximity to public transportation.

“The Brownstone is close to the upcoming Canberra MRT station on the North-South Line, while Sol Acres is near the new Bukit Panjang MRT station on Downtown Line 2. Buyers know that there is a premium to pay for being close to an MRT station, but the price is definitely lower compared to private condos nearby.”

However, Ong thinks the economic slowdown will continue to put pressure on the market, and the only way to revive demand is to price units more attractively.

More launches coming soon

In 2016, a number of new EC launches are expected to take place, including Wandervale at Choa Chu Kang Drive, The Visionaire at Canberra Drive and Parc Life at Sembawang Avenue (refer to Figure 2).

Based on the land prices, developers are expected to price these three projects more competitively, with estimates ranging from about $740 psf to $820 psf, noted Ee.

“As developers become more price-sensitive, hoping for better take-up rates, new EC prices should be at a good entry level.”

He added that tough competition from the new supply will see developers offering discounts for EC projects that are nearing completion.

“Looking at the upcoming launches, I do not foresee a sharp spike in the sales transactions of EC units as there is still ample supply in the market. EC transactions should reach around the 2015 level of over 2,500 units sold.”

Picture Source: URA,JLL Research & HDB,PropertyNet Research
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Completed condo price falls slow

Prices of completed non-landed residential properties in Singapore fell by 0.4 percent in December 2015 after dropping by 0.7 percent in the month before, according to latest flash estimates of the NUS Singapore Residential Price Index (SRPI).

Excluding small units, the central region saw prices decline by 0.6 percent last month, compared to the 0.9 percent decrease in November. In the non-central region, prices fell by 0.2 percent, lower than the previous 0.4 percent drop.

The central region comprises the postal districts 1 to 4 and 9 to 11, while the non-central region covers the other postal districts.

Meanwhile, prices of small units up to 506 sq ft remain unchanged after falling by 1.3 percent in November.

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Property trough in sight: CBRE

Compared to the robust market conditions seen in 2013, sales of new private homes in the last two years have been severely depressed, with transactions halving to 7,300 units in 2014 and 7,440 units last year, according to CBRE Research.

The report stated that Singapore’s housing market is likely to remain flat this year as demand continues to be hindered by the property cooling measures, economic slowdown and rising interest rates.

As sales have slowed, developers are finding themselves stuck with many unsold units, but the situation is not as bad as before. The number of uncompleted unsold units fell to 23,000 at the end of 2015 from nearly 27,000 in 2014, said CBRE.

“The reduction is due to lesser new projects being added due to fewer sites being sold in 2015, translating to a limited new supply going forward.”

Meanwhile, the private property price index has dropped by 8.4 percent since peaking in Q3 2013. Specifically, the price gap between the Core Central Region and the outer regions have narrowed, presenting a window of opportunity for investors looking for good deals in the prime market, noted the consultancy.

It believes that after suffering nine quarters of price and volume adjustments, the trough may be in sight as supply runs low and prices reach an equilibrium.

“Should the government relax the existing cooling measures, it may stoke buying interest. When that happens, the window of opportunity will narrow and prices might see some upside as early as 2018, led by the prime segment.”

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14 March 2016

Shunfu Ville tries to en bloc again

Shunfu Ville has been re-launched for collective sale at the same reserve price of $688 million, or $791 psf ppr, said marketing agent JLL.

This is the second time that the 358-unit residential development built in the 1980s has gone en bloc after more than 80 percent of the owners agreed to the sale.

The first attempt at a collective sale in September 2015 attracted expressions of interest from two developers, but PropertyGuru understands that the offers were rejected for being too low.

Situated in the Bishan/Thomson area, the 408,927 sq ft site is zoned residential under the 2014 Master Plan and could yield over 1,100 units with an average size of 1,000 sq ft.

Yong Choon Fah, National Director of Capital Markets at JLL, noted that while the residential market continues to be bogged down by the property cooling measures, some positive signs are now emerging.

“With price moderation working its way alongside the continued rise in wages and the stabilisation of HDB flat prices, private housing has become very much affordable. We estimate that it now takes about 5.6 years of income to buy a home, close to the 5.9 years in 2003, which was a recession year. At the peaks of the market in 1996 and 2008, home prices were equivalent to nine to 10 years of income.”

With this, she reckons that developers will continue to press on with replenishing their land banks.

Moreover, there has been no Government Land Sales (GLS) site released for sale in the area since the Lorong Puntong land parcel (Thomson Impressions) was awarded to a Chinese developer in October 2014.

The Shunfu Ville site is also close to established schools, shopping malls and two MRT lines.

At $688 million, the estimated breakeven cost for the successful buyer stands at around $1,250 psf, with the new units expected to fetch between $1,400 psf and $1,450 psf, said JLL.

The tender for Shunfu Ville will close on 10 March 2016.

Picture Source: Aerial view of the Shunfu Ville site. (Photo: JLL)
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Aussie developer dips toes into Singapore’s housing market

Property giant Lend Lease is set to enter Singapore’s residential market after receiving planning approval to develop a mixed-use development in Paya Lebar Central, which includes over 400 apartments, reported The Australian.

The Urban Redevelopment Authority (URA) has granted provisional permission to a consortium comprising the Abu Dhabi Investment Authority (ADIA) and Lend Lease to develop the project.

The developers had won the tender for the 99-year leasehold site with a bid of $1.67 billion.

The project is expected to further expand Lend Lease’s presence in the city-state after building mostly shopping centres during its 40 years in Singapore.

As the lead developer, Lend Lease holds a 30 percent stake in the consortium, while ADIA owns the remaining 70 percent.

Aside from the residential component, the project will also feature 45,000 sqm of retail space and a 90,000 sqm office tower.

Located in the city fringe, the 3.9ha site is part of the government’s plan to establish commercial clusters outside the central business district.

Meanwhile, the move by Lend Lease aims to target key urban regeneration projects in gateway cities across the world.

The Australian group is also jointly developing the International Quarter in London while building the Lifestyle Quarter at Tun Razak Exchange in KL.

Denis Hickey, Chief Executive of Lend Lease Americas, had earlier revealed that the group is running the ruler over various billion-dollar urban regeneration projects in the United States.

Picture Source: Artist’s impression of future developments in Paya Lebar Central.(Photo: URA)
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Malaysian property promising despite headwinds

Even with the challenging headwinds ahead, independent economist Lee Heng Guie believes that the medium-term prospects for Malaysian property are still promising, reported The Star.

And while property prices may ease further, he does not expect a significant drop.

“This is because Malaysia is not heading for an economic recession,” said Lee during a presentation at the 9th Malaysian Property Summit recently.

“The softening property market renders the buyers the opportunity to purchase property. For foreigners looking to invest in real estate in Malaysia, the weaker ringgit comes as a boon.”

However, he noted that the market is still hampered by weak economic growth, cautious sentiment and affordability issues.

“The prospects of higher domestic interest rates in 2017 may be a dampening factor,” he said.

“Likewise, the banks are expected to maintain vigilance in the evaluation of property loans while ensuring the good credit-worthy borrowers will continue accessing home financing.”

Lee hopes that the government will keep the property cooling measures in place for now.

“The right time to adjust some of the measures is when the market equilibrium is a lot more certain and sustainable. An over-adjustment of the property sector must be avoided for now.”

In addition, the authorities should closely monitor the supply and demand conditions in order to prevent overbuilding in some segments and avoid a systemic risk to the banking sector, in case of prolonged economic slowdown and severe correction in property prices, said Lee.

“While ensuring a sustainable property sector, Bank Negara should ensure the banking institutions continue to lend to those eligible borrowers,” he added.

“Fiscal incentives such as stamp duty relief and developers’ interest bearing schemes should consider for the first time home buyer and for the property priced below RM1 million.”

Picture Source: Aerial view of Penang.
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Balestier condo sale rejected

Singapore-listed developer SingHaiyi must first complete the development of the City Suites project before it can be allowed to sell its stake, reported The Straits Times.

The Controller of Residential Property recently rejected SingHaiyi’s application for approval on the proposed sale of the condominium project in Balesteir to Ang Cheng Guan Construction.

Last April, the developer announced plans to sell Corporate Residence, which is the developer of City Suites, for $16.38 million “in view of the possible levy as a result of the Qualifying Certificate on unsold units”.

It revealed that the 56-unit development witnessed slow sales progress at around 10 percent since its launch in May 2013.

Meanwhile, the Singapore Land Authority (SLA) explained that the application was rejected in order “to ensure that the developer fulfils its obligations to complete the development under the Qualifying Certificate (QC)”.

The rule mandates that developers should complete a project and obtain the Temporary Occupation Permit (TOP) within five years from the date of issuance of the QC – which needs to be obtained by foreign developers to acquire private residential land in Singapore.

The estimated TOP for the City Suites project is this year.

“We are working closely with the main contractor to come up with the project timeline,” said a SingHaiyi spokesman.

Under the QC conditions, a developer cannot transfer its shares without prior approval from the Controller until all units have been sold or when the TOP has been issued, whichever comes later, said Lee Liat Yeang, partner at Rodyk & Davidson.

Picture Source: View of Balestier Road. (Photo by Terence Ong / Wikimedia Commons)
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MP urges removal of ABSD for Singaporeans

Should a citizen who can afford to buy a second or third property through the Total Debt Servicing Ratio (TDSR) regime also be required to pay the Additional Buyer’s Stamp Duty (ABSD)? This was a question posed by Mr Christopher De Souza in Parliament on Monday, reported Channel NewsAsia.

He urged the government to remove the ABSD for Singaporeans while retaining the ABSD for foreigners and TDSR for Singaporeans.

“By retaining the TDSR, the Singaporean is only going to be allowed a credit line that is within his means. By retaining the ABSD for foreigners, we help ensure that the foreigners will not enter the Singaporean market in an overly speculative way,” said the MP for Holland-Bukit Timah GRC.

First introduced in December 2011, the ABSD was revised upwards in January 2013 to rein in Singapore’s escalating residential property prices.

Singaporeans are required to pay an ABSD of seven percent for a second property, and 10 percent for a third and subsequent property. However, foreigners are required to pay an ABSD of 15 percent for their first and subsequent property purchases.

Meanwhile, the TDSR framework limits the amount borrowers can spend on debt repayments to 60 percent of their gross monthly income.

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11 March 2016

Tough times ahead for self-storage industry

2016 is shaping up to be a challenging year for Singapore’s self-storage industry as more households and businesses tighten their purse strings in anticipation of tougher times ahead.

Helen Ng, Deputy Chair of the Self-Storage Association Asia and Group Chief Executive Officer of General Storage Company, said: “Households may try to discard their belongings instead of storing them and businesses may reduce their inventory to reduce overstock.”

Despite the headwinds for the self-storage industry, Ng believes there are still growth opportunities.

For instance, some demand is likely to come from businesses selling Chinese New Year merchandise. Ng noted that unlike traditional warehousing where there is a lengthy lock-in period, storage terms at self-storage facilities are flexible, and thus more appealing to businesses that want the flexibility to adjust their inventory according to seasonal demand.

Ella Sherman, Founder of popular Singaporean brand Animal Merchandise, which specialises in animal-themed homeware, gifts and cushions, chooses to store her stock at Lock+Store’s Serangoon North branch.

“We expand and reduce our storage space according to the retail season, with Christmas and Chinese New Year being our busiest periods. Storing our inventory at a self-storage facility allows us to scale up to meet seasonal peaks and troughs while managing our operating budget throughout the year. It works out to be far more cost effective and efficient than using a logistics company.”

The rise of Ecommerce storers across the region has also created a new revenue stream for the self-storage industry.

“In Asia, there is a trend of women entrepreneurs leading the Ecommerce revolution by setting up online stores retailing fashion and lifestyle products. They eschew traditional brick and mortar stores for self-storage and choose to operate from homes instead,” said Ng.

Ecommerce storer and owner of Rainbow Lab, Ervinna Neo, who sells lifestyle products such as Hello Kitties, opted to use a self-storage facility because she had run out of space at home.

“I have been using the self-storage space since January 2015. I love the flexibility of going to the facility whenever I wish. There is also an onsite bulk parcel drop-off service. I can access the goods in my storage unit and mail them to my buyers straightaway.”

Picture Source: Photo of self-storage units in Singapore.
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Tenants rule the rental market

Gone are the days when property owners and investors ruled the market as tenants today have the choice of being picky given the influx of new units, reported The Straits Times.

In the case of Celine Tan, her potential tenant wanted the unit to be fully furnished, have new bath towels and cutlery, a bigger TV set and free servicing of air-conditioners.

“It’s quite ridiculous. I never had this experience in the last 10 to 15 years of renting, but everyone in the market is so competitive… (that I) have to accede to most of their requests,” she said.

Although Tan did not provide new bath towels and cutlery, she gave in to the other demands, which included refurbishing the dining room and bedroom, with the tenants selecting the new furniture. “They took a picture at Ikea and showed me the model they wanted,” she added.

With that, she was able to rent her three-bedroom apartment at Robertson 100 in Robertson Quay last year for $4,600 per month, down from $5,200 previously.

Aside from lower rents, tenants are also demanding shorter leases of six months to one year, noted PropNex agent Anthea Yeo. “Rental is coming down; nobody wants to commit to two years because they know next year, it could be cheaper.”

She revealed that the lacklustre market also saw her income drop by $200,000 in 2015 from the year before.

According to data from the Urban Redevelopment Authority (URA), private residential rents dropped by 4.6 percent last year. The suburbs registered the biggest decline, with rents falling 5.6 percent, followed by the city fringe and city area at 4.9 percent and 3.8 percent respectively.

Analysts expect rents to continue sliding this year amid the weaker economy, tight immigration policies and a flood of 26,467 new private homes and executive condominiums.

In fact, rents may fall by more than eight percent this year, said Century 21 Singapore Chief Executive Ku Swee Yong. Private home rents in suburban areas are expected to face more pressure as the bulk of new homes are found there.

Cushman & Wakefield Research Head Christine Li expects the vacancy rate for private homes to increase from 8.1 percent in Q4 2015 to a “critical point” of nine to 10 percent this year.

“At that level, it shows that the market is correcting in a big way, and owners may be a bit jittery, so they may rush to offload their units,” noted Li.

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New Silver Zone at Lengkok Bahru

Elderly residents living in Lengkok Bahru, a small neighbourhood in Redhill, will now find it easier to cross the road with the completion of the Silver Zone in their estate, revealed the Land Transport Authority (LTA) in a Facebook post.

The Silver Zone programme involves installing senior-friendly road safety features to make motorists slow down and look out for pedestrians, and urges seniors to be more careful when crossing the road.

Launched on Sunday, 24 January, the Silver Zone at Lengkok Bahru includes raised informal crossings, fitted with ramps to provide users with a barrier-free route when crossing the road. In addition, land widths were reduced to encourage motorists to travel at lower speeds.

The LTA said it plans to build 35 new Silver Zones in Singapore by 2020.

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Mega project the size of Ang Mo Kio launching soon

A S$58.3 billion township the size of Ang Mo Kio is set to rise near the Tuas Second Link in the Johor Strait.

The first phase of Forest City, a 14 sq km mixed-use development comprising four man-made islands, will launch in Singapore, China and Malaysia in the first quarter of 2016, but the sales gallery is already open for bookings.

Aside from condominium units and high-rise coastal residences, Forest City also consists of hotels, retail centres, parks and leisure attractions, which will be developed in nine phases over 20 years.

Country Garden Pacificview, the master developer, is jointly owned by Chinese property giant Country Garden Holdings and Johor’s Esplanade Danga 88.

As part of long-term planning, Country Garden is in discussions with the Malaysian government to set up dedicated entry points to Forest City, such as a light rail transit system and a ferry network that will link to Singapore and to the planned high-speed rail (HSR) between Singapore and Malaysia.

This is the biggest overseas development undertaken by Country Garden, which has more than 200 projects globally.

At a global press conference held in Singapore on Friday, the Hong Kong-listed developer said that the project is still under construction and prices of the residential units have not yet been set, but will likely cost around RM1,200 psf (S$400 psf) on average. Comprising two- to four-bedroom units, sizes range from about 818 sq ft to 1,915 sq ft.

Meanwhile, a Straits Times report last year stated that the project could house around 700,000 people. So far, 700 residential units at Forest City have been approved for sale, excluding the 336,000 new private residential units in the pipeline for Johor.

Responding to media queries about the future oversupply in Iskandar’s property market, Country Garden Pacificview executive director Datuk Md Othman Yusof said: “We are working with a company (Country Garden) that has a strong capital base and knows how to create their own market. Most of their launched projects are more than 60 percent sold.”

Country Garden is also developing a waterfront project in Danga Bay featuring 9,000 residential apartments. Covering 50 acres, phase one and two have launched with more than 6,000 units already sold. More than 50 percent of the units were sold to overseas buyers from Singapore, Indonesia and the Middle East, said the developer.

Picture Source: Artist’s impression of Forest City.
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More help for the vulnerable

The Ministry of National Development (MND) on Thursday said it is committed to helping young couples and lower-income families own homes, while enabling the elderly to age gracefully, reported Channel NewsAsia.

“We will ensure that our housing policies continue to help young couples start a family, uplift the lower-income and vulnerable to a better future, and enable our elderly to age gracefully,” said National Development Minister Lawrence Wong in his ministry’s addendum to President Tony Tan Keng Yam’s address to Parliament.

“We remain committed to help Singaporeans own their homes and keep housing affordable for future generations.”

In fact, it plans to enhance various programmes to make housing more affordable to vulnerable groups.

For instance, the MND will work closely with social agencies to provide holistic support to second-timer public rental families under the Fresh Start Housing Scheme. This includes helping them keep their children in school and finding a job.

The ministry also plans to build more public rental flats.

“We will also look into ways to support other vulnerable groups, including divorcees and low-income singles,” shared Wong, noting that demand for new flats from singles has been strong since they were made available to them in 2013.

For senior citizens, the ministry aims to help them live in safer environments, with new smart-enabled homes. It will also build on schemes like the Two-Room Flexi Scheme and Lease Buyback Scheme to ensure affordability for the elderly.

Meanwhile, the living environment of older estates will also be improved via the Remaking Our Heartland initiative, Home Improvement Programme, Neighbourhood Renewal Programme and Selective En bloc Redevelopment Scheme.

The ministry will also make greenery more accessible to Singaporeans, with nine in ten households situated within 400m of a park or park connector by 2030, Wong said. The network of green corridors will also increase to 400km from 300km.

“We will activate green spaces and intensify greenery horizontally and vertically, and work with passionate Singaporeans to conserve our biodiversity and celebrate our built heritage,” he added.

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10 March 2016

Private home prices keep falling

Prices of private residential properties fell by 0.5 percent in the last three months of 2015, compared to the 1.3 percent decline in the previous quarter. For the year, prices fell by 3.7 percent, compared with the 4.0 percent decline in 2014, revealed latest figures from the Urban Redevelopment Authority (URA).

For the whole of 2015, prices of non-landed properties in the Core Central Region (CCR), Rest of Central Region (RCR) and Outside Central Region (OCR) fell by 2.5 percent, 4.3 percent and 3.7 percent respectively. Prices of landed properties declined by 4.1 percent.

The URA added that rentals of private residential properties fell by 4.6 percent for the whole of 2015. During the period, rentals of non-landed properties in the CCR, RCR and OCR declined by 3.8 percent, 4.9 percent and 5.6 percent respectively. Rentals of landed properties fell by 4.5 percent.

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HDB resale prices drop further

HDB resale flat prices rose slightly by 0.1 percent in Q4 2015 from the previous quarter, according to the latest resale price index (RPI) from the Housing Board. However, resale flat prices for the whole of 2015 fell by 1.6 percent.

The number of resale transactions for the year reached 19,306 cases, up 11.5 percent from 2014.

As at 31 December 2015, 50,264 HDB flats were sublet, up 0.9 percent from the 49,796 units in the previous quarter.

In 2016, the HDB plans to launch four Build-To-Order (BTO) exercises, with a total supply of about 18,000 new flats. These flats will be spread across various locations, so that home buyers can choose a flat that best meets their budget and needs.

The first BTO exercise will be held next month where about 4,150 flats in Bidadari, Bukit Batok and Sengkang will be offered.

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CDL, CapitaLand honoured for sustainability

City Developments Limited (CDL) has emerged as the 10th most sustainable corporation in the world and the most sustainable real estate firm globally in Corporate Knight’s 2016 Global 100 Sustainability Index.

This makes CDL the first and only Singapore firm to be ranked on the list for seven consecutive years. The company started in 81st position in 2010, before rising to 34th in 2015 and 10th this year.

Considered the gold standard in corporate sustainability analysis, the announcement was made at the World Economic Forum in Davos, Switzerland.

“Over the past two decades, CDL has continuously innovated, invested and improved on the way buildings sustain life. We are focused on sustainable development and have helped to green Singapore with more than 80 Green Mark buildings,” said Chief Executive Officer, Grant Kelley.

“Our efforts have created stronger brand equity and product differentiation. They have also given us a first-mover advantage as environmental regulations have been mandated progressively for the property sector.”

Meanwhile, CapitaLand was ranked in the Global 100 list for the fifth year running.

The developer was also listed in The Sustainability Yearbook 2016 of RobecoSAM, with a ‘Bronze Class’ distinction, effectively placing it among the top five real estate companies worldwide.

“This is our seventh listing in The Sustainability Yearbook, and our second consecutive listing as a ‘Bronze Class’ recipient. These accolades validate our success in integrating sustainability into our business. We will stay the course and continue developing and operating sustainably and responsibly,” said Tan Seng Chai, Group Chief Corporate Officer of CapitaLand and Chairman of the CapitaLand Sustainability Steering Committee.

RobecoSAM is an investment specialist that exclusively focuses on sustainability investing. Its annual report recognises the top 15 percent of companies across various industries worldwide, and identifies companies that are strongly positioned to create long-term shareholder value.

Picture Source & Source copied: Tree House condominium in Singapore. (Photo: CDL)

JLL: Home price recovery in 2017

Singapore’s annual population growth fell from 3.2 percent in the 2006 to 2012 period to 1.2 percent in 2015, which implies that annual housing demand plummeted from 38,000 to 16,000 units, according to property consultancy JLL.

Nonetheless, housing supply remains high at 50,000 units per year from 2014 to 2018. This comes as the government looks to compensate for the low supply recorded till 2013.

JLL expects most of the new supply to be developed in the suburbs. Public housing units will account for 73 percent of the total stock, down from 80 percent in 2000.

Meanwhile, the slew of property cooling measures rolled out by the government has dampened the mood in the housing market.

In 2011 to 2012, home loans grew by 17 percent and 13 percent per annum for owner-occupied and investment properties, but the number of housing units grew by only two percent per annum.

JLL revealed that loan growth fell to 4.7 percent and zero percent in 2015 respectively after a cap on the Total Debt Servicing Ratio (TDSR) was imposed. Primary sales fell 60 percent as the capital base shrunk.

The presence of the Additional Buyer’s Stamp Duty (ABSD) also saw foreign purchases within the central region shrink to 10 percent from 20 to 25 percent.

Moreover, prices of high-end homes fell by 20 percent following the introduction of the ABSD in 2011, while the implementation of the TDSR in 2013 has resulted in mass market home prices dropping by 12 percent.

Looking ahead, prime and mass market prices are expected to fall five to 10 percent more before recovering in 2017.

The report noted that the government could consider replacing the various additional buyer and seller stamp duties with higher property taxes in order to push up transactions and remove friction in the market.

“Currently, non-owner occupied residential taxes do not differentiate between residents and foreigners and this can be tweaked,” added JLL.

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Chinese buyers shun Singapore

Discouraged by the high taxes in Singapore, fewer foreigners are purchasing private homes here, leaving the market to rely on local buyers, reported Reuters.

Data compiled by DTZ showed that foreigners, including permanent residents, purchased 499 homes in Q4 2015. This accounted for around 16 percent of total transactions, down from 30 percent recorded in Q3 2011 just before the introduction of the Additional Buyer’s Stamp Duty.

Acquisitions by the Chinese, considered one of the biggest foreign buyers of Singapore private homes, fell 40 percent from a year earlier to 151 units. DTZ noted that the figure is also down 80 percent from the peak in Q3 2011.

The figures were based on caveats lodged as of 15 January, with the land planning authority maintaining an online database.

“Chinese money is being attracted by Australia and the UK,” said Alan Cheong, Research Head at Savills Singapore.

He noted that the stamp duties should be rolled back to a level where the city-state can still capitalise on Chinese funds without attracting too much hot money.

“If we continue to sit by with all these measures, we are just going to miss the boat,” he said.

And with the benchmark 3-month Singapore Interbank Offered Rate (Sibor) on an uptrend, local buyers may also become cautious. The Sibor, which is used to set interest rates on mortgages, rose to 1.254 percent this week, or its highest since October 2008.

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04 March 2016

New Disney Park in Laos?

There remains a mystery about the possibility of a Disney Laos being built, according to The Nation, with business leaders in nearby Nakhon Phanom in Northeast Thailand trying to verify a report that construction of the project will commence soon. The local government is concerned that the report is a hoax, but could still trigger a round of land price speculation in the province.

Charnyuth Uppapong, chairman of the provincial chamber of commerce, is unable to confirm if construction work is scheduled to take place despite having discussions with officials in the Khammuan province of Laos where the supposed park is set to be built.

He added that this could see investors purchasing land in an attempt to jump on what could be a lucrative opportunity for the region. He explained that if the report of Disney Laos is true, the province could benefit greatly from both tourists coming to visit the area during their trip and people from Laos having more spending power and coming across the border to make purchases.

“If this is true, it would bring great benefits to Nakhon Phanom as our province could be a transport centre, thanks to our readiness in terms of roads and airport,” said Charnyuth. “We have thousands of restaurants and hotels. If Disney Laos takes shape, Nakhon Phanom would be the must-visit province to all.”

But Tharin Phanthumai of the province’s tourism council is not convinced that the project will actually happen because of several logistical issues. “What concerns me is this could be a hoax, designed to drive up land prices. This will affect real estate development. If this is a hoax, it would definitely hurt Thailand,” he shared.

Somjith Aliyaphaphone, chairman of Akane Farm Sole, a Lao investor in the project, told the Vientiane Times that Disney Laos would be part of the third phase of a massive investment project in Khammuan’s Thakhek Specific Economic Zone. He noted that any further reports on the project would be released at the end of this month, but that could be too late for officials in Nakhon Phanom to stop speculators from buying up land in the region.

Picture Source: Disneyland Resort in California. (Photo: Cd637/Wikimedia Commons)
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Tanah Merah site launched for sale

UPDATED: A residential site at New Upper Changi Road/Bedok South Avenue 3 (Parcel B) was launched for sale by public tender today, revealed the Urban Redevelopment Authority (URA).

The 2.4ha site which could yield about 570 housing units was made available for sale on the reserve list of the second half 2015 Government Land Sales (GLS) Programme.

On 7 January 2016, the URA announced that it had received an application from a developer for the site to be put up for public tender. The developer had committed to a minimum bid price of $320 million in the tender for the site.

“The bid that triggered the launch of the site is slightly conservative, as the developer may have presumed a 15 percent decrease in sales price from December 2015 to October 2016. Assuming that prices will dip by about five percent, we anticipate the winning bid to be around $380 million ($690 psf) to $400 million ($725 psf),” said Dr Lee Nai Jia, Regional Head of Southeast Asia Research, DTZ.

“Given the location, we expect the number of bids to be around 10,” he added.

The 99-year leasehold site is close to Tanah Merah MRT station, Changi Business Park and the Singapore University of Technology and Design.

“Rental yield in the area is about three percent to 3.5 percent, which is pretty attractive for residential developments,” noted Lee.

The tender exercise will close on 23 February 2016, said the URA, adding that any tender below $320 million will not be considered.

Meanwhile, The Glades, a 726-unit condominium located at the corner of Bedok and New Upper Changi roads, is set to be completed in 2017. The 3.2ha site was sold to Keppel Land for $434.6 million in October 2012.

According to Lee, The Glades has sold 371 of the 400 units launched, while nearly all units in Eco, another nearby development, have been transacted. The prices for The Glades as at December 2015 ranged from $1,274 psf to $1,540 psf.

Picture Source: Aerial view of the site at Tanah Merah. (Photo by URA)
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Developers cut prices as ABSD deadline looms

Singapore developers are starting to slash condo prices as the deadline for the Additional Buyer’s Stamp Duty (ABSD) looms, reported The Straits Times.

Under the ABSD rules, developers are given five years within which to complete a housing project and sell all units. Otherwise, they must pay the ABSD, which was initially set at 10 percent of the site’s purchase price, and subsequently raised to 15 percent on 12 January 2013.

Since it was first introduced on 8 December 2011, the first deadline comes up at the end of this year.

As such, projects such as The Trillinq, which is believed to be the first site to come under the ABSD rules, saw median prices drop to $1,329 psf in Q4 2015, from $1,545 psf in Q1 2013 during the project’s launch. The 755-unit project has sold 220 units as at end-2015.

Over at Mon Jervois, which is set to incur ABSD from early-2017, median prices for units stood at $1,852 psf in Q4 2015, down from $2,087 psf in Q2 2013. As at end-2015, the project moved 46 out of the 109 units.

Also poised to incur ABSD from early next year is Kingsford@Hillview Peak. The project sold 242 of 512 units as at end-2015, with median prices falling from $1,340 psf in Q2 2013 to $1,288 psf in Q4 last year.

Another source of pressure for developers is the Qualifying Certificate (QC) rules.

Under these rules, non-Singaporean developers should finish building a housing project in five years of acquiring the site and sell all the units in two years from the date of completion. Developers looking for more time on either deadline can pay extension charges. But unlike the ABSD, the amount is pro-rated for QC based on the number of unsold units.

“As the ABSD charges will kick in first, developers are now given a shorter timeline to clear the units if they want to avoid the hefty fine,” said Cushman & Wakefield Research Director Christine Li.

She noted that ABSD charges will still apply even if developers only have one unsold unit. This is “in stark contrast with QC extension charges, which are more progressive, especially in the first year”.

Picture Source: Condominiums in Singapore. Photo: Cheryl Marie Tay
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Famed developer sells $25m bungalow

Luxury property developer Simon Cheong recently sold a good class bungalow (GCB) that he built along King Albert Park within the Bukit Timah/Clementi Road vicinity, reported The Business Times.

The property was sold for $25 million, which works out to $1,493 psf based on the freehold land area of 16,750 sq ft.

Completed in late 2012, the two-storey bungalow has a built-up area of around 10,000 sq ft and comes with a swimming pool. The property is currently being tenanted.

The buyer, Absolute Kinetics Consultancy founder Fang Koh Look, is expected to occupy the property following the end of the existing lease.

Known for building luxurious condos under the SC Global Developments brand, Cheong also develops landed properties under SC Homes. He owns several GCBs on Pierce Road and is believed to be open to selling them at the right price.

Meanwhile, a wholly-owned unit of Soilbuild Group Holdings has acquired an old, two-storey bungalow along Wilkinson Road for $19.28 million. This translates to $1,203 psf based on the land area of 16,031 sq ft.

Soilbuild Executive Chairman Lim Chap Huat noted that the freehold property could easily be 40 to 50 years old.

“We are buying it from a family,” he said.

He revealed that the group plans to redevelop the site, which is zoned for two-storey bungalow use, into two new bungalows.

Set to be completed in two years, works for the new bungalows is expected to begin around the middle of this year.

One of the bungalows will be bigger, with a land area of around 11,000 sq ft and a built-up area of around 6,000 to 8,000 sq ft. It will also feature a swimming pool.

Nestled on about 5,000 sq ft of land, the smaller bungalow will have a built-up area of 5,000 sq ft as well. Both bungalows will be two storeys high with four bedrooms and an attic.

With a construction cost of almost $6 million, the two properties will be the first landed housing project by the group in over two decades.

“In the early 1990s, we developed about 40 landed homes in various locations in the Sixth Avenue vicinity. Even before that, in the early 1980s, we built 18 landed houses at Coronation Road,” said Lim.

Picture Source: File photo of a GCB.
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Rangoon Road properties for sale

A row of adjoining properties located along Rangoon Road have been launched for sale by tender, revealed marketing agent Knight Frank Singapore.

The 6,879 sq ft site comprises a four-storey mixed-use building and a two-storey shophouse. Under the Master Plan 2014, the entire site is zoned residential with commercial at 1st storey at a gross plot ratio of 3.0.

The properties could be upgraded through asset enhancement initiatives or redeveloped into a brand new mixed-use development with shops on the ground floor and residential apartments on the upper levels, said Knight Frank.

The site is close to Farrer Park MRT station and shopping malls. Connexion at Farrer Park, the world’s first fully integrated healthcare and hospitality complex, is also nearby.

“We expect the properties to attract strong interest in view of their strategic location, proximity to an MRT station, prominent main street frontage and relatively affordable investment size,” noted Ian Loh, Executive Director & Head, Investment and Capital Markets at Knight Frank.

The tender for the subject properties will close on 1 March 2016.

Picture Source: Knight Frank Singapore.
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New German school at Dairy Farm Road

The construction of a new German European School Singapore (GESS) at Dairy Farm Road is set to commence next month after a subsidiary of Singapore-listed TA Corporation secured a $94 million contract to undertake the project.

This brings the order book for the group’s construction business to approximately $300 million.

“This new construction contract from GESS marks an exciting start to 2016, and further validates our capabilities and reputation as a top-tier construction company,” said Neo Tiam Boon, Chief Executive Officer and Executive Director of TA Corporation.

“We remain sanguine on opportunities within the Singapore construction industry,” he added.

Some of the group’s notable educational developments include the iconic School of the Arts (SOTA) and the Singapore American School.

The latest contract is not expected to have a material impact on the net tangible assets and earnings per share of the group for the current financial year.

Completion of the GESS is expected within 25 months.

Picture Source: Artist’s impression of the new GESS.
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Siglap condo site awarded

A 1.93ha residential site at Siglap Road has been awarded to a consortium comprising Frasers Centrepoint unit FCL Topaz, Sekisui House and Keong Hong Holdings unit KH Capital, after the developers submitted the highest bid of $624.18 million, according to the Urban Redevelopment Authority.

The offer translates to about $858 per square foot per plot ratio.

The tender for the 99-year leasehold site closed on 14 January 2016 with eight bids. It could yield 750 housing units.

The land parcel is within proximity to the future Siglap MRT station and the East Coast Parkway (ECP). Parkway Parade, 112 Katong and established schools such as Victoria Junior College and Tao Nan School are also nearby.

Picture Source: Aerial view of the site at Siglap Road. (Photo: URA)
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03 March 2016

City Suites sale hits snag

The Controller of Residential Property has rejected the application of SingHaiyi Group for the proposed sale of City Suites, reported The Business Times.

This effectively results in the termination of the memorandum of understanding that the company entered into with ACG Construction.

In April 2015, SingHaiyi announced plans to sell Corporate Residence Pte Ltd, the developer behind City Suites, to Ang Cheng Guan Construction for $16.38 million.

Located along Balestier Road, the 56-unit freehold private residential project has witnessed slow sales, at around 10 percent, since its launch in May 2013.

SingHaiyi noted that the Controller rejected both its application and subsequent appeal for approval.

As such, the proposed disposal could not proceed and was therefore aborted, the firm added.

Picture Source: View of Balestier Road. (Photo by Terence Ong / Wikimedia Commons)
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Fall in number of Singapore’s ultra-high net worth individuals: Survey

While there was a drop of 205 people with a net worth of more than US$30 million (S$42 million) to 2,360 last year, the Republic retained its second place in the Asian league table, according to the study by Knight Frank.

SINGAPORE: There has been a fall in the number of people in Singapore with a net worth of more than US$30 million (S$42 million), according to a study by UK-based property consultancy Knight Frank.

The study, released on Wednesday (Mar 2), showed that there were 2,360 “ultra-high net worth individuals” (UHNWIs) in Singapore last year, down from 2,565 in 2014.

That put Singapore in sixth place in the global league table, behind New York (5,600), London (4,905), Hong Kong (3,854), Moscow (3,457) and Los Angeles (2,820).

Knight Frank said the study tracks the growing “super-rich population” in 98 cities across 91 countries. The survey was based on the views of about 400 leading private bankers and wealth advisors globally who, between them, manage assets for about 45,000 UHNWIs with a combined wealth of over half a trillion US dollars, it added.

The decline in the number of such individuals in Singapore follows a global 3 per cent slide in the total number of UHNWIs. Almost 6,000 people fell out of the wealth bracket in 2015, the first annual dip in ultra-wealthy populations since 2008, the consultancy said.

Over the next 10 years, Knight Frank projects that the UHNWI population in Singapore will increase a further 48 per cent.

Head of Consultancy & Research of Knight Frank Singapore Alice Tan said the attributes that Singapore had built over the decades — a conducive business environment, clear regulatory framework and a progressive ecosystem of financial and business services — had “augmented its status amongst the wealthy as a preferred location to live and do business in Asia”.

“Singapore’s excellent infrastructure, education and healthcare systems further anchors its global city accolade by promoting a vibrant economy, which will in turn boost the country’s real estate landscape within the next decade.”


The study also ranked the cities that mattered most to the world’s wealthy, based on where they live, invest, educate their children, grow their businesses, network and spend their leisure time.

Singapore was ranked third in the world for its importance to UHNWIs based on these factors in 2016 according to the study, overtaking Hong Kong from fourth place in 2015. London and New York retained the first and second positions as the most important cities to UHNWIs worldwide.

Although more than half of survey respondents did not believe that the two top cities could be overtaken in importance in the coming decade, the 34 per cent of respondents who did believe that this was possible placed Singapore as the top contender for the next most important city in the next 10 years. This included respondents from Singapore, India, Australia, the US, Hong Kong, UAE, the UK, Malaysia and China.

Ms Tan suggested that if the Republic strengthened its trade relations with East and Southeast Asian markets and positioning as a strategic location it could further grow the size of its external market.

“Advancing the growth of wealth management and professional services in key business industries could foster a greater impetus for UHNWIs to make Singapore a city of choice,” she added.

Picture Source: Marina Bay Sands and skyscrapers of Singapore’s central business district. (Photo: Hester Tan)
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Singapore office vacancies to rise as economy falters

Analysts predict vacancy rates will continue to rise this year, with real estate services firm JLL estimating prime office rents to fall between 10 per cent and 20 per cent.

SINGAPORE: Vacancies at Singapore’s gleaming office towers are nearing their highest level in almost a decade, with construction of the city-state’s tallest building – GuocoLand Ltd’s 64-floor block in the financial district – wrapping up just as the economy slows.

Singapore’s export-oriented economy has been hit by the slowdown in China and beyond, which has also put pressure on key sectors such as marine oil and gas, commodity trading and banks. Last year, the economy grew just 2 per cent, its slowest pace since 2009.

A January review by real estate services firm JLL of major foreign international banks in the financial district showed half had either reduced the size of their office space over the past year and a half, or had to contend with extra space.

Analysts predict vacancy rates will continue to rise this year, with JLL estimating prime office rents to fall between 10 per cent and 20 per cent after dropping 15 per cent last year in a city that is ranked the 11th most expensive in the world to rent top-quality offices.

Nicholas Mak, executive director at SLP International Property Consultants, said many of the buildings that are now ready for occupancy were planned about five years ago, towards the end of the global financial crisis.

“Many people thought that this is the new boom, let’s try to capitalise on it. Nobody expected the party to end by end of 2015,” he said, adding that office vacancy rates could hit 13.5 per cent, a level not seen since 2005.

Broader cost-cutting at banks due to the slowdown in the global economy is likely to have an impact on vacancies as financial institutions are key tenants for prime commercial space in Singapore.

Barclays will cut about 1,000 jobs in investment banking worldwide and close its cash equities business in Asia, an internal memo seen by Reuters showed.

Societe Generale gave up two floors in an office tower after selling its private banking activities in Asia to DBS Group Holdings in end-2014, taking up a smaller space in an existing building instead.

Mr Mak said vacancy rates could improve by the end of next year if the economy picks up and as demand catches up with the supply, easing the glut.

In the meantime, office landlords are limiting the number of leases that will expire over the next couple of years as well as diversifying their tenants to cope with the glut.

“This will be a short-term blip,” Lynette Leong, chief executive of CapitaLand Commercial Trust, said in January.

Banking, insurance and financial services represented 33 per cent of Capitaland Commercial Trust’s tenant mix at end-2015, compared with 38 per cent five years ago, its results show.

Picture Source: A view of high-rise financial district office buildings from the Marina Bay promenade in Singapore. (Photo: AFP/Roslan Rahman)
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26 February 2016

3 factors could boost housing demand

Maybank Kim Eng said there are three factors that could help Singapore bump up the demand supply outlook for its residential market, reported Singapore Business Review.

Firstly, the country could review its long-term population target established in 2013, where growth was capped in response to the infrastructure shortfall seen in recent years.

“Recall that population growth was capped in response to Singapore’s infrastructure shortfall in recent years. As Singapore continues its build infrastructure aggressively, including housing, there could be room for a review of the target,” noted Maybank Kim Eng.

To boost demand for housing, Singapore may also revisit its foreign-worker policy.

“The number of EP and S Passes it issued in 2015 was less than a quarter of the 47,300 approved during the peak in 2011. If the economy and job creation pick up, we believe the Ministry could adjust its cap.”

Maybank believes that a revival of the en-bloc market may help overturn the supply-demand disparity.

“Land remains in limited supply in Singapore. With the government reining in land supply in its GLS programme, we believe that a revival of the en-bloc market cannot be ruled out as developers seek to replenish landbank from the private land market. This could raise demolition rates and absorb part of the market surplus,” it added.

Picture Source: Someformofhuman/Wikimedia Commons
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Nearly 50% drop in Dec home sales

Sales of new private homes by developers plunged almost 50 percent to 384 units in December 2015 from the 759 units sold in the month before, according to data released this afternoon by the Urban Redevelopment Authority (URA).

PropNex Realty stated that cautious market conditions and the year-end holiday period contributed to the fall in demand. Only 173 private homes were launched for sale in the month, the lowest number in the year.

“December is traditionally a lull period for property sales due to the festive season. Many prospective buyers usually go on holidays and prefer to delay their property purchases to the next year. December’s low volume and launches can thus be attributed to the seasonal effect and the continued impact of the various measures together with the TDSR,” said PropNex CEO, Mohamed Ismail.

The top-selling project was the 731-unit Poiz Residences (pictured) in Potong Pasir, which sold 64 units in December at a median price of $1,430 psf.

Meanwhile, PropNex revealed that the primary sales volume in 2015 totalled 7,625 units, a slight increase of 2.5 percent from the 7,437 recorded in the previous year. In addition, developers launched 7.4 percent less units for sale within the same period due to the impact of the tough cooling measures.

Looking ahead, Ismail expects 2016 to be another challenging year for the property market.

A combination of the restrictive loan environment, along with the pending interest rate hikes will prevent market activity from picking up, he said.

“Buying interest will remain selective. It is highly unlikely that volume of transactions will return to the boisterous level as witnessed in 2012,” said Ismail, noting that a project’s pricing and location will be the main drivers of demand.

He expects developer sales to remain muted until after Chinese New Year. The next hotly anticipated launch will be in Toa Payoh – which is slated to be launched in March.

The property agency expects new private home sales this year to reach about 8,000 units as developers will likely dangle incentives to move their unsold units.

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Siglap site draws 8 bids

The tender for a 99-year leasehold residential site at Siglap Road closed on Thursday after attracting eight bids, according to the Urban Redevelopment Authority (URA).

Launched for sale on 26 November 2015 under the confirmed list of the second half 2015 Government Land Sales (GLS) Programme, the 1.93ha site could yield about 750 condo units.

A consortium comprising Frasers Centrepoint unit FCL Topaz, Sekisui House and Keong Hong Holdings unit KH Capital submitted the top bid of $624.18 million for the site, which translates to about $858 per square foot per plot ratio.

The site is located close to the future Siglap MRT station and the East Coast Parkway (ECP). Parkway Parade, 112 Katong and a number of reputable schools such as Tao Nan School and Victoria Junior College are also nearby.

A decision on the award of the tender will be made after the bids have been evaluated, said the URA.

Picture Source: Aerial view of the site at Siglap Road. (Photo: URA)
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Home prices near DTL2 rise

The completion of the Downtown Line 2 (DTL2) in December 2015 has boosted home prices near the new stations, as well as pushed up rents and sales volumes, reported The Straits Times.

In fact, Knight Frank’s analysis of caveats lodged for private apartments along major roads close to the DTL2 showed that average prices climbed 4.5 percent from Q3 2015 to $1,592 psf in Q4 2015.

“In this post-Total Debt Servicing Ratio period, these average prices have held up well compared with islandwide price trends,” said Knight Frank Research Head Alice Tan.

In the past two years to 31 December 2015, average prices of apartments along these major roads increased by 3.58 percent, while the property price index of the Urban Redevelopment Authority weakened by around 7.6 percent. Tan noted that the presence of the DTL2 may have supported home prices near the stations.

Greater buying interest was also observed as the DTL2 neared completion. Eco Sanctuary in Chestnut Avenue, for instance, went from 82 percent sold in December 2014 to 91 percent sold in November 2015, said R’ST Research Director Ong Kah Seng.

Over the same period, The Skywoods in Dairy Farm Heights went from 43 percent to 85 percent sold, while Kingsford Hillview Peak in Hillview Rise rose from 33 percent to 46 percent sold.

In the Core Central Region (CCR), Robin Residences near Stevens MRT station saw median prices increase 0.3 percent year-on-year to $2,378 psf in H2 2015, compared with a 2.6 percent drop in the overall CCR price index over the same period, said SLP International Executive Director Nicholas Mak.

Sales transactions in the project also increased from 15 in H1 2015 to 29 in H2 2015.

Rents and leasing activity near these stations appear to have improved as well.

Ong revealed that the number of leases signed within the vicinity of the King Albert Park station jumped 38 percent from Q2 to 358 deals in Q3 last year, while median rents climbed from $3.15 psf per month during the first quarter to $3.23 psf per month during the second and third quarters.

Picture Source: alantankenghoe
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Which districts have the most unsold units?

Due to an unprecedented building boom in the wake of the global financial crisis (GFC), Singapore’s three mass market districts, namely 19, 27 and 3, now account for about a third of the total unsold inventory of condo units within the city-state, reported Singapore Business Review citing research from Maybank Kim Eng.

District 19, particularly Punggol, Hougang and Serangoon Garden, registered the most number of unsold units with 1,832 executive condominiums (ECs) and 2,370 private homes unable to find buyers, the report said.

Overall, the district has 4,202 unsold homes, which makes up 14.4 percent of Singapore’s total unsold inventory.

Meanwhile, Sembawang and Yishun in District 27 account for 12.1 percent of the city-state’s total unsold stock, or 3,531 units (2,468 ECs and 1,063 private units).

District 3, specifically Tiong Bahru and Queenstown, has 2,876 unsold private units, which accounts for 9.9 percent of the total unsold inventory. There are no ECs within the area.

Maybank Kim Eng believes that mass market homes face a huge risk since prices within this sector only fell marginally.

“We reiterate that the mass market has the biggest downside risk. This is because prices in the OCR (Outside Central Region) have corrected the least since the GFC. Furthermore, recent increases in the household-income ceiling for the application of ECs from $12,000 to $14,000 could shrink the pool of mass market home buyers,” it said.

Picture Source: Aerial view of an apartment unit with rooftop pool. (Photo by Hu Totya: Wikimedia Commons)
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Regional currency outlook for 2016

When one looks at an overseas property investment, it actually consists of 2 components – the property investment and the currency investment. If you invest in a property that increases in value by 20% over a period of three years, but the currency depreciates by 30% over the same period, you will be realizing a loss if you liquidate.

Usually, Singaporeans will compare the local currency in the country of investment against either the Singapore Dollar (SGD) or the US Dollar (USD). Most often the base currency is SGD, simply because that is the currency that the Singaporean earns, and is most familiar with.

Interest rate trends in major economies

The US economy is recovering, with unemployment at five percent (as of Nov 2015) and an Interest Rate (IR) of 0.25%. On 16 Dec 2015, the Federal Reserve increased the overnight target rate from 0.25 percent to 0.5 percent. Inflation in the US is currently still under one percent, below the Federal Reserve’s target of 1.5 to two percent.

Although the US recovery seems tentative, it is nonetheless an economic recovery. It is possible there will be a few rate hikes in 2016 as the target overnight Federal Reserve funds rate at 0.5% is still low.

However, other global major economies such as the European Union, China and Japan are slowing down. EU’s growth rate is less than two percent, China is struggling to maintain seven percent growth, and Japan’s growth stands around one to two percent. EU’s interest rate is close to zero percent, Japan’s is at zero, while China dropped its benchmark yearly interest rate to 4.35 percent. EU and Japan have no more room to reduce interest rates, while China can continue to reduce both the interest rate as well as the bank’s reserve ratio to increasing lending to corporations to stimulate growth.

Just to put things into perspective, the world’s major economies are:

The European Union – at around 18 trillion USD
USA – Number 2 – at around 17 trillion USD
China – Number 3 – at around 10 trillion USD
Japan – Number 4 – at around 4.6 trillion USD
The world economy is around US$77 trillion dollars. The top 4 economies make up roughly US$49.6 trillion dollars or about 65 percent of the world’s economy and would be a good enough representative study.

Impact of capital flow

Singapore maintains a currency exchange rate based on a trade-weighted basket of its top 15 trading partners (refer to Figure 1) via a Nominal Effective Exchange Rate (S$NEER). Currently, Singapore has set a rate of slower currency appreciation. This means that Singapore watches the exchange rate of its major trading partners and appreciates the SGD against them on an aggregate basis.

Singapore’s top 10 trading partners are:

Republic of Korea

Currently, Malaysia’s Ringgit is under pressure due to political events, as well as the decline in oil
prices, one of its most important exports. Meanwhile the national currencies of the Philippines, Indonesia and Thailand are also under threat of funds outflow. This has contributed to a weakening SGD vis-à-vis the USD in recent months, as Malaysia and Thailand are two of the (speculated) currencies in the S$NEER basket.

If most of Singapore’s top 15 trading partners’ currencies are depreciating against the USD, based on a trade-weight S$NEER, the SGD will likely strengthen against some of these currencies, but will weaken versus the USD. Singapore is also entering a period of slower growth as inflation has dropped and GDP growth has slowed, with the Purchasing Manager Index coming in at 49.5 percent in Dec 2015.

The challenge for our policymakers hence, is to find a balance between import-led inflation, export competitiveness and economic growth. To do so, they will need to normalize interest rates upwards to maintain an orderly depreciation of the SGD against the USD.

Why do currencies come under threat?

Currencies generally come under threat when a number of factors are present. These include low foreign reserves, a pegged exchange rate, high debt levels at the state, household, or corporate levels, slowing GDP, inflated assets, low interest rates, among other factors.

Countries with low foreign reserves, high foreign debt and a high budget deficit are most at risk of a weak currency. Furthermore, a weakening economy with several of the mentioned risk factors are likely to suffer an extra blow from capital outflows, when it needs those funds the most. With an untimely exodus of funds from the country, the currency will weaken, causing interest rates to rise, and could lead to a rapid deterioration of its financial position.

High asset prices, such as an inflated stock market or property market, would be susceptible to speculative attacks and magnify the crisis.

Where are the bright spots?

Under-developed countries such as Cambodia, Laos and Myanmar did not receive a large amount of capital inflow. As such, they are less susceptible to capital outflows due to currency fluctuations.

These markets are potential high risk and high return locations to put your money. Their rule of law is weak and there is a degree of corruption within their systems. However, their fiscal positions currently are quite poor. For Myanmar, opening up their economy to foreign investors would be a good development. Should investors wish to enter these markets, they should benchmark property prices to Thailand’s and apply an appropriate discount. This is because Thailand is more developed, and has a better infrastructure. Hence, while these markets are rated positively, their risks are also huger.

Philippines is a fast growing economy with a young population. However, debt levels are high, and exports are weak. This is mitigated by remittances from Overseas Foreign Workers, which continue to be strong. Thus, the outlook on the Philippines is somewhere between neutral to positive.

Thailand’s economy is slowing down and may enter a period of recession, but it has one of the best infrastructure for tourism, far ahead of the Philippines, Vietnam, Cambodia, Laos and Myanmar. Thailand has about US$100 billion in reserves and a floating currency. Unless there is huge political insurrection or rioting, Thailand is unlikely to suffer from massive currency depreciation, and is therefore rated neutral.

Malaysia does have good infrastructure, but its currency has already taken a beating and its political stability is in question. Nonetheless, it is still competitive and runs a trade surplus. Despite its huge debt, Malaysia does have ample reserves, and has taken steps to mitigate currency depreciation by raising interest rates. Singapore’s northern neighbor thus remains good
for selective purchases due to its weak currency.

In the region, perhaps the one market that investors should really be wary of is Vietnam. Vietnam is highly trade dependent, and therefore, will be strongly affected by capital outflows. Furthermore, Vietnam has low foreign reserves and is running a huge budget deficit. Debt levels in this former Communist state are quite high, and corporate non-performing loans are on the rise. The rating on Vietnam is therefore negative, and investors should stay away from it for a while.

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Banks bidding for HDB’s largest bond issue

Banks are bidding for the largest issue yet from Housing and Development Board (HDB), totalling up to S$1.6 billion, IFR reported Friday (15 January).

According to the report by the Thomson Reuters publication, the HDB asked banks for proposals to sell a seven-year bond for a target size of S$1 billion and a S$600 million greenshoe. “If it does achieves the maximum deal size, it will beat its largest single issue, when it sold a S$1.5 billion 1.875 percent four-year issue in November 2013.”

Bids are due for submission on Monday (18 January).

The Singapore statutory board obtained its first rating in October 2015, when Moody’s gave it the top rate Aaa, increasing its appeal to banks’ asset liability management desks.

IFR said the rated HDB notes will now have a zero risk-weighting and qualify as Level 1 high-quality liquid assets under the Monetary Authority of Singapore’s (MAS) rules on liquidity coverage ratios, adding that previously, the unrated notes qualified as a Level 2 HQLA and were subject to a 15 per cent haircut under LCR rules.

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Property Market Retrospective 2015

Another year has passed, but for those in the real estate industry, it has been a long year with few bright sparks. Cooling measures have slowly but surely brought down prices, even as transaction volumes are seeing signs of recovery.

For deeper insights into the Singapore property market, download PropertyGuru’s Property Market Outlook H1 2016 now!

It is possible that both sellers and buyers have come to accept this new normal. We have seen developers start to “right-price” across all segments, helped by the fact that most of the new launches hitting the market saw their land sales taking place after the implementation of cooling measures, so the land bids were more cautious. Likewise, many of those looking for a home might have felt that the overall quantums had fallen to a level that were acceptable for their wallets.

In 2015, the key driver for property transactions remains affordability. The segment is price sensitive, and buyers are motivated by good deals.

Private non-landed property

The non-landed private property market remains lukewarm at best, with over 12,400 transactions caveated in 2015 (refer to Figure 1), an 8.6 percent improvement from 2014’s 11,400-plus transactions. This worked out to be about an average of 1,000-plus units cleared per month, with an overall median price of $1,230 psf.

Flash estimates by the Urban Redevelopment Authority (URA) show that overall prices fell by 3.7 percent in 2015, a slight slowdown in declines compared to 2014’s 4.0 percent. Speculation and short-term flipping have practically fallen off the radar for this property segment, with sub-sales 3.7 percent of total transactions in the year. 56.5 percent of all transactions were new sales, and 40.1 percent were resales.

Right-pricing properties, more than ever, becomes imperative for developers to move properties in an environment where Total Debt Servicing Ratio (TDSR) has constricted liquidity and stamp duties have increased the cost of ownership. CEL Development’s High Park Residences was the clear winner in the private non-residential market in 2015, with 1,105 caveats for the project lodged in the month of July alone, at a median PSF of $1,016. Recorded prices for the project started around $373K for a studio unit, which suggests that capital outlays started at around $74K, a palatable amount for most investors.

To reach this price point however, some compromises were made. The average size of units sold in High Park Residences was around 788 sq ft, which could be a tight squeeze for families with children. This appears to be a trade-off many buyers were willing to make, with the project close to sold out at time of writing, and studios and one-bedroom units fully sold out.

When we look at the top five projects sold in 2015, it is clear that aside from pricing, location is the other common factor. Out of the top five, three are located in the Rest of Central Region (RCR), suggesting that drops in pricing have made it more feasible for buyers to move from the outskirts to locations closer to the city. While Frasers’ North Park Residences is further out than the other projects, it is a massive integrated development and brings huge conveniences to its residents.

Furthermore, all five projects are located within walking distance to MRT or LRT stations, which also increases their value proposition for homebuyers. On the ground, we also see several new launches that are not within close proximity to MRT stations offer shuttle bus rides to the nearest MRT station for residents, to compensate for this.

Executive Condominiums (EC)

This public-private hybrid property class saw some excitement in 2015, with the Prime Minster announcing an increase of the income ceiling from $12,000 to $14,000 during the National Day Rally. This allowed many couples and families who felt that they were part of the “sandwich class” – those who earned too much to buy Build to Order (BTO) flats or ECs, yet found themselves having to stretch financially to pay for private property – a viable option for home purchases.

At the same time, a proliferation of EC land sales by the state in the past couple of years, especially in the North and Northeast regions of Singapore, not only meant that buyers had a variety of projects to choose from, but that developers also had to price even more competitively to attract buyers.

Over the course of 2015, 3,310 EC units saw caveats lodged, with an overall median price of $793 psf (refer to Figure 3). By transactions, MCL Land’s Sol Acres had the best market performance, with 371 caveats recorded, at a median of a rather affordable $788 psf.

Some of the most popular projects for 2015 were not the latest launches (refer to Figure 4). The Terrace, Bellewaters and Bellewoods saw marketing starts in 2014, but their popularity in the past year was likely due to the developer offering attractive rebates and discounts to buyers. Again, right-pricing here, especially in areas where there is plenty of competition for ECs, helped developers move stock.

HDB Resale

After falling for nine consecutive quarters, prices for resale flats rose by a conservative 0.2 percent in the last quarter of 2015. While overall prices did still dip 1.5 percent from the previous year, the decline has slowed, compared to 2014’s 6.2 percent fall in prices. 2015 saw over 17,800 HDB resale transactions, an increase of 10.6 percent from those in 2014. However, market watchers are cautious to declare this a recovery, and we will likely have to see a few more quarters of modest price increases before we can declare that the HDB market is out of the doldrums.

Figure 5 shows HDB resale price and volume trends by estate. A trend that emerges from the data is that estates with a larger volume of transactions also tend to be the ones that are priced a lot more affordably. Like all the other market segments hence, pricing, and indeed, right-pricing are key. A couple of the bigger mature estates with established amenities, like Tampines and Bedok, moved well in 2015, at a median of $401 psf and $423 psf respectively. Scarcity continues to drive higher prices, with resale flats in Bishan, Marine Parade, Bukit Timah and the Central Area continuing to command higher prices.

40 percent of the flats sold in 2015 were four-room flats, which remain popular starter homes with adequate space for a family of four. Executive flats, which include maisonettes and jumbo flats, comprised 7.6 percent of resale stock sold last year. Five-room flats had the lowest median psf price overall at $376 psf, 4.2 percent lower than executive flats, which went for a median of $392 psf.

Pinnacle at Duxton made headlines in 2015 for record-breaking sales, including the record for a four-bedroom flat at $990,000. According to the data, 122 units moved at Pinnacle, of which 90 were four-room flat units. The lowest priced resale unit sold at Pinnacle was a low-floor four-bedroom unit, which moved at $650,000, a relative bargain, while only nine units moved above the million-dollar mark.

Retrospective round-up

The general consensus is that we will begin to see a recovery in 2016 in the property-for-sale market, with 2015 and perhaps the first half of 2016 the trough of our current property cycle. However, developers and sellers need to be wary of being overly optimistic.

Signs of recovery are weak, and the real estate segment remains extremely price sensitive. Coupled with the fact that affordability is unlikely to increase further with the government stating on record that the TDSR is here to stay, sellers could easily alienate buyers by rushing to increase prices.

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Colours of Fortune


Yellow is the colour of wealth for those born in the year of the rat, while blue is the colour to avoid. Shades such as Nippon Paint’s Buttercup Bouquet and Softly Lit are recommended; the former adds a pop of colour to your home, while the latter easily complements furniture and home accessories.


The ox would do well to incorporate pinks and purples into his home for familial harmony, with lilac in particular a lucky colour for the bedroom and living room. Pink Floss and Royal Mist are good examples of auspicious colours for your home.


Those born in the year of the tiger would do well to dress their bedroom in any shade of blue, such as Cerulean, for luck in the romance department. When it comes to wealth, red for the living room is recommended for the positive energy it represents. Sashay Red is a good choice for this purpose.


Soft, muted tones bode well for the rabbits among us, with the colour grey specifically said to bring luck to your household. Colours such as White Concrete and Weatherbell for your dining area and living room can serve as a simple, effective backdrop for the rest of your décor.


The mighty dragon can boost his luck this year with white and silver; the former to deflect negative energies and the latter to improve his love life. Colours like Steel Pot for the dining area and Granite Rock for the bedroom are recommended.


Earth tones of brown and green spell good fortune for the snake in 2016. A shade of green, such as Calm Spirit, for your study can create a relaxing environment in which to work. Your bedroom, on the other hand, would benefit from a brown shade such as Natural Cedar.


Like the snake, the horse’s lucky colour in the year of the monkey is brown. He is also advised to avoid blue, black and grey. Those born in the year of the horse can use colours like Birch Patina and Old Boots, especially in bedrooms.


Citrusy colours like yellow and orange are auspicious for the goat in 2016. Invest in orange-coloured furniture to up your stakes in the romance game; shades like Creamy White and Monet’s Purple will brighten your mood, calm your nerves and create a relaxed, harmonious home atmosphere.


This is your year, and your lucky colour is — believe it or not — black. This is especially so in the wealth department. Try shades like Gray Ashes in the bedroom and Black Night in the living room for an unconventionally auspicious start to the new year.


Those born in the year of the rooster will benefit from a mix of cool (silver or grey) and warm (gold or yellow) shades. A colour like Swan Wing would make the living room look more spacious, while Sassy Yellow works well for the bedroom.


Pastel colours have all the luck for the dog this year, particularly blue and yellow, as they are calming shades that symbolise confidence and positive energy. For the living room, try a hue like
Laid Back, and for the bedroom, Circus Top.


For those born in the year of the pig, 2016 is the year to go green. Turquoise and pastel shades are unique and refreshing: a colour like Nice Mint works well for the bedroom, while Paradise Waters would look lovely outside of it.

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GIC commits to invest S$520m in Indonesian retailer

The investment reflects its confidence in Indonesia’s long-term growth potential, said GIC on Wednesday (Feb 24).

SINGAPORE: GIC has entered into a partnership with PT Trans Retail, the main retail arm of Indonesian conglomerate CT Corp.

Under the partnership, Singapore’s sovereign wealth fund has committed to invest an aggregate of IDR 5.2 trillion (S$520 million) in Trans Retail, which operates hypermarkets, supermarkets, and cash and carry stores under the Carrefour and TRANSmart brands in Indonesia.

In a statement on Wednesday (Feb 24), GIC said the investment reflects its confidence in Indonesia’s long-term growth potential.

Mr Amit Kunal, Head, Direct Investments Group, South East Asia, GIC said: “We are keen to build lasting partnerships with reputable local partners and look forward to a deep relationship with CT Corp, which also has a strong track record for making good investments and share our investment values.”

GIC manages Singapore’s foreign reserves and invests in a wide range of asset classes, including real estate, private equity, equities and fixed income.

Picture Source: File photo of a GIC sign on a building facade in Singapore. (AFP/Roslan Rahmann)
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25 February 2016

Berlin: Europe’s new darling

Property in safe haven markets such as Germany remains attractive as one of the most stable asset classes, especially compared to bond and equities markets, which have seen significant volatility in the run-up to the December 2015 rise in US interest rates, said Alex Bellingham, Director at property investment firm IP Global.

He believes that Singaporeans are still on the lookout for low-risk capital investment opportunities in major cities with a value story and strong currency play.

“In that sense, Berlin fits the bill,” said Bellingham. “When you look at pricing versus other capital cities, it is very attractive, and this is essentially what makes it so compelling.”

Costs less

According to Berlin-based real estate agency ADEN Immo, property prices in Europe’s second-largest city are three to six times lower than those in London or Paris.

At the same time, Berlin is undergoing a major transformation, with a growing population supported by one of the world’s strongest and most secure economies, noted IP Global.

Investitionsbank Berlin (IBB) estimates economic growth of 2.2 percent for Berlin in 2016. This is higher than the national average of 1.6 percent growth forecast for Germany as the whole.

Meanwhile, IP Global expects a population boom of about 340,000 new residents in the city by 2030 to fuel a strong demand for housing. In addition, over a quarter of a million jobs have been created in the last decade, generating demand for some 55,600 apartments.

The surge in population means that 19,655 new units will need to be completed every year to 2020. However, less than 9,000 were completed in 2014, revealed the consultancy.

“This imbalance is driving prices higher, with the average apartment price gaining 11.7 percent in 2014,” said Bellingham, adding that rents rose by six percent over the same period to keep typical gross yields at around five percent.

“The value in Berlin is hard to beat, mostly because of its unique history. Vacancy rates are also low at only 1.8 percent, which is attractive for investors looking for rental yields.”

The shift to smaller households

So what properties are available for sale and what should investors be targeting?

“Due to planning laws and an abundance of high-quality historic buildings, the majority of residential units coming online in Berlin tend to be refurbishments of older residential or converted stock,” said Bellingham.

“Another development has been the trend for smaller households. The average number of persons per household fell from around 1.84 to 1.17 over the past 15 years, a factor that further compounds the rising demand for housing driven by population growth.

“Berlin is the biggest city for singles in Germany and is likely to remain so, hence the great need for additional one- to two-bedroom apartments,” he added.

For non-EU residents keen on purchasing a property in Berlin, Bellingham explained that the process is straightforward. In terms of management costs, it is generally similar to the UK, ranging from five percent to 15 percent, depending on the level of service, the property type, and whether it is furnished or unfurnished. “A key distinction is that if the property is held for over 10 years, then there is no capital gains tax to be paid,” he said. Five to 10 years is IP Global’s recommended holding period for stable growth and returns.

As for financing, the consultancy advises would-be-investors to obtain financing through German banks. “The process is similar to Singapore, in that it is a staged payment system. As soon as documents are notarised, the process begins and it is then similar to any other mortgage process,” shared Bellingham.

Key locations

There are several areas that IP Global is currently exploring, mixing traditional prime neighbourhoods with up and coming hotspots on the city’s fringe. These include:


The historic heart of Berlin, Mitte is a political centre that is home to numerous museums, high-end shops and restaurants. It borders Tiergarten, the biggest park in Berlin. In 2014, apartment prices in Mitte rose 24.2 percent, while rents were up 10 percent.


Located in West Berlin, this is a traditional neighbourhood full of parks and green spaces. Home to the famous Kurfürstendamm (Berlin’s Bond Street), Charlottenburg is among the city’s wealthiest neighbourhoods. Price performance reflects this, with average apartment prices across the district having risen 20.5 percent over the course of 2014.


Further out in former East Berlin, this is very much the ‘de rigueur’ location for young professionals as well as artists, and there are many bars, restaurants and art galleries. It is also undergoing major regeneration, especially along the river.


Set to undergo major transformation, this gentrifying suburb in Southeast Berlin is fast becoming very desirable among young professionals, students and creatives seeking affordability, vibrant nightlife and a cosmopolitan lifestyle. The recent closure of Tempelhof Airport has added to this desirability, with the airfield converted into a huge park attracting international acts.


Population: 3.52 million

Total area: 891.8 sq km

Currency: Euro

GDP per capita: €31,476

GDP growth: 2.2 percent (2016)

Future transport: Extension of the Berlin U-Bahn

Apartment prices: Up 11.7 percent on average

Distance from Singapore: 9,910 km


Berlin’s most chic neighbourhoods are home to some striking new apartment buildings. Here are some of our picks.


The Wilhelm
Wilhelmstrasse 56-59, 10117, Berlin Mitte

Type: Apartment
Developer: Mundial Ag
Tenure: Freehold
Facilities: Concierge and valet services, 24-hour security
Nearby Key Amenities: Brandenburg Gate, Reichstag building, embassies, Mall of Berlin
Nearby Transport: Within walking distance to three underground railway stations (U Bahn Mohrenstrasse, U Bahn Franzözische Strasse, S+U Bahn Brandenburger Tor)
Price Range: €421,000 to €884,000

This luxury new-build development in Berlin’s main business and cultural district consists of 165 units, namely studios and one-bedroom apartments.

Expected to be completed in Q2 2018, the project is close to major tourist attractions such as the Brandenburg Gate. Several embassies, including the UK and US embassies, are also located nearby.

The building forms part of a larger regeneration project in Mitte to revitalise Wilhelmstrasse all the way down to the Mall of Berlin.

Residents of The Wilhelm can enjoy both concierge and valet services, as well as 24-hour security.

Facilities also include a meeting room, wine cellar and a humidor.

Stralauer Allee
Markgrafendamm 36, Berlin

Type: Apartment
Developer: LRC UK
Tenure: Freehold
Facilities: Landscaped central courtyard, children’s playground
Nearby Key Amenities: Treptower Park, Kreutziger Strasse, Badeschiff public swimming pool
Nearby Transport: Berlin Ostkreuz and Berlin Ostbahnhof railway stations
Starting Price: €135,000

Part new-build and part rejuvenation of an old East Berlin block, Stralauer Allee by LRC UK combines old-world charm with modern touches.

Located close to the River Spree, it features 24 high-standard apartments and two sixth-floor penthouses with stunning terraces.

To be ready by Q4 2016, the freehold project lies within one of Berlin’s largest regeneration schemes, making it an ideal location for property investment.

The surrounding area is home to a thriving outdoor café and bar culture, while employment hubs in the centre of the city are just a short distance away.

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Eye on Siglap: Singapore’s coolest neighbourhood

Residents of the eastern side of our island have long trumpeted the superiority of their end of the country to the west of Singapore. While the western suburbs tend to be a bustle of activity and a blur of crowds, the east side features pleasantly laid back neighbourhoods and hole-in-the-wall food and beverage outlets.

Siglap is one of the most sought-after areas in eastern Singapore, and is populated by upper-middle class families who reside in clusters of landed homes and condominiums. Just a 20 minute drive from the central business district (CBD), the area manages to avoid the pretentiousness that plagues the quickly gentrifying addresses in other parts of Singapore while still remaining a prestigious area.

Siglap’s residential area is comprised entirely of private housing. While four low-rise HDB blocks used to stand at the intersection of Siglap Road and East Coast Road, they were repossessed by the government under the Selective En-Bloc Redevelopment Scheme, and are slated for demolition sometime in 2016. Former residents of Blocks 1 to 4 are now being relocated to Chai Chee Road.

Siglap’s only public housing blocks still standing were originally built in 1963 for the victims of a fire that broke out close to the former Siglap Market, where Siglap Centre now stands. The culprits of the fire were firecrackers that had been set off during Chinese New Year.

Today, Siglap is a relatively quiet neighbourhood that is still hip enough to attract visitors from all over the island, thanks to strips of restaurants, cafes and bars that line the major roads. The area has been rejuvenated by the explosion of F&B outlets on Upper East Coast Road and at Siglap V, a freehold condominium with retail and dining options on the ground floor.

Some of the most popular cafés in the area include Udders Ice Cream on Upper East Coast Road and up-and-coming Craftsmen Specialty Coffee at Siglap V. Then there are old favourites that long-time residents keep coming back to, like Vie Bar on Upper East Coast Road and BLooiE’s Roadhouse on Jalan Tua Kong.

The newest part of Siglap to get a makeover is the Siglap Canal area, which has been revamped as a community space connecting estates like Marine Parade and Kembangan. An activity plaza where morning tai chi sessions are held has been opened in front of the Kampong Kembangan Community Club, and green spaces and a rain garden have been built over the canal.

No matter where in Siglap you might choose to while away a Sunday afternoon, you won’t hear the click-clack of high heels or catch sight of suited gentlemen staring at their Blackberries. Instead, a mixture of residents and visitors unassumingly clad in casual wear lick the foam off their cappuccinos as they leaf through the Sunday papers, or kick back with a pint of cold beer on a steamy afternoon.

A great place to call home

Residents in the east are already familiar with Siglap, which has long been one of the most sought-after residential areas this side of the island. Part of Siglap’s appeal lies in its proximity to the city and some of Singapore’s most reputable schools.

Eugene Lim, Key Executive Officer at ERA Realty Network, is confident that Siglap’s popularity is here to stay. “Siglap has very desirable location attributes. It is within short driving distance from both the CBD and the airport, which is attractive to working professionals and those who need to travel often,” he said. “There are also many established schools in the vicinity, such as Tao Nan School and Victoria School, which appeals to families.

“Public transport-wise, there are many bus services plying the area and with the Thomson East Coast Line, connectivity will be further enhanced. Also, for those who are willing to pay a premium, Siglap is one of the few places in Singapore with a full sea view.”

The residents of Siglap seem to agree. Nirev Shah, a lawyer and Siglap resident, said, “It’s a lovely residential area with cafes and bars that open till quite late like Häagen-Dazs, plus there are nice houses there and it’s well-connected by bus services. The area is becoming livelier, with decently-priced eateries and bars that provide the public with some entertainment.”

In fact, each weekend non-residents flock to Siglap for a treat at tried-and-tested eateries. Etna and Al Forno serve up authentic Italian cuisine, while Indian Curry House and Thai Express are popular with fans of Asian food.

According to Mr Shah, another of Siglap’s draws is that its adjacent neighbourhoods are chock-full of amenities like shopping malls. “It’s smack in the middle of Bedok and Marine Parade, two good areas for shopping, food and other amenities. Katong Mall is also not too far away,” he said.

There’s a generous range of leisure options for residents and visitors alike, whether it’s getting a massage at a spa, picking up groceries at Cold Storage, or scheduling a grooming session for Rover at Pet Lovers Centre.

The Siglap of the future

The Siglap neighbourhood has stood undisturbed for some time, with no major residential development launches taking place in recent years. But this is about to change.

According to Lim, “Under the H2 2015 Government Land Sales (GLS) Programme, a site in Siglap has been placed on the confirmed list, slated for development into private residential units. Located adjacent to Victoria School and within walking distance of the upcoming Siglap MRT station on the Thomson East Coast Line, it will be a project to look forward to when it is launched, possibly in early 2017.”

In fact, while Siglap has always been a popular residential location, some home buyers have been discouraged by the lack of an MRT station in the area. The upcoming Siglap MRT station, which is expected to be opened in 2023, looks set to boost the popularity of the area and raise property values.

“Siglap has always been an established housing estate, one of the few places in Singapore where freehold condominium projects can still be found. While there are not many vacant land parcels left for development, the construction of the Thomson East Coast Line is expected to boost housing prices once completed,” said Lim.

It looks like Siglap’s enduring popularity is about to grow even more.

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Joint Tenancy versus Tenancy-in-Common: What’s the difference?

It’s more common these days in Singapore for single friends to buy private property together under the Joint Tenancy or Tenancy-in-Common scheme. But what are the differences between the two?

1. Shares make all the difference

If you and another person / other people purchase a property together without clearly determining how big each person’s share is, the arrangement is known as a joint tenancy. If, however, you each have a specific share (this can be equal or unequal), the arrangement is known as tenancy-in-common.

2. Regardless of dollars and cents

Under a joint tenancy, each co-owner has the rights of a single owner, as well as an equal interest in the property. This is regardless of how much he paid for the property. Any legal decision made
regarding the property also must be made jointly.

3. Making the distinction

Under tenancy-in-common, each co-owner holds a distinct and separate share in the property. This may be equal (50-50), or unequal. Nonetheless, each of them also has the rights of a single owner and the right to live in the property, regardless of the size of his share. At the same time, each owner is entitled to dispose his share to a third party while he is alive, or leave his share to a third party in a will.

4. Till death do us part

In the event of a co-owner’s death under a joint tenancy, the right of survivorship applies. This means his interest in the property is automatically transferred to the surviving co-owner(s). However, the same does not apply for tenancy-in-common. Upon the death of a co-owner, his share in the property will either be distributed according to his will, or, if he did not leave a will, his share will be handled according to Singapore law.

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Sliding prices may force govt to adjust property curbs

Property consultants believe the government may finally be persuaded to tweak some of the cooling measures as home prices are expected to drop further this year, reported Bloomberg.

JLL National Director of Research & Consultancy, Ong Teck Hui, expects home prices to fall by as much as eight percent this year, while Knight Frank predicts a three to six percent decline in residential values.

“All the noises from the Government are that cooling measures are here to stay,” noted Nicholas Holt, Singapore-based Asia-Pacific Research Director at Knight Frank.

Nonetheless, he reckons that “behind closed doors they are talking about possible tweaking of some of the cooling measures,” especially given rising mortgage rates, slowing macroeconomic growth and falling home prices.

With prices falling for a ninth quarter over the last three months of 2015, the city-state has been successful in cooling its once red-hot property market.

The measures, which include higher stamp duties on home sales and acquisitions, as well as a cap on real estate loans at 60 percent of a borrower’s monthly income, have earned the ire of Singapore’s biggest developers. In November, City Developments urged the government to review the measures as demand for apartments weakens.

Home prices declined 3.7 percent in 2015, almost matching the four percent drop seen in the year before, the first year-on-year decline recorded since 2008. Prices climbed to a record high in 2013, which prompted the government to introduce additional curbs as demand from foreign buyers and low interest rates raised concerns that the market could be overheating.

Ong stated that tweaks to the measures will likely be gradual in order to prevent the market from overheating again.

For a progressive easing, the seller’s stamp duty, additional buyer’s stamp duty and loan-to-value ratio may be adjusted gradually, he said. Holt, on the other hand, said that the government can slowly scale back the high stamp duty, starting with permanent residents and locals.

“The government has maintained that it is not yet time to ease the cooling measures and our sense is that it is more likely to be later rather than earlier in 2016,” shared Ong.

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Private housing resale market shines as buyers get off sidelines

TODAY reports: Property cooling measures and loan curbs have made private homes more affordable.

SINGAPORE: After waiting more than one year for an opportune time to purchase a condominium to house his family of three, Mr Amrit took the plunge in early 2015 after coming across a resale unit in his choice location with a “reasonable” price tag.

He had always intended to upgrade to a private home, and when prices for Housing and Development Board (HDB) flats started falling in 2013, he decided to cash out before the value of their four-room flat dipped further.

But instead of immediately upgrading to a private property, Mr Amrit, who is in his 40s, decided to bide his time and rent a place with his wife and teenage daughter while they went about hunting for the ideal home. This came about one year later, in the form of a two-bedroom resale condominium in the Western part of Singapore.

“We heard that prices would fall even more, so we thought we should take our time to look around,” said Mr Amrit, who works in the media industry.

Like Mr Amrit, many homebuyers who are owner-occupiers returned to the market last year after property cooling measures and loan curbs put a lid on private home prices.

SRX data shows that by the end of last year, resale prices of non-landed private residences had fallen 7.8 per cent from the recent peak in January 2014. Analysts said compared with new launches sold directly by developers, some sellers in the resale market have been more willing to price down their properties to secure buyers.

The return of potential buyers on the sidelines helped transaction volume in the resale private homes segment grow by 24.1 per cent to 6,160 sales last year from the previous year, far outpacing the 1.7 per cent increase in sales in the primary market to 7,440 units, showed statistics by the Urban Redevelopment Authority (URA).


“I believe there’s pent-up demand that has built up when prices were rising, because a lot of upgrading decisions had to be put on hold then. Now that prices have come down from the peak, it has become a good time for upgraders to buy,” said Mr Colin Tan, director of research and consultancy at Suntec Real Estate Consultants.

Property agents note that besides more realistic pricing by sellers, these buyers often look for larger units to house their families and prefer certain locations that many new launches today are unable to provide. As a result, many of them turned to the resale market — a business opportunity that agents have also tapped.

ERA key executive officer Eugene Lim told TODAY that private residential resale transactions done by the agency jumped 33 per cent last year from the previous year.

“Many buyers nowadays are owner-occupiers (and) these buyers have very specific needs — location and size are very important to them. The sizes of new projects are smaller than some of the older ones and developers have also not dropped prices significantly, whereas there are serious sellers in the resale market who are more open to negotiating,” said Mr Lim.

“The investment climate is not quite there any more. We see the rental market is not doing so well, so generally we see fewer investors in the market,” he added.

Sharing his view is Mr Chris Koh, director of Chris International, who said that rental prospects have dimmed as a result of tighter controls on foreign manpower inflows and the large impending supply of completed homes, with close to 22,000 private homes due for completion this year.

Rents have also taken a hit, falling 7.9 per cent in nine consecutive quarters from the peak in the third quarter of 2013 to the last three months of 2015, showed URA data.


Besides property curbs such as the Additional Buyer’s Stamp Duty (ABSD) and Total Debt Servicing Ratio (TDSR) framework, the current economic climate is also adding to the subdued investment sentiment, with slower growth prospects and rising interest rates deterring big-ticket investments such as property.

The analysts said growth in private residential resales will likely continue for the rest of this year, given that prices are likely to fall further and attract more potential buyers on the sidelines to return to the market. In addition, the number of new launches is expected to come down due to the reduction in land supply in the Government Land Sales programme.

However, the return of owner-­occupier buyers to the market would not be enough to lift the overall market that has seen prices decline for nine consecutive quarters, said analysts.

“I don’t think prices will come up in the short term because supply is still outpacing demand. In 2015, prices have already reached 2011 levels, so it’s starting to look attractive to buyers who have been waiting. By this year, prices would have dropped for three years, I believe more buyers will find it attractive,” said Mr Koh.

By the last quarter of 2015, overall private property prices had fallen 8.4 per cent from the recent peak in the third quarter of 2013, showed URA data. This is still shy of the more than 60 per cent increase in prices after the global financial crisis, which prompted the Government to implement cooling measures to prevent the market from overheating.

The Government has repeatedly said the time is not yet right to tinker with the measures. In October, Minister for National Development Lawrence Wong said that even though the market is stabilising, price adjustments so far had been moderate compared with the price increase in earlier years and the Government did not want to “risk a premature market rebound”.

Picture Source: A view of blocks of private residential condominiums, left, and executive condominiums in Singapore Jan 4, 2016. (Photo: Reuters)
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20 February 2016

GuocoLand tops out $3.2b Tanjong Pagar Centre

Property developer GuocoLand on Wednesday topped out Tanjong Pagar Centre, its $3.2 billion integrated mixed-use project located above Tanjong Pagar MRT station.

At 290 metres high, the development is set to become the tallest building in Singapore, once completed in mid-2016.

National Development Minister, Lawrence Wong, was the guest-of-honour at the ceremony to mark the important milestone.

The building will integrate 890,000 sq ft of Grade A office space at Guoco Tower, a 100,000 sq ft dynamic lifestyle and F&B component, 181 luxury homes at Wallich Residence, the 222-room Sofitel Singapore City Centre and a 150,000 sq ft landscaped Urban Park.

“Tanjong Pagar Centre makes two key contributions to the Singapore city. It will act as a catalyst in accelerating the rejuvenation and transformation of Tanjong Pagar District into a business and lifestyle hub in the CBD. Additionally, its ‘Integrated Vertical Living’ design concept offers a model for Singapore’s urban future. Through intelligent and sustainable designs, we can still achieve excellent quality of life in a highly-urbanised environment,” said Raymond Choong, President and CEO of GuocoLand Group.

Meanwhile, Channel NewsAsia reported that GuocoLand will start selling the residential units upon the project’s completion. Wallich Residence will house Singapore’s tallest and largest penthouse – a triple floor duplex on levels 62 to 64.

Picture Source: Aerial view of the Urban Park at Tanjong Pagar Centre.
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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.

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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).

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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.

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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)
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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.

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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.

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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.


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)
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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)
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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.
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15 February 2016

$10m for owners affected by MRT Line

Eight owners of partial land lots that are being acquired for the construction of the Thomson-East Coast MRT Line received a total of $10 million, reported Channel NewsAsia.

According to the Singapore Land Authority (SLA), the owners were paid the corresponding market value of their property as determined by private valuers and in accordance with the Land Acquisition Act.

Most of the 24,000 sqm of land is located within the Marine Parade and Changi South areas. Over 17,000 sqm is owned by the Laguna National Golf and Country Club.

In April last year, owners of 15 houses affected by construction of the MRT line were awarded $45 million. The homes are situated at Tanjong Katong Road and Amber Road.

The SLA revealed that some of the owners have accepted the compensation while others have appealed to the Appeals Board. One valuer noted that the valuation process is not that straightforward sometimes.

“The challenges are basically understanding of the asset, what are the encumbrances, covenants or restrictions,” said Tan Keng Chiam, Head of Valuation Advisory Services at JLL.

“I think one has to understand the product and thereafter determine the basis. In many occasions, differences arises because of different assumptions.”

Picture Source: LTA
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Thailand property to see growth in 2016

Several property firms are predicting that Thailand’s real estate market will see growth of around five to ten percent in 2016, with Greater Bangkok expected to lead the charge, reported The Nation. The government’s investment in infrastructure projects across the country is just one reason for the positive outlook this year.

“When the government starts to invest in infrastructure projects, that will open up new land for property firms to develop residential projects,” said Thongma Vijitpongpun, President and Chief Executive Officer of Pruksa Real Estate. “This will challenge property firms to invest in the new locations following the new mass-transit route from Bangkok to the suburbs and nearby provinces.”

The Nation noted that infrastructure projects either under construction or scheduled to begin construction soon include railway double-tracking, motorways, and ten new mass-transit routes. The goal is to make Thailand a regional transport hub and this in turn will boost demand to buy homes in the country as foreign companies see Thailand as a gateway to other Asean countries, noted Thongma.

He added: “We believe that Thailand’s property market will show average growth of five to ten percent a year from 2016 to 2020. We will launch more new residential projects nationwide to serve strong demand in the market, especially in locations close to the mass-transit system.”

Tritecha Thanmatithum, Supalai Deputy Managing Director, agrees with this sentiment and noted that the government measures to cut transfer and mortgage fees will also help improve the property market this year. He said that the company plans to launch up to 29 residential projects in 2016. Of these, 20 will be low-rise developments such as detached houses and townhouses, while the rest will be condominiums.

Chanond Ruangkritya, President and CEO of Ananda Development, also believes that the property market in Thailand will see growth and the developer is making plans accordingly. It expects to launch ten residential projects in 2016, of which eight will be condominiums and the other two detached housing projects.

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Nearly 230 babies born to couples living in PPHS flats

Close to 230 babies have been born to couples living in Parenthood Provisional Housing Scheme (PPHS) flats, wrote Senior Minister of State (Prime Minister’s Office) Josephine Teo in a Facebook post, reported Channel NewsAsia.

Introduced in January 2013, the scheme offers interim housing for those who have booked an uncompleted HDB unit under the Build-to-Order (BTO) or Sale of Balance Flats (SBF) exercises. Applicants under the Fiancé/Fiancée Scheme or married couples, and widowed or divorced parents with children, are eligible to rent a flat under the PPHS.

Currently, there are around 1,900 PPHS flats in several locations including Jurong, Tiong Bahru and Commonwealth, said Teo, who also helps oversee the National Population and Talent Division (NPTD).

She noted that couples need not wait until their BTO flats are completed before marrying or having a child since PPHS offers a temporary rental option within an HDB setting.

“It’s a helpful scheme which I hope HDB will similarly scale up if there’s demand,” she added.

National Development Minister Lawrence Wong recently revealed that this year’s supply of BTO flats will increase by 3,000 units from last year to 18,000 units. This comes after the last BTO exercise in November 2015 saw a healthy response.

“With affordable HDB housing more readily available now, young couples should not wait too long to welcome (a) baby to the family,” said Teo.

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Vietnam condo to go on sale in Singapore

The first luxury condominium from Vietnam to be launched for sale in the city-state this year will take place next weekend, 16 to 17 January, at the Grand Hyatt Singapore, revealed marketing agent CBRE.

Located in the Thao Dien area in prime District 2 of Ho Chi Minh City, the 238-unit Nassim project by Hong Kong Land and SonKim Land will bear resemblance to the prestigious Nassim enclave in Singapore.

A selected number of one- to four-bedroom units will be available, with prices starting from around S$195,000 for a one-bedroom apartment.

Set to be completed in 2018, the development is close to the scenic Saigon River, Vincom Mega Mall Thao Dien, restaurants, international schools and clinics, making it popular among wealthy Vietnamese and much sought after by expatriates, said CBRE.

The upcoming An Phu Metro station (Ho Chi Minh City’s first Metro line) will help to improve connectivity and accessibility. CBRE also noted that properties within a 10 minute walk to Metro stations will command a 10 to 20 percent premium over those sited further away.

In fact, prices in the high-end and luxury segments have recorded growth since the market bottomed out, with the sales volume of prime-grade condos starting to pick up since the second half of 2014.

New luxury properties at very prime locations such as those in District 2 will probably reach S$325 to S$377 psf in 2016, added CBRE.

Meanwhile, Leong Boon Hoe, Managing Director of CBRE Realty Associates, is confident that the project will attract strong interest from Singaporean investors.

“The Nassim will be one of the very few and limited high-end condominium projects to be classified as luxury class available for sale now. Early investors will reap very good growth potential given the very limited number of projects of this category in HCMC at this moment. As the city matures and rides the wave of economic reform and increasing foreign direct investments, the growing affluence and confidence of the market in investing into the high-end condominium segment, it is not surprising The Nassim sold very well when it previewed in HCMC just two months ago,” he said.

Vietnam has been in the spotlight in recent months after changes to property ownership rules were implemented in July 2015, allowing foreigners with a valid visa to own property in the country. Previously, only foreigners married to Vietnamese nationals and those making contributions to the country were allowed to buy property.

Picture Source: Artist’s impression of The Nassim. Photo by CBRE
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Residential site close to Tanah Merah MRT triggered for sale

A 99-year leasehold residential site at New Upper Changi Road/Bedok South Avenue 3 (Parcel B) that was on the reserve list was triggered for sale today after a property developer committed to bid a minimum price of $320 million for the plot, said the Urban Redevelopment Authority (URA).

As the minimum price committed by the developer is acceptable to the government, the site will be released for sale by public tender.

With a land area of about 2.4ha, the land parcel is expected to generate a gross floor area of around 51,228 sqm and yield up to 570 housing units.

The site is close to Tanah Merah MRT station, Changi Business Park and the Singapore University of Technology and Design. Many condominiums such as Stratford Court, East Meadows, Casa Merah and Optima@Tanah Merah are also located nearby.

The URA will launch the public tender for the site in about two weeks.

Picture Source: URA
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12 February 2016

Location, pricing still key to attracting buyers

Last year’s property launches showed that home buyers go for reasonably priced homes in good locations, reported The Straits Times.

In fact, three projects performed exceptionally well during their launch despite the cooling measures, primarily due to pricing and location.

High Park Residences in Sengkang moved 1,169 units at a median price of $989 psf, while North Park Residences in Yishun sold 486 units at a median price of $1,374 psf.

Over in the city fringe area, The Poiz Residences in Potong Pasir moved 277 units at a median price of $1,440 psf during its launch.

ERA Realty Key Executive Officer, Eugene Lim, noted that projects that sold well in 2015 were all attractively priced, situated close to an upcoming or existing MRT station, and near various amenities like shopping malls and reputable schools.

“This year, we expect buyers to be equally discerning of new projects. Prices and location should remain the determining factors behind a project’s performance.”

According to PropNex Realty’s Chief Executive, Mohamed Ismail, a project is considered highly attractive to home buyers when they are priced towards the lower end for the area it is located. For the Core Central Region, this would be closer to $2,000 psf and nearer to $1,000 psf for the Outside Central Region. The Rest of Central Region, on the other hand, would be closer to $1,500 psf.

“However, a premium may be commanded due to the location and availability of transportation – near the MRT – or the nature of the project, such as a mixed development,” said Ismail.

He noted that buyers showed a willingness to pay a premium for mixed-use projects like J Gateway, DUO Residences and North Park Residences.

“But for most cases, price is the main factor,” said Ismail.

This is comes as the “restrictive loan environment prevents developers from setting a price that is unrealistically high,” he added.

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BCA looks to raise productivity of tunnelling projects

Works for tunnelling projects may soon be completed in a shorter span of time and be less noisy as the Building and Construction Authority (BCA) expands a framework presently used to improve productivity in high-rise buildings, reported My Paper.

Under the buildability framework, designers and developers are required to meet a minimum standard of labour-saving methods as well as technology, or face penalties.

They can, for instance, use machines and prefabrication to reduce the excavation on site.

On prefabrication, Deputy Prime Minister Tharman Shanmugaratnam said: “There’s a lot of reduction of disamenities for the public because projects are completed faster, less noisily and with much less dust.”

In fact, BCA expects site productivity to increase yearly by over two percent in the next five years, up from the annual growth of about 1.2 percent in the last five years, said Mr Tharman, who also serves as Chairman of the National Productivity Council, during his visit to the construction site of Nanyang Technological University’s three new residential halls.

The new residential halls are being built using the ‘prefabricated prefinished volumetric construction’ (PPVC) method, in which whole rooms, including fittings like fans and lights, are made overseas and fitted out further here before being taken to constructions sites where they are stacked ‘Lego-style’.

This construction method helps developers save up to 25 to 40 percent in labour and 15 to 20 percent in construction time.

Mr Tharman stated that while the method costs about 18 percent more than conventional concrete construction, such costs can be reduced as suppliers come onboard.

“The public sector is taking the lead in building up demand,” he said.

Meanwhile, BCA Chief Executive John Keung expects civil engineering projects to take up a bigger portion of future construction demand in Singapore.

“It’s not a building, so you’ve got to find a different way to encourage them to make it easy to build,” noted Dr Keung.

Picture Source: Prefabricated Prefinished Volumetric Construction. Source: UB Australia
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16 tips on buying overseas property in 2016

The arrival of New Year is a time when many first-time investors finally plan to buy their dream home overseas.

While the overseas market offers many great value properties for those who know where to look, Chris White, Founding Director of Ideal Homes International, says: “We would always advise buyers to be cautious though, particularly if they haven’t bought overseas before – it’s really important to do your homework and buy through a trusted and reputable company.”

As such, White and his team have put together their 16 top tips on buying a home overseas in 2016, to help buyers turn their dreams into reality.

1. Investigate on the Internet – research potential areas thoroughly, rather than individual properties. Find out about local amenities, from beaches to restaurants, based on your priorities. Think about how those priorities may change in the future as well – a holiday home bought this year could serve as a retirement pad later on, so what facilities would you want on hand then? Don’t fall in love with a particular property until you know the location is right for you!

2. Use an agent with form – opt for an organisation with a good track record. Make sure they have been in business for some time and have a long list of satisfied customers happy to speak about their experiences.

3. Budget carefully – buying overseas isn’t just about the property price. Be aware of the buying costs like fees and local taxes. These can vary hugely from country to country, so do your research and budget accordingly.

4. Plan a trip – once you’ve identified the places you like on the Internet, hop on a plane and check them out for yourself. You will quickly be able to get a feel for whether or not a place is right for you, and a few hundred dollars invested at this stage can serve extremely well when it comes to finding the perfect location for your new home overseas.

5. Know what you want BEFORE you visit – think about how many bedrooms you need, whether proximity to the beach or a local golf course is important to you, whether you simply must have your own pool, and whether the local supermarket can be reached on foot or by car. Whatever your preferences, have them firmly fixed in mind before you visit – and be sure that your agent understands them too. This will ensure that he/she is able to show you properties that perfectly suit your requirements, and avoid wasting time spent touring unsuitable homes.

6. Think about the journey – work out the journey from your current home to the area in which you plan to purchase. What are the flight times and costs like? Is there just one airline that flies into the local airport or several? Can you hire a car easily upon arrival if you need to? These factors will impact on how relaxed you are by the time you arrive at your overseas property each and every time you visit, so think the journey through in detail.

7. Find a reputable lawyer – this is one of the most important elements of buying a second home overseas. A good agent should be able to recommend a reputable lawyer, or you can do your own research on the Internet and by speaking to others who have bought property in the area. Chat on the phone with the lawyer and meet him or her when you visit – test their knowledge and be sure to choose someone you are comfortable with.

8. Think about money matters – once you’ve bought your property, you will need to get money out to that country regularly in order to pay bills, take care of maintenance issues and so forth. Look at what you need to do to set up a local bank account and plan to do this as early as possible in the process. Bear in mind that many overseas banks also have a local branch where you can take care of some of the initial paperwork should you need to do so.

9. Remember the insurance – before you commit to purchasing a property, check that it is insurable and at a reasonable rate. If the area that you like the look of is prone to flooding or sink holes, then it might be time to look elsewhere.

10. Ask about hidden requirements – speak to your agent and conduct your own research online to ensure that you know everything you need to. In Portugal, for example, you need a fiscal number in order to purchase a property. You can get one quickly and easily from the local Finanças department for a small fee – or you can appoint a lawyer to take care of this on your behalf.

11. Consider other significant expenses – what other expenses might your property purchase give rise to? One of the most commonly overlooked items is the need for a car, so think about whether you can access your new home on public transport, whether you will pay for a hire car each time, or whether you would prefer to purchase a car of your own overseas.

12. Is the property just for you? – if you plan to rent your property out as well as using it yourself, then be sure that it appeals to a wide range of holidaymakers. Neutral décor and access to a pool can make a big difference to the number of people choosing your holiday home over another one.

13. Speak to the experts – join some online forums and Facebook groups and chat to those who have already purchased in the area you like. Even better, find people who have moved full-time and benefit from their experiences of local life.

14. Know the market – understand price trends in the country and region you like in order to know whether or not your expectations are realistic based on your budget. Knowledge of local prices will also help you to gauge whether you are paying over the odds or picking up a real bargain.

15. Think about maintenance – unless you are planning a permanent move, you will need to consider how best to maintain your property from afar. An isolated villa might be your dream holiday home, but an apartment on a managed condominium might present far fewer headaches in terms of regular maintenance, particularly if you plan to rent it out as well as use it yourself.

16. Use an agent who does it all – find an agent you trust and who can offer you the whole package. They will be able to support you with every step of the process, from finding a reputable lawyer to arranging an inspection trip. This can often be by far the quickest and cheapest approach – and also the least hassle!

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New survey to seek input on smart homes

Leading up to the launch of Singapore’s first smart executive condominium (EC) in the first quarter of 2016, Qingjian Realty is looking to find out young couples’ attitudes towards smart living.

In a statement, the developer said this will be achieved through a survey of about 100 respondents living in Singapore.

The EC project in Sembawang will be targeted at families who are looking to live in a home that embraces the latest technological advancements.

“Technology has become essential in our lives and has immense potential to positively impact our lifestyles even further. To build a smart home that supports the integration of technology to offer homeowners a seamless connection and greater convenience, we need to find out the lifestyle aspirations that they have for their dream homes,” said Li Jun, General Manager, Qingjian Realty.

The survey also aims to find out what features young couples would like to see in a smart EC.

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Property agents turn to Uber amidst chilly housing market

Due to the slump in home sales and the difficulty in securing deals amidst fierce competition, some property agents in Singapore are driving for Uber, a tech firm that allows users to utilise the service of a taxi or private car via their smartphone, reported Bloomberg.

“The market is slow because of the cooling measures. We have no choice, we have to come up with means to make ends meet, said 50-year-old Billy Loh, who started working as a property agent in 2008, but began driving for Uber late last year.

By driving passengers around Singapore, he earns $3,000 per month on average, a far cry from the $30,000 commission he could get selling a unit during the market’s heyday.

Although property agents in other countries typically take on other jobs to supplement their income when the market is not doing so well, the situation in Singapore is very gloomy. Among the world’s major housing markets, it suffered the highest price drop in 2015 and total transaction levels have plummeted by 68 percent since 2012. In fact, developers only managed to move around 7,000 new homes last year, according to SLP International Property Consultants.

Making matters worse, the city-state has a relatively large number of property agents compared with the volume of deals. There are more than 30,000 registered estate agents, ten times the volume of monthly transactions. In comparison, there are only 1,840 agents in the state of New South Wales in Australia who handle an average of 8,160 monthly transactions, noted CoreLogic Inc.

To help agents cope with the weak residential market, the Institute of Estate Agents in Singapore is offering courses and helping agents to get trained in other jobs.

Teaching property agents other skills would enable them to “at least earn a fixed income rather than only rely on commissions in this market,” said its President Jeff Foo.

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08 February 2016

Luxury home prices to slide further in 2016

Prices of luxury homes in Singapore are expected to drop by 3.3 percent in 2016 compared to an estimated decline of 3.5 percent last year, according to Knight Frank’s Prime Cities Forecast Report.

However, the city-state is expected to fare better than Hong Kong, where prices of prime properties are predicted to fall by five percent versus an estimated growth of 1.5 percent in 2015.

As such, the property consultancy foresees that the territory will overtake Singapore as the weakest-performing luxury residential market this year among the ten global cities being tracked.

“Many of the Asia-Pacific prime residential markets will face existing and new headwinds in 2016, with our forecasts showing quite a range of price performances, including negative price growth in Hong Kong and Singapore. Despite that, there remain pockets of opportunity in these two markets, as prime supply is relatively limited,” said Nicholas Holt, Knight Frank’s Research Head for Asia Pacific.

Meanwhile, Sydney is expected to see the strongest price growth of 10 percent in 2016, albeit slower than the estimated 15 percent expansion last year due to Australia’s economic slowdown, weaker stock market performance in recent months, and the introduction of foreign investment fees.

This is followed by Monaco and New York with a forecasted price growth of five percent each. Shanghai is expected to post a gain of four percent, while Miami and London could each post growth of two percent. Conversely, prices in Geneva are likely to remain unchanged, while Paris could see a dip of three percent.

Picture Source: knight frank research
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Colliers Singapore appoints new business leaders

As part of its growth plans, Colliers International has announced two senior appointments to strengthen its Singapore team.

Duncan White will head up the Office Services team, while Anthea To (pictured) joined the firm in November last year to lead Research and Advisory.

White joined the team in June 2015 and has more than 10 years’ experience in corporate commercial real estate and workplace strategy. He will be responsible for driving Colliers’ Office Services business through an advisory-led approach and a commitment to best practices.

To, who relocated from the UK, has more than 10 years’ experience working with major real estate research houses in the European markets. She will focus on creating market-leading, forward-looking research and thought leadership to support clients and industry professionals.

Commenting, Tang Wei Leng, Managing Director of Colliers International, Singapore, said: “Our most important resource is our people. In building our business, we are always seeking to attract, grow and retain the best talent the market has to offer.

“We chose Duncan and Anthea because they are ambitious, passionate, driven and fit well into our collaborative and high performance culture. Duncan’s promotion demonstrates our commitment to accelerate the success of our people,” she added.

The new business leaders will report directly to Tang and work closely with the regional team.

Meanwhile, former Deputy Managing Director, Calvin Yeo, has left the company, while Grace Ng will continue to head up the Auction team and grow the local brokerage business, noted Colliers.

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6 resolutions for homeowners in 2016

The fireworks have gone off, the champagne has been drunk, the Auld Lang Synes have been sung. It’s officially 2016, and we’ve got out our (virtual) pens and papers, and we started making our list of resolutions, as homeowners.

We’re often so busy working to pay the mortgage on our homes that sometimes, we forget to actually live in our homes. So here are six resolutions we came up with, to be better people, and better homeowners.

1. Time to declutter.
Yup, those online sales are definitely tempting, and perhaps we went a little crazy during the Great Singapore Sale. But the fact of the matter is, the square footage in our home didn’t grow a single square centimeter in the past year, even if the closets are filled to bursting. So we’re going to get a head start on Chinese New Year Spring Cleaning, and really de-clutter. Good, usable items will be donated to the Salvation Army, or sold online.

2. Don’t buy stuff I don’t need.
And of course, after decluttering, we need to make a resolution not to buy more stuff than we need. We don’t really need photo frames for that gallery wall that won’t happen because I haven’t printed the photos off my phone from that vacation two years ago. Nor will we need a fancy noodle maker for my kitchen when we barely cook once a month. So no matter how tempting the sale, we will resist and keep from buying what we do not need.

3. Invest in greener appliances.
If we do need to buy something however, like a new washing machine to replace the current unit that only partially cleans our clothes, we’ll invest in appliances that consume less resources and energy. This helps us to conserve the environment, and helps us save money in the long run as well, by keeping our PUB bills down.

4. Have more plants.
Speaking of green, we think that we should have some plants in our home. Aside from cleaning the air, houseplants are supposed to affect productivity, fight indoor pollution, and help to prevent illnesses. And they have the added benefit of making our home look better. Now, if we only we can remember to water the plants regularly.

5. Creating a quiet place.
Since these resolutions are to help us really live in and enjoy our home, we think we should create a lovely quiet corner on the balcony, a place that we can sit, relax, and read a book. Sip at a cup of coffee. It’s important to have those quiet moments, to think and to re-center ourselves. Perhaps we could put a couple of plants there as well.

6. Do at least one DIY project.
We’ve seen the TV shows, the “hacks” and the magazines. Perhaps it’s time to try this ourselves? We’re not going to be over-ambitious, and build a new sofa or something, but something that we can show off to our friends when they come over. Perhaps one of those Edison bulb light fixtures that we see so often in cool cafes. Can’t be too hard, right? Right..?

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Grim 2016 for private housing market

The overall 2015 price fall of 3.7 percent is the lowest decline for private home prices for more than two years, revealed PropNex Realty citing latest flash estimates of the Urban Redevelopment Authority (URA) price index.

However, this still reflects the current languid market sentiment and the sustained impact of the cooling measures, noted the property firm.

Prices in the Core Central Region (CCR) dropped by 2.6 percent last year, lower than in the Rest of Central Region (RCR) and Outside Central Region (OCR), which saw overall prices decrease by 3.9 percent and 3.8 percent respectively.

According to PropNex, luxury prices in the CCR fell the least as wealthy buyers with greater holding power are taking their time to search for their next investment property whilst also looking out for overseas properties.

Meanwhile, the bigger price declines in the other regions is the result of the Total Debt Servicing Ratio (TDSR) framework, which impacts the mass market segment where the capacity to take up loans is critical for middle-income buyers.

Mohamed Ismail, CEO of PropNex, believes that it is becoming more difficult for potential buyers to invest in a private home with a price quantum over $1.3 million given the stricter lending conditions.

At the same time, sellers of resale homes face stiff competition from developers who are continuing to launch projects at more attractive prices and with incentives.

“As such, buyers will have more options – they will only commit if they perceive the property to be a good value proposition. This may put a fair bit of pressure on sellers in the resale market, who may have to lower prices in order to make a sale,” shared Ismail.

In 2016, Ismail maintains that home buyers will continue to look for reasonably-priced properties with desirable product and location attributes. Despite this, private home prices are set to decline further, with weak demand coming from the TDSR and Additional Buyer’s Stamp Duty (ABSD) restricting home buying.

“Buyers are now more discerning and are taking a longer time to decide on investing in private homes.

“Additionally, HDB resale flat prices have further softened, thus reducing the motivation for HDB owners to upgrade to mass market private properties as their purchasing power have been affected – due to a mix of abundant incoming supply, continued enforcement of cooling measures and public housing regulations such as the tighter MSR (Mortgage Servicing Ratio) on HDB loans,” explained Ismail.

He added: “With TDSR being a long-term instrument – and together with the ABSD, will continue to dampen any speculative activity. Under such an environment, we expect price weakness to persist into 2016, with possible negative growth of about 3.0 percent. The government has stated that it is not time to unwind the existing cooling measures yet; however, with nine consecutive quarters of price declines and lukewarm transaction volume, it is timely to look into tweaking some of the measures, namely the ABSD.”

Picture Source: URA
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Perennial hints at changes afoot at Capitol Singapore

In the face of a tough retail environment, landlord Perennial Real Estate says it will work on finding the right tenant and a “win-win” rental structure.

SINGAPORE: Some changes could be afoot at Capitol Singapore after it has been hit with a depressed retail environment. Landlord Perennial Real Estate on Friday (Feb 5) said it is looking at ways to help tenants.

CEO of Perennial Real Estate Holdings Pua Seck Guan, said: “The retail sector is not easy now, because a lot of retailers are faced with the problem of labour shortage and also in this volatile market.

“As a landlord, we therefore have to adopt a strategy to find the right tenant and a win-win rental structure, and some of the rentals we may have to get it on a turnover basis rather than insist on a very high base rent.”

The announcement comes as Capitol Singapore integrated development is edging closer to completion. The 157-room The Patina hotel has been completed, although it has not yet opened its doors. Meanwhile, the luxury Eden Residences expects to receive its Temporary Occupation License by end-February. The retail complex has been opening in phases since May 2015.

Concerns about Capitol’s retail tenants aside, Perennial presented a strong report card for the three months to December at a briefing on Friday, with net profit almost doubling up 93 per cent to S$41.1 million.

Property consultant, Chestertons, said Capitol could get a boost when the hotel starts operating. “One potential catalyst that might come out for Capitol’s retail centre would be the opening of Patina Hotel,” said managing director of Chestertons Donald Han.

“The Patina is almost ready to open its doors and it would welcome high-end or business tourists. So effectively, that could be a crowd puller to be able to support some of the high -end offering in Capitol. This year might potentially might see some footfall traffic. I think it might see higher occupancy settling in, as the year moves on. ”

Turning to its other Singapore properties, Perennial said it hopes to start selling office space and medical suites at TripleOne Somerset sometime in the second quarter, and it is awaiting final approval to do the same for AXA Tower.

Perennial’s other properties in Singapore include Chinatown Point and CHIJMES. The Singapore properties account for 21 per cent of the group’s total assets, behind China whichs accounts for around 73 per cent.

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