Prices of some new properties coming down

Move may signal end of months-long stand-off between buyers and sellers

GOOD news for homebuyers: The prices of some new developments are finally starting to come down.

At least two new projects have been tagged with prices below what they were expected to fetch just months ago.

Shelford Suites (left)
Sold in March for: $1,869 psf – $1,905 psf
Current price: $1,600 psf

Dakota Residences
Planned price: $1,000 psf – $1,100 psf
Current price: $950 psf — PHOTO: CITY DEVELOPMENTS

This may be because developers are faced with no sign of improvement in the cooling property market, consultants say. They may be choosing to move units by making their projects more affordable rather than continuing to wait out the gloomy sentiment.

One example is Dakota Residences in Dakota Crescent, a 99-year leasehold project by Ho Bee Investment and NTUC Choice Homes.

Sales of its 348 units will start next Saturday at an average of about $950 per sq ft (psf) – below the $1,000 psf to $1,100 psf that Ho Bee had previously targeted.

This means a 1,300 sq ft three-bedroom unit would cost about $1.24 million, down from as much as $1.43 million previously.

‘After the land cost and building cost, the break-even price is actually almost $900 psf,’ said a property agent, who asked not to be named.

The Straits Times understands that about 120 units will be released in the first phase, and prices may go up by at least 5 per cent for the remaining units, depending on demand.

For now, the two- and three-bedroom units that face away from Geylang River are said to cost $950 psf to $970 psf, while the bigger four-bedroom units facing the river will go for $1,000 psf.

City Developments’ (CDL) Shelford Suites in Shelford Road has also started previews for its 77 units at about $1,600 psf on average.

Market watchers said this was lower than expected, as two units were sold in March for $1,869 psf and $1,905 psf.

Shelford Suites’ launch had been delayed for months as CDL waited for sentiment to improve.

Property consultants say the act of lowering prices may be the beginning of the end of a months-long stand-off between homebuyers and home sellers that has led to a slump in transactions.

Would-be buyers have proved strongly resistant to current property prices, which have jumped 36 per cent in the last five quarters, while sellers have refused to reduce their prices until now.

But while lowering prices may jump-start the market, a one-off reduction may not be enough to sustain sales, said Mr Colin Tan, the head of research and consultancy at Chesterton International.

‘Developers will have to continue to reduce prices if they want to maintain sales, as many projects are still out of the reach of owner-occupiers,’ he said.

Meanwhile, developers are gearing up to launch more mid-tier projects for an increasingly price-sensitive market.

East Bay, a 40-unit condominium at Tay Lian Teck Road off Upper East Coast Road, will be on sale in the coming weeks. Prices average $1,100 psf, starting at about $600,000.

Also in the east, Ivory at Ceylon Road has sold about five of its 28 units. Prices start at $558,000 for a 640 sq ft two-bedroom apartment, averaging $800 psf.

At 353 Pasir Panjang Road, a 19-unit boutique project will be completed soon, though sales have just started. A handful of units have been sold so far, with one-bedroom apartments going for $550,000, and three-bedroom units priced at $1.4 million to $1.5 million.

ONE-TIME PRICE CUT NOT ENOUGH

‘Developers will have to continue to reduce prices if they want to maintain sales, as many projects are still out of the reach of owner-occupiers.’ – MR COLIN TAN, head of research and consultancy at Chesterton International, who thinks one-off price reductions may not be enough to sustain sales

Source : Straits Times – 12 Jun 2008

JTC launches tender to develop hotel, retail shops

This will add vibrancy to Changi Business Park, offer business travellers options

IN A Singapore first, the fast-growing Changi Business Park (CBP) is set to boast a hotel and retail outlets alongside the hubbub of enterprise.

A move yesterday by industrial landlord JTC Corp to invite developers to inject vibrancy into CBP with the novel development was warmly welcomed by the property market.

 
The 4.7ha site on offer, next to Singapore Expo, will include a business park’s regular features, such as an industrial space for high-tech and research and development firms.

JTC, however, yesterday asked that the proposals – which are to cover price and concept – should also include plans to develop a hotel and retail outlets. This is the first such project for a business park in Singapore.

It means business travellers attending exhibitions and conventions in the east will soon be able to rest and relax at CBP rather than heading elsewhere in town.

JTC said it expected CBP’s population of 6,000 to surge to 20,000 by 2011.

Mr Dominic Peters, the director of industrial services at property advisory firm Savills Singapore, said: ‘There is currently no retail component in and around CBP; just mere amenities like F&B outlets. A hotel and retail mixture will create some vibrancy in the evenings in and around the Changi area… The response for tenders should be overwhelming.’

The site will yield a gross floor area of 117,515 sq m, 40 per cent of which has been designated for commercial activities. About 45 per cent to 60 per cent of the area designated for commercial activities can be used for retail, leaving a floor area of 18,800 sq m to 25,900 sq m for a hotel.

Bids for the site could be in the region of a few hundred million dollars, some consultants said.

JTC has said it is catering to the rising demand for business park space and amenities in CBP.

CBP, launched in July 1997 and covering 66ha, houses a mix of high-tech, data and software enterprises, and R&D and knowledge-intensive outfits like IBM and Honeywell. It is also fast-becoming a hub for financial backroom operations, with Citibank, Credit Suisse, DBS Group Holdings and OCBC Bank poised to set up there.

Said a JTC spokesman: ‘The hotel component is a must and should be at least a three-star one catering to the business traveller.’

This is good news for CBP’s neighbour, Singapore Expo, just across Changi South Avenue 1.

A spokesman for Singex Venues said all 10 halls and 100,000 sq m of the Singapore Expo had been sold out through this month, citing the burgeoning meetings, incentive trips, conventions and exhibitions (Mice) industry.

A business hotel over the road could help meet this demand, as the country’s hotels have estimated that over 20 per cent of room revenue last year was from Mice visitors.

Said Mr Keith Oliver, the general manager of Singapore Expo: ‘The hotels will be good for our overseas exhibitors and visitors, who will find the proximity a great convenience.’

Interested developers have up to Aug 19 this year to submit their proposals for the tender.

LIVELIER MIX

‘A hotel and retail mixture will create some vibrancy in the evenings in and around the Changi area… The response for tenders should be overwhelming.’ – MR PETERS, of Savills Singapore, on the likely impact of developing a hotel and retail outlets in CBP

Source : Straits Times – 12 Jun 2008

Cost of living up for expats in Singapore

Republic up 17 places in global ranking due to higher inflation and stronger Singdollar

SINGAPORE has become a more expensive place for expatriates to live, but it is still cheaper than Hong Kong, even though the gap is closing with its long-time rival.

The Republic jumped 17 places to land at the 114th spot in a global survey of the costliest cities for expatriates, because of higher inflation and a stronger Singdollar in the past year.

FEELING THE PINCH: The purchasing power of expats living in Singapore has been dented by higher costs such as rents, fuel and food. — ST FILE PHOTO

Singapore closed the gap with pricier cities such as Hong Kong, which fell in the rankings to the 97th spot, in the survey conducted by human resources firm ECA International.

Within Asia, Singapore actually fell from the ninth spot six months ago to the 13th spot, partly because the cost of living in some Japanese cities had risen rapidly due to the stronger yen.

The purchasing power of expats living in Singapore has been dented by higher costs such as rents, fuel and food, as well as a stronger Singdollar.

 According to ECA’s data, the cost of fuel rose by more than 13 per cent in the last six months, while the price of foodstuffs such as egg noodles soared by almost 15 per cent.

Inflation in Singapore is now at a 26-year high, after accelerating at a faster-than-expected rate of 7.5 per cent in April.

This prompted the Government to raise its inflation forecast to between 5 per cent and 6 per cent, up from the 4.5 per cent to 5.5 per cent range.

Yesterday, the Singdollar fell to about 1.374 against the greenback, but analysts expect it to gain further this year as the Government seeks to rein in inflation.

Mr Scott Colman, 38, an executive in an American technology company, said he felt the greatest pinch from rising rents and petrol prices, as well as the strengthening Singdollar because his compensation package is partly paid in US dollars.

Mr Lee Quane, the general manager of ECA International Hong Kong, said Singapore’s rising cost of living has prompted global companies to adjust their expat employees’ pay and allowances.

He added that the gap between Singapore’s cost of living allowance for expats and that of Hong Kong has shrunk dramatically from about 20 per cent five years ago to less than 5 per cent today.

Still, he said Singapore remained a cheaper place for expats than Hong Kong or Shanghai, and global companies were not considering relocating their staff from the Republic to the Chinese cities.

Top spot in the global ranking went to the African city of Luanda in Angola, where some expat consumer items are hard to get and command top dollar.

The survey compares a basket of 128 consumer goods and services such as groceries, clothing and electrical goods that are commonly purchased by expats in more than 300 locations worldwide.

Multinational firms use the results to help determine how much to pay their staff who work overseas.

Ms Kate Bryce, a finance professional in her 40s, said her company recently reviewed her allowance and raised it by about 10 per cent.

‘I’m hoping that the Singapore dollar doesn’t strengthen further because I doubt I would get another revision in the next year. Most companies are tightening their belts as the global economy slows down.’

STILL CHEAPER

The gap between Singapore’s cost of living allowance for expats and that of Hong Kong has shrunk dramatically from about 20 per cent five years ago to less than 5 per cent today. Still, the Republic remains a cheaper place for expats than Hong Kong or Shanghai, says Mr Lee Quane, general manager of ECA International Hong Kong.

Source : Straits Times – 12 Jun 2008

Inflation likely to peak at record 8.1% this month: Economist

IT MAY appear unstoppable, but inflation in Singapore is likely to peak this month – but at what could be a record 8.1 per cent – before moving down to about 3 per cent next year.

The prediction – from Mr Cem Karacadag, the director for non-Japan Asian economics at Credit Suisse – was in line with forecasts from government and private sector economists, although a tad higher.

It also assumes that oil prices will remain at around US$130 per barrel.

Mr Karacadag said inflation was being driven by a variety of factors: rising food and oil prices, the knock-on effects from a hike in the goods and services tax, and the housing boom in January.

He believes that if oil and food prices stabilise, inflation will return to moderate levels, but there will be pitfalls.

‘The risks are that the oil price spike in May has not fully transmitted its effects, and that food prices might continue to increase despite recent drops in prices, as the effects from the previous months’ hikes continue to elicit an effect,’ said Mr Karacadag.

He also cited the effects that costlier raw materials could have further along the production chain, including pushing up prices.

The high inflation afflicting the country could cause real gross domestic product growth this year to slow to 5.5 per cent – within the upper half of the Government’s 4 per cent to 6 per cent forecast range.

This fairly optimistic estimate is based on the strong momentum in domestic demand, underpinned by high employment, rising wages and the mega-construction projects under way.

Source : Straits Times – 12 Jun 2008

Man arrested for rental flat scam

WITHOUT viewing the flat to be rented, 11 people handed over hundreds of dollars each in cash deposits to the owner of a Commonwealth Drive HDB flat, in exchange for a set of keys.

But when they turned up at the three-room flat, they found it locked. None of the keys worked and the landlord could no longer be contacted.

The 11 victims, six of whom are foreigners, lost $8,250 in total.

On Tuesday evening, police arrested a 46-year-old unemployed man. If found guilty of cheating, he could be jailed up to seven years and fined.

Police believe the first tenant was cheated in March, and that there are more victims who have not come forward.

Housing agents and prospective tenants would respond to newspaper advertisements offering the suspect’s flat for rent.

He would meet the potential tenant, usually at a shopping centre, and hand over photocopies of documents including his identification card, as well as a set of two keys.

Making an excuse that he was in a rush, he would suggest that the tenant view the unit himself. Just before leaving, he would ask for a cash deposit ranging from $150 to $3,000.

Interior designer Rainer Lew, 36, was one of the 11 who handed over his money. He had met the man on Monday, a day before the suspect was nabbed.

‘I gave him $300 as a deposit. He didn’t strike me as suspicious. He even showed me his identity card which had an address that matched the unit he was renting out,’ said Mr Lew.

But when he visited the flat later, the gate was chained and padlocked. The door, which was unlocked, opened to show an unfurnished flat.

Police believe the man had an accomplice as he would sometimes meet his victims accompanied by another man whom he referred to as his brother.

They said they are closing in on this second man, and urged prospective tenants to be careful before putting down a deposit.

Tips on renting flat

THINKING of renting a flat?  To avoid falling prey to a rental scam, Mr Eric Cheng, executive director of HSR property group, suggests that tenants:

·  View the flat first to ensure it is in good condition.

·  Check that the landlord is the rightful owner by asking to see the conservancy charges bill.

·  Pay the deposit with a cheque and only after collecting the key personally. It will be easier to prove that payment was made.

·  Move in as soon as possible.

·  Engage a housing agent. Most established agencies refund deposits if anything goes wrong.

Source : Straits Times – 12 Jun 2008

Chinatown Complex: Make it accessible to all

I REFER to the reply, ‘NEA working to improve ventilation in hawker centre’ (June 2). I am heartened to learn that the National Environment Agency (NEA) is taking steps to improve the poor air quality in that section of the upgraded wet market in Chinatown Complex.

I understand the NEA, the manager of this project, can begin construction work only when the proposed building plans have been approved by the authorities, especially the Singapore Civil Defence Force fire-safety department.

After incorporating any requirements into the plans and once they are finally cleared, NEA starts construction. I understand the constraints NEA faces, for example, working within the budget and meeting the completion deadline.

May I offer my humble suggestions to avoid problems like those in the wet market? It costs much more to retrofit a completed job than do it from scratch. It is a waste of taxpayers’ money and resources, and causes inconvenience to occupants.

After the building plans are cleared, the project team should do a final evaluation of whether requirements imposed by other authorities will affect the environment (especially air quality), accessibility and so on. If the answer is yes, take pre-emptive measures at the planning stage to solve the problem.

I live in Chinatown Complex and my mother is wheelchair-bound. There are many elderly and infirm folk in my block. Some are also wheelchair-bound.

I urge the planning committee and our MPs to take a personal interest in this upgrading so that accessibility for the physically challenged is not compromised.

I salute NEA for an excellent job incorporating numerous accessibility features in the upgraded Chinatown Complex. Going around in a wheelchair is now a breeze.

However, the old folk in my block await with trepidation the completion of the enclosed lift lobby on the ground floor. For more than 20 years, we have enjoyed an open-concept lift lobby. Old folk, some with weak limbs or in wheelchairs, can reach the lifts effortlessly.

To follow fire-safety rules, walls have been built around the lift lobby on the ground floor of the two apartment blocks and heavy doors are fixed at all staircases. Access to the lifts is now via two heavy fire doors – supposedly to be kept closed at all times.

Many old folk fear such imposing features will curtail their independence. Not to mention the wheelchair-bound who need someone to wheel them. If there is no one to hold the door open, they will be stranded.

Source : Straits Times – 12 Jun 2008

En bloc blues? There’s hope, says support group

WE REFER to the report, ‘En bloc sales bring out the worst in Singaporeans’ (June 1) by Ms Jessica Cheam.

We are a group of concerned friends who love Singapore and the estates in which we live. While we welcome progress, we also cherish the old and familiar.

Our cityscape has improved enormously in the past decades, thanks to the vision of Singaporeans and its leaders.

But for our communities to forge together in good-neighbourliness, roots to grow deeper and future generations to see Singapore as home, we need to preserve our homes. We need to retain the kampung spirit that binds us.

The recent spate of attempts in en bloc sales have impacted us in a way that is counter-productive to our nesting instincts and identity as a gracious society.

We need to stop perpetuating these negative experiences. We want to be free from the constant worry of losing our homes to those who see them as mere financial tools for increasing wealth.

In this spirit of proud home ownership and community living, we have formed an online community called Hope for Stayers (www.hope4stayers.com) where we share our experiences and educate others on the whole process of an en bloc sale.

As ’stayers’, we hope that we can contribute to the ethos and values needed to enable Singapore to evolve into a truly first-class progressive nation, where the term ‘prosperity’ reflects more than dollars and cents.

Lastly, we agree with Ms Cheam’s view that it would be prudent to consider a requirement for an 80 or 90 per cent quorum for an extraordinary general meeting to decide whether to push for en bloc sale. This is consistent with the current 80 or 90 per cent requirement for an en bloc sale to succeed.

This would establish whether an estate has such support from the very outset. The current system of 30 per cent quorum encourages a possible abuse of MCST funds in repeated and wasteful attempts at the en bloc ‘lottery’ and results in the depletion of funds meant primarily to maintain the estate.

We also hope that the entire en bloc sale process is tightened in such a way that it reflects and acknowledges the need for fair play and the deep-rooted sentiment that we have for our homes.

Dai Qiujin (This letter carries 12 other names)

Source : Straits Times – 12 Jun 2008

HDB upgraders hold key to property market turnaround

Squeezed out of private home market for some years, they see their share rise again

HDB upgraders could once again provide the base for a recovery in private home buying, just like they did in 1998, property consultancy group DTZ argues, based on its latest analysis of caveats data which show an increase in these upgraders’ share of private homes bought in Q1 this year.

HDB upgraders accounted for 28 per cent of all private homes purchased in Q1 2008, up from a 22 per cent share in the preceding three months. Their Q1 share was also the highest in seven quarters, according to DTZ’s analysis of caveats released to BT.

‘This is in line with the current profile of private home buyers we’ve been seeing amidst a quieter market; they’re buying more for owner occupation rather than for investment.’ DTZ executive director Ong Choon Fah says.

‘HDB upgraders are price sensitive and very careful with their purchase. They’re waiting for the right opportunity,’ she added.

Mrs Ong compares the growing share of HDB upgraders in the private home-buying pie in Q1 2008 to the surge seen in 1998, at the trough of the last big property slump during the Asian financial crisis. In that year, HDB upgraders made up a whopping 60 per cent of caveats lodged for private home sales, up from a 42 per cent share in 1997 and 34 per cent share in 1996.

Another surge in HDB upgraders’ share of private home buying was seen in 2002, when it hit 59 per cent, after private home prices fell during the 2001 economic slowdown. Since 2002, HDB upgraders’ share has been slipping, hitting a low of 22 per cent last year. The falling share of HDB upgraders over the past few years has come in tandem with rising property prices – which squeezed them out of the market – and the emergence of more foreign buyers, industry watchers said. The first quarter of this year saw their share rise again.

DTZ’s Mrs Ong reckons HDB upgraders’ share of private home purchases should continue to rise in the coming quarters but this will also be a function of the type of projects developers launch. Typically, HDB upgraders go for mass-market developments in the suburbs.

‘They’re pretty comfortable living in their HDB flats and face no pressing need to upgrade to a private home. So upgrading is quite an aspirational thing; they’re not satisfying a need, but a want. They will buy selectively; it has to be a project that suits their lifestyle but it must also be priced attractively,’ Mrs Ong stresses.

‘Part of the reason developers have not been selling many homes lately is that they are not offering many mass-market projects at attractive price-points. They have not re-priced existing projects. It’s only for their new launches that prices are being set at the lower end of, or below, earlier market expectations,’ she added.

Agreeing, Knight Frank executive director Peter Ow noted that the level of activity in the HDB resale market is still healthy. ‘So mass-market condos that are reasonably priced should appeal to HDB dwellers aspiring to upgrade to private housing. These buyers are very price sensitive though,’ he said.

DTZ’s analysis, based on caveats captured by Urban Redevelopment Authority’s Realis system, showed that the total number of caveats lodged for private home purchases fell 40 per cent quarter-on-quarter to 3,066 in Q1 this year.

Amid the slower home sales, the number of private homes bought by those with HDB addresses also fell 25.8 per cent, from 1,145 units in Q4 2007 to 850 units in Q1 2008.

However, this decline was lower than a 44.4 per cent slide in the number of private homes bought by those who already have a private home address over the same period. As a result, the share of private homes bought by HDB upgraders rose in the first three months of this year.

Districts 15, 9 and 16 were the top picks for HDB upgraders who bought private apartments/condos from developers in Q1 2008. The most sought-after projects included Waterfront Waves in the Bedok area (District 16), Wilkie 80 (District 9) and Zenith in the Zion Road location (District 10).

Landed properties made up 13 per cent or 111 of the total 850 caveats lodged for private home purchases in Q1 2008.

Source : Business Times – 12 Jun 2008

JTC launches hotel-in-biz park tender

A hotel within a business park? That may soon become reality, as JTC Corporation launched a concept and price tender yesterday for the development of an integrated business park facility with retail and hotel components in Changi Business Park (CBP).

The 4.7-hectare Plot 61 is a ‘Business Park – White 40′ site. Forty per cent of the total gross floor area of 1.26 million square feet will go towards ‘white’ or commercial activities.

Retail activities will take up 45 to 60 per cent of the ‘white’ space, while the balance will be set aside for a hotel. ‘It would seem that there is a deliberate effort to ensure that a hotel will be built on the site, adding a complementary element to the predominantly business park use at CBP,’ said executive director of CBRE Research, Li Hiaw Ho.

According to the tender document, bidders may opt for either a term of ‘30 years with an option for a further term of 30 years’, or 60 years.

JTC said that it launched the tender to meet rising demand for business park space and amenities in CBP. The working population in the park could rise from 6,000 to 20,000 by 2011.

The integrated development would house firms in the high-technology, high value-added and knowledge-intensive industries. CBP is already attracting backend operations from financial institutions.

According to Knight Frank’s senior manager of industrial business space Chow Kok Seng, rents in CBP can range from $3.50 to $6 psf.

He believes that the site may attract three or more bids from private developers, and Soilbuild Group Holdings could be one of them. The firm has developed Eightrium @ CBP, and recently won a JTC award to build, own and operate a stack-up factory at Tanjong Kling.

He also notes that private developers may offer bids ranging from $130 to $167 psf.

Observing that Plot 61 is larger than a previous site which was awarded to United Engineers in Q4 2007, Mr Li said that ‘Plot 61 is likely to draw bigger developers which have the experience with large mix-used developments.’

The design concept probably needs to have a ‘wow’ factor because JTC may want the development to be a showcase, according to Chesterton International’s head of research and consultancy Colin Tan. Therefore, he does not expect the award to be based solely on the bid price.

CBRE Research’s Mr Li is optimistic on the integrated development’s appeal. ‘The proposed hotel would be able to draw guests that are working on a short-term basis in CBP or at Changi Airport, as well as participants of events held in the Singapore Expo,’ he said.

Interested developers have up to August 19 to submit their proposals.

Source : Business Times – 12 Jun 2008

CapitaLand, Grand Hyatt win green awards

CAPITALAND won the Singapore Environmental Achievement Award while Grand Hyatt took home a merit prize at the second Singapore Green Summit yesterday.

The Summit, said to be the ‘Oscars for the environment’, is organised by the Singapore Environment Council. The award recognises overall environmental and social responsibilities in an organisation and is the most prestigious green gong in Singapore.

This year saw a new category which recognises SMEs that have gone green.

Richard Hale, a board director at CapitaLand, said that it was not enough for companies to be ‘an acceptably pale, commercial green’. He said that his company’s winning of the award validated its efforts, including its comprehensive green strategy, energy saving efforts and outreach programmes.

John Beveridge, manager of the Grand Hyatt Singapore, said that the award ‘will act as a motivator to help us focus on making even more of a positive impact on the environment’. The hotel was lauded for a $3.5 million efficient cooling system and its efforts to reduce energy consumption.

Marc-Plan, an offshore and shipbuilding company, got the inaugural Efficiently Developing Growing Enterprise (Edge) award. The offshore and shipbuilding company was praised for its waste-cutting and energy efficiency strategies.

The SEC-Senoko Power Green Innovation Awards was won by Microwave Packaging, which designs food containers. Senoko Power was the main sponsor of the event.

The second Singapore Green Summit was meant to bring all environmental awards under one roof. But differences over timing and a re-alignment of its corporate objectives meant that last year’s partner, the Association of Chartered Certified Accountants, went it alone this year and presented its part of the awards on environmental and social reporting at a conference last week.

The guest of honour at yesterday’s ceremony was Minister for National Development Mah Bow Tan.

Source : Business Times – 12 Jun 2008