11th August, Saturday
Economy
S'pore economy dips 0.7% q-o-q in Q2 Source: Business Times The Singapore economy shrank in 2Q from the previous quarter as weaker global demand hit the outward-facing electronics and wholesale trade sectors. With growth from once-bright tourism-related services, such as hotels, restaurants and the integrated resorts (IRs), starting to wane, the Ministry of Trade and Industry (MTI) now predicts tepid growth for the rest of 2012. Pharmaceuticals' surge in June helped cushion but could not ward off a seasonally adjusted, annualised 0.7 per cent dip in GDP in the last quarter. While this was better than the flash estimate of a 1.1 per cent contraction and year-on-year growth of 2 per cent was also slightly above the flash estimate of 1.9 per cent, the prospect of a technical recession still lingers. At a briefing Friday, MTI said: "Barring unforeseen circumstances externally, we don't think that would be likely to take place. But it's hard to tell." Still, the possibility of the economy shrinking for a second straight quarter in 3Q is provided for in the narrowed official forecast of 1.5-2.5 per cent full-year growth. Manufacturing shrank 0.5 per cent in 2Q, much better than the flash estimate of a 6 per cent quarter-on-quarter decline. But services overturned its growth estimate of 0.4 per cent to contract 0.6 per cent quarter-on-quarter. Wholesale and retail trade sank 0.4 per cent in both sequential and year-on-year terms because of reduced trade flows. It was also the only major sector to register a decline from a year ago. The largest quarterly declines came from accommodation and food services, which shrank 5.8 per cent, and "other services", which contracted 7.5 per cent. The latter includes the arts, recreation and entertainment segment, which includes the two IRs. MTI Friday identified "pockets of strength" in the transport engineering sector with its strong order books and in construction, as infrastructure and industrial building activities continue. But overall growth of the economy is expected to stay subdued, MTI warned, citing near-term economic indicators like the purchasing manager's index, which points to a manufacturing contraction in July, while the composite leading index for 2Q fell after two quarters of expansion. Such considerations underpinned MTI's decision to lower the top-end of its earlier 1-3 per cent forecast. But if Europe's crisis worsened or China had a hard landing, growth could fall below the forecast.
Links to the story: http://www.businesstimes.com.sg/archive/saturday/print/176937 http://www.straitstimes.com/st/print/409915 http://www.channelnewsasia.com/stories/singaporebusinessnews/print/1219260/1/.html
Residential
Tampines holds its own with attractive amenities Source: The Straits Times Tampines has stayed on the radar of home buyers despite stiff competition from a bumper supply of launches in other suburban estates. The area - designated a secondary commercial zone after the central business district - has continued to attract buying interest largely due to its wide array of amenities and easy accessibility. The presence of international schools such as the United World College of South East Asia and its proximity to the Changi Business Park and Seletar Aerospace Park have also caught the eye of investors looking for healthy rental yields. Experts say home prices in Tampines have outpaced the national average due to pent-up demand from Housing Board upgraders and the relatively lower supply in the pipeline. Developments in the area have enjoyed price gains of between 23 per cent and 53 per cent over the past two years, said Mr Lee Sze Teck, Dennis Wee Group's senior manager of research and consultancy. Prices at The Tropica at Tampines Avenue 1, for example, have surged 30 per cent and those at former HUDC estate Tampines Court have rocketed 53 per cent. That is a healthy premium over the nationwide average price increase of 21 per cent for private suburban apartments, according to the Urban Redevelopment Authority. Tampines rental yields are between 4 per cent and 4.5 per cent, at the higher end of the typical 2 per cent to 4.5 per cent range found across the country, Mr Lee added. Another analyst noted that the area is well-served by three major shopping malls and transport links, including the East-West MRT line and the Downtown line, due to be completed by 2017. Tampines Finance Park, which houses the backroom functions of some banks and insurance companies, is another economic driver. Demand for new launches to be supported by upgraders who want to stay within the area. About 75 per cent of Tampines residents live in HDB four-room and five-room flats - a potential pool of buyers for new launches. There have not been many new projects in the area so demand is likely building up. Two sites that can yield an estimated 1,200 units in total were sold earlier this year while three plots are on the reserve list of the government land sales programme for this half of the year. Confirmed list sites go on sale regardless of interest, while those on the reserve list are put up for tender only if developers make an acceptable initial offer.
Link to the story: http://www.straitstimes.com/st/print/409850
The Marq is 6th most expensive globally Source: Business Times The Republic's most expensive residential real estate, The Marq on Paterson Hill, was ranked sixth in a global comparison of record transactions in the top 10 "world class" cities, according to a recent study by an international real estate consultancy. With a hefty price tag of £3,400 (S$6,606) per sq ft, the luxury residence designed by French label Hermès hit the headlines when the transaction was made in 2011. All the spacious 6,200 sq ft apartments at the Signature Tower at The Marq, developed by SC Global Developments, feature a carefully curated combination of Hermès furniture, furnishing fabrics, wallpapers, carpets, tableware, along with made-to-order leather upholstered items and a choice of artworks. The league table shows the top three "world class" cities closely grouped with records set at over £8,000 psf. London's Kensington Garden Palace continued to hold top spot for the fourth year, after setting a record-breaking price of £8,500 psf for a home in 2008. Following closely behind was the transaction for a house in Hong Kong's Deep Water Bay Road, which sold at £8,400 psf and an apartment in New York's 15 Central Park West which fetched a price of £8,300 psf. Both were transacted in 2011.
Link to the story: http://www.businesstimes.com.sg/archive/saturday/print/178534
New homes put pressure on high-end rentals Source: The Straits Times Landlords of newly completed upmarket homes are being warned that they may have to be prepared to accept lower rents. More than 4,000 private homes are set to be completed in the second half of the year - with many of them in the city centre and city fringe regions - possibly putting further pressure on rents of posh apartments that have already been softening. Data from a property consultancy shows at least 20 projects, with 4,285 units, are due to be ready in the six months to December. About half are in the prime districts of 9, 10 and 11 and the central business district. These include projects like Boulevard Vue, Volari, Skyline 360° and Marina Bay Suites. Rents of non-landed city centre homes dipped 0.1 per cent in the second quarter - the only private non-landed rental segment to slide - according to data from the Urban Redevelopment Authority (URA). Experts say that the upcoming completions of upscale units will weigh further on the market. But as long as Singapore remains a cost-competitive choice for corporates, newly completed projects should keep finding tenants, though landlords might have to manage rental expectations. An analyst said vacancy rates for city centre homes have been trending up - to 8.2 per cent in the second quarter, from 7.8 per cent in the first. This is in contrast to islandwide vacancy rates falling from 6 per cent to 5.9 per cent in the same period. A property consultancy expects the leasing volume of high-end homes to ease in the third quarter as rental budgets continue to shrink. This may see many mid-level expats moving to the suburban areas.
Link to the story: http://www.straitstimes.com/st/print/409844
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