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23 February 2013

23rd February, Saturday




Mild relief from growth pains, but still no cheer

Source: Business Times

The Singapore economy did better than initially thought in 4Q 2012, ending what was a rocky year for growth on a firmer footing. But the government will stick to its "cautiously positive" forecast of one to 3 per cent growth this year, as the global outlook remains clouded with uncertainties.

While major risks have receded with the European Central Bank's introduction of Outright Monetary Transactions and a partial resolution of the US fiscal cliff, the Singapore government's economists say global growth will be subdued this year.

The strength of the US economic recovery will be restrained by fiscal tightening, despite signs of improvement in its housing market. Growth in the eurozone is also expected to remain stagnant due to ongoing fiscal tightening, private sector deleveraging, and high unemployment.

Singapore's gross domestic product for 4Q 2012 grew 1.5 per cent year-on-year, stronger than both the advance estimate of 1.1 per cent and the consensus forecast of 1.2 per cent growth. The upward revisions were broad-based - manufacturing shrank less and services and construction grew a little more than 4Q flash estimates had suggested.

This nudged full-year growth for 2012 up to 1.3 per cent, from a flash estimate of 1.2 per cent. But this was still a marked slowdown from 2011's growth, also revised up to 5.2 per cent from 4.9 per cent Friday.

The manufacturing sector growth evaporated from 7.8 per cent in 2011 to 0.1 per cent last year. Electronics, a mainstay of Singapore manufacturing, shrank 11.3 per cent in 2012 as global semiconductor demand weakened.

The poor electronics performance also meant that for the first time, biomedicals contributed to a larger share of manufacturing value-added last year. The biomedical cluster grew 9.9 per cent last year and made up 25.5 per cent of industrial value-added, just above electronics' 25 per cent share.

Services grew 1.2 per cent last year, as a buoyant real estate sector led to stronger business services growth. This helped to offset slowing growth in the wholesale and retail trade, finance and insurance, and other services sectors. Construction growth sped up to 8.2 per cent in 2012, thanks to an increased number of public and private building projects.

This year, construction will continue to be a key pocket of demand, said MTI. And if confidence in the global markets and risk appetite returns, there may be positive spillovers into the financial services sector too.

Also expected to support Singapore's growth this year are the transport engineering cluster and domestically-oriented sectors such as business services.

The government continues to expect headline CPI inflation of 3.5-4.5 per cent and core inflation of 2-3 per cent this year. The Monetary Authority of Singapore said at the briefing that inflation may be volatile in the next few months due to fluctuations in vehicle COE (certificate of entitlement) prices.


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Completed and unsold

Source: The Straits Times

The anaemic high-end property market is still languishing as foreign buyers flee the market in the wake of the string of cooling measures and the residual sting of the global financial crisis.

New analysis by a consultancy has identified almost 500 completed but unsold homes in upmarket districts 9, 10 and 11.

And there are 9,295 non-landed high-end homes under construction by the end of last year. Of these, about 44 per cent - or 4,077 units - remain unsold. A majority have sale licences but are not even launched as developers bide their time in a down market.

The unsold completed homes include the 241-unit Hilltops in Cairnhill Circle, finished in mid-2011 with 195 units unsold, and Treasure on Balmoral with all of its 48 units unsold. It received its temporary occupation permit in the fourth quarter of last year.

Others include Hamilton Scotts, The Trizon, The Ritz-Carlton Residences Singapore and 111 Emerald Hill.

The whopping supply of high-end homes in the pipeline is likely to keep prices depressed.


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Sizzling strata-titled office space in the CBD

Source: The Straits Times

New office projects are a dime a dozen in the bustling city centre but three developments in Robinson Road have been creating a buzz.

The SBF Center, Robinson Square and Oxley Tower are being developed as strata-titled blocks, an unusual move in the downtown area where new buildings tend to have single landlords.

The 31-storey SBF Center next to Capital Tower is being jointly developed by Far East Organization and Far East Orchard. The top three floors have been set aside for whole-level offices measuring about 10,700 sq ft each while levels 10 to 28 will contain 196 offices between 590 sq ft and 1,400 sq ft each. Prices for these offices range from $3,300 to $3,800 per sq ft (psf).

A further 48 units have been designated medical suites. These units, measuring between 660 sq ft and 1,290 sq ft, are going for $3,800 psf to $4,000 psf.

While the developers are waiting for the official go-ahead to start selling units, the take-up at Oxley Tower and Robinson Square has been brisk.

Developer Oxley Holdings told The Straits Times this week that it has sold about 85 per cent of the project's 92 office units, hitting an average price of $3,105 psf. Oxley Holdings has retained 12 office units. Oxley Tower also contains 133 commercial units, which have all been sold.

All the units at neighbouring Robinson Square, also developed by Oxley Holdings, have also been sold, including the 32 offices, which went for an average of $2,837 psf, and the five commercial units.


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International Markets


China new home prices in January up 0.8%

Source: Business Times

China’s new home prices rose an average of 0.8 per cent in January from a year earlier, snapping 10 months of decline and raising the risk Beijing may seek to bolster a three-year campaign to curb property inflation.

Home prices in 70 major cities across China rose an average of 0.7 per cent in January from the previous month, after a 0.4 per cent rise in December, according to Reuters' calculations from data released by the National Bureau of Statistics (NBS).

Home prices rose month-on-month in 53 of 70 major cities monitored by the NBS in January, just down from 54 in December, the NBS data showed, and confirming signs of a gradual rebound in the property market.

The NBS also said new home prices in Beijing rose 3.3 per cent in January from the previous year - more than double December's rise of 1.6 per cent. Shanghai prices gained 1.3 per cent on the year in January. They were flat in December.


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