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2nd December 2014

Singapore Economy

Singapore to map out its Smart Nation dream in 3D

Digital model of country to help planners, businesses and citizens

Source: Straits Times / Top of The News

IT LOOKS like a city-planning simulator game but Virtual Singapore - a three-dimensional digital model of the entire country - sets the stage for the Republic to become a Smart Nation with cutting-edge urban living solutions.

To be completed by 2017 at a cost of $73 million, the detailed map of Singapore will show virtual 3D replicas of buildings, roads, carpark spaces and other aboveground structures. One can even click on individual sections of buildings to find out, for instance, about the material used on the windows as well as the number of hours a structure faces direct sunlight every day.

With the model in place, it will be possible to run simulations on the map to address issues such as crowd control, flooding and noise levels.

Prime Minister Lee Hsien Loong first announced Virtual Singapore last week as part of his 10-year goal of making Singapore a Smart Nation. Yesterday, the National Research Foundation (NRF) unveiled more details.

Businesses such as telcos can benefit by visualising more efficient mobile network coverage. Shoppers can use the virtual model to navigate their way in malls.

The platform can translate information from tracking devices or wearables, which should make it possible to keep tabs on elderly family members with dementia or to locate missing pets.

Professor Low Teck Seng, chief executive of the NRF, said: "Its potential uses are limitless."

Included in the budget is the building of a technology platform for private companies and government agencies to upload, store and share data sets to carry out virtual tests.

To protect the privacy of individuals, security and data protection safeguards will be in place.

But the most challenging part will be getting the buy-in from all agencies and integrating the disparate information, Prof Low noted.

Work on the new 3D map started last year, with the Singapore Land Authority (SLA) scanning the city with lasers from low-flying planes to collect landscape information.

Once Virtual Singapore is ready, the SLA will own and operate it while the Infocomm Development Authority will offer technical expertise.

Mr Tan Kok Yam, head of the new Smart Nation Programme Office, said: "Even for people who may not know anything about Virtual Singapore, we hope that this will be of great benefit to them - be it in mobility, noise control or city liveability."

-By Aw Cheng Wei

Project to map S’pore data ready by 2017

S$73m Virtual S’pore 3D model can be used for planning and testing concepts, services

Source: Today Online / Singapore

SINGAPORE — A dynamic 3D model of the Republic, integrating a raft of data and serving as a collaborative platform for the Government, businesses and the general public, will be available by 2017.

Promising a plethora of possibilities, Virtual Singapore — a S$73 million project by the National Research Foundation (NRF), Singapore Land Authority (SLA) and Infocomm Development Authority — will be the “authoritative 3D digital platform” for various users to develop sophisticated tools and applications for planning, testing concepts and services, as well as research on technologies to solve emerging and complex challenges, a joint statement by the three agencies said yesterday.

For example, policy planners can simulate crowd control and evacuation measures, plan scenarios for the delivery of municipal services and analyse pedestrian flows. Describing Virtual Singapore as a “useful and convenient platform for individuals to make collective decisions”, the agencies said communities would also be able to, say, choose the colour of paint for a Housing and Development Board block, flag amenities that are defective or suggest new facilities in their estates. Individuals can share photographs and videos and tag their contributions via handheld devices. The platform — which was one of the projects highlighted by Prime Minister Lee Hsien Loong last week at the launch of the Smart Nation initiative — uses existing data from various government sources such as the SLA’s OneMap and 3D National Topographic Model as well as the Urban Redevelopment Authority’s 3D Singapore City Model.

Work began last year with the SLA collecting information via laser-scanning technology from low-flying planes. Fine details such as the type of vegetation along a pavement or the composition of a building’s material will be captured. Certain information, such as movement of people and the climate, will be updated in real time.

Mr George Loh, NRF director of physical sciences and engineering, said: “It is not only a 3D graphical model … (it) contains information and people can come in and participate, contribute ideas, even innovate … that is the power of Virtual Singapore.”

Common functions will be free for use by the general public. However, businesses seeking to develop specialised features may have to pay for access, the NRF said. Its spokesperson added: “As 3D city models with semantic information is an emerging technology, we would need to explore what types of information, functions and services may require some form of fee payment during the development of Virtual Singapore.”

For security reasons, the extent and depth of information accessible will be limited for members of the public. The particulars and details of people who provide the data will also be omitted.

App developers whom TODAY spoke to were keen to tap the platform. To achieve its full potential, they hope the authorities will cut the red tape on data access. Mr Toh Kian Khai, business development director of, said: “Currently, many government agencies want to know exactly what the data will be used for before they are ready to open up (information). Sometimes, we don’t even know and just want to explore.”

Mr Jerry Lim, owner of Megapixel Solutions, which developed apps such as SG Traffic Cam and Cab@SG, added: “Based on our past experiences, not all government agencies are forthcoming with information. The usefulness of this platform will hinge on how restrictive access will be.”

He suggested allowing users to merge different data sets for better analysis. “Instead of viewing isolated data sets, filters and overlays can be put in place to let users retrieve, say, the percentage of broadband users who also drive cars, for example,” Mr Lim said.

Apart from issues of privacy and security, Mr Anthony Lim, vice-chairman of the Application Security Advisory Council, pointed out the risk of irresponsible users providing misleading information as data for the map. He felt that the authorities should verify and record the details of information providers, even if these are omitted from public view. He added that only the authorities should be able to edit the information. “We don’t want to turn this into a public ‘Wikipedia’, where anyone can modify or delete data,” he said.

-By Kelly Ng

Singapore Real Estate

Singapore developers on overseas buying spree

Local entities invest US$9.8b in commercial property abroad in the nine months to September, overtaking China at US$8.4b, says research firm RCA

Source: Business Times / Companies & Markets

Singapore developers struggling to sell apartments in their home market are buying property overseas, turning the island-state into the largest foreign investor from the region this year. Companies including City Developments and Keppel Land pumped US$2.32 billion into overseas markets in the nine months through September, a three-fold increase from the same period last year and the most in at least eight years, according to data from Real Capital Analytics, a research firm that specialises in investments in commercial property.

SilverNeedle not eyeing Singapore hotel deals now

CEO Jumabhoy wonders whether costs here will match yields; focuses on NZ and Australia

Source: Business Times / Real Estate

Singapore-based SilverNeedle Hospitality, which recently opened the first Next Hotel in Brisbane and is adding more properties in Thailand and Sri Lanka, is less keen on Singapore hotel deals, however. In a recent interview, CEO Iqbal Jumabhoy said that while he wouldn't rule out building or buying hotels in Singapore, higher costs and lower yields compared to the other Asia-Pacific regions it is exploring make the republic a less compelling option.

-By Lee Meixian

BTO project for Bidadari next year

Source: Business Times / Real Estate

The first build-to-order (BTO) project in Bidadari will be launched next year with more than 2,200 units, Minister for National Development Khaw Boon Wan said in a blog post on Monday. This comes as the Ministry of National Development (MND) works towards having more extended families living near one another.

Pro-family housing policies popular and will continue: Khaw

Source: Straits Times / Top of The News

PRO-FAMILY housing policies proved a hit with buyers in the latest Housing Board flat launches, said National Development Minister Khaw Boon Wan yesterday.

One in three applicants is a parent or a married child looking to live with or close to each other through the enhanced Married Child Priority Scheme (MCPS), he wrote in a blog post.

This is up from the usual one quarter who apply under the scheme at each sales exercise.

The enhanced scheme, announced just ahead of last week's launches, gives greater priority to parents and married children who apply to live with or near each other, setting aside up to 30 per cent of new flats for them.

Mr Khaw also said the November sales launches, which closed at midnight yesterday, saw 123 multi-generation families apply for the 56 three-generation or 3Gen flats at Tampines GreenRidges - the first housing project in the upcoming Tampines North district. This was also the first time 3Gen units were offered in a mature estate.

Such pro-family initiatives were rolled out in response to public feedback received at the Ministry of National Development's (MND) Housing Conversations in June.

"Our housing policies will continue to support strong family formation," wrote Mr Khaw. "Next year, as we celebrate SG50, MND will do even more to help extended families live close by."

Another 360 3Gen flats will be launched next year, including 150 units in Tampines.

Some 1,200 new flats in Tampines North and 2,200 units in the first Build-to-Order (BTO) project in Bidadari will also be put on sale, he wrote.

Under the MCPS, priority will be given to those with parents or married children already living in the same town or within 2km.

For instance, in the case of Bidadari, which will be part of Toa Payoh town, applicants with parents or married children living in Toa Payoh will get priority.

Graduate student Tan Chor Seng, 26, is considering applying for a Bidadari unit with his girlfriend next year under the scheme. "It will boost my chances of getting a flat and keep the family closer," said Mr Tan, whose parents live in nearby Bishan.

As of 5pm yesterday, five- room and 3Gen BTO flats in Tampines were 4.3 times oversubscribed overall. Two-room BTO units remained popular among singles, with those in Sengkang oversubscribed by 30.9 times.

-By Yeo Sam Jo

More initiatives to help extended families live close by in 2015: Khaw

National Development Minister Khaw Boon Wan said HDB will launch another 360 3Gen flats, including 150 units in Tampines.

Source: Channel News Asia / Singapore

SINGAPORE: National Development Minister Khaw Boon Wan said on Monday (Dec 1) that housing policies will continue to support strong family formation, and more will be done to help extended families live close to each other in 2015.

In a blogpost, Mr Khaw said in the November Build-To-Order (BTO) exercise, there were several firsts. Firstly, the Housing & Development Board (HDB) launched the first housing project in Tampines North, and with about 1,500 units, it is HDB's largest offering in a mature estate in a long time.

"Children growing up with their parents in Tampines can now hope to buy new flats near them," he wrote.

Secondly, 56 units of 3Gen flats were offered - the first time these are available in a mature estate such as Tampines. Lastly, MND introduced quotas to make it easier, and offered greater priority, for married children and their parents to apply to live together or close by through the enhanced Married Child Priority Scheme (MCPS).

Close to 6,000 family applicants have applied to live with or close to their parents and married children through the enhanced MCPS. The enhancements started from November's BTO and Sale of Balance Flats exercises, which were launched on Nov 25.

"Not surprisingly, the response to these initiatives was very positive. One in three family applicants applied to live with or close to their parents or married children through the enhanced MCPS," Mr Khaw revealed.

"One hundred and twenty-three multi-generation families applied for the 56 units of 3Gen flats at Tampines GreenRidges. The supply at Tampines North was oversubscribed by more than 1.3 times," he added.

Property firm ERA Realty said the numbers showed that housing demand for BTO flats has stabilised. "HDB's move to ramp up the BTO (supply) from 2011 to 2014 has paid off, and it is timely that they slow down the BTO programme for 2015 to about 16,000 flats," said ERA Realty's key executive officer, Mr Eugene Lim.

"By also conducting four BTO launches next year (once a quarter) versus the six BTO launches in the past (once every two months), the resale HDB market could see the return of more buyers and hopefully in 2015, will see an increase in transactions from the expected all-time low resale volume this year of around 17,000 units," he added. 

For 2015, even more will be done to help families stay close to each other. HDB will launch another 360 3Gen flats, including 150 units in Tampines. It will also launch another 1,200 new flats in Tampines North, giving priority to those whose parents or married children are already living in the neighbourhood.

HDB will also launch its first BTO project in Bidadari, with over 2,200 units to be put on offer in the second half of next year. Parents or married children currently living in Toa Payoh will get special priority under the MCPS for the Bidadari project, the minister pointed out.

"Our family is what makes us happy, and that which gives meaning to our life. As 2014 draws to a close, let us be reminded again, to always make time to spend with our family and loved ones, and enjoy life to its fullest," Mr Khaw said.

- CNA/kk/ms

Close Family Ties Make A Happy Life

Source: MND Singapore

The Nov BTO exercise will close shortly tonight. In this final BTO exercise for 2014, we did a few firsts:

First, we launched the first housing project in Tampines North. The project, with about 1,500 units, is our largest offering in a mature estate in a long time.  Children growing up with their parents in Tampines can now hope to buy new flats near them.

Second, we offered 56 units of 3Gen flats, the first time 3Gen flats are offered in a mature estate (Tampines).

Third, we introduced quotas to make it easier, and offered even greater priority, for married children and their parents to apply to live together or close by, through the enhanced Married Child Priority Scheme (MCPS).

These initiatives were in response to public feedback received through Our Housing Conversations earlier this year.

Not surprisingly, the response to these initiatives was very positive. 1 in 3 (or 5,941) family applicants applied to live with or close to their parents or married children through the enhanced MCPS. 123 multi-generation families applied for the 56 units of 3Gen flats at Tampines GreenRidges. The supply at Tampines North was oversubscribed by more than 1.3 times.

Our housing policies will continue to support strong family formation. Next year, as we celebrate SG50, MND will do even more to help extended families live close by. We will launch another 360 3Gen flats, including 150 units in Tampines. We will launch another 1,200 new flats in Tampines North, again giving priority to those whose parents or married children are already living in Tampines. We will also launch our first BTO project in Bidadari, with over 2,200 units. Parents or married children currently living in Toa Payoh will get special priority under the MCPS for the Bidadari project.

Our family is what makes us happy, and that which gives meaning to our life. As 2014 draws to a close, let us be reminded again, to always make time to spend with our family and loved ones, and enjoy life to its fullest.

Surbana clinches US$300m Myanmar project

It also offers scholarships to five Yangon Technological University students

Source: Business Times / Real Estate

In a drive to deepen its presence in Myanmar, Surbana International Consultants has secured a new master-planning project worth US$300 million in the Bago region of the country. Under the contract, Surbana will master-plan i-Land Industrial Park, a 400-acre (162 hectare) new development in Bago City, the fourth-largest town in Myanmar.

Views, Reviews & Forum

Habitable housing for foreign workers

Source: Straits Times / Opinion

THE dimensions of housing Singapore's non-resident population have grown tenfold over the decades. However, the market has proven generally resilient in catering to the various needs of this demographic, which now numbers 1.6 million - forming 29 per cent of the total population, compared with 2.9 per cent in 1970.

What has caused public discomfit from time to time has been the provision by certain employers of below-par accommodation for lower-paid foreign labour, notably construction workers. It would be scant exaggeration to describe some of these pockets of makeshift housing for foreigners as ghettoes that stand in stark contrast to the spick-and-span built environment that is the product of their labours.

Many of the over 300,000 construction workers here are well housed but there are still a proportion who are packed in quarters built at construction sites, in apartments, shophouses and temporary dormitories. Hygiene and sanitation suffer from overcrowding, workers have to sleep shoulder to shoulder, and demanding work cycles lead to soiled apparel and discarded food piling up within. In some instances, workers were made to live in shipping containers and bathe next to drains, in a shack erected above an underground sewage tank, and at other unsavoury locations.

It's a world that ordinary Singaporeans do not dwell upon until it comes uncomfortably close, as at Serangoon Gardens six years ago when residents campaigned strenuously against a foreign workers' dorm in their neighbourhood. Rather than having a sense of gratitude towards those who undertake dirty and back-breaking work shunned by Singaporeans, many mentally rationalise that foreign workers' villages might be no better than the workers' slums here and that they ought to be thankful for their higher wages.

Naturalising the poor state of such housing ought to be repugnant to any First World society. Instead, Singaporeans ought to support basic standards of human decency, tighter monitoring of such quarters, and stiffer penalties under the Employment of Foreign Manpower Act for employers responsible for deplorable conditions, either wilfully or through neglect. There is no excuse for such acts, especially when there's a range of better options available, including purpose-built dorms for foreign workers. There are 200,000 beds available now in about 40 big dorms. Nine more are to be built with amenities such as cafeterias.

Alongside such efforts, it's also important for more to be done to educate workers on what is deemed inhabitable quarters and what amounts to ill-treatment at a workplace. Acceptable housing must be seen as a must rather than an indulgence.

Home prices down, yet property tax unchanged

Source: Straits Times / Forum Letters

I JUST received my property tax bill for next year and was surprised to see that my property value has remained unchanged for the last 31/2 years. I checked with friends and they, too, face the same situation.

Government data and property analysts' latest reports show that both private and public property prices and rents have dropped over the last 18 months.

Developers and owners are trying to offload properties by lowering prices, resulting in private condominium prices sliding by not less than 20 per cent in many instances. 

Some properties have been put up for auction, and owners are defaulting on mortgage instalments.

So it is surprising that the Inland Revenue Authority of Singapore still maintains the same annual values for many properties.

It is time to revise the annual values of residential properties.

-By David Goh Chee Hoe

Companies' Brief

Expiring tax break may keep new Reits away

Listings next year could be affected if the tax break for income from assets held abroad is allowed to lapse

Source: Business Times / Companies & Markets

The number of new S-Reit (Singapore real estate investment trust) listings next year could be affected if a tax break for income from assets held abroad by these trusts is allowed to lapse in 2015.

-By Jamie Lee

Fair value gains give Goodland FY14 boost

Source: Business Times / Companies & Markets

Residential developer Goodland Group said on Friday that fair-value gains pushed full-year net profit up by 24 per cent despite revenue dropping by a third. Net profit for the year ended Sept 30 rose to S$21.1 million, or 10.84 Singapore cents per share, even though revenue fell 32 per cent to S$25.3 million, the company announced on Friday after the market closed.

-By Kenneth Lim

CDL Hospitality Trusts enters Japan, acquires two hotels

Acquisition of Hotel MyStays Asakusabashi and Hotel MyStays Kamata to cost 6b yen

Source: Business Times / Companies & Markets

CDL Hospitality Trusts (CDLHT) is making its foray into Japan by acquiring two hotels at a total cost of six billion yen (S$66.3 million). CDLHT - a stapled group comprising CDL Hospitality Real Estate Investment Trust (H-Reit) and CDL Hospitality Business Trust (HBT) - will acquire the 138-room Hotel MyStays Asakusabashi and the 116-room Hotel MyStays Kamata for 3.2 billion yen and 2.6 billion yen respectively from AKH GK. Both hotels operate in the business economy segment.

-By Nisha Ramchandani

Global Economy & Global Real Estate

Deutsche Annington seeks to buy Gagfah in 3.9b euro deal

Germany's biggest-ever real estate acquisition will cement former as country's largest residential landlord

Source: Business Times / Real Estate

Mixed picture emerges for Aussie city home prices in November

Source: Business Times / Real Estate

UK mortgage approvals at year-low in October

Source: Business Times / Real Estate

AustralianSuper Bets on U.S. Properties With Principal Financial

Source: Bloomberg / News

AustralianSuper Pty, the country’s largest pension fund, struck a deal to increase investments in top U.S. commercial real estate markets.

Principal Financial Group Inc. (PFG) will seek office properties valued at $200 million (A$235 million) or more for the fund to invest in, according to a statement yesterday from the Des Moines, Iowa-based life insurer and asset manager. The company will focus on markets including New York, Washington, Boston, Los Angeles and San Francisco.

U.S. insurers have been increasing asset-management operations to boost fee income as clients in other nations seek to diversify in the world’s largest economy. Principal in September joined with Australia’s Macquarie Group Ltd. in a venture to make commercial real estate loans and package them into bonds. MetLife Inc. (MET), the largest U.S. life insurer, has been buying offices with Norway’s sovereign-wealth fund.

“We’ve been tracking the U.S. market for an extended period of time and we see good long-term opportunities in select markets to continue to build our international property portfolio,” Jack McGougan, head of property at AustralianSuper, said in the statement.

AustralianSuper has been pushing beyond its home market and said in September that it plans to hire as many as 10 people to manage global equities. The fund oversees more than $70 billion, including about $5.2 billion in real estate assets.

Principal Real Estate Investors manages or subadvises $54.3 billion in commercial real estate, compared with about $34 billion four years ago. Principal slipped 1.2 percent to $52.66 at 4:04 p.m. in New York trading yesterday, narrowing its advance for the year to 6.8 percent.

-By Jing Cao

U.K. Mortgage Approvals Fall to Lowest Level in More Than a Year

Source: Bloomberg / Luxury

U.K. mortgage approvals fell to the lowest in more than a year in October, adding to signs the property market is cooling.

Approvals declined to 59,426, the lowest since June 2013, from 61,234 in September, the Bank of England said in London today. The median forecast of economists in a Bloomberg News survey was a reading of 59,000. Net lending on homes rose 1.5 billion, the least in 11 months.

Britain’s housing market has lost momentum in recent months after the BOE introduced new curbs on risky lending and warned of the threat of a property bubble. The central bank’s Monetary Policy Committee will keep the key interest rate at a record-low 0.5 percent this week as the economy battles headwinds from the euro-area.

The BOE report showed that the effective interest rate on new mortgages fell to 3.18 percent in October from 3.22 percent in September. The rate on outstanding secured loans dropped to 3.19 percent, the lowest since the series began in 1999, from 3.20 percent.

Nationwide Building Society said last week that U.K. house price growth slowed in November as demand for property continued to weaken. Annual price gains cooled to 8.5 percent from 9 percent in October. That’s the smallest increase in 11 months.

Today’s report showed that business lending fell 1.9 billion pounds in October from September, more than the 400 million-pound average decline over the previous six months. Lending was down 3.2 percent from a year earlier. Loans to small and medium-sized companies dropped an annual 2.1 percent, the BOE said. Consumer credit rose 1.1 billion pounds in October.

M4 money supply fell 0.1 percent in October from the previous month and dropped 2.6 percent from a year earlier, the biggest annual drop in two years. A measure of M4 excluding intermediate OFCs rose an annualized 2.5 percent in the three months through October.

-By Jennifer Ryan

Australian Landlords Take Record Debt as Rent Yields Fall

Source: Bloomberg / Luxury

Satyajit Deb, who has bought five homes across Australia since 2009 as investments, said he plans to purchase more, even as rental yields fall.

“History shows property will roughly double in value every seven to 10 years,” said Deb, 44, who works at a software-services firm in Sydney. “A carefully constructed property portfolio is the best retirement asset.”

Investors are pouring into Australian real estate and dominating the market like never before, spurred by low borrowing costs and rising prices. Home loans to landlords now account for more than half of all mortgages, the highest share on record. The Reserve Bank of Australia warned in September that the rise in lending to investors could be “a sign of speculative excess,” as the record-low 2.5 percent cash rate helps drive demand for property.

The risk for landlords is that a rise in bond yields and a continued slowdown in the rental market would spur a property sell-off, causing home prices to fall.

“There’s a general hunt by investors for anything that’s got income yield,” said Louis Christopher, managing director of Sydney-based SQM Research Pty. “That’s potentially dangerous and risky because at some point we’ll see global bond yields rise, cash rates rise and that will be a particularly dangerous time for investors.”

Home prices in major Australian cities rose 8.5 percent in the year through November, according to CoreLogic Inc. They climbed 13 percent in Sydney and 8.3 percent in Melbourne, the most among all major Australian cities.

Falling Yields

The higher prices, coupled with an increase in the supply of homes for lease, are causing rental yields to fall. They dropped to 3.7 percent for houses and 4.5 percent for apartments in the nation’s eight state and territory capitals in October. That compares with 4 percent and 4.7 percent a year earlier, CoreLogic figures showed. Sydney and Melbourne, which have had the most investor activity, produced the lowest yields.

Even as yields decline, rising prices helped boost total returns on residential property investments to 13.3 percent across the major cities as of Oct. 31. That’s up from 12.6 percent a year earlier, according to CoreLogic. In Sydney, total return climbed 1 percentage point to 17.6 percent from a year ago.

The returns are spurring landlords to boost their borrowing. Mortgage approvals to investors climbed 25 percent to A$11.9 billion ($10.2 billion) in September from a year earlier, exceeding borrowing by owner occupiers for the first time. It rose 3.4 percent to A$11.8 billion.

Tax Incentive

Australian tax rules are encouraging landlords to take interest-only mortgages. They climbed to A$36.3 billion over the three months through September, from A$28.8 billion a year earlier, according to the Australian Prudential Regulation Authority. Landlords can claim deductions against other income if rental property costs, including interest payments, exceed income.

Deb, the landlord, said he plans to put more money into property because his other investment options are not appealing. The S&P/ASX 200 share index offered a total return of 5.7 percent over the past 12 months. Term-deposit rates fell to 3.4 percent in October, the lowest level since the central bank began compiling such data, and the 10-year government bond yield has slid 1.2 percentage points in 2014.

Australia’s A$1.9 trillion pension system, the fourth largest in the world, lacks a broad range of “post retirement products” that suit retirees, Marsh & McLennan Cos.’s Mercer unit said in a submission to the government’s first inquiry into the nation’s financial system since 1997.

Lending Curbs

“A factor driving the investor activity is the need for a monthly income after retirement,” said Shane Oliver, head of investment strategy at AMP Capital Investors Ltd., which manages about A$144 billion. “A lot of them are extrapolating the past price gains into the future, though I’m skeptical.”

The central bank, facing an overvalued local currency, slow income growth and an unemployment rate at a 12-year high, hasn’t raised its benchmark rate to cool the housing market. The average interest rate on variable mortgages, which about 85 percent of Australian borrowers take out, is 5.95 percent, the lowest since September 2009.

The central bank will cut its key interest rate by 50 basis points next year as unemployment rises, Deutsche Bank AG said today, breaking rank with its major counterparts.

The RBA has stepped up its rhetoric about housing risks, saying the investor-led rise in prices may amplify any subsequent decline. It has said that measures were being considered to target investors buying residential properties, including possible lending curbs.

U.K. Cooling

“Investors are looking for some sort of capital return, they’re trying to capitalize on some of the strong price growth,” said David Cannington, senior property analyst at Australia & New Zealand Banking Group Ltd., the nation’s third-largest bank by market value. “One thing that could damp investor demand in the Sydney market is if the RBA pursued macroprudential policy measures.”

Similar moves in New Zealand and the U.K. have cooled those housing markets. New Zealand’s central bank last year required loans for more than 80 percent of a property’s value to account for less than 10 percent of banks’ new lending. The Bank of England capped mortgages of 4.5 times a borrower’s income at no more than 15 percent of a lender’s new home loans.

Deb, who bought his last property in September, said he takes a long-term view of the housing market. While prices more than doubled in the decades to December 2005 and to September 2011, increases slowed to 60 percent in the 10 years to Oct. 31, CoreLogic data from 1995 show.

“While rental yields have remained stagnant, I’m not too concerned as they will increase over time,” Deb said. “Everyone needs shelter. Property investment clicked in the past and will do so in the future.”

-By Nichola Saminather and Narayanan Somasundaram

Italian Home Prices Will Bottom Out in 2016, Fitch Says

Source: Bloomberg / Luxury

Italian house prices are declining at a slow rate and will bottom out in 2016, Fitch Ratings said.

By then, property values will be about 20 percent lower than the market’s 2008 peak, Fitch said in a report today. That compares with 15.8 percent at the end of September.

Sales of existing homes will rise this year for the first time since 2006, researcher Nomisma Institute said in a report in November, as buyers take advantage of the lowest mortgage costs since 2011. Prime Minister Matteo Renzi has promised to accelerate his economic agenda as Italy struggles to emerge from its longest recession since World War II.

The volume of home loans entering arrears fell to 1 percent in the fourth quarter, down from 1.1 percent in the preceding three months, according to the Fitch report. The volume of new borrowers entering default remained stable at 1.3 percent.

“Arrears and defaults have been remarkably stable, despite the weak economic background,” Andrew Currie, head of EMEA structured finance surveillance at Fitch, said in an e-mailed note.

-By Sharon Smyth

Additional Articles of Interest - Local & Overseas Real Estate