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6th February 2015

Singapore Real Estate

Far East executive is new Redas chief

Source: Business Times / Real Estate

The Real Estate Developers' Association of Singapore (Redas) on Thursday named Far East Organization executive director Augustine Tan as its new president for a two-year term. Mr Tan takes over from Chia Boon Kuah, who is group president and CEO of GuocoLand.

-By Lee Meixian

Redas elects new president

Source: Straits Times / Money

THE Real Estate Developers' Association of Singapore (Redas) elected property executive Augustine Tan as its new president yesterday.

Mr Tan, who is Far East Organisation's executive director of property sales, will head the industry body for the next two years. He takes over from GuocoLand group president and chief executive Chia Boon Kuah, who has served a two-year term.

"We have to give back to the industry, and Far East felt it is as good a time as any. Many of our fellow members have also served Redas," said Mr Tan, who was with Keppel Land for 21 years before joining Far East in 2013.

"Times are tough now and Redas must pull itself together.

"We'll reflect on what we can do better, in terms of productivity and safety, for example, and we'll continue to support the Government and ensure we have a stable property market. There's going to be a lot of work ahead."

Membership of the Redas management committee is tied to a company, not an individual.

That rule caused some uncertainty for the outgoing Mr Chia. He was executive director and chief operating officer of property sales at Far East when elected Redas president in January 2013. He had to resign when he left for GuocoLand a year later but was subsequently re-elected Redas president.

The Redas management committee includes City Developments group general manager Chia Ngiang Hong, who is first vice-president, and Frasers Centrepoint group chief executive officer Lim Ee Seng, the second vice-president.

-By Rennie Whang

HDB resale prices edge up 0.6% after year of declines

Source: Straits Times / Top of The News

AFTER a year of consecutive monthly declines, Housing Board resale prices edged up 0.6 per cent last month, according to SRX Property flash figures yesterday.

But experts do not take this as a sign that the market is rebounding. Instead, they expect prices to continue sliding.

The last time HDB resale prices rose was in January last year. They have fallen 5.7 per cent since then.

"We cannot read the monthly price increase... as a sure sign of turnaround in HDB resale flat prices, as the increase was very marginal," said R'ST Research director Ong Kah Seng.

Said ERA Realty key executive officer Eugene Lim: "The increase has more to do with the up-and-down fluctuations that are associated with tracking prices on a monthly basis."

Last month's rise was driven by four- and five-room flats, with their prices increasing by 1.1 per cent and 1.5 per cent respectively.

This more than made up for a 0.9 per cent fall in three-room flat prices and a 0.6 per cent fall for executive flats.

Both mature and non-mature estates saw price increases, of 0.5 per cent and 0.7 per cent respectively.

The tepid uptick could be partly due to units sold at the Pinnacle@Duxton premium HDB project last month, said Mr Ong.

Units there have fetched prices ranging from $818,000 to $1.03 million and may have pulled up overall prices, he added.

But analysts see the overall downward trend continuing. Mr Ong expects prices to fall by up to 4 per cent in the first half, while HSR International Realtors expects falls of up to 1 per cent each quarter.

But sellers such as Madam Safiah, 50, hope last month's marginal climb in prices will not be an exception.

"Hopefully the prices will really go up. Last year they already came down a lot," said the housewife, who has been trying to sell since November.

She had thought her four- room flat in Hougang could fetch $460,000, but now hopes to get $430,000 instead.

Resale volumes fell for the fourth straight month in January with 1,255 flats sold, down from 1,295 in December.

However, this was still 15.3 per cent more than the 1,088 units sold in January last year.

This year-on-year increase "is an encouraging sign that more buyers are entering the market as prices become more attractive", said HSR.

Noting that January and February are traditionally quiet months in the resale market due to Chinese New Year festivities, ERA's Mr Lim expects the pace of deals to pick up from next month.

"The pace we see in March to May will set the tone for the year... March, April and May are very important months for the HDB resale market," Mr Lim added.

-By Janice Heng

HDB resale prices edge up in January: SRX Property

Prices of HDB resale flats rose 0.6 per cent last month – the first increase in 12 months – driven by four- and five-room flats, according to the Singapore Real Estate Exchange.

Source: Channel News Asia / Singapore

SINGAPORE: The resale prices of Housing and Development Board (HDB) flats rose 0.6 per cent on-month in January, the first increase in 12 months, the Singapore Real Estate Exchange (SRX Property) said on Thursday (Feb 5).

Still, an ERA analyst cautioned that the price increase does not mean the market is rebounding. “The increase has more to do with the up and down fluctuations that is associated with tracking prices on a monthly basis. We expect prices to be muted, at least for the first half of this year,” said ERA Key Executive Officer Eugene Lim.

The price increase was driven by four- and five-room flats, whose resale prices rose by 1.1 per cent and 1.5 per cent, respectively. In contrast, the resale prices for three-room and executive flats fell 0.9 per cent and 0.6 per cent, respectively.

Overall, prices have declined 5.7 per cent from the same period a year ago and 9.4 per cent from the peak in April 2013, SRX Property said.

A total of 1,255 HDB resale flats were sold last month, a 3.1 per cent decline from the 1,295 transacted units in December. Compared with a year ago, resale volume was up 15.3 per cent, SRX Property said.


Overall median Transaction Over X-Value (TOX), which measures whether people are overpaying or underpaying SRX Property’s estimated market value, improved but remained negative in January at -S$1,000.

For HDB towns with more than 10 resale transactions last month, Geylang reported the highest median TOX of S$8,400, followed by Bukit Merah and Kallang/Whampoa with S$8,000. The lowest median TOX were in Clementi, Bukit Batok and Toa Payoh, at -S$15,500, -S$10,500 and -S$7,500, respectively.


Moving forward, property analysts expect prices to remain muted, adding that the latest numbers are not a sign of a rebound in the market yet.

"The increase has more to do with the up and down fluctuations that are associated with tracking prices on a monthly basis," said Mr Eugene Lim, Key Executive Officer at ERA Realty. "We expected prices to be muted, at least for the first half this year."

Said Mr Thomas Tan, executive director at RE/MAX: "In order to see a rebound, you probably want to see a spike in volume first. It's probably going to be a very stable market, in the next quarter at least. 

"The reason why people tend to see a small increase in price is probably because there's a lack of supply right now, because some of the sellers are saying that if the prices are not too good, I probably won't let it out for sale. 

"And where the buyers are concerned, they don't want to overpay. So everybody is in a very cautious mode. What we're seeing is buyers buying because they really need the house, not because they're buying in preparation for something else like marriage. These are all indications that genuine demand is meeting supply."  

- CNA/cy

HDB resale prices inch up, but down 5.7% year on year

Source: Today Online / Singapore

SINGAPORE — Resale prices of Housing and Development Board (HDB) flats inched up last month – the first increase in a year – but prices remained lower than a year ago, the Singapore Real Estate Exchange (SRX Property) flash report released today (Feb 5) showed. 

Prices were up 0.6 per cent last month from December. However, year on year, prices have dropped 5.7 per cent. Prices have also declined 9.4 per cent since they peaked in April 2013, with analysts saying the latest increase does not signal a reversal of the slump in the market, given property market cooling measures are still in place. 

According to the report, the January increase was driven by HDB four- and five-room flats, where resale prices rose by 1.1 per cent and 1.5 per cent respectively. On the other hand, resale prices for HDB three-room and executive flats fell by 0.9 per cent and 0.6 per cent respectively. 

The transaction volume of resale flats was 1,255, a 3.1 per cent decrease from the 1,295 units in December. Compared to the 1,088 units resold in January last year, resale volume last month increased by 15.3 per cent. 

Buyers continued to pay below the estimated market value for flats, with the overall median Transaction Over X-Value (TOX) at -S$1,000, although this was an improvement from the –S$4,000 in December. 

The figures come on the back of numbers released by HDB last month, showing that overall, HDB resale prices fell 6 per cent last year.

Property analysts said the slight pick-up in prices do not reflect a market rebound, and prices are expected to continue to fall. ERA key executive officer Eugene Lim said the price increase is part of the fluctuations associated with tracking prices on a monthly basis. 

On the other hand, HSR International Realtors research analyst Lin Zhiqin felt the price increase and rise in overall TOX for four- and five-room flats indicate that upgraders are entering the market, as prices for these flat types have fallen to attractive levels. 

Mr Lim, meanwhile, expects prices to be muted for at least the first half of this year. “In the absence of any tweaks to the Mortgage Servicing Ratio (MSR) of 30 per cent, buyers are inclined to be on the conservative side as the MSR limits their loan quantum,” he said. 

Property agency OrangeTee’s research and consultancy manger Wong Xian Yang noted that the outlook for the HDB resale market is likely to remain negative as price growth and demand are capped, given the tight MSR limits and the three-year waiting period for permanent residents planning to buying resale flats. 

Furthermore, market sentiment remains tempered, where many buyers are staying on the sidelines in hopes that prices will drop further, creating a stand-off between buyers and sellers, he said.  

Mr Nicholas Mak, executive director (research and consultancy) at SLP International Property Consultants said prices could continue to fall as the economic outlook for this year is expected to be similar to last year’s. 

He also cited signals given by the Government which suggests that resale prices will continue fall. In December, National Development Minister Khaw Boon Wan said he was in favour of a single-digit decline when asked what would be a meaningful price correction before cooling measures could be rolled back. Mr Mak said is suggestive of the authorities’ intention to let resale prices soften further. 

As for the fall in resale volume, property analysts noted that traditionally, January and February see fewer transactions with the onset of Chinese New Year. Mr Lim expects the pace to pick up from March and noted that the pace between March and May will set the tone for the resale volume for the rest of the year.

-By Siau Ming En

Facebook tipped to be moving to South Beach Tower

Social media giant in advanced talks to lease about 70,000 sq ft in recently completed tower

Source: Business Times / Real Estate

Facebook is expanding its footprint in Singapore. Talk in the market is that the social media giant is in advanced stages of negotiations to ink a lease for about 70,000 square foot of office space at South Beach Tower. This would be roughly double the space it now occupies at 158 Cecil Street. Facebook is expected to vacate the Cecil Street premises later this year to move into the 34-storey South Beach Tower, which was completed in the fourth quarter of last year and is awaiting Temporary Occupation Permit from the Building and Construction Authority.

-By Kalpana Rashiwala

ERA Realty sees auctions market as a new growth area

It hopes to enter the market this year, also looking to establish a franchise in Philippines

Source: Business Times / Real Estate

The surge in property auctions last year has caught the eye of Singapore's largest real estate agency, ERA Realty, which now wants a slice of this growing pie. Jack Chua, ERA Realty's CEO for Asia Pacific and Singapore, told The Business Times that the agency hopes to enter the market this year as he expects more auctioned properties to be sold. He is also spearheading efforts to launch an ERA franchise in the Philippines this year.

-By Lynette Khoo

January's marginal rise in HDB resale prices a blip, say property consultants

Source: Business Times / Real Estate

Prices of HDB resale flats registered a marginal 0.6 per cent month-on-month rise in January, going by flash estimates from the Singapore Real Estate Exchange (SRX), but property consultants noted that this does not signal a turnaround of the market. "The increase has more to do with the up and down fluctuations that are associated with tracking prices on a monthly basis," said ERA Realty key executive officer Eugene Lim. "We expect prices to be muted, at least for the first half this year."

-By Lynette Khoo

Global Logistic's Q3 profit down 36.2% at US$112m

Lower contributions from joint ventures and higher expenses; fair-value gains up 26.6%

Source: Business Times / Companies & Markets

Global Logistic Properties' (GLP) third-quarter earnings plunged 36.2 per cent as the group recorded lower contributions from its joint ventures and incurred higher expenses related to its business expansion and a larger property portfolio. For the three months ended Dec 31, 2014, net profit attributable to shareholders fell to US$112.45 million, or 2.16 US cents per share. Net asset value per share was US$1.82.

-By Chan Yi Wen                

First Sponsor's Q4 earnings more than double to S$19.3m

Source: Business Times / Companies & Markets

Property sales provided a fillip to First Sponsor Group in the fourth quarter, helping the China-focused property developer to more than double its net profit to S$19.3 million from S$9.2 million. This came as the group's revenue surged to S$84.5 million for the three months ended Dec 31, 2014, from S$8.4 million a year ago.

-By Andrea Soh

Wong Heang Fine to head Surbana

Source: Straits Times / Money

THE former chief of CapitaLand's Singapore residential arm has taken the helm at what could be a newly merged entity under Temasek Holdings.

Mr Wong Heang Fine has been appointed group chief executive of Surbana International Consultants Holdings, said the Real Estate Developers' Association of Singapore (Redas) yesterday.

Although Temasek Holdings has yet to make an official announcement, talk has been swirling that Mr Wong would head one of the new entities formed by a planned merger between Ascendas, Jurong International Holdings, Singbridge Group and Surbana International Consultants.

Temasek Holdings and JTC Corp announced the mega merger of the four firms last September. At the time, Surbana and Singbridge were Temasek units, while Ascendas and Jurong International were JTC subsidiaries.

Temasek and JTC have not yet said whether the merger has been completed.

Mr Wong left his position as chief executive of CapitaLand's Singapore residential property arm at the end of October, about a month after the merger announcement.

He is still a committee member of Redas, which mentioned his new job title in a press statement last night that was actually meant to announce the appointment of its new president.

Market watchers expect Surbana to be merged with Jurong, and Singbridge with Ascendas.

Mr Liew Mun Leong, CapitaLand's former president and group CEO, is widely expected to be appointed chairman of both merged entities.

-By Melissa Tan

No decision yet on govt platform to support Smart Nation

Source: Today Online / Voices

We refer to the report “Microsoft to help build system for better sharing of public information” (Feb 3). The Smart Nation will be built on innovations and ideas from citizens, companies and public agencies.

We are heartened that, as part of this endeavour, Microsoft is collaborating with the Agency for Science, Technology and Research (A*STAR) to propose a technical reference architecture.

We wish to dispel any concern, however, that we have already narrowed down our options for the technical architecture of the platform that will support the Smart Nation. The conversation is ongoing.

The Infocomm Development Authority is now seeking proposals and inputs from the information and communications technology (ICT) industry, through the government procurement process and industry consultations.

We look forward to what we can learn from industry collaborations such as the Microsoft-A*STAR partnership. We will consult widely because we want to apply the best ideas to use ICT to raise quality of life and encourage co-creation in a Smart Nation.


As Christchurch heals, investment window opens

Source: Business Times / Real Estate

HK home prices hit record high in 2014

Source: Business Times / Real Estate

Manhattan condos go for a bargain of US$3m

Developers are converting former rental buildings into new housing in the form of non-luxury condominiums

Source: Business Times / Real Estate

Hong Kong Can’t Build Public Homes Fast Enough as Demand Soars

Source: Bloomberg

(Bloomberg) -- For Terence Tong, who lives in a 300-square-foot apartment with his parents and brother, Hong Kong can’t build public housing fast enough in the world’s most expensive place to own a home.

Tong joined almost 130,000 others seeking to purchase one of the 2,160 subsidized homes, the first in more than a decade, released for sale in December. The 30 percent discounted units start at HK$1.9 million ($245,000).

“They aren’t cheap, but at this moment I can say they’re still affordable,” the 30-year-old information technology employee said. “I’d like to have my own place. I can’t live with my family forever.”

Chief Executive Leung Chun-ying is racing against time to deliver on a promise to increase total housing stock by 18 percent over the next 10 years as soaring prices made homeownership impossible for those like Tong. The challenge is whether Leung can find enough land to accomodate his plan to build 480,000 new homes.

“The government is making a big effort, but meeting the target 100 percent will be difficult,” said Alnwick Chan, executive director at Knight Frank LLP. “Land supply will need to increase drastically to lead people to believe home prices will come down.”

Public housing, which makes up almost half of all homes in Hong Kong, is back in the limelight after an outcry against ambitious building plans laid out in 1998 forced the government to pull back construction. Now it’s expected to account for 60 percent of Leung’s supply target.

Income Limit

The new subsidized units range from 34.5 square metres (371 square feet) to 47.5 square metres in size and successful applicants can borrow as much as 95 percent of the sale price.

A family can’t earn more than HK$46,000 a month, which means around 80 percent of the city’s households would qualify, according to government data. Monthly income can’t be more than HK$23,000 for a single person, such as Tong, who says he barely qualifies because he takes home about HK$22,000 a month.

“For young people wanting to buy their first home, their only way may just be subsidized housing,” said Chan of Knight Frank. Anyone below the income and asset threshold will apply “because they know they don’t have a chance in the private market,” he said.

The average per-square-foot price for 100 private housing projects tracked by realtor Midland Holdings Ltd. exceeded HK$10,000 for the first time last month. A 363-square-foot apartment at one of the projects changed hands for HK$4.5 million in January, 17 percent more than a similar transaction a year earlier, according to Midland.

Soaring Prices

A government program to sell cheap housing was suspended in 2002 under then-Chief Executive Tung Chee-hwa’s administration to support the private residential market where prices plunged as much as 70 percent after the 1997 Asian financial crisis. Regular land sales to private developers were also halted and resumed only in 2010.

The drop in supply sent prices soaring. They have doubled over the past five years spurred by record-low mortgage and an influx of mainland Chinese investors. They gained 13 percent to a record last year, a government index shows.

“Those who choose to buy now either are convinced there’s no way the government can increase supply significantly or they don’t believe it has the real intentions to do so,” said Edward Yiu, a real estate professor of the Chinese University of Hong Kong.

Housing Affordability

Hong Kong has the worst housing affordability out of 378 metropolitan areas in nine countries, with the median home price 17 times household income, according to an annual study by consultancy Demographia.

Almost one-third of the city’s housing stock is public rental units, typically clusters of tall uniform towers in suburban areas. A family applying for a public rental home now has to wait about 3.1 years, compared with a two-year wait four years ago, according to the Housing Authority.

Leung’s resolve to address the city’s home affordability crisis comes as he tries to shore up his popularity, which plummeted to a record low last year amid a near three-month-long street protest against China’s interference in the city’s leadership elections in 2017.

Finding Land

The government is finding it difficult to get enough land for more housing. It has identified 150 sites that can accomodate 210,000 new homes, though only nine have been rezoned for residential development purposes, according to Development Secretary Paul Chan.

The government has floated the possible rezoning of land in country parks, which makes up 40 percent of Hong Kong, an idea that has met with resistance. A plan to build new districts in northeastern Hong Kong led to protests by villagers whose current homes would give way to the development.

“Beyond 2020, the land supply plan is still under review and just part of a broad framework,” said Chan of Knight Frank. “Those will take time.”

Smaller Apartments

Developers have been adjusting to the worsening housing affordability by building smaller units to reduce the down payment, said Paul Louie, a property analyst at Barclays Plc. Buyers now have to pay as much as a 50 percent deposit for homes from HK$7 million to HK$10 million, from 30 percent before government curbs rolled out over the last four years.

At Lohas Park, a large housing development in eastern Hong Kong that’s been built in phases by different developers, the average unit size of the latest phase will be about 27 percent smaller than an earlier one, according to Bloomberg Intelligence. A 518-square-foot apartment sold for HK$5.3 million there last month.

That is still out of reach of home seekers such as Tong, who is not optimistic he will secure a subsidized flat.

“I will want to get married, my brother will want to get married, but there’s only one apartment,” he said. “The only way is if the property market crashes.”

-By Michelle Yun

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