April 15, 2008
As effects of US housing slump spread...
Prices of homes drop worldwide
Global slowdown could become wholesale collapse, warn analysts
DUBLIN - THE collapse of the housing bubble in the US is mutating
into a global phenomenon, with real estate prices swooning from the
Irish countryside and the Spanish coast to Baltic seaports and even
parts of northern India.
This synchronised global slowdown, which has become increasingly
stark in recent months, is hobbling economic growth worldwide,
affecting not just homes but jobs as well.
In Ireland, Spain, Britain and elsewhere, housing markets that soared
over the past decade are falling back to earth.
Property analysts predict that some countries will face an even more
wrenching adjustment than the United States, including the
possibility that the downturn could become a wholesale collapse.
To some extent, the world's problems are a result of American
contagion.
As home financing and credit tightens in response to the crisis that
began in the sub-prime mortgage market, analysts worry that other
countries could suffer the mortgage defaults and foreclosures that
have afflicted California, Florida and other American states.
Citing the reverberations of the US housing bust and credit squeeze,
the International Monetary Fund last Wednesday cut its forecast for
global economic growth this year and warned that the malaise could
extend into next year.
'The problems in the US are being transmitted to Europe,' said Mr
Michael Ball, professor of urban and property economics at the
University of Reading in Britain who studies housing prices.
'What is happening now is an awful lot more grief than we expected,'
he said.
For countries like Ireland, where prices were even more inflated than
in the US, it has been a painful education as home owners learn the
American vocabulary of misery.
'We know we are already in negative equity,' said Ms Emma Linnane, a
31-year-old university administrator.
She bought a cosy one-bedroom apartment in the Dublin suburbs with
her fiance, Mr Paul Colgan, in May 2006 at the peak of the market.
They paid US$575,000 (S$780,000) - at least US$100,000 more than it
would fetch today. 'I sometimes get shivers thinking about it,' Ms
Linnane said. 'But I will let the reality hit me when I go to sell
it.'
That reality is spreading.
Once-sizzling housing markets in eastern Europe and the Baltic states
are cooling rapidly as nervous western Europeans stop buying
investment properties in Warsaw, Tallinn, Estonia and other real
estate Klondikes.
Further east, in India and southern China, prices are no longer
surging.
With stock markets down sharply after reaching heady levels, people
do not have as much cash to buy property.
With low interest rates helping to inflate housing bubbles in many
countries, economists said the confluence of falling prices was
predictable, if unsettling.
This is not the first housing downturn to cross borders, but its
reverberations have been amplified by the integration of financial
markets.
When faulty American mortgages end up on the books of European banks,
the problems of the US aggravate the world's problems.
Consider Britain, which had one of Europe's most robust housing
markets, with less of an oversupply than in Ireland or Spain. Then
last summer came the sub-prime crisis across the Atlantic.
Within two months, mortgage approvals dropped 31 per cent, compared
with the previous year. And in March, average housing prices had
fallen 2.5 per cent, the largest monthly decline since 1992.
'The boom in house prices was actually much bigger here than in the
US,' said Mr Kelvin Davidson, an economist at Capital Economics in
London.
'If anything, people should be more worried than in the US.'
EastLiving.com.sg
Contact Stuart Chng: (65) 9691 9907
Email: stuart.chng@eastliving.com.sg
EastLiving - Singapore Property and Real Estate DB
Tuesday, April 15, 2008
Record $8b worth of govt tenders up for grabs
April 15, 2008
Record $8b worth of govt tenders up for grabs
Lion's share goes to building projects but boom could add to cost
pressure
By LYNETTE KHOO
(SINGAPORE) It may have pushed back building projects worth $3
billion to ease the crunch, but the government is still calling for
tenders to the tune of a record $5.8 billion in the construction
sector this fiscal year.
In all, its tenders for FY2008 will touch $8 billion - surpassing the
previous record set in FY2006 when it called for some $7.5 billion
worth of tenders.
The bulk, this year, will be splashed out on building and
construction projects. This includes moves to improve traffic on the
Central Expressway and the Gardens by the Bay project that will keep
the Marina Bay area development on schedule, the Ministry of Finance
(MOF) said yesterday.
The bumper $6.4 billion budget surplus has allowed the government to
spend generously, economists said.
'We had a very healthy budget surplus last year and essentially, that
provides some deep pockets for the government to embark on a more
robust expansion policy,' said DBS economist Irvin Seah.
Economists also noted that the record amount of tenders involving
building and construction projects reinforces the government's long-
term goal to beef up its infrastructure to boost the country's
competitiveness.
'I tend to see this building and construction project as a long-term
effort to improve the competitiveness of our economy,' Citi economist
Kit Wei Zheng said, pointing to the strains that the rising
population and growing economy have imposed on infrastructure.
'In terms of construction, it's all well and good because it supports
our thesis that demand remains very healthy,' he added.
Of the government tenders announced yesterday by MOF, some $1.2
billion will go towards the purchase of goods and services, such as
the supply of equipment, appliances and the operation of the
automated toll system at the checkpoints.
Tenders in information and communications technology (ICT) projects
are also expected to be worth at least $1 billion. The Infocomm
Development Authority of Singapore (IDA) will be announcing further
details on the upcoming ICT projects during their annual industry
briefing next month.
The plan for public sector procurement was first introduced in 2003
by MOF to inform suppliers about the public sector's indicative
purchasing plan for the financial year between April and March. Its
objective is to make the government marketplace more attractive and
transparent to suppliers and purchases exceeding $200,000 are listed
in the plan.
While economists believe that the large government tenders for
building and construction projects are generally good for the
industry, some felt there was still a need to address tightness in
construction resources and rising costs.
'The growth is still there for the construction sector but it has to
be measured against rising building costs,' Standard Chartered
economist Alvin Liew said. 'Although we see that the $3 billion of
deferred projects will mitigate some of the building costs pressures,
a lot of the demand is global, whether it is steel or cement and
construction workers. These are all globally priced.'
Mr Kit of Citi noted that the industry has already been squeezed by
supply-side tightness in the first quarter, when the construction
sector grew at an easier pace of 14.6 per cent year-on-year after
growing by 24.3 per cent in the preceding quarter.
'It does suggest that supply-side constraints are already beginning
to bite into construction growth,' he added. 'Growth would have been
faster if not for the supply-side constraints.'
MOF said yesterday that it will continue to monitor the construction
industry closely with BCA and other relevant agencies and make
appropriate adjustments when necessary.
The timing of the large government tenders against the backdrop of a
global demand slowdown could also alleviate any potential shortfall
of investments in the private sector.
In response to a BT query on this, MOF said these government tenders
are only based on the actual requirements of the government agencies.
Said Mr Kit from Citi: 'This move is probably quite timely but how
effective it will be in boosting the economy is a question mark.
'I think the government will have to do more to ease the supply-side
constraints if they want this to contribute fully to GDP growth...
and prevent prices from spiralling upwards,' he added.
On a more positive note, Mr Seah of DBS said a bigger outlay from the
government 'will certainly be helpful to businesses, especially when
external demand is weakening.'
EastLiving.com.sg
Contact Stuart Chng: (65) 9691 9907
Email: stuart.chng@eastliving.com.sg
EastLiving - Singapore Property and Real Estate DB
Record $8b worth of govt tenders up for grabs
Lion's share goes to building projects but boom could add to cost
pressure
By LYNETTE KHOO
(SINGAPORE) It may have pushed back building projects worth $3
billion to ease the crunch, but the government is still calling for
tenders to the tune of a record $5.8 billion in the construction
sector this fiscal year.
In all, its tenders for FY2008 will touch $8 billion - surpassing the
previous record set in FY2006 when it called for some $7.5 billion
worth of tenders.
The bulk, this year, will be splashed out on building and
construction projects. This includes moves to improve traffic on the
Central Expressway and the Gardens by the Bay project that will keep
the Marina Bay area development on schedule, the Ministry of Finance
(MOF) said yesterday.
The bumper $6.4 billion budget surplus has allowed the government to
spend generously, economists said.
'We had a very healthy budget surplus last year and essentially, that
provides some deep pockets for the government to embark on a more
robust expansion policy,' said DBS economist Irvin Seah.
Economists also noted that the record amount of tenders involving
building and construction projects reinforces the government's long-
term goal to beef up its infrastructure to boost the country's
competitiveness.
'I tend to see this building and construction project as a long-term
effort to improve the competitiveness of our economy,' Citi economist
Kit Wei Zheng said, pointing to the strains that the rising
population and growing economy have imposed on infrastructure.
'In terms of construction, it's all well and good because it supports
our thesis that demand remains very healthy,' he added.
Of the government tenders announced yesterday by MOF, some $1.2
billion will go towards the purchase of goods and services, such as
the supply of equipment, appliances and the operation of the
automated toll system at the checkpoints.
Tenders in information and communications technology (ICT) projects
are also expected to be worth at least $1 billion. The Infocomm
Development Authority of Singapore (IDA) will be announcing further
details on the upcoming ICT projects during their annual industry
briefing next month.
The plan for public sector procurement was first introduced in 2003
by MOF to inform suppliers about the public sector's indicative
purchasing plan for the financial year between April and March. Its
objective is to make the government marketplace more attractive and
transparent to suppliers and purchases exceeding $200,000 are listed
in the plan.
While economists believe that the large government tenders for
building and construction projects are generally good for the
industry, some felt there was still a need to address tightness in
construction resources and rising costs.
'The growth is still there for the construction sector but it has to
be measured against rising building costs,' Standard Chartered
economist Alvin Liew said. 'Although we see that the $3 billion of
deferred projects will mitigate some of the building costs pressures,
a lot of the demand is global, whether it is steel or cement and
construction workers. These are all globally priced.'
Mr Kit of Citi noted that the industry has already been squeezed by
supply-side tightness in the first quarter, when the construction
sector grew at an easier pace of 14.6 per cent year-on-year after
growing by 24.3 per cent in the preceding quarter.
'It does suggest that supply-side constraints are already beginning
to bite into construction growth,' he added. 'Growth would have been
faster if not for the supply-side constraints.'
MOF said yesterday that it will continue to monitor the construction
industry closely with BCA and other relevant agencies and make
appropriate adjustments when necessary.
The timing of the large government tenders against the backdrop of a
global demand slowdown could also alleviate any potential shortfall
of investments in the private sector.
In response to a BT query on this, MOF said these government tenders
are only based on the actual requirements of the government agencies.
Said Mr Kit from Citi: 'This move is probably quite timely but how
effective it will be in boosting the economy is a question mark.
'I think the government will have to do more to ease the supply-side
constraints if they want this to contribute fully to GDP growth...
and prevent prices from spiralling upwards,' he added.
On a more positive note, Mr Seah of DBS said a bigger outlay from the
government 'will certainly be helpful to businesses, especially when
external demand is weakening.'
EastLiving.com.sg
Contact Stuart Chng: (65) 9691 9907
Email: stuart.chng@eastliving.com.sg
EastLiving - Singapore Property and Real Estate DB
Slew of events to add buzz to F1
April 15, 2008
Slew of events to add buzz to F1
By Hong Xinyi
A DIZZYING array of events will ride shotgun with the Singapore Grand
Prix when it motors into town in September.
Tourism officials and the private sector have lined up everything
from jazz concerts to float parades to capitalise on the influx of
visitors expected for the Formula One weekend, which runs from Sept
26 to 28.
To date, eight events have been arranged under the banner of the
Singapore Grand Prix Season, which takes place from Sept 20 to Oct 5.
More events are expected to be announced, and the season will be
promoted through advertising campaigns in regional markets such as
Australia, China and India, said the Singapore Tourism Board (STB).
Ms Lynette Pang, director of cluster development (events and
entertainment) for STB, said planning for the event started last
year.
'By encouraging the private sector to organise or coincide their
events with the season, we hope not only to up the buzz in
Singapore's events and entertainment calendar... but also to give
stakeholders a greater sense of participation in Singapore's first F1
race,' she told The Straits Times via e-mail.
Mr Adrian Hobbs, chief executive of events company One Lifestyle
Group, is bringing in jazz singer Diana Krall for a concert at the
Marina at Keppel Bay - one of the key events of the season.
The company will also be sailing in a luxury yacht to host private
parties for clients at the same venue.
It hopes to launch a jazz festival during next year's F1season.
'I envisage a clamour for luxury events during the Singapore Grand
Prix,' said MrHobbs.
'By next year, there should be an even bigger smorgasbord of
activities.'
EastLiving.com.sg
Contact Stuart Chng: (65) 9691 9907
Email: stuart.chng@eastliving.com.sg
EastLiving - Singapore Property and Real Estate DB
Slew of events to add buzz to F1
By Hong Xinyi
A DIZZYING array of events will ride shotgun with the Singapore Grand
Prix when it motors into town in September.
Tourism officials and the private sector have lined up everything
from jazz concerts to float parades to capitalise on the influx of
visitors expected for the Formula One weekend, which runs from Sept
26 to 28.
To date, eight events have been arranged under the banner of the
Singapore Grand Prix Season, which takes place from Sept 20 to Oct 5.
More events are expected to be announced, and the season will be
promoted through advertising campaigns in regional markets such as
Australia, China and India, said the Singapore Tourism Board (STB).
Ms Lynette Pang, director of cluster development (events and
entertainment) for STB, said planning for the event started last
year.
'By encouraging the private sector to organise or coincide their
events with the season, we hope not only to up the buzz in
Singapore's events and entertainment calendar... but also to give
stakeholders a greater sense of participation in Singapore's first F1
race,' she told The Straits Times via e-mail.
Mr Adrian Hobbs, chief executive of events company One Lifestyle
Group, is bringing in jazz singer Diana Krall for a concert at the
Marina at Keppel Bay - one of the key events of the season.
The company will also be sailing in a luxury yacht to host private
parties for clients at the same venue.
It hopes to launch a jazz festival during next year's F1season.
'I envisage a clamour for luxury events during the Singapore Grand
Prix,' said MrHobbs.
'By next year, there should be an even bigger smorgasbord of
activities.'
EastLiving.com.sg
Contact Stuart Chng: (65) 9691 9907
Email: stuart.chng@eastliving.com.sg
EastLiving - Singapore Property and Real Estate DB
Monday, April 14, 2008
Decision to let Sing$ strengthen 'not a response to spike in inflation'
April 14, 2008
Decision to let Sing$ strengthen 'not a response to spike in inflation'
Policy change not a knee-jerk reaction, but aimed at medium term, says Tharman
By Shobana Kesava & Bryan Lee
THE decision to let the Singapore dollar rise further was not a knee-jerk response to a recent spike in inflation, but a decision with longer-term considerations in mind, said Finance Minister Tharman Shanmugaratnam yesterday.
'Short term, we're not in a crisis and if we do face a very severe downturn in growth, you can't rely on monetary policy to solve that; you've got to have other policy responses,' he told reporters yesterday on the sidelines of a community event.
The Monetary Authority of Singapore (MAS) caught many by surprise last Thursday when it said it would allow for an immediate one-off jump in the Sing dollar's value in response to a backdrop of 'continuing cost pressures'.
Singapore manages the value of the local currency as its chief weapon against inflation. A stronger Sing dollar helps make imports, such as oil and food, cheaper. But it also makes local exports less competitive in the global marketplace.
The policy change, which was widely regarded as an aggressive move, caught most analysts by surprise.
Many expected that economic growth concerns would deter the central bank from tweaking its monetary policy so soon after it had moved to allow for a faster Sing dollar appreciation at the last scheduled review in October.
Some analysts said the move suggested that the Government may have underestimated the inflation threat and is playing catch-up.
However, Mr Tharman said yesterday that the central bank looked at price trends over the next one to three years when it decided on the policy change.
'It's got to keep its focus on the medium term. That's the way the MAS does its job.'
As such, Mr Tharman said he expected little impact on inflation in the short term. MAS has projected Singapore's inflation rate this year to come in at the upper half of the 4.5-5.5 per cent forecast range.
Mr Tharman said that the MAS' last two policy changes were not large jumps, but discreet moves that allow a gradual appreciation of the Sing dollar.
They came as the MAS assessed that in the next few years, inflation will be a risk around the world.
'And if it's a risk all round the world, we have to be on guard as well,' said Mr Tharman.
Still, he acknowledged that there are short-term risks, which the Government is watching carefully.
'The exchange rate remains supportive of sustainable growth in the medium term, so it's always a fine balance between paying heed to inflation and paying heed to wanting to ensure that the economy keeps growing.'
The Government last week released a better-than-expected advance estimate of 7.2 per cent gross domestic product growth in the first quarter of the year.
At this point, he said, if Singapore did not focus enough on inflation over the next one to three years, growth would ultimately be undermined.
Asked if a stronger Sing dollar would hurt export competitiveness, he said there will be some compromise in the short to medium term, but it would be mitigated by the economy's performance in the short term, which he said was at its potential.
'It does not make a significant dent on competitiveness over the medium to longer term,' added Mr Tharman. The exchange rate is now about S$1.36 to the US dollar.
skesava@sph.com.sg
bryanlee@sph.com.sg
Copyright © 2007 Singapore Press Holdings. All rights reserved. Privacy Statement & Condition of Access
EastLiving.com.sg
Contact Stuart Chng: (65) 9691 9907
Email: stuart.chng@eastliving.com.sg
EastLiving - Singapore Property and Real Estate DB
Decision to let Sing$ strengthen 'not a response to spike in inflation'
Policy change not a knee-jerk reaction, but aimed at medium term, says Tharman
By Shobana Kesava & Bryan Lee
THE decision to let the Singapore dollar rise further was not a knee-jerk response to a recent spike in inflation, but a decision with longer-term considerations in mind, said Finance Minister Tharman Shanmugaratnam yesterday.
'Short term, we're not in a crisis and if we do face a very severe downturn in growth, you can't rely on monetary policy to solve that; you've got to have other policy responses,' he told reporters yesterday on the sidelines of a community event.
The Monetary Authority of Singapore (MAS) caught many by surprise last Thursday when it said it would allow for an immediate one-off jump in the Sing dollar's value in response to a backdrop of 'continuing cost pressures'.
Singapore manages the value of the local currency as its chief weapon against inflation. A stronger Sing dollar helps make imports, such as oil and food, cheaper. But it also makes local exports less competitive in the global marketplace.
The policy change, which was widely regarded as an aggressive move, caught most analysts by surprise.
Many expected that economic growth concerns would deter the central bank from tweaking its monetary policy so soon after it had moved to allow for a faster Sing dollar appreciation at the last scheduled review in October.
Some analysts said the move suggested that the Government may have underestimated the inflation threat and is playing catch-up.
However, Mr Tharman said yesterday that the central bank looked at price trends over the next one to three years when it decided on the policy change.
'It's got to keep its focus on the medium term. That's the way the MAS does its job.'
As such, Mr Tharman said he expected little impact on inflation in the short term. MAS has projected Singapore's inflation rate this year to come in at the upper half of the 4.5-5.5 per cent forecast range.
Mr Tharman said that the MAS' last two policy changes were not large jumps, but discreet moves that allow a gradual appreciation of the Sing dollar.
They came as the MAS assessed that in the next few years, inflation will be a risk around the world.
'And if it's a risk all round the world, we have to be on guard as well,' said Mr Tharman.
Still, he acknowledged that there are short-term risks, which the Government is watching carefully.
'The exchange rate remains supportive of sustainable growth in the medium term, so it's always a fine balance between paying heed to inflation and paying heed to wanting to ensure that the economy keeps growing.'
The Government last week released a better-than-expected advance estimate of 7.2 per cent gross domestic product growth in the first quarter of the year.
At this point, he said, if Singapore did not focus enough on inflation over the next one to three years, growth would ultimately be undermined.
Asked if a stronger Sing dollar would hurt export competitiveness, he said there will be some compromise in the short to medium term, but it would be mitigated by the economy's performance in the short term, which he said was at its potential.
'It does not make a significant dent on competitiveness over the medium to longer term,' added Mr Tharman. The exchange rate is now about S$1.36 to the US dollar.
skesava@sph.com.sg
bryanlee@sph.com.sg
Copyright © 2007 Singapore Press Holdings. All rights reserved. Privacy Statement & Condition of Access
EastLiving.com.sg
Contact Stuart Chng: (65) 9691 9907
Email: stuart.chng@eastliving.com.sg
EastLiving - Singapore Property and Real Estate DB
Data for new home sales will be out
April 14, 2008
Data for new home sales will be out
WHAT IT IS
PROPERTY developers will release their figures on the numbers and prices of new private homes they sold last month.
The data, which will be available on the Urban Redevelopment Authority's (URA) website tomorrow, will show the total number of new homes launched and sold in the month.
It will also reveal the lowest, median and highest prices of the units sold in each project for March.
WHY IT MATTERS
Experts expect the March figures to affirm the trend of new home sales stalling in recent months as the housing market comes almost to a standstill.
February's figures showed that only 185 new homes were sold in that month - the lowest level since this monthly data was made public last June.
These weak sales were likely to have continued last month, which could take the total number of new-home sales in the first quarter to one of the lowest levels ever seen here, second only to the 2003 Sars period.
FIONA CHAN
Copyright © 2007 Singapore Press Holdings. All rights reserved. Privacy Statement & Condition of Access
EastLiving.com.sg
Contact Stuart Chng: (65) 9691 9907
Email: stuart.chng@eastliving.com.sg
EastLiving - Singapore Property and Real Estate DB
Data for new home sales will be out
WHAT IT IS
PROPERTY developers will release their figures on the numbers and prices of new private homes they sold last month.
The data, which will be available on the Urban Redevelopment Authority's (URA) website tomorrow, will show the total number of new homes launched and sold in the month.
It will also reveal the lowest, median and highest prices of the units sold in each project for March.
WHY IT MATTERS
Experts expect the March figures to affirm the trend of new home sales stalling in recent months as the housing market comes almost to a standstill.
February's figures showed that only 185 new homes were sold in that month - the lowest level since this monthly data was made public last June.
These weak sales were likely to have continued last month, which could take the total number of new-home sales in the first quarter to one of the lowest levels ever seen here, second only to the 2003 Sars period.
FIONA CHAN
Copyright © 2007 Singapore Press Holdings. All rights reserved. Privacy Statement & Condition of Access
EastLiving.com.sg
Contact Stuart Chng: (65) 9691 9907
Email: stuart.chng@eastliving.com.sg
EastLiving - Singapore Property and Real Estate DB
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