May 16, 2008
US sub-prime crisis hurting Asian property: GIC
By Fiona Chan
THE sub-prime crisis in the United States is starting to weaken Asian property markets, said the real estate arm of the Government of Singapore Investment Corporation (GIC) yesterday.
GIC Real Estate president Seek Ngee Huat told a regional property conference that the impact of the crisis could hasten downtrends in the Asian property markets, according to a report by news agency Reuters.
'The contagion effects of the sub-prime crisis can potentially accelerate the downward spin of the property cycle,' he said in a keynote speech at the Financial Times Asia Property Summit.
'Some market weakening is being sensed in Asia, particularly in Japan and in Australia.'
In Australia, house prices are growing more slowly and demand for mortgages fell 6.1 per cent in March from February, according to the Reuters report.
It added that in Japan, the stock of unsold apartments is rising, while housing starts fell 15.6 per cent in March from a year ago.
Housing starts - the number of new private homes under construction - are used as an indicator of the state of an economy.
On the bright side, the sub-prime carnage presents opportunities for well-positioned players, Dr Seek said.
But he added that any interested party would face competition from other institutional investors.
'As always, weak markets favour those with the capacity to take strategic positions, and so the sub-prime meltdown presents threats as well as opportunities,' he was quoted by Reuters as saying.
Morgan Stanley has estimated that GIC manages more than US$330 billion (S$456.8 billion) of assets. This makes it the world's third-largest sovereign wealth fund, behind the Abu Dhabi Investment Authority and Norway's Government Pension Fund.
GIC Real Estate is also one of the top 10 property investors in the world, with more than 200 investments across more than 30 countries.
Its multibillion-dollar portfolio includes the Queen Victoria Building in Sydney and the Westin Paris in France, among other buildings.
In his speech, Dr Seek said that GIC began by investing in developed markets. It only started to focus on emerging markets in Asia in the mid-1990s.
Copyright © 2007 Singapore Press Holdings. All rights reserved. Privacy Statement & Condition of Access
Sunday, May 18, 2008
Developers have lowered asking price to bring in buyers
Dive in property launches
Developers have lowered asking price to bring in buyers
Friday • May 16, 2008
Esther Fung
esther@mediacorp.com.sg
Singapore's much-anticipated property market slowdown is here.
April saw a 58-per-cent dive in new property launches by developers as buyer sentiments soured.
According to data released by the Urban Redevelopment Authority (URA) yesterday, developers put 271 new private homes on sale last month, down from 642 in March.
Sales dropped by another 13 per cent with just 279 homes changing hands across Singapore, down from 322 in March. This is a sharp contrast to the 1,885 units launched and 1,731 sold at the peak of the housing boom last August.
"There is still a bit of a stand-off between developers and buyers," said DTZ Debenham Tie Leung's senior research director Chua Chor Hoon.
"Buyers are still taking a wait-and-see approach as they are not sure how things are going to unfold. It doesn't make sense for them take the plunge and buy unless they have a strong reason to."
To lure buyers, some developers have lowered the asking price.
According to Mr Nicholas Mak, a director at Knight Frank, the median prices of new sales dipped 8.9 per cent to $943 per sq ft (psf) last month.
The URA does not release monthly changes in price statistics. Its last set of figures shows private home prices rose 3.7 per cent in the three months to end-March, albeit at a slower pace.
Mr Colin Tan, head of consultancy and research at Chesterton International, said: "The evidence is mounting that the market may reached a declining stage."
The asking price has been dropped in some new developments such as Far East Organisation's The Lakeshore in Jurong West and World-Class Capital's Blu Coral in Telok Kurau, which has resulted in higher sales.
Buyers snapped up 18 units in Blu Coral — up from nine in February — after its median price fell to $657 psf last month.
"The question is, can they sustain sales at this price level or do they have to continue to lower it further," said Chesterton's Mr Tan.
City Developments has held back its property launches so far this year, but may launch this year's first new development in the second quarter or third quarter if market conditions permit, its executive chairman Kwek Leng Beng told Dow Jones Newswires.
GIC Real Estate president, Dr Seek Ngee Huat, yesterday warned that Wall Street's credit crisis may flow into Asia's "main street".
"The contagion of the sub-prime crisis can potentially accelerate the downward spin of the cycle," Dr Seek was quoted as saying by Bloomberg.
"Its ripple effects are certainly being felt here in Asia. While Wall Street is picking up the pieces, the problems on Main Street are just beginning."
Copyright MediaCorp Press Ltd. All rights reserved
Developers have lowered asking price to bring in buyers
Friday • May 16, 2008
Esther Fung
esther@mediacorp.com.sg
Singapore's much-anticipated property market slowdown is here.
April saw a 58-per-cent dive in new property launches by developers as buyer sentiments soured.
According to data released by the Urban Redevelopment Authority (URA) yesterday, developers put 271 new private homes on sale last month, down from 642 in March.
Sales dropped by another 13 per cent with just 279 homes changing hands across Singapore, down from 322 in March. This is a sharp contrast to the 1,885 units launched and 1,731 sold at the peak of the housing boom last August.
"There is still a bit of a stand-off between developers and buyers," said DTZ Debenham Tie Leung's senior research director Chua Chor Hoon.
"Buyers are still taking a wait-and-see approach as they are not sure how things are going to unfold. It doesn't make sense for them take the plunge and buy unless they have a strong reason to."
To lure buyers, some developers have lowered the asking price.
According to Mr Nicholas Mak, a director at Knight Frank, the median prices of new sales dipped 8.9 per cent to $943 per sq ft (psf) last month.
The URA does not release monthly changes in price statistics. Its last set of figures shows private home prices rose 3.7 per cent in the three months to end-March, albeit at a slower pace.
Mr Colin Tan, head of consultancy and research at Chesterton International, said: "The evidence is mounting that the market may reached a declining stage."
The asking price has been dropped in some new developments such as Far East Organisation's The Lakeshore in Jurong West and World-Class Capital's Blu Coral in Telok Kurau, which has resulted in higher sales.
Buyers snapped up 18 units in Blu Coral — up from nine in February — after its median price fell to $657 psf last month.
"The question is, can they sustain sales at this price level or do they have to continue to lower it further," said Chesterton's Mr Tan.
City Developments has held back its property launches so far this year, but may launch this year's first new development in the second quarter or third quarter if market conditions permit, its executive chairman Kwek Leng Beng told Dow Jones Newswires.
GIC Real Estate president, Dr Seek Ngee Huat, yesterday warned that Wall Street's credit crisis may flow into Asia's "main street".
"The contagion of the sub-prime crisis can potentially accelerate the downward spin of the cycle," Dr Seek was quoted as saying by Bloomberg.
"Its ripple effects are certainly being felt here in Asia. While Wall Street is picking up the pieces, the problems on Main Street are just beginning."
Copyright MediaCorp Press Ltd. All rights reserved
In Hong Kong, you are where you live
Home, sweet home
In Hong Kong, you are where you live
Friday • May 16, 2008
Topping my list of things to do the moment I touched down at Chek Lap Kok airport was to find a place to live.
Despite the dire warnings I had been given about how rents in Hong Kong are the highest in Asia, if not the world, I wasn’t too worried.
Unlike in Singapore, property agents have brick-and-mortar shops here.
There is no need to wade through the classifieds to find them — they are everywhere. If an area is very popular — such as the Mid-Levels — there are rows of such shops, all displaying enticing photos in their windows. All you have to do is pick one and pop in.
But I had reckoned without a few things. One was that owners don’t tie up exclusively with an agent here, which means there could be up to a dozen trying to rent you the same flat.
It may sound convenient — one agent can show you every flat available in the area if you wish — but it also means you don’t get a chance to bargain prices down.
With so many agents competing, the owner is likely to choose the one who comes up with the best offer. So, most agents try to get prospective tenants to go for the flat with the highest rent.
Having dealt with nightmarish realtors in Singapore, aggressive sales tactics were the least of my worries. The real headache was trying to decide which area to live in. It was no use asking the locals.
Don’t get me wrong. It’s not that they don’t care. Hong Kongers are as obsessed about land as Singaporeans — perhaps more so, given how much of Hong Kong Island (the most desired piece of real estate in the Special Administrative Region) is made up of mountains so that the only build-able areas are along the coastline.
The problem is, if you ask a local where the good areas are, you never get a straight answer. Instead, he is more likely to profile you: “Hmm, you strike me as someone who likes to shop, has no children, so you don’t need to be close to schools … try Causeway Bay.”
Even strangers you have spoken to for about one second at a party will try their hand at this amateur personality profiling.
It was only after I arrived that I realised why the Hong Kong-based friends I had emailed before the move refused to commit themselves to which would be a good area to live in.
“It depends,” they had said. If pressed, they would reluctantly tell you where they are living but added quickly: “It suits me, but I don’t know about you.”
Eventually, someone spelt it out for me: “Where you live says something about who you are. If you pick The Peak or Repulse Bay, you are old money. If you plumb for the Mid-Levels, you are either a new expat or an upper-middle class local. If you live in the Outlying Islands, you are either a farmer or a hippie expat.”
It finally made sense. It wasn’t how much you could pay, but what sort of image you wanted to project.
I was shown flats in North Point — an area that had no recommendable qualities other than being an interchange station for even more ulu areas with flats costing as much as those in the Mid-Levels.
We have the same thing in Singapore too, don’t we? Katong for old money, Marine Parade for beach-loving family types, Toa Payoh for heartlanders, Orchard Road and Tanglin for the expats — every area has a personality.
My problem now was to pick a place that would suit a laidback Katong Girl who loves bargain shopping and a city-lover who wants to be within walking distance of Central, the equivalent of our CBD.
I wanted Wan Chai, the world of Suzie Wong, with its wet markets and dark alleys selling counterfeit goods. My husband wanted somewhere in the city, as close to his office as possible.
We settled for the Mid-Levels, wheremost first-time expats end up, because it’s only 10 minutes’ walk to Central. So, what does it say about us?
I don’t know and I don’t care because the flat has a roof terrace with a view of The Peak and that’s good enough for me.
Tabitha Wang loves her roof terrace, never mind that it’s grubby, hot and good only for hanging the laundry out to dry.
Copyright MediaCorp Press Ltd. All rights reserved.
In Hong Kong, you are where you live
Friday • May 16, 2008
Topping my list of things to do the moment I touched down at Chek Lap Kok airport was to find a place to live.
Despite the dire warnings I had been given about how rents in Hong Kong are the highest in Asia, if not the world, I wasn’t too worried.
Unlike in Singapore, property agents have brick-and-mortar shops here.
There is no need to wade through the classifieds to find them — they are everywhere. If an area is very popular — such as the Mid-Levels — there are rows of such shops, all displaying enticing photos in their windows. All you have to do is pick one and pop in.
But I had reckoned without a few things. One was that owners don’t tie up exclusively with an agent here, which means there could be up to a dozen trying to rent you the same flat.
It may sound convenient — one agent can show you every flat available in the area if you wish — but it also means you don’t get a chance to bargain prices down.
With so many agents competing, the owner is likely to choose the one who comes up with the best offer. So, most agents try to get prospective tenants to go for the flat with the highest rent.
Having dealt with nightmarish realtors in Singapore, aggressive sales tactics were the least of my worries. The real headache was trying to decide which area to live in. It was no use asking the locals.
Don’t get me wrong. It’s not that they don’t care. Hong Kongers are as obsessed about land as Singaporeans — perhaps more so, given how much of Hong Kong Island (the most desired piece of real estate in the Special Administrative Region) is made up of mountains so that the only build-able areas are along the coastline.
The problem is, if you ask a local where the good areas are, you never get a straight answer. Instead, he is more likely to profile you: “Hmm, you strike me as someone who likes to shop, has no children, so you don’t need to be close to schools … try Causeway Bay.”
Even strangers you have spoken to for about one second at a party will try their hand at this amateur personality profiling.
It was only after I arrived that I realised why the Hong Kong-based friends I had emailed before the move refused to commit themselves to which would be a good area to live in.
“It depends,” they had said. If pressed, they would reluctantly tell you where they are living but added quickly: “It suits me, but I don’t know about you.”
Eventually, someone spelt it out for me: “Where you live says something about who you are. If you pick The Peak or Repulse Bay, you are old money. If you plumb for the Mid-Levels, you are either a new expat or an upper-middle class local. If you live in the Outlying Islands, you are either a farmer or a hippie expat.”
It finally made sense. It wasn’t how much you could pay, but what sort of image you wanted to project.
I was shown flats in North Point — an area that had no recommendable qualities other than being an interchange station for even more ulu areas with flats costing as much as those in the Mid-Levels.
We have the same thing in Singapore too, don’t we? Katong for old money, Marine Parade for beach-loving family types, Toa Payoh for heartlanders, Orchard Road and Tanglin for the expats — every area has a personality.
My problem now was to pick a place that would suit a laidback Katong Girl who loves bargain shopping and a city-lover who wants to be within walking distance of Central, the equivalent of our CBD.
I wanted Wan Chai, the world of Suzie Wong, with its wet markets and dark alleys selling counterfeit goods. My husband wanted somewhere in the city, as close to his office as possible.
We settled for the Mid-Levels, wheremost first-time expats end up, because it’s only 10 minutes’ walk to Central. So, what does it say about us?
I don’t know and I don’t care because the flat has a roof terrace with a view of The Peak and that’s good enough for me.
Tabitha Wang loves her roof terrace, never mind that it’s grubby, hot and good only for hanging the laundry out to dry.
Copyright MediaCorp Press Ltd. All rights reserved.
Anchorpoint relaunched as first 'outlet' mall
Business Times - 16 May 2008
Anchorpoint relaunched as first 'outlet' mall
FRASERS Centrepoint Trust (FCT) has relaunched Anchorpoint, the suburban shopping mall in Bukit Merah, after giving it a $13 million makeover.
The mall is branded as Singapore's first 'outlet mall', with several brand- name chains setting up 'outlet' stores which offer heavily discounted goods.
Already, the strategy seems to be paying off.
Christopher Tang, CEO of Frasers Centrepoint Asset Management, the manager of FCT, said that in the three months following the progressive relaunch of Anchorpoint in February, shopper traffic has shot up 20 per cent. Rentals have also jumped to $7.50 per square foot, up from $5.40 psf a year ago.
Anchorpoint's revamp, Mr Tang said, is part of FCT's enhancement and acquisition strategy in the next few years.
Following Anchorpoint, the next suburban mall in line for a facelift is Singapore's first suburban mall, Northpoint. It will be integrated with a new building, Northpoint 2, at a total cost of $38.6 million, and will be completed by year-end.
Mr Tang also says FCT will be acquiring existing malls such as Yew Tee Point and Bedok Mall as part of its strategy. 'All the new malls that we add are very well located, with high catchment area, are next to MRTs, and have very good connectivity,' he said.
Although more mega malls are expected to enter the market soon, Mr Tang remains confident that FCT's suburban malls will not be facing a rush for tenants. 'Generally, there is additional retail space, and the bulk of it is in the Orchard Road belt and Marina Square,' he said, adding that suburban malls were a 'totally different market'.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
Anchorpoint relaunched as first 'outlet' mall
FRASERS Centrepoint Trust (FCT) has relaunched Anchorpoint, the suburban shopping mall in Bukit Merah, after giving it a $13 million makeover.
The mall is branded as Singapore's first 'outlet mall', with several brand- name chains setting up 'outlet' stores which offer heavily discounted goods.
Already, the strategy seems to be paying off.
Christopher Tang, CEO of Frasers Centrepoint Asset Management, the manager of FCT, said that in the three months following the progressive relaunch of Anchorpoint in February, shopper traffic has shot up 20 per cent. Rentals have also jumped to $7.50 per square foot, up from $5.40 psf a year ago.
Anchorpoint's revamp, Mr Tang said, is part of FCT's enhancement and acquisition strategy in the next few years.
Following Anchorpoint, the next suburban mall in line for a facelift is Singapore's first suburban mall, Northpoint. It will be integrated with a new building, Northpoint 2, at a total cost of $38.6 million, and will be completed by year-end.
Mr Tang also says FCT will be acquiring existing malls such as Yew Tee Point and Bedok Mall as part of its strategy. 'All the new malls that we add are very well located, with high catchment area, are next to MRTs, and have very good connectivity,' he said.
Although more mega malls are expected to enter the market soon, Mr Tang remains confident that FCT's suburban malls will not be facing a rush for tenants. 'Generally, there is additional retail space, and the bulk of it is in the Orchard Road belt and Marina Square,' he said, adding that suburban malls were a 'totally different market'.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
Property seems paler, but it's anyone's call
Business Times - 16 May 2008
Property seems paler, but it's anyone's call
Volumes shrink, prices weaken but some segments are holding firm
By ARTHUR SIM
(SINGAPORE) Based on the latest monthly developer sales data from the Urban Redevelopment Authority (URA), property prices could be on the downward trend.
Developer sales fell, with April seeing only 274 transactions. This is about 9 per cent lower than the 301 units sold in March, though still higher than the 174 units sold in February.
And while it is difficult to accurately pinpoint price movements with such low volume, an analysis by Knight Frank of overall median prices achieved nevertheless registered an 8.9 per cent drop in April, falling to $943 psf compared to $1,035 psf in March.
The peak median price of over $1,400 psf was reached in August 2007.
Knight Frank director (research and consultancy) Nicholas Mak also explained that the analysis was a 'median of median prices', and so may not be a precise reflection of price movements.
Mr Mak also said that applying a different mode of analysis to the same data - the formula used to calculate URA's quarterly property price index for instance - could even show that prices have increased slightly.
Still, a comparison of monthly median prices of recently launched developments does suggest that prices could be falling.
The 79-unit Blu Coral was launched in February with nine units sold at a median price of $872 psf. In March, 28 units were sold at a median price of $802 psf, while in April, 18 units were sold at a median price of $657.
Similarly, 53 units of the 106-unit, The Verve, were launched in March with 36 units sold at a median price of $1,187 psf. In April, 8 units were sold at a median price of $1,055 psf.
And nine units of the 625-unit, The Quartz, were sold in March at a median price of $742 psf, followed by 14 units sold in April at a median price of $721 psf.
Interestingly, one unit of Waterfront Waves was sold at $909 psf in April, higher than the median price of $806 in March when 14 units were sold.
Perhaps another indication of the weakening market is that 43 units of 659-unit The Parc Condominium, previously reported as being fully sold, have re-emerged on the market. According to the monthly data, the returned units first appeared in February.
A source that did not want to be named also said that these units were returned by buyers who chose not to exercise their options, forfeiting a quarter of the 5 per cent downpayment in the process.
Jones Lang LaSalle head of research (South-East Asia) Chua Yang Liang has also analysed median prices as a measure of volatility and suggests that this has increased in the Outside Central Region (OCR).
Dr Chua explained that volatility, as a measure of how wide market prices are per unit dollar of the median price achieved could also reflect, 'the market's speculative level'. As such, he said: 'It would appear that upgraders may be returning, with entry level projects that are moderately priced between $750 to $850 psf as the preferred choice.'
Supporting this were the healthy sales of the 56-unit Stadia at Yio Chu Kang, which saw 52 units sold. Two units were sold for under $750 psf while the remaining 50 were sold at between $750 and $1,000 psf.
In the OCR, Dr Chua said based on the analysis, median prices continued to soften by 4.2 per cent. But he also added that the analysis was just an 'indication of the market's mood', and does not account for product differentiation or physical attributes of each development.
While the volume of sales was low in the Central Core Region with just 19 non-landed homes transacted, Dr Chua believes that the low volatility in median prices there suggests that market activity and future prices in the high end market are likely to remain stable.
Also holding this view is CB Richard Ellis Research executive director Li Hiaw Ho who noted that two units in Scotts Square were sold at around $4,300 psf, a unit at Orchard Scotts was sold at $2,520 psf and two units at Skypark were sold at around $2,300 psf.
'Although high-value transactions were limited, the individual transactions seemed to indicate that prices in the high-end market were still holding firm,' he added.
The analysis of price movements will however, remain an academic one, and as such will remain open to debate.
Colliers International director (research and advisory) Tay Huey Ying said there were too few transactions at the higher end of the market to comment fairly on the sector.
And even for the OCR, she noted that the median transacted price for mass-market units averaged $792 psf in April, about 8 per cent higher than the average median price of $729 in August 2007 when the highest sale volume for the sector was registered.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
Property seems paler, but it's anyone's call
Volumes shrink, prices weaken but some segments are holding firm
By ARTHUR SIM
(SINGAPORE) Based on the latest monthly developer sales data from the Urban Redevelopment Authority (URA), property prices could be on the downward trend.
Developer sales fell, with April seeing only 274 transactions. This is about 9 per cent lower than the 301 units sold in March, though still higher than the 174 units sold in February.
And while it is difficult to accurately pinpoint price movements with such low volume, an analysis by Knight Frank of overall median prices achieved nevertheless registered an 8.9 per cent drop in April, falling to $943 psf compared to $1,035 psf in March.
The peak median price of over $1,400 psf was reached in August 2007.
Knight Frank director (research and consultancy) Nicholas Mak also explained that the analysis was a 'median of median prices', and so may not be a precise reflection of price movements.
Mr Mak also said that applying a different mode of analysis to the same data - the formula used to calculate URA's quarterly property price index for instance - could even show that prices have increased slightly.
Still, a comparison of monthly median prices of recently launched developments does suggest that prices could be falling.
The 79-unit Blu Coral was launched in February with nine units sold at a median price of $872 psf. In March, 28 units were sold at a median price of $802 psf, while in April, 18 units were sold at a median price of $657.
Similarly, 53 units of the 106-unit, The Verve, were launched in March with 36 units sold at a median price of $1,187 psf. In April, 8 units were sold at a median price of $1,055 psf.
And nine units of the 625-unit, The Quartz, were sold in March at a median price of $742 psf, followed by 14 units sold in April at a median price of $721 psf.
Interestingly, one unit of Waterfront Waves was sold at $909 psf in April, higher than the median price of $806 in March when 14 units were sold.
Perhaps another indication of the weakening market is that 43 units of 659-unit The Parc Condominium, previously reported as being fully sold, have re-emerged on the market. According to the monthly data, the returned units first appeared in February.
A source that did not want to be named also said that these units were returned by buyers who chose not to exercise their options, forfeiting a quarter of the 5 per cent downpayment in the process.
Jones Lang LaSalle head of research (South-East Asia) Chua Yang Liang has also analysed median prices as a measure of volatility and suggests that this has increased in the Outside Central Region (OCR).
Dr Chua explained that volatility, as a measure of how wide market prices are per unit dollar of the median price achieved could also reflect, 'the market's speculative level'. As such, he said: 'It would appear that upgraders may be returning, with entry level projects that are moderately priced between $750 to $850 psf as the preferred choice.'
Supporting this were the healthy sales of the 56-unit Stadia at Yio Chu Kang, which saw 52 units sold. Two units were sold for under $750 psf while the remaining 50 were sold at between $750 and $1,000 psf.
In the OCR, Dr Chua said based on the analysis, median prices continued to soften by 4.2 per cent. But he also added that the analysis was just an 'indication of the market's mood', and does not account for product differentiation or physical attributes of each development.
While the volume of sales was low in the Central Core Region with just 19 non-landed homes transacted, Dr Chua believes that the low volatility in median prices there suggests that market activity and future prices in the high end market are likely to remain stable.
Also holding this view is CB Richard Ellis Research executive director Li Hiaw Ho who noted that two units in Scotts Square were sold at around $4,300 psf, a unit at Orchard Scotts was sold at $2,520 psf and two units at Skypark were sold at around $2,300 psf.
'Although high-value transactions were limited, the individual transactions seemed to indicate that prices in the high-end market were still holding firm,' he added.
The analysis of price movements will however, remain an academic one, and as such will remain open to debate.
Colliers International director (research and advisory) Tay Huey Ying said there were too few transactions at the higher end of the market to comment fairly on the sector.
And even for the OCR, she noted that the median transacted price for mass-market units averaged $792 psf in April, about 8 per cent higher than the average median price of $729 in August 2007 when the highest sale volume for the sector was registered.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
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