News Highlights Thursday 12 June_2008

HDB upgraders hold key to property market turnaround
HDB upgraders accounted for 28% of all private homes purchased in Q1 2008, up from a 22% share in the preceding three months. Their Q1 share was also the highest in seven quarters, according to DTZ's analysis of caveats. DTZ reckons HDB upgraders' share of private home purchases should continue to rise in the coming quarters but this will also be a function of the type of projects developers launch. Typically, HDB upgraders are price sensitive and go for mass-market developments in the suburbs. The total number of caveats lodged for private home purchases fell 40% quarter-on-quarter to 3,066 in Q1 this year. The number of private homes bought by HDB upgraders also fell 25.8% in Q1 2008. But the share of private homes bought by HDB upgraders rose in Q1. Districts 15, 9 and 16 were the top picks for HDB upgraders who bought private apartments/condos from developers in Q1 2008. The most sought-after projects included Waterfront Waves in the Bedok area (District 16).

- The Business Times, P1




Sub-sales market may stay active as punters sell units
The sub-sale market may continue to be active as speculators dispose of units in projects that are physically completed, said DTZ. Those who had purchased multiple units on deferred payment schemes are likely to sell their units to avoid stretching their financial limits. The median sub-sale price of caveats lodged for private home purchases fell by nearly 8% quarter-on-quarter to $1,107 psf in Q1 2008. This was due to fewer high-end units being transacted in the sub-sale market. Projects which received the strongest subsale interest in Q1 2008 were Citylights, Icon and Varsity Park Condo, as TOPs for these projects were granted recently. Property investors tend to sell off units shortly before or after a project receives TOP as buyers are willing to pay a slightly higher price then, because units in the development can be immediately rented, said DTZ. Foreigners (including permanent residents) accounted for 28% of caveats lodged for overall private home purchases in Q1 this year, up slightly from 27% in the preceding quarter. Indonesians and Malaysians continued to be the biggest buyers, accounting for 18% and 15% respectively. Buyers from India saw their share go up from 11% in Q4 last year to 14% in Q1 2008. Koreans' share slipped from 8% to 5% over the same period. Projects that were popular among foreign buyers in Q1 2008 included Zenith in Zion Road, Waterfront Waves, and Marina Collection in Sentosa Cove.

- The Business Times, P29




Prices of some new properties coming down
At least two new projects have been tagged with prices below what they were expected to fetch. One example is 99-year leasehold project Dakota Residences in Dakota Crescent. Sales of its 348 units will start next Saturday at an average of about $950 psf - below the $1,000-1,100 psf previously targeted. About 120 units will be released in the first phase. The two- and thr
ee-bedroom units that face away from Geylang River are said to cost $950-970 psf, while the four-bedroom units facing the river will go for $1,000 psf. City Developments' Shelford Suites has also started previews for its 77 units at about $1,600 psf on average. This was lower than expected, as two units were sold in March for $1,869 psf and $1,905 psf. Developers are launching more mid-tier projects. East Bay, a 40-unit condominium off Upper East Coast Road, will be on sale in the coming weeks. Prices average $1,100 psf, starting at about $600,000. Ivory at Ceylon Road has sold about five of its 28 units. Prices start at $558,000 for a 640 sq ft two-bedroom apartment, averaging $800 psf. At 353 Pasir Panjang Road, a boutique project will be completed soon. One-bedroom apartments are selling for $550,000, and three-bedroom units are priced at $1.4 million to $1.5 million.

- The Straits Times, H26




JTC launches hotel-in-biz park tender
JTC Corporation launched a concept and price tender yesterday for the development of an integrated business park facility with retail and hotel components in Changi Business Park (CBP). The 4.7-hectare Plot 61 is a 'Business Park - White 40' site. 40% of the total gross floor area of 1.26 million sq ft will go towards 'white' or commercial activities. Retail activities will take up 45-60% of the 'white' space, while the balance will be set aside for a hotel. The integrated development would house firms in the high-technology, high value-added and knowledge-intensive industries. According to Knight Frank, rents in CBP can range from $3.50 to $6 psf and private developers may offer bids ranging from $130 to $167 psf.

- The Business Times, P4




S Korea eases property controls for small cities
South Korea said that it was easing measures aimed at curbing a sharp rise in domestic housing prices for small cities to support ailing property markets. The government had decided to lift the maximum loan-to-value ratio for unsold houses to 70% from the current 60% in areas where housing prices are unlikely to jump on speculation, if builders cut prices of unsold houses by 10%. The government will also cut acquisition tax and registration tax for those homes by 50%. The concessions took effect from yesterday until the end of June next year. South Korea had some 132,000 unsold houses as of the end of March this year, almost double the average number over the last 10 years.

- The Business Times, P29




UK commercial property rents fall in May
Commercial property rents in the UK fell for the first time since 2003 in May, data from CB Richard Ellis Group Inc showed. The data showed an acceleration in the monthly rate of decline in capital values. Commercial property valuations, on average, have fallen by more than a sixth since the UK market peaked last August. Capital values fell by a further 1% in May and are now 6.2% lower than at the beginning of the year, CBRE said.

- The Business Times, P28




UK banks, valuers tighten conveyancing
Britain's mortgage banks and property valuers are to tighten up their conveyancing procedures. The Council of Mortgage Lenders (CML) said that lenders might sometimes unintentionally offer a mortgage based on a valuation of a property that is higher than the true price paid. That has left some buyers more exposed to the risk of negative equity as house prices have tumbled and increased the potential for repossessions. From Sept 1, lenders will require builders of any newly built, converted or renovated property to disclose buyer incentives so that a mortgage is based on a reliable valuation of the property. According to Britain's biggest lender HBOS, the average cost of a UK home has fallen by almost 8% since prices peaked in August. The CML has said that it expects gross mortgage lending to fall by a fifth in 2008 compared with 2007.

- The Business Times, P28




S'pore inflation to peak above 8%: Credit Suisse
Inflation in Singapore is expected to peak above 8% in May or June, but the risk of higher prices stifling economic growth is not imminent, a Credit Suisse economist said. He also said that real wages in Singapore are holding up well and inflation is not at a level that will stifle growth. The government has raised its full-year forecast range for Consumer Price Index twice since the start of this year, with the latest hike forecasting 5-6%.

- The Business Times, P1




Expatriate cost of living climbs
ECA International's latest cost-of-living study shows Singapore climbing 17 places in the rankings to 114th spot. Within Asia, it is 13th. ECA says a stronger currency and high food and fuel price rises led the climb in rankings for cities such as Singapore. The survey compares a basket of 128 consumer goods and services commonly bought by expatriates in more than 370 locations worldwide.

- The Business Times, P10




BNP Paribas unit picks S'pore for global IT devt hub
BNP Paribas Private Bank will centralise its global IT development operations in Singapore and hire 110 people for the project by next year. The Singapore hub will serve the key software development needs of its 11 locations worldwide. Initially, the IT development team will be housed at the Tung Centre in Collyer Quay for about eight months. The bank is already looking for new premises. The private bank is a unit of BNP Paribas, France's biggest bank.

- The Business Times, P4




CapitaLand, Grand Hyatt win green awards
CapitaLand won the Singapore Environmental Achievement Award while Grand Hyatt took home a merit prize at the second Singapore Green Summit. The award recognises environmental and social responsibilities in an organisation and is the most prestigious green gong in Singapore.

- The Business Times, P10



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