DAILY MARKET UPDATES 6th August 2008

Tough calls in next property DC revision
Recently a few 99-year leasehold condo sites at Woodleigh, West Coast and Choa Chu Kang were sold at prices below land values implied by current DC rates, and this could provide evidence for a downward revision in DC rates come Sept 1. But some property market watchers suggest that the government may leave DC rates largely unchanged. Any drastic cut in DC rates may be seen as the government taking a bearish view on the Singapore property market and lead to a nosedive in sentiment. Jones Lang LaSalle said that these instances where land prices are below the land values implied by current DC rates are not statistically significant and that neither a drop nor rise in DC rates is warranted. Colliers said that even in places where there is justification to reduce DC rates, the cuts are likely to be moderate of not more than 10%. Colliers expects DC rates to stay unchanged for landed residential, commercial, industrial and hotel use but to be cut 0.5-1.5% for non-landed residential use. DTZ forecasts that DC rates will remain unchanged except for industrial use, which may see a slight increase. Some non-landed residential areas in the prime districts may see a slight decrease in DC rates.

- The Business Times, P1



Fee guidelines for property agents deemed anti-competitive
Existing commission guidelines for property agents by the Institute of Estate Agents (IEA) - are likely to infringe the Competition Act, the Competition Commission of Singapore (CCS) said. The IEA's position is that the guidelines are non-binding and agents are free to negotiate fees with their customers. But the CCS holds the view that even if the price recommendations are not binding, they will provide a focal point for prices to converge. CCS noted that the fees payable by sellers are couched as a minimum fee recommendation in the guidelines and this discourages any price competition below the recommended rate. IEA has until Sept 25 to comply with CCS’s recommendation to remove its guidelines on fee structures. Property firms said that the removal of the guidelines is unlikely to have much of an impact.

- The Business Times, P10



Single-premium sales dive 61% on CPF rule changes
New Central Provident Fund (CPF) rules have sent single-premium sales plunging. The sales slumped 61% to $667.5 million for the second quarter compared with Q1 this year. Most experts had tipped that sales of the products - such as endowment and investment-linked policies - would fall by between 30 and 50%. CPF money has been crucial for these single-premium products but the cash flow was curbed dramatically on April 1 when new rules cut the sum available for private investments under the CPF Investment Scheme.

- The Straits Times, H20



Sers scheme gets the thumbs up
Residents under the Selective En bloc Redevelopment Scheme (Sers) have shown strong support for the programme, said HDB. HDB's latest survey, which covered 1,019 households, showed that support for Sers stood at 85%.

- The Business Times, P10


Depositors strain under limbo rock rates
Depositing money in the bank looks less attractive now with low interest rates and record inflation. Yesterday Singapore's key three-month interbank interest rate dropped to 1%. According to the Monetary Authority of Singapore, the average fixed deposit rate and savings rate from 10 leading banks and finance companies fell to 0.40% and 0.23% respectively in July. Citigroup said that the increase in liquidity may have contributed to the fall in the three-month interbank rate and expects this pattern to continue. OCBC said that with the growth slowdown, equity weakness and softening property market, people prefer to hold cash. MasterCard has forecast increased retail spending in Asia for the second half of this year because of relatively strong employment.

- The Business Times, P1



Roxy-Pacific posts 78% Q2 profit rise
Listed property group Roxy-Pacific Holdings said that its Q2 net profit rose 78% to $8.95 million, from $5 million a year ago, as it continued to book revenue from projects launched in 2006 and 2007. Property development continued to drive revenue. Representing 69% of group revenue, turnover from this segment grew 75% to $28.9 million. Turnover was boosted by progressive recognition of revenue from six projects - The Treeline, The Montage, St Patrick's Loft, Axis@Siglap, The Marque@Irrawaddy and The Medley. In the first seven months of 2008, Roxy-Pacific launched six mid-tier projects, selling 114 of 165 units despite the lacklustre market. The company intends to launch three more residential projects, with about 170 units in all, by the end of the year - market conditions permitting.


- The Business Times, P8



The Arc at Draycott
The recently completed residence by BS Capital Group at Ardmore Park – Draycott enclave.
- 36 storey
- 50m lap pool
- Freehold
- 2 or 3 bedroom suites, 4 bedroom duplexes, penthouse
- Private lift for each unit
- Viewing by appointment (from mid-September onwards)
- Only 1 unit left for sale - 22nd floor 3-BR showflat unit
- Asking price: $3,800psf ($4.8 million) for 3-BR 1,270sq ft unit
Following the success of The Arc at Draycott, the Group has two new property developments:
Lumiere, a landmark 45-storey SOHO concept development along Mistri Road
- 2 Mistri Road (off Shenton Way)
- 99-years wef 21/03/06
- 45 storey
- 168 units
- Studio, 1+1-, 2-bedroom
- 506-990 sqft
- Estimated TOP: 30 June 2012
- $1,850-2,300psf
- Viewing by appointment
Mount Sophia Suites, suites-only development at the apex of Mount Sophia
- 95 Sophia Road
- Freehold
- 5-storey
- 50 units
- Studio, 1-, 1+1-, 2-bedroom suites
- 336-721 sqft
- Estimated TOP: 31 Dec 2011
- Only 1+1-BR units available for sale
- $1,600-1,800psf
- Viewing by appointment
Both Lumiere and Mount Sophia have enjoyed brisk uptake, with limited premium units available.
- The Business Times, P17-19 - advertisement

¯ ST Index change 2,860.51 (-15.57)
SIBOR (3 mths): 1.00000 (S$)
SWAP (3 mths): 1.02966 (S$)