SINGAPORE: Housing mortgage rates in Singapore are on the rise.

UOB and DBS are the latest to jump on the bandwagon.

UOB announced on Monday that it had raised its board rate by a quarter percentage point for new home loan customers.

DBS will do the same, starting May 1.

A hike in board rate will directly increase mortgage costs.

Over the weekend, Standard Chartered Bank said it would raise mortgage rates by half a percentage point for private homes.

This is the second rate hike by Standard Chartered Bank this year.

Just last month, OCBC announced that it would hike its board rate by 30 basis points to 5.8 percent from March 29.

Channel NewsAsia did a check with the remaining lenders.

HSBC, Citibank and ABN are currently staying put, but they said they were keeping the situation under close review. - CNA

DEVELOPERS achieved varying degrees of success for their residential property sales over the weekend.

Wheelock Properties (Singapore), the company behind the latest release in the Singapore property market - The Cosmopolitan condo on the former Times House site - was keeping mum on how many units it has sold for the freehold condo. It began selling tbe project last week at an average price of $1,100 per square foot after a 10 per cent discount.

Sime Properties Singapore is said to have sold a few more units over the weekend for its Orion freehold apartment development along Orange Grove Road. Prices start from $1,350 psf. The 27-storey project, which will come up on the site of the Orange Court serviced residences, has a total of 46 units including two penthouses.

City Developments and TID are said to have sold 20 units at the freehold Parc Emily last week, bringing total sales to 60 of the 100 units released so far in the project, at an average price of $750 psf. In total, Parc Emily has 295 units.

Things were quieter for Cheung Kong Holdings' completed Costa Del Sol condo over the weekend, BT understands. Nonetheless, the developer has managed to sell another 15 units over the past fortnight, bringing total sales to 30 of the 100 units that it relaunched in late February at the 99-year leasehold condo - at an average price of $650 psf. The current batch of 100 apartments being marketed actively are located in the lower half of one block in the 30-storey project.

Far East Organization sold seven units over the weekend, mostly at Lakeshore near Boon Lay MRT Station, and Hillview Regency in Bukit Batok.

Resale condos hit by new launches
 By Desmond Ng
 desmondn@...



 WITH a whole slew of new developments hitting the market, resale private properties have been losing their shine, property watchers said.

 The URA figures are revealing.

 New home sales hit 5,785 units last year, an improvement of 12 per cent from the previous year.

 And developers are coming out with more.

 When that happens, resale prices for apartments are hit.

 Resale prices for landed properties are less affected as there are few new landed property launches.

 So why would the price of resale apartments soften with the launch of new projects?

 Mr Eugene Lim, assistant vice-president of real estate firm ERA Singapore, said developers have become realistic in their pricing.

 This means that the price tag for a new unit is usually the same as the price of a resale apartment in the same area.

 Owners of the older units are then left with little choice but to push their prices down.

 And people just want new apartments, it seems.

 Developers of new apartments are also trying to sweeten the deal with freebies such as renovation or furniture vouchers, said Mrs Ong Choon Fah, executive director of DTZ Debenham Tie Leung.

 She added: 'The quality of the furnishings will be more contemporary, plus for leasehold properties, the lease period will be longer for new projects too.'

 This has been the trend for some time now.

 Property agent Bernard Chia recalled that he was marketing some resale units of Northvale condo in Choa Chu Kang about two years ago when a new condo, the Warren, launched its units.

 Northvale was launched in 1995.

 Said Mr Chia: 'When that happened, the sellers of Northvale had to adjust their prices to compete with the new project. The difference was about 10 per cent.'

 Like many other property agents, he said he would rather sell new units now.

 But not all industry watchers believe it's doom and gloom for resale apartments.

 Chesterton International's research director Nicholas Mak said: 'Although the older properties may be dated in terms of design, some of them are located in areas where there are no new projects.

 'Plus, the older condo units tend to be bigger than some of the newer projects.'

 He said some of the older condominiums may have better facilities such as bigger swimming pools and more tennis courts than the newer ones.

 Home buyer Koh S L, 30, took a year and a half before she found her ideal place.

 Ms Koh, who is married with two children, was choosing between a resale and new condo unit.

 The family lives in a five-room Pasir Ris flat.

 She finally bought a three-bedroom unit at Kovan Melody in Hougang for about $600,000 last year.

 She said: 'We saw a few resale condos in the area but the facilities quite lacking and the designs too old. Plus the neighbours were quite old.

 'We have two young kids and wanted a place where there are young families.

 'We chose Kovan Melody because of that, and also because of the amenities, proximity to MRT station and cheaper price.'



 Recent launches
   THERE have been a number of new condos soft-launched in recent weeks, including Scenic Heights (left).
   It is a freehold condo project comprising 50 units off Balestier Road. Other new developments include Platinum Edge, a freehold development at Leicester Road, and Parc Emily, also freehold, at Wilkie Road. 

Agent: Tougher to sell resale properties now
 

IN the past, commissions from resale private properties formed the biggest chunk of property agent Bernard Chia's income.

 He said that about 11 years ago, 85 per cent of his income was from resale properties while the rest was from marketing new properties.

 Today, the story is very different.

 The 35-year-old said marketing resale properties now contribute about half of his income, and he's spending more time and effort marketing new properties.

 Said the Propnex division director: 'It's getting more difficult to sell resale properties, especially when there're quite a number of new projects in the market.

 'At the end of the day, it's all about pricing, but some owners are quite stubborn and don't want to lower their prices.'

 Mr Chia said the prices for resale properties have to be lower to compete with the new projects which are attractively priced.

WILLING TO WAIT

 In today's market, buyers do not just focus on resale, they also go to new projects to compare prices, he said.

 Mr Chia also goes with customers to look at new projects where, in the event of a sale, he gets commissions ranging from half to 1 per cent of the property price.

 Added Mr Chia: 'And many buyers take up to a year to house-hunt and are willing to wait for new projects to be completed.'

First of a kind CBD homes to be launched next year

(SINGAPORE) Far East Organization expects to launch a project with slightly over 300 apartments in the Central Business District early next year.

At 43 storeys, the new tower will be more than double the height of the existing 17-storey NatWest Centre now standing on the site.

This will be the first office block in the CBD to be redeveloped into homes. The Urban Redevelopment Authority has supported an 11.2 plot ratio (or the ratio of maximum potential gross floor area to land size) for the project, which is the maximum allowed for the site based on commercial zoning under Master Plan 2003.

The URA's approval is for a residential project with commercial space on the first level.

The government has indicated for some time that one way for owners of older CBD office blocks to rejuvenate their properties in the face of competition from the New Downtown would be to redevelop them into residential projects. However, the authorities have been silent on whether such residential projects could receive the same plot ratio as for commercial use.

So the ratio granted for Far East's Natwest Centre development is noteworthy and should set the benchmark for other redevelopment applications in the area, say property market watchers.

Analysts say that it makes sense for new residential developments in the CBD to be given the same plot ratio as for commercial use, since there are already tall office blocks in the area.

However, this policy of awarding the same plot ratio for residential as for commercial use would probably only apply to the CBD office district, at least for now, say market watchers.

Far East's deputy chief operating officer (retail and lifestyle concepts) Chia Boon Kuah, said the group's decision to redevelop the 17-year-old NatWest Centre was in response to the planning authorities' aim to repopulate the city by introducing inner-city housing. 'Our Icon project underscores this trend,' he says.

In May 2003, the property company managed to draw out home buyers after the Sars outbreak with the release of its Icon project in Tanjong Pagar. To date, it has sold about 90 per cent of Icon's 646 apartments, for an average of about $750 per square foot for the 99-year leasehold development.

Following its experience with Icon, Far East expects the majority of units at the NatWest Centre redevelopment to comprise studio and one-bedroom units.

The remaining apartments will be of one-bedroom lofts and two-bedroom units, Mr Chia says. In addition to the usual facilities such as a swimming pool and gym, the project, which is being designed by DP Architects, will have a sky garden on a high floor above the 30th level. With shops on the ground floor and carparks above it, the apartments will be located from 10th floor upwards. The project is slated for completion in 2009.

Far East plans to sell all the apartments but retain the ground-floor shops - the same strategy as with Icon.

It has paid about $9 million to the state for the NatWest Centre site. This sum includes a land premium to upgrade the lease for the site to 99 years (from the remaining 74 years) as well as a differential premium for the additional plot ratio.

NatWest Centre's current gross floor of 128,672 sq ft (11,953 square metres) is 6.57 times the site area of 19,586 sq ft, said Mr Chia.

The 47-year-old father of two, who holds an MBA and a degree in mechanical engineering, noted the revival of inner-city living not just in Singapore but also in other popular cities. 'People want to live in the city again because it has become more habitable - unlike in the old days when it was polluted and congested.

'And Singaporeans are starting to appreciate the benefits of city-centre living, especially in a development with full facilities. And there's the added convenience of not having to spend so much time travelling to and from work,' says Mr Chia, who was Singapore Airlines' area vice-president (Singapore) before he joined Far East Organization two years ago.

NatWest Centre, located at the corner of McCallum and Telok Ayer streets, is flanked by office blocks on one side and restored conservation shophouses on the other, set in the historic district of Stanley, Telok Ayer and Boon Tat streets.

The area was teeming with lunchtime crowds thronging the local eateries when BT interviewed Mr Chia. 'These people will live here,' he says

Studios at Central for sale soon

HAVING sold about 85 per cent of 227 small-office, home-office (or SoHo) units at its Central project over the past year, Far East Organization is releasing next month what it dubs 'New Age' studio offices in the project facing the Singapore River.

The 99-year leasehold mixed development is located above Clarke Quay MRT station.

Far East's deputy chief operating officer (retail and lifestyle concepts) Chia Boon Kuah says the studio offices are 'New Age' because like the SoHo units, they will have high ceilings, with a floor-to-floor height of 4.5 metres, compared with 3.2 metres for traditional offices.

In addition, each studio office, ranging from about 646 sq ft to 1,200 sq ft, will be fitted with its own bathroom and pantry. 'Pricing will be similar to our SoHo units, which achieved close to $1,100 psf on average,' said Mr Chia.

The group is targeting small businesses, professionals and representative offices as well as property investors, for the 120 studio offices. These units will have river views and be located from the 11th to 25th storeys in one half of a V-shaped wing.

Those who require larger offices can lease of up to 13,000 sq ft per floor in the other half of the wing, totalling about 150,000 sq ft. Far East is keeping this component of the project, along with the entire 204,000 sq ft retail podium, for rental income.

Besides its location, a major selling point of Central is that the various occupants - of the SoHo units, offices and shops - will be able to enjoy common recreational facilities such as a swimming pool, gym and spa.

The development is slated for completion in late 2007 or early 2008.

Valuing your property

IT never occurred to me that selling my flat would eventually put me in the shoes of a potential buyer. But after I had unsuccessfully showed my property to at least 10 potential purchasers, my property agent took me aside to enlighten me on some of the finer points of property valuations.

He told me that even though he personally thought the renovations I had recently done should improve the value of my property, the only valuations he knew of by a financial institution for similar properties in my area were about 15 per cent less than what I was hoping to get.

So even if people were keen to buy, none were prepared to pay the difference between my asking price and the bank's valuation, which in turn would dictate the loan available.

Any buyer would have had to have at least 25 per cent of the sale price in cash as opposed to about 10 per cent, and this was a major deterrent, or so my agent said.

This got me thinking: 'How are property valuations actually done?'

A quick check with several property valuers revealed that my property valuation was probably the result of what is known in the industry as a 'desktop valuation', where the property in question is not even inspected. Instead, similar properties in the area are used to determine an indicative figure.

Generally, property valuations are based on four key factors: land, built-up area, age, and property type. These in turn dictate the market value which is the main determinant in property valuation, explains Tan Keng Chiam, national director and head of valuation advisory services at Jones Lang LaSalle (JLL). 'Renovation is a wild card,' he adds.

Elaborating on why renovations do not necessarily add to the value of a property, he says: 'A home owner may have spent a lot of money for marble on the walls but if there are still old tiles on the floor, I will discount the renovations heavily.'

There is also a misconception that a property valuation is definitive, he says. 'I have to tell people that it should be used as a guide, rather than used to determine price. Then depending on market sentiment, the price might go up or down.'

He thinks it is important that potential sellers look at property titles, Urban Redevelopment Authority (URA) planning constraints and the type of lease. He says that he once handled a property which had an unusual caveat written into the lease which stipulated that the property to be sold could only be used by a specific corporation.

This was a commercial property, but complexities do come up in residential properties too, especially where 'special value or investment value' come into play. The Singapore Institute of Surveyors and Valuers handbook on standards and guidelines describes these as 'A term relating to an extraordinary element of value above market value' and 'The value of a property to a particular investor, or class of investors, for identified investment objectives'.

In Singapore, where plot ratios can change dramatically, and en bloc sales are quite common, the potential value of a site, especially landed property, can be a very important factor. Mr Tan has dealt with cases where the value of property differed by as much as 300 per cent when the site value was taken into account.

He advises property owners to be well acquainted with the Master Plan at the URA. It will not only give information on changes in plot ratio, and change of use, but also indicate what kind of developments may be planned for a neighbourhood. You might just be sitting on a gold mine - or a potential disaster - and not know it.

It might also be prudent to follow property price indices to get a better feel of property values, even if reading these is getting more complicated. Lydia Sng, executive director at Knight Frank and an SISV member, says that in the past, 'our price-index cycles were more predictable'. 'The last seven-year cycle ended in 1996. It created a pent-up demand which gave us volume.'

Today, she suggests, cycles are much more difficult to identify and prices change from month to month, making it difficult to fix market values. In a sense, a volatile market gives rise to varying interpretations of market value, and the recent 'cash-back' scandal, where the value of an HDB flat was inflated beyond market value is evidence of this.

First impressions count

While renovations, or what the industry calls depreciated replacement cost (DRC), generally do not add much value to your property, first impressions do count. 'A seller should spruce up his property before selling by, say, painting it, doing minor repairs or mowing the lawn. But there is no need to renovate the property before selling it as the buyer might want to do extensive renovations later,' says Nicholas Cheng, executive director, valuation, at DTZ Debenham Tie Leung.

The resounding advice is that buyers and sellers should do their homework. Records of property transactions are the main source of information for valuers applying the most commonly used comparison method in calculating property values. Although firms of valuers have their own databases, transaction figures are available to the public at websites including Realis and Realnet.

Buyers and sellers should also be aware that although the en bloc potential of a certain property may increase its value, 'valuers will not explicitly state that they are valuing the property with en bloc potential because it is never a given that an en bloc sale will happen', Mr Cheng says.

It is not common but 'a buyer can always pay for a valuation on the property if he feels the asking price is too high', he says. 'This is of course assuming the seller is prepared to lower the price if the valuation turns out to be lower than his asking price. The final purchase/sale price negotiated is really a function of the differing needs and the urgency of the buyer's and seller's personal situation.'

However, property valuations done independently by buyers or sellers are generally not accepted by banks and financial institutions, so engaging one would not help very much. It is a much better idea to speak to the people that matter. In this case, the banks.

JLL's Mr Tan says: 'It will be good if buyers consult the bankers as they will be able to provide a full range of services from assessing what loan a buyer can afford and working out an instalment plan to providing an indicative value of the property and assessing legal needs.'

---

TIP

Property valuations are mostly based on recent property transactions in the same neighbourhood or building. The public can get indicative values (to be used as a guide only) of properties at the following websites:

www.sisv.org.sg (click on the REALink, then select Public Access)

www.ura.gov.sg (Under the heading URA Functions, click on Property Market)

www.hdb.gov.sg (click on RESALE, scroll down to STATISTICS link for average valuations of resale flats for the last six months)

Balestier's Hang Tat Garden up for sale en bloc

HOMEOWNERS are again jumping on the collective sale bandwagon. And this time, it's the folks at Hang Tat Garden in Balestier Road.

The owners of the eight-storey residential freehold site at No 348 are asking for $24.3 million for the 25,196 square foot development. With a development charge (DC) of about $2 million, the land price will work out to about $370 per square foot per plot ratio. And a new development will probably break even at about $580 to $620 psf, property analysts say.

The site, marketed by Propnex, has a plot ratio of 2.8 and height constraint of 36 storeys. The property can be redeveloped into one with a gross floor area of 70,549 sq ft.

Hang Tat Garden is just behind Shaw Plaza and close to Balastier Road eateries such as Loy Kee Chicken Rice.

There are now 27 units in the development, with sizes ranging from 1,647 to 2,659 sq ft.

Propnex reckons that the estimated break even cost is $530 psf if a developer builds between 80 and 85 new apartments averaging 850 sq ft each. Propnex said that the breakeven cost takes into account the $2 million DC.

But analysts contacted by BT see the asking price as a tad on the high side. At about $370 psf per plot, some believe it is optimistic for the location.

'A more realistic asking price would be around $300 psf per plot,' said a market source. He explained that although Hang Tat Garden is a freehold site in a relatively central spot, the Balestier Road area is seen more as a 'functional location'.

Also, at $530 psf, he thinks the estimated breakeven cost is too low. A more realistic amount, said the market watcher, would be upwards of $580 psf.

SINGAPORE : Residents of Spottiswoode Park Road have said 'yes' to lift upgrading.

Flat owners in all nine blocks under the Lift Upgrading Programme gave the required 75 percent vote needed to proceed with the plan.

Construction work will start in the first quarter of next year, for completion by the end of 2007.

The four-day polling was held last week.

Minister Mentor Lee Kuan Yew, who launched the programme, urged residents to vote in favour of it or miss their chance to enhance their assets while the economy is still good.

Mr Lee, who is MP for the area, had said the government would ensure that Singaporeans' assets increase in value as the country grows.

And one way is to offer main upgrading or lift upgrading programmes to enhance the value of their flats.

The Housing and Development Board says 465, or about 94 percent, of the 494 HDB blocks which have undergone polling for the LUP, obtained the required 75 percent approval.

Earlier this year, Prime Minister Lee Hsien Loong announced in Parliament that lifts in all blocks would be upgraded within 10 years. - CNA

March 8, 2005
HDB to help needy who need to downgrade



FAMILIES that are stricken by money problems and who need to downgrade will get help.

 The Housing Board is willing to let them sell their flats earlier than the five years it rules they must live there. It may also give them a loan again at subsidised rates to buy a smaller HDB flat.

 This assurance was given by National Development Minister Mah Bow Tan yesterday after four MPs highlighted the difficulties such people face when they want to downgrade.

 Among them was Mr Yatiman Yusof (Tampines GRC), who said he was seeing more downgraders at Meet-the-People sessions he holds for his constituents to see him with their problems.

 These home owners fall into one of two groups: couples who are divorcing or home owners who have lost their jobs.

 They need to move to a smaller flat but cannot, either because they have not occupied their flats for the minimum period of five years or have problems getting a bank loan to help them pay for the next home they are buying.

 HDB rules do not allow downgraders to seek its cheaper loans, forcing them to go to banks. But banks are unlikely to give them a mortgage loan when they have been retrenched and have no regular income.

 The plight of such families has been highlighted by MPs for several years, ever since job losses mounted as a result of changes in the economy.

 Responding to MPs yesterday, Mr Mah said HDB already had various schemes to help those struggling to pay their home loans.

 These have been 'generally adequate' in helping flat owners tide over their temporary financial hardship so that they need not sell their flats, he said.

 The measures include helping home owners to reduce or defer their loan instalments, increasing the payment period for the whole loan and paying their mortgage arrears in instalments. Last year, HDB approved 40,000 applications for such help.

 But Mr Mah acknowledged that it might be better for financially beleaguered families to downgrade to reduce their burden.

 He, however, turned down MPs' calls for elderly home owners who have sold their HDB flats to be allowed to rent a home from HDB immediately.

 Such owners are barred from renting for at least 2 1/2 years, because rental flats are part of the Government's social safety net for poor families who cannot afford to own a home, he said.

 Last year, HDB received 2,300 such appeals. If it had agreed to them, HDB would have to spend almost $300 million to build more rental flats. This was something it could ill afford, Mr Mah said.

 As for Dr Maliki Osman's (Sembawang GRC) concern about families losing their homes for failing to repay their bank loans, Mr Mah said that out of the 50,000 homes with mortgages from banks, only one has been repossessed by the bank.

 The minister urged Singaporeans to buy a flat that is within their means.  --  LYDIA LIM

March 8, 2005
Waiting time to buy second flat now 5 years
by Lydia Lim



HOUSING Board flat owners no longer have to wait 10 years before they can buy a second flat directly from the HDB. They can now do so after five years.

 More owners can also sublet their flats following the further easing of rules announced by National Development Minister Mah Bow Tan yesterday.

 These moves benefit elderly home owners who want to convert their flats into sources of income. Those with no outstanding HDB loans can now sublet their entire flats after living in them for five years, down from 10 years. Those who are still paying off their loans can do so after 10 years, down from 15 years.

 The move means about 537,000 flats - or 65 per cent of the total stock - can be rented out.

 This is more than double the 250,000 flats that could be sublet under the old rules.

 The changes go some way to address MPs' concerns about the need to help older Singaporeans who are asset-rich but cash-poor.

 MP Cynthia Phua (Aljunied GRC) said it could also benefit some lower-income families who need to rent but do not qualify for HDB rental flats.

 This is because with more flats being sublet, rents are likely to come down, she said.

 However, Mr Mah said he expected most flat owners to continue to occupy their flats.

 He also assured MPs his ministry would pursue the issue of reverse mortgages with banks or insurers who could offer them on good terms to HDB owners. But so far, studies on this issue have not been promising. In most cases, the monthly payments to flat owners would be low. They also risked losing their homes if they outlived the fixed term of the reverse mortgage. (If this goes thru, owners will not be motivated to sell, kep our fingers crossed)

 Mr S.K. Cheah, senior sales manager at Knight Frank, said the policy change could affect the demand for resale flats, especially in newer estates where there was also a ready supply of new flats. But he said he did not expect any drastic change in resale prices.

 Mr Dave Lau of Roof Real Estate Group predicted that owners of three-room flats were more likely to snap at the chance to upgrade. This is because they will need to pay a smaller resale levy, he said.

 This is why: Any flat owner who applies to buy a second flat direct from the HDB needs to pay a resale levy equivalent to a share of the first flat's selling price. For a three-room flat, the levy is equivalent to 20 per cent of the selling price.

 But home owners like Mr Mohammad Zaki are not jumping at the chance to upgrade. The 32-year-old production planner shares a four-room flat in Woodlands with his parents. He suggested HDB 'do away with the levy' if it wanted more people to upgrade and buy up its stock of unsold flats. 

March 8, 2005
HDB gives developers a bigger role
by Joyce Teo



HOME-BUYERS looking to buy a newly-constructed Housing Board flat in Tampines in the next year or two are set for a big surprise.

 Instead of arranging the purchase with the HDB, they will find themselves face-to-face with a private developer.

 In a bold experiment, the Government announced yesterday that it will allow private developers to design, build, price and sell some HDB flats in Tampines Avenue 6.

 The site, with space for 500 flats, will go up for tender later this year.

 Industry insiders say this outsourcing of the whole HDB development process is set to result in a wider choice of flats, better quality housing, such as more condo-style features, and shorter waiting lists.

 However, National Development Minister Mah Bow Tan stressed the Government was stepping warily in the move to open up more public housing to the private sector.

 For years, private firms have played a role in the design and building of HDB flats.

 But letting developers price and sell the flats - with no price ceiling - is a major change.

 Mr Mah said the idea 'is untested and unfamiliar to HDB as well as flat buyers'.

 'We will therefore take a cautious approach and test out the concept via a pilot project,' he told Parliament.

 Mr Mah expects most HDB projects outsourced privately to be done under the 'tried and tested' design and build system, where the HDB takes over as the seller.

 The experiment is part of the Government's continued efforts to liberalise public housing, which now accounts for about 80 per cent of total housing stock.

 Almost nine in 10 Singaporeans are HDB dwellers, and almost all of them own their flats.

 Under the scheme, private players will tender for land on a 103-year lease, and design, build and price the flats, which will be subject to HDB rules and conditions.

 So, for example, a policy designed to ensure a balanced mix of Singapore's ethnic groups will apply.

 To ensure affordability, first-time buyers will receive a government CPF housing grant of $30,000 or $40,000, similar to the grant for first-timers buying HDB resale flats.

 Permanent resident households, households earning above $8,000 a month, and others now ineligible for new HDB flats will not qualify.

The Real Estate Developers Association of Singapore said: 'With an enlarged market, there will be new opportunities for private enterprise to contribute fresh ideas and be creative in building and design. This will result in more choices for the home-buyers.'

 Jones Lang LaSalle's associate director, residential, Ms Jacqueline Wong, said developers could throw in more 'condominium' standard finishes, such as split-level air-conditioning or completed kitchens with built-in hobs and ovens.

 PropNex chief executive Mohamed Ismail said: 'There won't be a long three to five year time lag to buy a flat. The HDB will only have the build-to-order scheme in future, after all their surplus flats are taken.'

 But the flats' pricing will not be far from current levels.

 Ms Wong said: 'Generally, the public should be prepared to pay a slight premium of, say, 5 per cent to 10 per cent.'

 One developer, who declined to be named, said: 'With a monthly income ceiling of $8,000, how much higher can you price it?'

 Another, who wished to remain anonymous, said: 'If you want to build a super-duper HDB flat, consumers may not be able to afford it. It will be a challenge for developers if you want to have better designs and still keep it affordable.'

OTHER HDB CHANGES

*Lifts on every floor for 95 per cent of blocks within 10 years. Town councils can use up to 10 per cent of sinking funds for lift upgrading.

*Home owners now have to wait just five years, down from 10, to buy a second flat direct from HDB.<= I forsee a higher turnover amongst the 3 & 4 rooms dwellers. Good for us.

*Further easing up on rules on subletting of flats. Those with paid-up mortgages can rent out after staying for five years, down from 10 years.

*HDB to waive rules for cash-strapped families who need to downgrade, including giving them loans at subsidised rates.

*Struggling HDB shopkeepers can quit business if more than half in identified clusters agree.

Monday March 7, 1:44 PM

Doubts as Singapore leads Asian property stocks By Dominic Whiting, Asia property correspondent HONG KONG, March 7 (Reuters) - Singapore property stocks are the pick of a lacklustre Asian bunch so far this year as the city-state inches into a property market revival, but analysts say high home ownership and oversupply still haunt developers. Asian property shares tracked by Netherlands-based Global Property Research (GPR) gave a 0.3 percent return in February and 1.1 percent so far this year. Seven Singapore property issues on GPR's list, including developers CapitaLand , Keppel Land and Singapore Land , gave an average return of 13.9 percent. With the island's economy racing to 8.4 percent growth last year, private home prices edged up 0.9 percent after four successive annual declines. Investors hope rising confidence in the property market will start to lift developers' sales. But some analysts are not convinced the run will last long as around nine in 10 families already live in their own homes and some 14,000 apartments still lie empty. Home ownership is about 71 percent in Australia and 54 percent in South Korea. "It's edging up, but it's very slow coming," Hong Kong-based CLSA analyst John Saunders said, referring to the property market revival in Singapore. Expectations are rising that Singapore could mimic Hong Kong's property market recovery in the last year. But property values in Singapore are 38 percent below their pre-Asian economic crisis peak, while Hong Kong values are at half their peak. A 60 percent jump in property prices in Hong Kong in the last 18 months is clawing back a price slide in 2003 when an outbreak of the SARS respiratory disease ravaged the economy. "Some people ask: if Hong Kong is up 50 percent, why not Singapore?" Saunders said. "The answer is Singapore didn't go down 80 percent." HONG KONG, JAPAN BETTER? Shares in CapitaLand and Keppel Land are up 16 percent so far this year, partly because both are also benefiting from strong earnings at projects in China. In comparison, Asia's biggest developer by capitalisation, Hong Kong's Sun Hung Kai Properties has fallen 9 percent in 2005 despite a near doubling in half-year earnings. Local rival Henderson Land is down 13.8 percent. Morgan Stanley analyst Kenny Tse said Sun Hung Kai is good value now at HK$71 a share and a 17 percent discount to forecast NAV (net asset value), but would be "compelling" at HK$65. CapitaLand is trading at a near 10 percent premium to NAV. Tse said Hong Kong was releasing land for auction to developers very slowly, which would keep property prices strong. Developers such as Sun Hung Kai, who bought land cheaply in the market trough, should widen their margins as land prices rise. "The land sale programme should extend the upcycle and be beneficial to Sun Hung Kai," Tse said. Authorities in Hong Kong and Singapore use land supply to try to control property markets, which are key to the economies of the crowded cities. CLSA's Saunders said he was keen on Japanese residential developers, especially smaller firms such as Goldcrest , because of a rise in consumer confidence. "It's simply a macroeconomic call, if you believe things are turning around in Tokyo with unemployment falling," he said. "The shape of the (property) price curve is similar to Hong Kong." Japanese property issues followed by GPR, such as property trusts and developers Mitsubishi Estate and Mitsui Fudosan , fell 2.1 percent in February but are up 3.1 percent this year. The 1.1 percent rise in Asian property stocks this year compares with a loss of 4.9 percent in North America and a gain of 2.1 percent in Europe, according to GPR

Sentosa Cove buyers may get PR deal

(SINGAPORE) The appeal of Sentosa Cove to wealthy foreign property buyers could get a boost soon - if an extension to a permanent residence scheme to woo high net worth investors takes effect.

Under the proposed extension, up to $2 million of the $5 million minimum investment required for the Financial Investor Scheme for Permanent Residence can be invested in a bungalow on Sentosa Cove. The remaining sum of at least $3 million must still be placed in financial assets, however.

The changes are still being finalised.

According to the existing scheme, which took effect late last year, applicants must place at least $5 million in financial assets with financial institutions regulated by the Monetary Authority of Singapore (MAS). Applicants must also have minimum net personal assets of $20 million.

An MAS spokesman yesterday confirmed that details are being finalised for a variation of the scheme to allow a bungalow purchase on Sentosa Cove to form part of the qualifying assets. 'We are working out the details with the Ministry of Trade and Industry,' said the MAS spokesman.

MTI is the parent ministry of Sentosa Development Corporation. The latter, in turn, is the parent of Sentosa Cove Pte Ltd, the master developer that has been selling land in the upmarket waterfront housing district since October 2003.

However, some developers and property market watchers are wondering why bungalows on Sentosa Cove are the only qualifying property assets allowed under the proposed variation of the Financial Investor Scheme.

Market watchers reckoned the authorities' thinking could be similar to the rationale given last year when fast-track approval within 48 hours was introduced for foreigners (including PRs) buying land and landed homes on Sentosa Cove: 'The strategic objective of Sentosa Cove is to attract international talent and high net worth personalities to have a stake in Singapore.'

Elsewhere in Singapore, foreigners including PRs, can only buy such restricted residential property if they have the permission of the Land Dealings (Approval) Unit. Approval is usually granted in about three to five weeks to PRs and foreigners deemed to bring some economic benefit to Singapore. However, under a special channel set up for Sentosa Cove, the approval time has been reduced to two working days.

On learning about the proposed change to the Financial Investor Scheme for PRs which will allow bungalows on Sentosa Cove as a qualifying asset for the minimum $5 million investment, a developer said yesterday: 'I guess they have to start somewhere, and Sentosa Cove is a good starting point. But we hope that the qualifying assets can be extended in the near future to cover terrace houses and condos on Sentosa Cove, as well as to residential properties in the rest of Singapore.'

Another restriction that developers have been lobbying to remove is a measure introduced as part of the May 1996 anti-speculation package - that residential property purchases can no longer form part of the $1.5 million investment that PRs make under the Economic Development Board's Permanent Residents for Investors' Scheme.

That restriction remains, an EDB spokesman confirmed yesterday.

Under the variation to the Financial Investor Scheme for PRs, the Sentosa Cove bungalow purchase can be for land bought directly from SCPL or a completed property bought from developers or subsequently in the resale market.

The minimum five-year holding period under the original scheme announced in November also applies to bungalow purchase on Sentosa Cove. However, applicants granted Singapore citizenship during the five-year retention period will no longer need to comply with the terms and conditions of the scheme.

SCPL began selling land on Sentosa Cove in October 2003. To date, it has sold through tenders two condo plots, four sites for terrace housing, 24 bungalow lots as well as Coral Island, which will be developed into 21 bungalows.

From today, SCPL is selling bungalow plots through private-treaty to broaden its reach to individual investors. When fully developed, Sentosa Cove will have about 300 bungalows, 200 terrace homes and 2,100 condo units.

Time is GMT + 8 hours
Posted: 07 March 2005 1943 hrs

Singapore announces policy changes for public housing
By Wong Siew Ying, Channel NewsAsia

SINGAPORE : The public housing sector is up for a makeover, starting with a pilot plan to allow private developers to design, build and sell HDB flats. National Development Minister Mah Bow Tan also announced other changes in Parliament, like relaxation of rental rules to encourage residents to be more self-reliant. MPs wanted the government to keep public housing affordable and to relax rules to help lower income families. A 2.4-hectare plot along Tampines Avenue 6 is where the first Design, Build and Sell blocks will be built by the private sector for the HDB. Gan Kim Yong, MP for Holland-Bukit Panjang, said, "HDB should focus on building smaller flats such as 2-room or 3-room flats, leaving the larger ones to the private sector, which is more than capable of building them. Smaller units will also be more affordable and take up less of the savings." Developers get to decide on flat mix and layout, but preserve the character of public housing by not having fences or facilities like a swimming pool. The flats will be treated like other HDB-developed flats. The National Development Minister called this a liberalisation of the market and a milestone. Mr Mah said, "They will be sold to Singaporeans who are eligible to purchase subsidised public housing. The Ethnic Integration Policy will also continue to apply. The liberalisation of the public housing market is a key milestone in the development of our public housing programme. I believe it will re-shape the way HDB provides public housing in future. It will introduce different ideas; it will bring different designs, different minds to bear on how we can provide good public housing. "But I want to assure Singaporeans, that even as we involve the participation of the private sector in our public housing programme, we will continue to provide housing subsidies for young couples to set up home, to start a family and for those who need to upgrade from their smaller flat. I hope that private sector participation in the development of public housing will help to enhance and enrich the HDB experience." Flat buyers can expect modern designs and features, which property watchers say could come at a premium. Said Eric Cheng, division director at PropNex Realty, "I feel that the prices will be at least 30 to 45 percent higher than the current prices. The developer will be putting in more effort on the concept of living. The developer will probably have the rights for deferment payment, progressive payment and even collection of keys. The developer therefore will probably renovate the place, where there will be marble flooring with all the features and buyers themselves would have saved $30,000 to $40,000." Mr Mah made clear in Parliament that prices will be affordable. Said Mr Mah, "HDB-developed flats, along with HDB resale prices, will set the benchmark for the prices of DBSS flats. This will ensure that public housing remains affordable for Singaporeans. MND will evaluate the pilot DBSS project carefully before deciding whether to implement more widely. If we do, it will be done selectively, probably in the more mature estates." To keep them affordable, eligible first timers will receive a 30,000 or 40,000-dollar grant from the government. Keeping flats affordable was topmost of MPs concerns, as well as helping financially strapped flatowners. Many urged a relaxation of eligibility for rental flats. MP for Ayer Rajah, Tan Cheng Bock, said, "Ask HDB to apply this rule but with a widened scope -- to buy back the flats at market rates, especially the three-roomers for those in severe hardship, and then rent them back the flat at subsidised rates." Yatiman Yusoff, Senior Parliamentary Secretary for Information, Communications and the Arts, said, "Over the last three years, I have seen an increasing number of cases where HDB flat owners who want to downgrade to smaller flats or sell their flats and move to rental flats, facing great difficulties in financing their needs." But the answer was no, though Mr Mah said flexibility will be exercised for those in genuine hardship. He also announced new flexibility in sub-letting, such as reducing the occupation period from 10 years to five, to allow elderly Singaporeans and others to rent out their flats and earn some income. Other changes include reducing the time bar for those who wish to apply for a second subsidised flat from 10 years to five. Another announcement was the introduction of the Town Council Lift Upgrading Programme, or TC LUP, where the Town Councils will be allowed to use part of their sinking funds for lift upgrading works. It is estimated that some 300 to 400 blocks around Singapore will benefit from this programme. It is part of a plan to speed up the lift upgrading programme island-wide, which will also see it extended to low-rise four- and five-floor blocks. But the cost must not be more than S$30,000 per unit. The programme will also be speeded up, with more precincts eligible this year. The measures are part of plans to complete lift upgrading for all eligible blocks in 10 years instead of 15, and will cost the government some S$5 billion. - CNA

March 8, 2005
HDB lifts to stop on all floors by 2015
by Daryl Loo



IN 10 YEARS' time, almost every HDB block will have lifts that stop on every floor. Even low-rise blocks that are four or five storeys high will get such lifts.

The goal to give ease of movement earlier to almost every HDB family is expected to cost $5 billion.

 HDB will accelerate the pace this year, with almost double the number of precincts getting these new lifts: 43 compared to 24 last year.

 Extras will be kept to what's necessary as well. For instance, lift lobbies on the upper levels will be tiled less extensively than the ground floor.

 In giving the details of the HDB plan in Parliament yesterday, National Development Minister Mah Bow Tan also put limits on how much town councils that cannot wait for the HDB to do it can take out of their sinking funds for these new lifts.

 Only 10 per cent is allowed. And when worked out among those flats that will gain from this new lift, the amount cannot exceed $5,000 per home. This is far below the $30,000 per home limit given for lifts upgraded by HDB.

 The reason, said Mr Mah, is to ensure that the town councils keep enough funds for other long-term needs such as replacing of roofs and water tanks and repainting of the blocks.

 Also, three-quarters of the residents must agree to it and pay for part of the cost. Mr Mah expects town councils to meet the needs of an estimated 300 to 400 blocks.

 However, what perhaps took several MPs by surprise is Mr Mah's decision to heed their call and let low-rise blocks of five storeys or lower have these upgraded lifts as well.

 His announcement fleshes out the decision to speed up HDB's Lift Upgrading Programme (LUP), from 15 to 10 years. It was announced by Prime Minister Lee Hsien Loong in January this year.

 The change is urgent in view of Singapore's rapidly ageing population. Many HDB blocks built before 1990 do not have lifts that stop on every floor.

 Since 2001, when the LUP was introduced, only about 1,250 blocks have been fitted with such lifts.

 'That leaves us with 3,000 high-rise and 800 low-rise HDB blocks waiting for their lifts to be upgraded,' he said.

 But the quicker pace means fewer precincts will be picked for the more expensive Main Upgrading Programme that gives flats, among others, new toilets and even an extra room. Only three will be picked this year, compared to 10 in 2003.

 Agreeing with the cutback, Dr Amy Khor (Hong Kah GRC) said: 'This is more practical. Also, my sense from the ground is that residents much prefer to have their lifts upgraded.'

 Lift upgrades typically cost from $1,500 per benefiting unit for standard blocks with common corridors, which are easier to upgrade, up to $80,000 for blocks where there are no common corridors on every level.

 With the cost capped at $30,000, about 95 per cent of the old blocks are eligible for lift upgrading, Mr Mah said. It includes low-rise blocks, which had earlier been excluded from LUP because such a change was costlier.

 Among MPs who had wanted the policy changed were Mr Ang Mong Seng (Hong Kah GRC), Dr Tan Boon Wan (Ang Mo Kio GRC) and Ms Indranee Rajah (Tanjong Pagar GRC). Said Mr Ang: 'I've been appealing for HDB to do this since 1997.'

 Madam Tan Pong Heng, 76, who lives in a four-storey block in Ang Mo Kio, heaved a sigh of relief at the news yesterday.

 Lugging two bags of groceries up to her top-floor unit, she was breathless as she told The Straits Times in Cantonese: 'Everyday, I climb up and down four storeys to buy vegetables. My old legs cannot take it for long.' 
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Ha ha ha....the reporter failed to mentioned that Mdm Tan Pong Heng does not have the required money in her bank and CPF to pay for the lift upgrading...So the general public will still complain in the end. The typical report in 10 yrs time would be "Sitting comfortably in her spartan flat, she told The Straits Times in Cantonese: 'Everyday, I wonder how i'm going to pay the HDB. my medical expenses are up and everything is so expensive. the government should help people like us cope and not force us to upgrade the lift. They should pay for it 100%.'