A stronger Singapore Dollar might curb imported inflation but will also dampen exports & tourism. The Singapore Dollar has gained about 8 percent against the U.S. dollar this year, and closed at a record S$1.2835 on Nov. 4.
The worst- kept secret in the property market is out in the open. Not only are developers less upbeat about the future but a third of them actually expect prices of new homes to decline. And market performance for the suburban residential sector may be the worst hit.
This dose of pessimism was reflected in the latest readings of Real Estate Sentiment Index (RESI) put out by the developers body and NUS.
In the wake of the Aug 30 cooling measures, some 34 per cent of developers polled for Q3 expect prices for new residential launches to decline, albeit by less than 10 per cent, over the next six months. None of the developers surveyed in Q1 and Q2 had predicted price drops.
Just 44 per cent expect more new residential units to be launched over the next half year, down from 68 per cent in the previous quarter.
The sentiment indices slipped below the psychologically significant mark of 5 in Q3, indicating respondents were less upbeat in the quarter and expect more uncertain market conditions over the next six months.
The consensus as indicated by net balances is generally weaker.
Polled on how the suburban residential sector would perform, the net balance in Q3 was -43 per cent. This means that most expect the sector to perform worse over the next six months. In Q2, this net balance was +27 per cent, hinting at better future performance.
'The strong historical price growth in the sector is not likely to be sustained moving forward. Downward adjustment to the price growth, if it occurs in the next few months, will ease some pressure on the affordability level of mass-market residential properties in suburban areas,' said Associate Professor Sing Tien Foo of NUS.
The net balance for the future market performance of the prime residential sector, while still in positive territory, has also been declining significantly, from +54 per cent in Q1 to +32 per cent in Q2 and +3 per cent in Q3.
About 70 per cent of the developer respondents in the latest survey were concerned that the government could intervene to dampen the property market further.
They also cited other factors that could hurt sentiment over the next six months. The concerns included a slowdown in the global economy (cited by 60 per cent), an increase in the supply of development land (53 per cent), too many new property launches (49 per cent), rising interest rates (47 per cent) and tightening financing/liquidity in the debt market (40 per cent).
Eighty-four per cent of all survey respondents consider it likely and very likely that there will be a further increase in the supply of development land over the next six months. An even higher proportion, 90 per cent, of respondents expect the government to further boost the supply of Build-to-Order and Design, Build and Sell Scheme public housing flats as well as executive condo (EC) units.
Recent government steps to cool the market are expected to have most impact on the HDB resale and mass private housing market segments. About 76 and 64 per cent respectively of survey respondents rated their impact on these two market segments over the next six months as significant. Conversely, the measures are expected to have the least impact on the high-end/luxury segment with 64 per cent predicting minimal impact. For the mid-end private housing segment, 79 per cent foresee only moderate impact.
Real Estate Developers' Association of Singapore and NUS' Department of Real Estate polled slightly over 70 respondents for their latest Q3 survey, similar to the size for the Q1 and Q2 surveys.
The Current Sentiment Index, where respondents are asked to rate overall Singapore real estate market conditions now compared with six months ago, fell from 5.8 in Q2 to 4.8 in Q3.
The Future Sentiment Index, where respondents rate overall property market conditions over the next six months, also slipped from 5.9 in Q2 to 4.8 in Q3. As a result, the Composite Sentiment Index (the average of the two indices), also declined to 4.8. The index ranges from 0 to 10 with a score below 5 indicating deteriorating market conditions.
Redas CEO Steven Choo said: 'The RESI was able to track closely the immediate impact the cooling measures has on sentiments in the property sector.'
Agreeing, Knight Frank chairman Tan Tiong Cheng said: 'The findings are not surprising. Just look at the amount of land government has been releasing and the supply of new HDB flats and ECs they're planning, plus the demand-side measures. People have put on their thinking caps to figure out how they'll be affected, whether they are HDB upgraders, buying a second/investment property, or even downgrading.
'The latest survey results are a clear signal to government that the measures are having an impact,' he added.
Separately, the NUS' Institute of Real Estate Studies yesterday released its monthly Singapore Residential Price Index tracking prices of completed non-landed private homes. The overall index rose one per cent month on month in September, slightly slower than the 1.1 per cent increase in August.
NUS' sub-index for Central region, which covers a basket of properties in districts 1-4 and 9-11, increased 0.6 per cent in September, the same pace as in August. The sub-index for Non-Central region appreciated 1.4 per cent in September, slightly slower than the 1.6 per cent gain posted in August.
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ST: The housing bubble trouble
By Tan Hui Yee, Correspondent
In most parts of the world, a government that intervened in the property market three times in one year would heighten uncertainty.
But not so in Singapore, observes Professor Joseph Gyourko, a housing economist from the University of Pennsylvania who was in town recently to speak at a forum conducted by the National University of Singapore's (NUS) Institute of Real Estate Studies.
He says: 'If the government gets into a habit of intervening all the time, it will harm market development. Investors won't want to invest because they can't be sure what the government is going to do Monday versus Friday.'
But the picture is clearly different in Singapore, he notes. The Government tried to temper speculation by abolishing developers' interest absorption schemes in September last year, and followed that with two additional rounds of measures in February and August this year that made it increasingly expensive for speculators to flip properties.
'You are sending a clear signal to investors that you are going to stop the price boom. The fact that you're doing the third round is a signal that you are going to do whatever it takes,' he says.
'And that actually may be providing clarity. You are telling everyone, 'Okay, we're just not stopping, we'll come up with something else down the road.''
This show of political will may just be what it takes to deflate Singapore's property bubble, he says.
Prof Gyourko, 54, knows bubbles intimately, having studied the sizzling property market in China and being privy to local developments as a board member of NUS' real-estate institute.
He believes home prices in Hong Kong, Singapore and China are being driven up by a mixture of real economic growth and short-term capital flows.
'Singapore's inflation rate is above the rate banks pay on deposits. When that happens, people want to put their money elsewhere. And one of the few alternative investments you can make is in housing.
'That's shifting a lot of money into homes. And that's not permanent or sustainable,' he says.
When the economy grows rapidly again, companies will ramp up production, the competition for capital will heat up, interest rates will rise - leaving over-leveraged property buyers in danger of defaulting on their loans. That could send property prices into a tailspin.
That said, he concedes that housing bubbles are by nature unpredictable, and the fact the Government here had to intervene three times indicates it had difficulty calibrating the measures required to tame the beast.
'Clearly, if the Singapore Government had known, it would have introduced Round Three right up front,' he says.
He rejects claims that rising property prices widen inequality, based on his experience in the United States market.
'The housing market is cyclical, so the claim is not true in the long run. In the US, when we had the boom...people were worried about wealth gains along coastal California and the East Coast of the US, which had the highest price rises. But prices cycle, and guess what?
They fell - by a lot. What generates long-run inequality are skill differences, not home ownership,' says Prof Gyourko.
He predicts property prices in Hong Kong, China and Singapore will take a hit in the next one to three years, effectively canceling out the gains owner-occupiers have made in the recent run-up.
'I don't worry about the fact that people got a bunch of capital gains because I think they are going to lose those capital gains,' he says, pointing out that these are paper gains.
But although property gains and losses even out over a lifetime, the resulting short-term frustrations may be hard to handle. 'It's easy for an academic to go, 'Don't worry, this stuff cycles.' If you are a politician, you've got to worry about that person being angry now because he has the vote, and you've got an election coming up.'
He acknowledges that while land in Singapore is scarce and property prices can be chased up without adequate control, the Government here has tried its best to make housing affordable through its public housing program.
'You guys do public housing about as good as it's done anywhere in the world,' he says. 'For such a small place, it's well-planned. It's affordable to people with modest incomes,' says Prof Gyourko.
But one suggestion he has is that Singapore could be more flexible about the housing grants or similar subsidies it gives households, to give them more freedom over what homes they can buy and where they can live.
Currently, subsidized households can use their housing grant of $30,000 to $40,000 to buy only HDB resale flats. With a voucher system, they would not be limited to government housing.
He also questions Singapore's system of allowing Central Provident Fund savings to be used to pay for homes. This encourages people to base a huge chunk of their retirement savings on the fortunes of the property market in a tiny country. In investment speak, this is considered 'undiversified'.
'That's a really risky thing to do. What happens if there is a housing market collapse?' he asks.
The Singapore property market has had its hairy moments: Housing prices plunged after the 1997 Asian financial crisis, although they have since bounced back and even surpassed 1996 levels.
Singaporeans, he says, have to understand that the CPF housing scheme amounts to an 'implicit subsidy' as it lowers the interest payable on bank loans by reducing a home buyer's loan amount.
'I view housing as a consumption good. I view it literally as 'I'm eating my house.'' That means retirement savings should be kept separate from housing expenditure, he says.
In his view, owner-occupied homes especially are not investments that can yield returns, so people should not devote their retirement savings to their homes in the hope of growing their money.
Asked about the attributes of an ideal housing system, he offers a verbal sketch of its key planks: It should be equitable, responsive and flexible.
This means society would have to determine some minimum quality of housing that everyone should be entitled to. Households that cannot afford to pay for this minimum standard would get subsidies. Poor households with children would get more subsidies because 'kids do not get to pick their parents, and thus, are not responsible in any way for their poverty'.
Ideally, housing supply should be plentiful, in the sense that the rules should allow developers to easily ramp up home building to meet increased demand.
This moderates housing prices, he says, as it will allow prices to be close to or at the level required to cover land costs, construction costs and a builder's usual profit.
Finally, an ideal system would offer different kinds of housing - including rental housing - to meet the needs of the population over its life cycle. It is also one where the population is 'educated on the true benefits and costs of the different types of housing'.
He accuses governments worldwide of a bias 'towards encouraging owning' homes instead of being upfront on the opportunity cost of doing that.
As a result, most people underestimate the costs of owning a property, he says. They forget the transaction costs of buying and selling a home are 'quite high', and it does not occur to them to set aside money for long-term maintenance.
Buyers also risk getting stuck with their homes if a sharp drop in prices pulls the value of their homes below the mortgage amount.
Unless a home owner in such a predicament has enough cash to make up the shortfall, he cannot move house. Some academics have fingered such 'underwater' mortgages as a possible explanation for stubbornly high unemployment figures in the US, as it means people living in declining cities cannot move to places where jobs are more plentiful.
In Singapore, which takes just about an hour to cross by car, the problems posed by such immobility are less serious. Still, he thinks being stuck in such 'underwater' homes could result in longer commutes to workplaces and stop families from moving close to the school they want their children to attend.
Prof Gyourko - a home owner himself in Philadelphia - is careful to declare he has nothing against home ownership, especially as it makes someone a stakeholder in his community. In the case of Singapore, it makes one a stakeholder in the nation.
But the goal of the Government should be to get people to 'make the right choice about owning versus renting, not that owning always is better'.
In sum, housing choices should follow people's needs over their lifetime, instead of determining how they have to live their lives.
Young people, he says, make 'natural renters' instead of home buyers because this arrangement allows them to respond quickly to changing circumstances.
'You can move to opportunity. You can get married. You can do all types of different things instead of being stuck in a house,' he says.
Developers will be banned from bidding for more properties if they have lands idle for more than a year, illegally transferred lands, or developed land in breach of agreements, two Chinese ministries said.
Read more at http://www.channelnewsasia.com/stories/afp_asiapacific_business/view/1083641/1/.html
Developers here plan to launch another 34 residential developments with more than 8,800 units by June 2011, data compiled by Knight Frank shows.
Most of the new projects rolled out will be mid-tier and high-end developments. Knight Frank's list shows that 21 out of the 34 possible launches are located in the up market districts of 1, 2, 4, 9, 10 and 11.
Developers BT spoke to trust that the latest round of government measures to dampen demand for private homes and HDB flats announced on Aug 30 will impact mostly mass market home buyers.
They are hopeful that new launches, which are mostly for homes in the mid-tier, high-end and luxury segments, will see healthy take-ups.
'I believe that the hardest hit projects will be the mass market ones,' said EL Development managing director Lim Yew Soon. 'For the mid to high-end projects, the impact will be somewhat lesser.'
The large number of upcoming mid-tier and high-end developments is not a reaction to the latest round of property measures, developers and analysts said. Rather, having pushed out numerous projects targeted at upgraders, many property groups are left with pending mid-tier and high-end project launches.
CB Richard Ellis executive director Joseph Tan said that many developers who bought mass market sites launched them within nine-12 months, with some even pushing out their projects in six-seven months to ride on the exuberant upgrader market.
'The fourth quarter will see more of the mid to high-end launches,' Mr Tan said.
Added one developer: 'Most developers rushed to launch mass market projects last year when that segment of the market was very hot, so there are mostly mid-tier and high-end projects that are waiting to be launched now anyway.'
But, many developers did not want to commit to a firm launch date - even though in some cases, show flats are ready and brochures have been printed.
CapitaLand recently said that it will go ahead with the launch of its new 1,715-unit condominium on the former Farrer Court site in Farrer Road by the end of this year.
The chief executive of the group's Singapore residential arm, Wong Heang Fine, said that while the new government measures have created some 'flux' in the market, things should 'settle in a couple of months'.
The launch of the Farrer Road project will be closely watched as it is the largest single residential development likely to be offered to home buyers in the near future.
CapitaLand is likely to hedge its bets by rolling out the development in phases, similar to what City Developments and the Hong Leong Group did with their 642-unit NV Residences in Pasir Ris.
EL Development's Mr Lim also said that he intends to launch his 115-unit freehold project on the site of the former Diamond Tower in Jalan Rajah, in the Balestier area, in Q1 2011. But, despite the more bullish outlook for the mid-tier and high-end segments, several large suburban projects will be launched soon.
Esparina Residences, a 573-unit executive condominium (EC) project at Sengkang by Frasers Centrepoint and Lum Chang Building Contractors, will be launched next month.
Major private suburban launches in Q4 2010 include Hoi Hup Sunway Property's 473-unit Vacanza @ East at Lengkong Tujoh; Far East Organization's 214-unit The Lanai at Hillview Avenue; and Keppel Land's yet-unnamed residential development at Lakeside Drive, which will have more than 600 units.
On Aug 30, the government said that it will now disallow concurrent ownership of HDB flats and private residential properties within the specified minimum occupation period.
Other measures were aimed at potential buyers of second homes. Those with an existing mortgage can now borrow only up to 70 per cent of a property's value for a second home, down from 80 per cent previously. They must also pay 10 per cent in cash, up from 5 per cent.
Developers and analysts said then that the measures will hit prices and sales of private homes, but mostly in the mass market segment.
SINGAPORE - Singapore's non-oil domestic exports (NODX) surged last month by the most in nearly five years, driven by shipments of pharmaceuticals and electronics.
International Enterprise (IE) Singapore, said NODX grew 31.2 per cent last month compared to August last year, up from the revised 18.3 per cent increase in July. The stellar performance was the best since Dec 2005. On a month-on-month seasonally adjusted basis, August NODX rose 10 per cent, reversing the negative trend of the past three months. In July, NODX fell 3.9 per cent from the previous month.
To read the complete article, please visit http://www.todayonline.com
Property expert says prices may collapse by up to 50 per cent in the next year or two
by Ephraim Seow Siew Lee | Sep 17
The dizzying rise in property prices here is not sustainable and the market may be heading for a hard landing in one to two years' time.
When that happens, property values may fall by as much as 50 per cent, according to an expert at a real estate forum yesterday.
Property experts speaking at the National University of Singapore's Institute of Real Estate Studies Forum said that excess liquidity in the market is the main factor that has been driving up property prices recently.
This liquidity may originate from prudent savings during the financial crisis, gains from the stock market run-up last year and foreign funds flowing here in search of better returns in Asian and emerging markets.
Mr Beat Lenherr, global chief strategist of LGT Capital Management, said: "I think that the money is finding a way around specific pointed measures and the money is just going to all the segments, micro-markets or micro-sectors."
Mr Lenherr also reckoned that the recent rally is not well supported and has been too fast, paving for a harder fall.
"If you look at the developments over the last four years, you clearly see elements of exaggerations where it doesn't make sense to buy in terms of rental yields or expected capital gains," Mr Lenherr added.
As such, he said property prices may "collapse by 30, 40 or 50 per cent" in the next one to two years.
Other speakers at the forum also said that the Singapore Government is still holding back on several other drastic measures such as the capital gains tax, which could dampen the property market abruptly if introduced.
They said the Government has so far been successful in building good neighbourhoods and community in its housing policies beyond controlling prices.
"I think the local market has been kept quite steady. I think the Government can indeed take pride in being able to making available affordable housing to more than 70 or 85 per cent of the masses," said Professor Bernard Yeung, Dean of NUS Business School.
My view is that it is as good as it gets...the rates can't really go much lower from here. The important question is how long this will last? Every Asian governments knows that we have a liquidity bubble going on here which is fueling asset price (specifically real estate, since other assets seem to be under performing).
Measures to dampen the property market have so far only a muted effect on prices but this could be the soft landing we are all hoping for.
CNA: Rental rates in the private property market are poised to rise with the expected influx of some 80,000 foreign workers this year. Analysts said this is because of the shortage of private housing. And the supply situation may not improve this year as only 5,000 private housing units are expected for completion by year's end.
Read more at http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1081453/1/.html
By KALPANA RASHIWALA
An analysis of developers' monthly sales information released yesterday by the government showed that 80.4 per cent of the 1,248 private homes sold in August were priced above $1,000 per square foot (psf).
This is the second month running that the share of this price band has surpassed 80 per cent. In July, 84.7 per cent of the 1,549 homes sold by developers were above $1,000 psf, according to an analysis by Colliers International. Market watchers suggest this pattern is being caused by the popularity of small-format apartments as well as more transactions in the high-end segment.
Information released by the Urban Redevelopment Authority (URA) yesterday showed that developers sold a higher-than-expected 1,248 private homes (excluding executive condos) in August as buyers brushed aside taboos about the Hungry Ghosts Month in the face of strong market sentiment at the time.
The figure, however, was 19.4 per cent below the previous month's and takes developers' sales in the first eight months of this year to 11,190 units, following last year's strong sales of 14,688 units.
Most analysts expect sales to slow for the September-to-December period, on the back of the property market-cooling measures announced on Aug 30. However, with the strong sales already chalked up between January and August, the full-year tally could still come in at around 14,000 units, they say.
Colliers director for research and advisory Tay Huey Ying pointed to signs of confidence returning to the higher-end market, with the number of new units sold above $1,500 psf increasing 81 per cent month on month from 175 units in July to 317 in August.
The most expensive transaction last month was $3,434 psf for a unit at the Orchard View development at Angullia Park, followed by $3,159 psf at The Laurels on Cairnhill Road, and $3,133 psf at Tomlinson Heights, being developed by Hotel Properties Ltd on the former Beverly Mai site.
CBRE Research noted that a whole suite of projects with shoebox units was launched in August - including Centra Suites (62 units sold), Suites @ Topaz (41 units), Dorsett Residences (35 sales), Studios @ Tembeling (22 units) and Opal Suites (19 units), all with a median price of between $1,200 psf and $1,750 psf. In addition, the top two selling projects for August - The Greenwich in the Seletar Hills area (207 units sold at a median price of $1,095 psf) and Viva Vista on South Buona Road (139 units at a $1,509 psf median price) - have a substantial number of smallish units and set benchmark prices for their respective locations.
URA's statistics also revealed that 35 units in Dorsett Residences above Outram MRT Station were transacted in August at a median price of $1,749 psf - contrary to the project's marketing agent Knight Frank's earlier news release that all 68 apartments in the project were sold out at its preview on Sept 1. The firm yesterday clarified that it brokered the sale of 34 units for which options were issued on Aug 31, inclusive of 30 units sold to a Singapore-registered company. The balance of units in the project were sold on Sept 1.
Property consultants expect developer sales to be clipped in September following the cooling measures. PropNex predicts 700 to 850 units could be sold this month, followed by perhaps 500 to 800 units per month for the fourth quarter. Colliers is predicting average monthly sales of about 800 units per month for the last four months of this year. Most consultants reckon full-year sales are likely to be of the order of about 14,000 units.
The jury is still out on the extent of impact of the latest cooling measures on prices. Says DTZ SE Asia head of research Chua Chor Hoon: 'Whether developers are unsure, pessimistic or optimistic about the impact of the measures, if they choose to proceed with launches, they're unlikely to push for new benchmark pricing levels. They will either price the same as before or slightly lower to entice buyers.'
The Core Central Region accounted for only 12.4 per cent or 155 units of the 1,248 units sold in August with the Rest of Central Region and Outside Central Region each having roughly equal split at 546 and 547 units respectively.
Developers launched a total of 1,326 units in August, a tad lower than the 1,336 units for July. Market watchers note that the ratio of units sold to units launched eased from 1.16 in July to 0.94 in August.
SINGAPORE - The Singapore housing market was well and alive during the Hungry Ghost Month as demand for new private homes continued to be strong in the month of August, with sales staying above the 1,000 level.
Latest figures from the Urban Redevelopment Authority revealed 1,248 units were sold last month, a 19-per-cent dip from the 1,549 sold in July.
In total, 1,326 units were launched in August with buyers snapping up 94 per cent of the new units launched.
Traditionally, demand for homes are more sluggish during the Hungry Ghost Month. The Government's package of anti-speculation measures, however, had come on the second-last day of August, meaning market watchers would have to wait another month before confirming its impact on market sentiment.
The strong sale was well beyond analyst expectations of 500 to 800 units and brought the number of new homes sold in the first eight months of this year to 11,381 units.
"There is a lot of liquidity out there and a lack of financial investment alternatives with the low interest rates," said Ms Chua Chor Hoon, senior director of research at property consultancy DTZ.
She added many still see property as a safe haven, citing its potential for capital appreciation and rental yield of 3 to 3.5 per cent - higher than savings and housing loan rates.
The hottest development last month was The Greenwich at Yio Chu Kang and Seletar Road, which sold 207 units for a median price of $1,095 per square foot (psf). The units ranged from 616 square feet (sq ft) to 738 sq ft.
Viva Vista at South Buona Vista Road came in second as it sold 139 units of between 334 sq ft and 485 sq ft. at the median price of $1,509 psf.
"Their attraction lies in the affordable price quantum as well as proximity to major transport nodes," said Mr Li Hiaw Ho, executive director, CBRE Research.
Property consultancy Jones Lang LaSalle said the Core Central Region remained the quietest despite the 406 units launched by developers to stir up the market. Only 155 units from Core Central Region were sold there. This is much lower than the 1,093 units sold in both the Rest of Central Region and Outside Central Region.
Market experts said the latest URA figures showed escalating prices, where 88.2 per cent of units sold had a median per square foot price of over $1,000.
However, looking ahead, observers expect the recent cooling measures by the government to impact buying sentiments. Jones Lang LaSalle estimates September private home sales to contract 30 to 35 per cent on-month as the policy takes effect.
"Although the full quarter numbers have not been released, we estimate resale volume (for all residential properties excluding executive condominium) in the third quarter could decline by 20 to 25 per cent quarter-on-quarter or 25 to 35 per cent year-on-year," said Dr Chua Yang Liang, Head of Research South-east Asia at Jones Lang LaSalle.
Bulk deals involving high-end apartments are gathering pace again. Some property funds which invested in Singapore's upmarket residential sector are taking advantage of a price recovery in this segment to exit their investments.
In the Draycott Park area, a German core fund managed by Morgan Stanley is understood to have recently sold 23 apartments it owned in the Draycott Eight condo for slightly over $157 million or about $2,300 per square foot (psf) of strata area.
The buyer is understood to be a fund managed by Alpha Investment Partners, which is part of Keppel Land group.
The German fund incurred a small loss on its late-2007 purchase price of $2,600 psf. Market watchers say the $2,300 psf sale reflects a discount of perhaps 10-15 per cent to what the units could have fetched if they had been sold on an individual basis. But the divestment reflects the fund's ongoing plan to monetise assets globally.
Savills Singapore is understood to have brokered the deal, but it declined to comment.
The 23 apartments transacted, most of which are currently leased, are in the same block. Another Morgan Stanley-managed German core fund owns the remaining 23 units in the block, which were purchased at the same time in 2007 at the same $2,600 psf price. For now, the plan is to hold these units, BT understands.
Draycott Eight comprises three 24-storey blocks with a total 136 units. The project, developed by Wing Tai, was completed in 2005 and its site has a balance lease term of about 86 years.
In the Balmoral Road area, Real Estate Capital Asia Partners (Recap), a Singapore-based investment fund, is said to have recently sold 20 apartments at the Sui Generis freehold condo for around $95 million or $1,935 psf. The buyer is understood to be a Singaporean investor.
Recap earlier sold one unit, a 2,594-sq-ft ground floor unit, in June for $4.9 million or $1,889 psf.
The sales represent a nice profit for Recap, which bought 21 units in the project for about $1,260 psf or $65 million in August last year from the project's developers, United Engineers and Kajima. Sui Generis received temporary occupation permit (TOP) recently.
Recap is headed by Suchad Chiaranussati, who is married to a niece of City Developments executive chairman Kwek Leng Beng.
Meanwhile, Hasetrale Holdings - the controlling shareholder of Napier Properties, developer of the 8 Napier project opposite the US Embassy - has acquired back the 19 freehold units that Napier Properties had sold to an MGPA fund three years ago. This was done in July through Napier Properties director Mark Wee and Hasetrale buying Botanic Investments, the company through which MGPA bought the 19 units in late 2007 at an average price of $3,550 psf.
Botanic had paid a 20 per cent deposit and was due to pay the rest of the purchase price when the project received TOP in June this year. Napier Properties still has some units to sell in the 46-unit project and rather than risk MGPA attempting a subsale below its purchase price, Hasetrale struck a deal to buy MGPA's stake in the 19 units via Botanic Investments, BT understands.
In another bulk purchase, Arch Capital, linked to the Ayala Group of the Philippines, recently bought all 34 units in Royal Oak at Anderson - formerly known as Anderson Green - for about $200 million or an average price of $2,337 psf.
Some investors who bought apartments in bulk are seeking to sell the units individually to secure higher prices than if they were to divest en bloc.
The ARA Asia Dragon Fund, which purchased 53 units at the Grange Infinite condo in early 2008, has begun to sell the units at an average price of about $3,200 psf, on individual unit basis. The fund's average purchase price was earlier reported to be in the $2,600-$2,700 psf range.
Above Outram MRT Station, a local investor entity is said to have picked up 30 units earlier this month at Dorsett Residences at an average price of slightly above $1,700 psf during the project's launch. The units have since been advertised for sale. Most of the units have apparently already been flipped and asking prices for the remaining units are said to be slightly over $2,000 psf.
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| The show suite for the former Farrer Court at Leedon Heights Road off Farrer Road |
SAT, SEP 4, 2010 Straits Times
Landlords with no real estate background accused of risking shareholders' funds.
These new landlords are sniffing out lucrative opportunities now that many big state-owned enterprises have exited the property market.
- the above is just an excerpt, please refer to the papers for the full article.
Greenery is one of the most sought-after feature and understandably so, since Singapore is such a built-up country. Even homes with green or unblocked views tend to fade with time since the march of development will slowly eat away the precious greens.
Being a project marketing agent, I've also encounter yet another source of angst and frustration for buyers when they learn that the new condo that they're eyeing has one-to-one car park lots. Developers want to maximize profits, home owners want to own multiple cars, visitors want to park within the condo...
But according to a couple of condo management firms, most of the condos units don't own one car each and only a handful own two cars or more. Still, I've been to viewings at certain condos over the weekends and had some trouble finding a lot at the visitor's lots.
* feel free to contact me regarding some of the properties mentioned in this news articles as I'm directly involved in marketing it.
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Buyers may prefer 'software' to 'hardware'
by Christine Sun | Sep 03
The recent move by the Government to cool the residential market is a measured one, targeted at property speculators. It is unlikely to deter genuine home buyers from shopping for their dream home.
We believe this group of buyers are now better placed as they could be more selective and choose where and what they want to buy.
So, what type of private homes would continue to entice buyers? What can developers do to differentiate their projects and entice buyers to opt for their project? After all, property purchases should be treated with a mid- to long-term investment horizon.
A survey was conducted by Savills Research and Consultancy in the first week of last month to explore what buyers would like to have when they buy a new private home, apart from common provisions such as swimming pools, tennis courts, kitchen appliances, wardrobes and air-conditioning.
The poll was done at various prime residential locations, heartland areas and new property show flats, comprising a good mix of different age groups, nationalities, housing types and gender. Of these demographics, 64 per cent of respondents were HDB upgraders versus 36 per cent private home owners.
Topping the wish list of 220 respondents was more greenery in their homes. Specifically, 57 per cent of respondents opted for "gardens and greenery". This was followed by "shuttle services to main shopping belts" (53 per cent), "services for housekeeping, laundry, car washing and child care" (45 per cent) and "more car park lots" (43 per cent).
Private homes adorned with lush landscaping will, therefore, remain popular among buyers here.
This could be a reason why many private homes that draw inspiration from a "green" theme have appealed to buyers. Some well received projects include The Tree House, Park Natura, Meadows Pierce and Nassim Park Residences.
These developments have either integrated their landscape into the surrounding natural greenery or have created their own expansive canopy of roof gardens, sky terraces or sprawling green fields within their premises.
Homes that come with verdant landscaping usually command a premium for their green tranquility and exquisiteness.
However, it seems that such serene living is not appreciated by private home owners alone (64 per cent) as HDB upgraders are found to have a strong preference too (54 per cent). Mass market homes which are predominantly bought by HDB upgraders could, therefore, incorporate more greenery to boost sales.
The survey also found that contrary to popular belief, buyers may have a stronger preference for "software" than "hardware" provisions.
"Software"provisions encompass branding, advertising efforts and personal services, while "hardware" offerings cover physical peripherals such as facilities, finishes, fittings, fixtures and landscaping.
Traditionally, developers differentiate their products by enhancing their "hardware".
For example, many developers have upgraded the types of swimming pools provided in new developments - from a simple lap pool to an array of water features like spa, dip, fun, heated, lounge and infinity pools. For some, hydro-therapeutic jets, spa equipment, aqua gyms and water playgrounds are incorporated.
Barbecue pits have also been outmoded by modern epicurean gourmet kitchens.
These entertainment pieces designed to impress guests are now stylized with different thematic cooking functions to serve tandoori, Japanese teppanyaki, Western BBQ and Italian cuisines. Brand appeals have also been raised by employing world-renowned architects, branded fittings and importing quality marble slabs from East Mediterranean countries.
But are these what buyers really want? According to the findings, common "hardware" items such as "imported quality marble tiles and timber flooring" (20 per cent), "spa facilities" (23 per cent) and "more or bigger balconies" (23 per cent) were not as popular among respondents.
Instead, they preferred "more car park lots" (43 per cent). The scarcity of both private and public parking spaces could have made this a precious commodity among buyers.
The other "hardware" item respondents chose is "white plans" (35 per cent), a relatively new concept where owners are given the flexibility and freedom to design, create and carve out their home layouts.
As this customization usually entails higher construction costs, only some luxury homes like The Alba, Boulevard Vue and Skyline Orchard Boulevard offer such privileges. More developments could incorporate such design flexibility, perhaps within the confines of limited layout choices to contain costs.
Interestingly, the second and third most popular wish list items were "software" items that encompass personal services that can enhance a dweller's daily convenience. These items include "shuttle services to main shopping belts" (53 per cent) and "services such as housekeeping, laundry, car-washing or child care services" (45 per cent).
These personal services were more popular among both private home owners and HDB upgraders than other commonly provided "software" items such as homes being "designed by renowned architects" (21 per cent) and "concierge services" (15 per cent).
Unfortunately, a comprehensive range of these personal services are not always available in developments.
Individual pockets of services are, however, found in selected private homes such as Bayshore Park, that has some laundry services, or The Minton, which is said to be contemplating some child care services from within its premises.
Moving forward, new developments could enhance their marketing strategies and forge new partnerships to enhance the palette of personal services provided for discerning home owners and investors.
After all, as society advances and competition intensifies, it would not be surprising that condominium development may incorporate the provision of services as well.
More studies can, therefore, be done to better understand the spectrum of "software" that buyers want and their impact on the buying decision.
The writer is senior manager at Savills Research and Consultancy.
SINGAPORE - Fresh graduates this year are getting more pay, but only marginally. According to a survey by the management consulting firm, Hay Group Singapore, this year's graduates command an average starting pay of $2,461 - only $28 more from $2,433 last year.
However, those graduating next year, could expect lower starting salaries.
Mr Chan said that due to uncertainties in the global economy, companies will be more cautious. He expects starting salaries for bachelor's and master's degree-holders to fall.
- this is an excerpt, visit Today Online to get the full article.
In a statement issued on Monday morning, MND said it would increase the holding period for the imposition of Seller's Stamp Duty (SSD) on residential properties sold from one year to three years.
The SSD levied will vary according to the term of occupancy. If the property is sold in the first year of purchase, the full SSD will be levied - one per cent for the first $180,000 of the consideration, two per cent for the next $180,000, and three per cent for the balance. Two-thirds of the SSD will be levied for properties sold in the second year of occupancy and one-third for properties sold in the third year of occupancy.
The extended SSD will not affect HDB lessees as the required Minimum Occupation Period for HDB flats is at least 3 years.
For property buyers with outstanding housing loans, the Minimum Cash Payment has been increased from five per cent to ten per cent of the valuation limit. This measure is applied only to buyers of private residential properties, Executive Condominiums, HUDC flats and HDB flats (including those under the Design, Build and Sell Scheme) who are taking housing loans from MAS-regulated financial institutions who already have one or more outstanding housing loans.
For this group, the Loan-to-Value (LTV) limit has been lowered from 80 per cent to 70 per cent. Borrowers who do not have any outstanding housing loans will continue to have an LTV cap of 80 per cent. Loans granted by HDB for HDB flats (including DBSS flats) will still have an LTV cap of 90 per cent.
HDB loans are offered to eligible first-time flat buyers and second-timers who are right-sizing their flats to meet their housing needs. They are required to utilise all of their CPF Ordinary Account balance before HDB loans will be granted.
In their statement, the MND said lowering the LTV limit would 'send a clear signal' to financial institutions to maintain credit standards, and also encourage greater financial prudence.
Channel News Asia: New measures to cool property market
By Mok Fei Fei | Posted: 30 August 2010 0824 hrs
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 Home buyers at a property launch | |||||||||||
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SINGAPORE: The government said Monday that it will increase the holding period for imposition of Seller's Stamp Duty (SSD).
The SSD will be raised from the current one year to three years.
Another measure will impact those who have more than one outstanding housing loan.
Property buyers who already have one or more outstanding housing loans at the time of the new housing purchase will have to pay more money upfront.
The government will increase the minimum cash payment from five per cent to 10 per cent of the valuation limit.
Those with more than one outstanding housing loan will also see a decrease in the Loan-to-Value (LTV) limit for housing loans granted by financial institutions regulated by MAS.
The LTV will be lowered from the current 80 per cent to 70 per cent.
The measures will take immediate effect on August 30.
The government said the objective of the measures is "to ensure a stable and sustainable property market where prices move in line with economic fundamentals".
It noted that the property market is currently very buoyant, with prices increasing by 11 per cent in the first half of this year.
It added that while Singapore has enjoyed strong economic growth in the first half, growth is expected to moderate in the second half of the year.
Should economic growth falter and the market correct, the government said property buyers could face capital losses.
It has thus decided to introduce additional measures now to temper sentiments and encourage greater financial prudence among property purchasers.
-CNA/wk
Some points I would like to highlight:
• your own home should be treated as an investment, I know some who sold their home earlier this year thinking the market has topped and is now renting, facing a
The key to investing in homes
• timing is everything in life, the old adage that if you can hold it will eventually go up, remember '97, some properties are just recovering to that price right now! Its been a good 13 years, almost half the time of the tenure of the mortgage loan.
• when done right, rolling the proceeds forward and accumulating properties and generating cash flow is amazing. But done wrongly, leverage can kill. Double-edged sword that is very sharp. Know where you stand, your balance sheet, reserves etc learn from the banks in the financial crisis.
Enjoy the article...
by Colin Tan | Aug 27
Most of us have heard it all before from the experts. Investing in homes is one of the safest and surest forms of investment. If you cannot re-sell the property for a good profit within a couple of years, you can always hold it for the long term because it will always appreciate.
But if everyone follows this advice, will it still work? Surely it is a recipe for disaster. If everyone is going to earn it the easy way, who will do all the hard work?
Given today's price levels, the vast majority of Singaporeans who own their homes are sitting on large paper profits. Many are paper millionaires; for them to become real millionaires, they would have no roofs over their heads.
Nevertheless, it is hard to argue against such a track record. In fact, the earlier the property was purchased, the greater the capital appreciation.
Most of us have bought our homes to live in, rather than as a get-rich-quick investments. When you buy for owner occupation, you have a guaranteed tenant - yourself. Instead of rentals, you are paying monthly mortgage payments.
It is a vastly different scenario when you are buying for investment. You do not have a guaranteed occupier. If you are not able to sell your property before its completion, you will have to look for tenants.
You will need to look at the yields and compare that with other forms of investments. You will need to assess the overall housing demand-and-supply situation. You will need to know how the economy is doing - now and in the future.
This means that you will need to do your homework and not go by herd instinct. The herd never gets it right all the time - hence economic and property cycles.
When an owner-occupier times his purchase right, he has one fewer big worry in life.
When an investor gets it right, he gets a windfall and lives the good life, but it never stops there, does it? The euphoria of earning big in a short few months or over one to two years what he could not earn in 10 or 15 years is intoxicating, to say the least. The profits will be re-invested in, what else, but property.
We read of success stories of people starting with a single property and having a string of them within a decade or two. How do they do it? We see many advertisements these days offering courses that will teach us how to make it big by investing in property. It is not a big secret: It is called leveraging - using other people's money to work for you.
When the value of your home rises significantly, as they always do during an up-cycle, you can secure a loan from banks by pledging your home as collateral. This is because your property's market value is much more than your outstanding loan.
You can use this loan to re-invest in property. In Singapore, buying a property under construction allows the investor to maximise his leverage. Since only a 20-per-cent down payment is required upon purchase, the investor can, in theory, play with an asset which is worth five times his initial capital.
Some people can own a number of properties in a short time because they are fully invested and fully leveraged. Profits are almost immediately re-invested. Like a person who buys his furniture on hire purchase, it looks like he is the owner, but the furniture is not yet fully his, even though no one else knows that.
This brings me to my last point. When an owner-occupier mis-times his purchase, he spends his whole working life paying for it. When a fully-leveraged investor gets it wrong, like in the real estate board game Monopoly, he becomes a bankrupt and retires from the game.
The writer is head of research and consultancy at Chesterton Suntec International.
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Aug. 25 (Bloomberg) -- Singapore bond sales are accelerating as companies on an island vying for the title of world's fastest-growing economy exploit the lowest funding costs in at least two decades to finance expansion.
Temasek Holdings Pte. and CapitaLand Ltd. led borrowers that raised $14.1 billion this year, topping the record $13.2 billion of notes sold in 2001, according to data compiled by Bloomberg. The benchmark three-month interbank lending rate was last at 0.54889 percent, the lowest since 1987, when data on the Monetary Authority of Singapore's website starts.
"Singapore is going through an outstanding period of economic growth with most sectors performing well," Aaron Russell-Davison, head of Asia debt syndicate at Standard Chartered Plc, said in a phone interview from the city-state. "In this context it makes sense that companies are looking to borrow longer-dated money at historically attractive levels."
The economy of Singapore, Asia's second-smallest country after the Maldives, may be the world's fastest-growing in 2010 after ballooning demand for goods and services prompted the government to raise forecasts three times since January. Gross domestic product increased 17.9 percent in the first half, ahead of the trade and industry ministry's full-year prediction of between 13 percent and 15 percent and surpassing India's expectations of 8.5 percent growth and China's of 9.5 percent.
Leisure Visitors
Companies added about 63,000 jobs in the six months to June 30, according to the Ministry of Manpower, a year after Singapore exited its worst recession since independence in 1965. Monthly tourist arrivals exceeded 1 million for the first time in July after Las Vegas Sands Corp. and Genting Singapore Plc opened the city's first casino resorts.
Property developers, shopping mall operators and hoteliers accounted for 26 percent of Singapore's 113 bond issues this year, Bloomberg data show.
CapitaLand, Southeast Asia's biggest developer, sold S$1.25 billion ($917 million) of bonds this month in maturities ranging from four to 10 years. The company paid a 4.3 percent coupon when it sold S$350 million of 10-year bonds at par on Aug. 17 compared with 4.4 percent when it sold S$100 million of eight- year notes in 2003, the data show.
"Our approach has been to grow the orchard not squeeze the orange," said Olivier Lim, CapitaLand's chief financial officer. We "nurture the group's access to markets and raise money when markets are conducive, not when we need the funds."
Lower Coupons
Temasek is Singapore's most prolific borrower this year after it issued notes in British pounds and Singapore dollars with maturities of between 10 and 40 years, according to Bloomberg data. The state-owned investment company is paying a 4.2 percent coupon for its 40-year notes, 10 basis points less than the 4.3 percent it paid for 10-year money in 2009.
Temasek sells bonds "as public markers of our credit quality," spokesman Jeffrey Fang said in an e-mailed response to questions. As well as improving capital efficiency and funding flexibility, they "foster the discipline of engaging with both international and Singapore bondholders," he said.
"With reasonable growth coming back into Asia, locking in a low coupon for the next 10 years is a pretty smart thing to do," said Sean Henderson, Hong Kong-based head of Asia debt syndication for HSBC Holdings Plc, the No. 3 arranger of Singapore bond sales this year. "Singapore borrowers tend to be rare and very high quality names, so investors have been comfortable about extending durations in order to get a bit of extra yield."
Smaller Sales
When Singapore's AAA rated Housing & Development Board sold S$500 million of three-year bonds in July it paid a 1.15 percent coupon, according to Bloomberg data. No Singapore borrower has paid more than 7.5 percent this year, the data show.
Olam International Ltd., the Singapore-based commodities trader, paid 7.5 percent this month when it sold $250 million of 10-year bonds, its longest-maturity notes. The bonds traded at 101.13 cents on the dollar to yield 7.338 percent yesterday, according to Royal Bank of Scotland Group Plc prices. Olam declined to comment in an e-mailed response to questions.
While companies can typically borrow larger sums in the U.S. dollar bond market, according to HSBC's Henderson, they pay slightly less to sell bonds in Singapore. Companies completed 35 U.S. dollar-denominated sales that raised $500 million or more in Asia excluding Japan this year compared to nine corporate sales of at least S$500 million.
Interbank Costs
The Singapore interbank offered rate that banks charge each other to borrow U.S. dollars was last at 0.31944 percent, its lowest in at least 23 years. The rate rose to as much as 5.7775 percent during the global financial crisis as banks hoarded capital after the collapse of Lehman Brothers Holdings Inc.
Borrowers sold $2.5 billion of bonds in the city in 1999 and issuance ranged between about $5 billion and $7 billion a year for much of the last decade, Bloomberg data show.
"The regulators in Singapore have been working hard to make this market appealing to both investors and issuers," said Clifford Lee, head of fixed-income for DBS Group Holdings Ltd., the top-ranked underwriter of Singapore dollar bond sales. "There's no withholding tax and the approval process for foreigners to sell bonds is simple and quick if it's just an offering to accredited investors," he said.
VTB Group, Russia's second-largest bank, raised S$400 million from two-year notes this month. It was the only Russian issuer to target Asian investors apart from Moscow-based gas company OAO Gazprom, which sold yen-denominated bonds in 2007.
Agricultural Bank of China Ltd., China's biggest lender by customers, sold $50 million of floating-rate notes through its Singapore unit in April. The lender has offices in the city- state as well as in Hong Kong, London, Tokyo, Seoul, Frankfurt, Sydney and New York, according to its website.
"We are seeing an increased maturity and sophistication in the Singapore capital markets," Standard Chartered's Russell- Davison said. "2010 is set to be a big year, reflecting the confidence of both issuers and investors."
To contact the reporter on this story: Katrina Nicholas in Singapore at knicholas2@bloomberg.net
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| (C) mypaper - Monday August 23, 2010 |
"The number of mortgagors defaulting on their property loans has reduced over the last two years, according to DP Credit Bureau (DPCB). It said in a report that the average default rate across all age groups fell to a low 0.43% in March 2010, down from the 0.89% in March 2008. DPCB general manager Lincoln Teo said this represents an improvement in the property market, leading to more positive sentiment which indirectly drives better payment behaviour."
Read more at http://www.channelnewsasia.com/stories/singaporelocalnews/view/1076643/1/.html
by Png Poh Soon of Knight Frank | Aug 20
When the show flat of a new residential project is ready, the new kid on the block often creates a buzz among the residents living nearby. People are generally curious about what the project looks like, its launch and completion date, and most importantly, the launch price.
Homes in these new projects are often priced higher than the average transacted value of resale units in the neighbourhood because of several factors, such as newer designs and longer tenures.
Many homeowners have asked how these new launches affect the value of their homes. Does the pricing of these new properties affect the prices of nearby resale units and, if so, to what extent?
Knight Frank has carried out a study to examine the pricing effects of new projects on resale properties in their vicinity. Our study is adjusted against the benchmark Urban Redevelopment Authority (URA) price index in the respective regions to take into account the effects of broad general market movements.
The price effect is based on the change in transacted prices per square foot over time of selected new and resale properties over the period from 2004 to last year in the Core Central Region (CCR), the Rest of Central Region (RCR) and the Outside Central Region (OCR), according to the URA's geographical classification.
The average transacted prices of similar-sized units in developments adjacent to the new project were studied and compared over a three-month period before and after the new launch. Sizes were controlled to reduce price distortion where smaller units command higher prices on a psf basis and vice-versa.
Anecdotal comparisons showed that new projects were generally priced 20 to 40 per cent higher than the average transacted prices of nearby developments of similar sizes. This was especially so in the CCR and the RCR region and during property market upturns.
The new developments were found to have a positive effect on the transacted values of resale units after adjusting for broad market movements.
Resale prices moved up in tandem following the launch of higher-priced developments. The average resale unit price appreciation was 12.98 per cent in the CCR, 19.14 per cent in the RCR and 4.23 per cent in the OCR over and above the benchmark price index.
Prima facie, new launches do seem to have a positive effect on resale prices.
For example, when Marina Bay Residences was launched in December 2006 at a premium of 38 per cent to the average price of similar-sized units in the neighbouring development, transacted prices of the already-launched The Sail went up by some 21 per cent after adjusting for broad market movement. Likewise, the transacted prices of The Metropolitan went up by 12.2 per cent after The Ascentia Sky was launched at a premium of 36.3 per cent in July last year.
Arguably, the positive effect arises because resale units take reference from the transacted prices in the vicinity, including the higher priced new projects.
Higher priced launches raise the selling price expectations of the owners of resale units, particularly if they are located near the new project.
From the buyers' perspective, resale units may also appear to offer value for money if they cost lower than their new neighbours. Inadvertently, this results in price appreciation for these resale units.
The real estate adage of "location, location, location" also applies in this instance, where the price effects of new launches have greater impact in the CCR and the RCR rather than the OCR.
Apparently, older properties in better locations benefited more where buyers have deeper pockets vis-a-vis buyers in the suburban regions.
But before you decide to jump on the property bandwagon, we would like to add a caveat. We noticed in our study instances where new launches did not result in a positive effect on the prices of nearby resale units.
Broadly, these instances occur during periods where home buyers' sentiment was weak, such as when the broad market was awash with negative news or in the doldrums. There were also periods when buyers' sentiment turned cautious after the announcement of public policies aimed at cooling the property market.
For example, in September last year, the Government announced the withdrawal of the interest absorption scheme and interest-only loan as an attempt to pre-empt a speculative bubble from forming.
The property market turned quiet for a while as buyers adopted a cautious stance. Resale units near new launches during this period did not exhibit much price movement compared to the market before the announcement.
To sum up, while new projects are still popular with potential home buyers, resale properties may be worth a second look, whether it is for owner-occupation or for investment.
Gems can be uncovered, especially for properties near sites with potential for new developments.
Perhaps it may help to look at yet-to-be launched sites that had been tendered between last year and this year.
If your sums, market conditions and timing are right, a pot of gold may be waiting at the end of the rainbow.
The writer is senior manager at Knight Frank's consultancy and research department.
Other notable nugget of news includes a pick up on en bloc deals, a surge in property sales for last month, a huge supply of homes by the way of government land sales and of course the Seventh-month.
My guess is there might be a moderation in the buying mood, this month and probably the next. The market here comes in fits & starts. So you won't know when it will suddenly pick up again.
from TODAY: NODX exports register slowest growth for year
by Ephraim Seow | Aug 18
SINGAPORE - Singapore's non-oil domestic exports (Nodx) registered their slowest growth so far this year, dragged by a lagging pharmaceutical sector.
Data released yesterday by the trade promotion agency, International Enterprise (IE) Singapore, showed that Nodx grew18 per cent last month from July last year, lower than the 28 per cent growth in June.
On a month-on-month seasonally adjusted basis, Nodx fell 3.9 per cent, compared to the 0.1 per cent contraction in June.
Action Economics director David Cohen said: "The pharmaceutical sector is a big factor contributing to the smaller growth ... Besides, Singapore's economy is moderating after getting ahead of itself."
The volatile pharmaceutical sector contracted 23.5 per cent last month compared to July last year, retreating from the 29.7 per cent gain in June. Industry experts say this year is appearing to be a year of two halves. After the stellar performance in the first six months, last month's Nodx presages a slower second half. They say Nodx growth will likely plateau at the lower end or even slightly under IE Singapore's forecast of 17 per cent to 19 per cent.
"With concerns of the sustainability of the global recovery in the coming months, unemployment remaining stubbornly high in G3 markets and lingering Europe sovereign debt concerns, we could yet see more significant moderation in Nodx growth in the second half this year," said Mr Alvin Liew, economist at Southeast Asia, Global Research, Standard Chartered.
Uncertain external conditions will impact demand for electronics in the next few months. However, this is buffered by demand arising from the recent launches of smartphones and Apple's iPad, the experts said.
Last month, electronic Nodx rose 26 per cent, after the 44 per cent increase in June and non-electronic Nodx grew by 14 per cent, after the previous month's 21 per cent rise.
Aug. 17 (Bloomberg) -- Beverley Kirby gave up trying to buy a house on her own in London's Chelsea neighborhood after twice getting burned by owners reneging on agreements to sell to her.
The night before Kirby was due to sign for one 4.5 million- pound ($7 million) house a year ago, she was trumped by an offer that was 500,000 pounds higher. The aborted deal cost her 4,000 pounds in fees and left her with a few months to vacate the apartment she had sold.
"I was getting desperate," said Kirby, who bought and sold seven other homes previously with her former husband. "There was madness in the market. People had no ethics at all."
That experience, along with the surge in prices for a dwindling number of top-end properties for sale, led Kirby to hire Robert Bailey, a type of broker known as a buying agent. Bailey is one of several hundred operators in a field that barely existed in the U.K. 15 years ago. He found her a home that wasn't advertised. Kirby moved into it in early April after Bailey helped her carry out refurbishments and get planning consent to use the top of the garage as a roof terrace.
The brokers are a response to a flaw in Britain that favors sellers, said Phil Spencer, who hosts property-search shows on U.K. television with fellow agent Kirstie Allsopp.
Typically, potential U.K. homebuyers register with "estate agents," who show them properties but are ultimately paid by the sellers. In the U.S., both buyers and sellers usually hire brokers, though only the sellers pay commission. These fees are shared by both sets of brokers.
'No Help'
"A buyer has nobody to help them with the biggest financial decision of their life," said Spencer, 40.
The new breed of advisers charge the potential purchaser a retainer plus commissions of as much as 2.75 percent of the sale price. It's a cottage industry largely used by the wealthy because it's too expensive for most people with budgets of less than about 500,000 pounds.
Buying agents have proliferated in the luxury markets of London and southern England as a weaker pound has lured overseas investors. They do everything from locating the home and negotiating the price, to arranging legal and survey work and researching potential pitfalls such as noisy neighbors.
They are prized largely for speeding up the process to reduce the chance of getting "gazumped," a British term for being trumped by a higher bid before signing contracts.
Agents Quadruple
"Over the past five years especially, there has been a quadrupling in the number of buying agents in the prime central London market and their numbers increase all the time," said Noel de Keyzer, head of house sales at broker Savills Plc's Sloane Street branch.
There are fewer luxury properties for sale in prime London neighborhoods even as demand is rising. Residential purchases in the Westminster and Kensington & Chelsea boroughs, where average house prices exceed 1.3 million pounds, are down 23 percent from the average since 1996, according to London Central Portfolio Ltd., which buys and manages prime rental property investments.
About 100 properties worth at least 20 million pounds have been purchased since 2006 -- a category that's less than 10 percent of the prime central London market. Most deals of that size are now handled by buying agents, de Keyzer said.
The scarcity of prime homes for sale lifted prices in central London by 23 percent since a yearlong slump, triggered by the worst recession since World War II, ended in March 2009, Knight Frank LLP estimates. Property values in the U.K. as a whole rose about 12 percent, according to the Nationwide Building Society.
Jackpot Deals
Agents have to court private banks or wealth managers to generate new leads to sustain the deal flow. Dozens of individuals, many former brokers, have set up on their own as overseas buyers flocked to London.
"All you have to do is two or three deals a year and you earn as much as you did before," said Johnny Turnbull, who has worked independently since 2006 after heading the London arm of Prime Purchase, Savills's buying-agent arm.
Competitors include Property Vision, a unit of HSBC Private Bank since 1991 -- and the biggest with a staff of 60 -- and Knight Frank's The Buying Solution.
Some independent buying agents say rivals owned by brokers have a conflict of interest because their companies represent both the buyer and the seller.
"They're trying to milk the fees at both ends," said Francis Long, who set up buying agency Hanslips 12 years ago covering London and southeast England.
'Chinese Walls'
Savills and Knight Frank say there are "Chinese walls" and enough transparency to avoid conflicts, and that few customers have problems with the arrangement.
Buying agents rely on relationships with brokers, developers and owners to get their clients first in line for a home. Providing a superior service is vital if they want steady business, said Bailey, who helped Madonna buy a home in Mayfair in 1999 and also works with hedge-fund managers and bankers.
Agents research an area and prepare reports that may reveal whether a rock-star neighbor has loud soirees or whether planning authorities are hostile to tennis-court floodlighting.
"What worries me is that people don't deliver and start to give the rest of us a bad name," said Bailey, who has covered the prime London market for 25 years.
One morning in early July, Camilla Dell and Grant Aitken, of Black Brick Property Solutions LLP, dodged workmen refurbishing a three-bedroom apartment in the Knightsbridge district to see whether to make an early offer.
Feng Shui
Dell, 32, set up the London-based company in 2007 and has generated business through regular trips to visit potential buyers in countries including India and Nigeria.
"It helps us to understand them, to see them in their home and their culture," said Dell, whose requests from clients have included properties with feng shui compliance.
Competition for high-end homes within commuting distance of London is also fierce. Here the agent's research has to be even more exhaustive, said Mark Parkinson, who helped set up Middleton Advisors LLP in 2008 covering country homes in southern England.
The efforts aren't always appreciated.
"You prepare a detailed report -- down to reminding the buyer of an old rectory that the church bells chime every 15 minutes -- and they probably don't even read it," said Parkinson, 37, as he drove a sport-utility vehicle that allows his customers to see properties over hedgerows.
Spencer and Allsopp
Spencer and Allsopp have encouraged buyers with smaller budgets to use agents, said Jo Eccles, who set up Sourcing Property four years ago and has handled about 70 purchases or rentals in London worth about 40 million pounds combined.
Not all the agents will survive, according to Andrew Giller, who heads London searches for The Buying Solution. Competition and the slump in deals since the financial crisis mean individual operators, in particular, may struggle.
Spencer's own London search company filed for insolvency in February 2009 after a four-month deal drought left it unable to cover the costs of running an office, marketing and staff.
He's no longer involved in the business, parts of which were bought by Garrington Country, a company created from its former regional arm. Garrington has since expanded in northern England, said Managing Director Jonathan Hopper.
"The market is an emerging one," Hopper said. "Who you are dealing with is key -- there's a mixture of very capable, experienced agents out there and then there are those who are just going out to spend other people's money."
To contact the reporter on this story: Simon Packard in London at packard@bloomberg.net .
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