The Ministry of National Development said this will help ensure a stable and sustainable property market, and to curtail the HDB resale market where prices tend to track private property movements.

From Saturday, it will be more difficult and expensive for speculators to own and flip properties. A Seller’s Stamp Duty will be imposed on all residential properties and residential land bought after Friday, and sold within one year from the date of purchase.

The housing loan limit will also be capped at 80 per cent – down from the current 90 per cent.

This new loan limit will apply to all housing loans granted by financial institutions for private homes, executive condominiums, HUDC flats and HDB flats, including those sold under the Design, Build and Sell Scheme. But loans granted by the Housing and Development Board (HDB) for flats, will still have a cap of 90 per cent.

Last September, the Government introduced anti-speculative measures to cool the private homes market. While these helped initially, there were signs the market was heating up again.

The new measures come as demand for private homes continues to soar. The number of units sold by developers in January was three times more than December. It was also the highest monthly total since September last year.

The Ministry said the objective of these measures is to discourage short-term speculative activity that could distort underlying prices. It is not targeted at the purchase of properties for owner occupation or longer term investment.

Market watchers said the measures are easiest to implement, without causing the market to come to a standstill.

Eugene Lim, associate director, ERA Asia Pacific said: “We are recovering. The economy is recovering and the market is picking up so what they want to do is to make sure the property market is moving up in tune together with the economy and not faster than the economic recovery.”

Analysts added that the prices and volume of private property homes are unlikely to be significantly impacted.

Donald Han, managing director, Cushman & Wakefield said: “It has got a fairly minimal impact to the market, mainly because a lot of investors from our records are buying for the medium term, at least for a period of two to three years.

“Some investors will probably stand by the sidelines and see how sales progress into February and March. It will take some wind out of the market; potentially it could be around 10-15 per cent in terms of the numbers of new home sales taken out of the equation.”

The Real Estate Developers’ Association of Singapore said the reduced mortgage cap is unlikely to have significant impact on genuine buyers and investors, as lending institutions have already been more prudent in the aftermath of the global financial crisis.

SOURCE: Channel NewsAsia

At the end of 2009, there were 1,183 housing projects for sale in Bangkok, and of those 843 had more than 20 units available per project. These were considered active projects. In this Asean region, Bangkok had the largest number of projects for sale.

Last year 283 residential projects were launched, a drop from 331 in 2008 and 375 in 2007. There were 57,604 units launched, a 15% dip from 2008. However, the total value of projects launched in 2009 was the same as in 2008.

The average offered prices of units launched increased from 2.289 million baht in 2007 to 2.718 million in 2008 and 3.177 million baht last year. This suggests that lower-priced units were offered less frequently and there might have been some shrinkage of affordability among lower and middle-income households in Bangkok.

Comparing publicly listed companies on the Stock Exchange of Thailand to private companies, the 30 listed companies accounted for 55% of the value of developments and 56% of the number of units launched in 2009. The prominence of listed companies reflects the fact that privately held developers opted to wait until there was less risk for investment.

Pruksa Real Estate, the largest real estate company in Thailand, launched 40 projects with 9,471 units worth 17.412 billion baht in 2009, representing 16.4% of the total units and 9.5% of the total value of developments. Other major developers were Asian Property Development (14.039 billion baht), Sansiri (13.887 billion) and Land & Houses (13.351 billion).

The total of existing and newly launched units booked by buyers in 2009 was 59,085. This implies efficient liquidity in the market because it was more than the number of units launched. However, 109,331 units remain to be sold in 2010, 2.5% of the total existing housing stock in Bangkok. During the 1997-99 crisis, this proportion increased to 5%, a more worrisome figure.

A warning sign is apparent as well. The year 2009 was the first since 2003 that the number of units launched, 57,604, was smaller than the number of housing units completely built, which totalled 65,282. These were units offered by developers and excluded individually self-built units. This is a sign of oversupply. In 2010, cheap housing units costing less than 1.2 million baht are being encouraged with a tax deduction from the Board of Investment. This will also accelerate supply.

The survey shows detached houses worth 1-3 million baht are still popular with middle-income residents. Lower-priced townhouses are also popular, as are condominium units worth 3-5 million baht located near mass transit.

The report showed that prices of non-landed properties grew at a slower pace of 7.2%, following the 15.9% increase in the previous quarter. Prices of apartments were up 9.7%, while prices of condominiums gained 6.1%.

Further, increase in rentals of private residential properties was 0.6%, reversing 2.2% decline recorded in the third quarter. For the year 2009 as a whole, rentals of private residential properties dipped 14.6%.

Prices have also increased to between S$2,500 and S$2,800 per square foot compared to the phase one release of its first 60 units.

The units in phase one were sold at prices ranging from S$2,400 to S$2,700 per square foot.

About 70 per cent of the buyers in the latest phase were foreigners, with Indonesians making up the majority of this group.

CapitaLand Residential’s Singapore CEO Patricia Chia said she expects buying interest for well-located homes in the high-end segment of the market to continue.

She added that the prices for the mid- to high-end segments of the market have been rising by between 5 per cent and 10 per cent this year.

Urban Suites – comprising two 20-storey towers and one 17-storey tower – is located on an 8,665-square-metre freehold site, bounded by Cairnhill, Hullet and Saunders roads.

Buyers have a choice of two-, three-, and four-bedroom apartments as well as duplex and triplex penthouses.

SOURCE: Channel NewsAsia

But as Singapore recovers from recession, its residents are questioning a key part of the country’s economic model: its long-standing openness to foreigners

Singapore has thrown open its doors to bankers and expatriates in recent years, making it easy in many cases to establish residency and hastening the country’s emergence as an Asian version of Dubai. It also welcomed low-skilled laborers from Bangladesh and other developing countries to help man construction sites and factories.

The goal was to capture more Asian wealth and offset Singapore’s low birth rate with immigrants, spurring economic growth. But the push has also fueled discontent, turning immigration into a red-hot political issue in a country where dissent is still tightly controlled by the government.

Between 2005 and 2009, Singapore’s population surged by roughly 150,000 people a year to 5 million—among the fastest rates ever there—with 75% or more of the increase coming from foreigners. In-migration continued in 2009 despite expectations it would collapse because of the global recession.

The influx helped boost Singapore’s economy in the short run by creating new demand for goods and services and helping manufacturers keep labor costs low. Developers built apartments and posh shopping centers for the new arrivals.

By some estimates, a third or more of Singapore’s 6.8% average annual growth from 2003 to 2008 came from the expansion of its labor force, primarily expatriates, allowing Singapore to post growth more commonly associated with poor developing nations.

At the same time, though, foreign workers have driven up real estate and other prices and made the city-state’s roads and subways more congested. Their arrival has kept local blue-collar wages lower than they would be otherwise, exacerbating Singapore’s gap between rich and poor.

Some economists say the most damaging effect of the immigration is that the influx appears to be putting a lid on productivity gains, as manufacturers rely on cheap imported labor instead of making their businesses more efficient. Labor productivity, or output per employee, fell 7.8% in 2008 and 0.8% in 207—a phenomenon that could eventually translate into lower standards of living.

Lee Ah Lee, a 58-year-old who makes 850 Singapore dollars a month (about US$600) clearing tables in a cafeteria, says the flood of immigrants has made it hard to make ends meet by pushing down blue-collar pay in Singapore, which has no legal minimum wage. Sitting nearby in a drab apartment block built by Singapore’s Housing Development Board, a state-owned body that constructs and sells subsidized housing, 79-year-old Lee Kwang Joo says low-skilled foreign workers are often housed in corporate dormitories, meaning they have no housing costs and can survive on lower pay.

On Temasek Review, a Web site dedicated to Singaporean affairs, one writer recently warned Singaporeans would be “replaced” as “3rd class citizens” by foreigners, while another said that immigration “will emerge as the single most important issue” in Singapore’s next general election, due by 2011.

Immigration “kept our economic growth high but, at a tremendous cost,” says Kenneth Jeyaretnam, the secretary-general of Singapore’s Reform Party, a small opposition party founded in 2008. Relying on foreign labor to help boost growth is unsustainable, adds Choy Keen Meng, an assistant professor of economics at Singapore’s Nanyang Technological University. He says a better model would involve the reining in immigration and accepting that Singapore is becoming a more mature economy like the U.S. or Europe, with a long-term growth rate of 3% to 5% a year.

Singapore, unlike many of its neighbors, has a reputation for reliable public services and minimal corruption. Its openness to foreign investment is one reason why gross domestic product is expected to rebound to 4.5% this year, according to the Asian Development Bank, from a contraction of 2.1% in 2009.

Still, Prime Minister Lee Hsien Loong, speaking at a Singapore university in September, said there was a need to be “mindful of how quickly our society can absorb and integrate” new arrivals, and vowed to curb immigration.

The government is also studying immigration as part of a wide-ranging review of the city-state’s economic model launched in 2009. Results of the review, due this month,are expected to include steps to diversify Singapore’s economy and reduce its reliance on exports to the United States and Europe by boosting domestic consumption, among other things.

Yet people familiar with the government’s plans say it is unlikely to press for deep cuts in immigration, and will aim to find other ways to restore productivity growth. Singapore remains committed to a long-term goal of increasing the population to 6.5 million, though it would do so by prioritizing high-skilled residents as opposed to blue-collar workers.

Immigration “is not a weakness, it’s a strength,” said one person familiar with the long-term economic planning process. “People want to come here, why not make use of that strength?”

Serious cuts to immigration could also generate a backlash from other interests—notably the factory owners and real-estate developers who rely heavily on foreign arrivals. Many employers complain that local Singaporeans, accustomed to a higher standard of living than most other Southeast Asians, are unwilling to take on menial jobs, and are likely to resist further tightening of foreign labor supply.

THE level of construction demand in Singapore is likely to be sustained over the next two to three years, with up to $52 billion worth of contracts expected to be awarded between 2010 and 2012.

Giving the outlook for the construction industry at a seminar on Wednesday morning, Senior Minister of State for National Development Grace Fu said the Building and Construction Authority (BCA) has projected that the value of construction contracts to be awarded this year will be between $21 billion and $27 billion, and between $18 billion and $25 billion for 2011 and 2012.

Mrs Fu said the construction sector enjoyed strong double-digit growth for the third consecutive year in 2009, achieving a record level of on-site construction activity or output of about $30 billion. This was driven by exceptionally strong construction demand in the earlier two years. But the global financial crisis had a considerable impact on the construction industry last year, especially on private sector demand.

‘In 2008, we saw a record high of $35.7 billion worth of contracts awarded. This moderated to $21 billion in 2009, out of which 64 per cent were public sector contracts. The government had supported the sector by advancing $1.3 billion worth of small and medium-sized projects,’ she said at the opening of the Construction and Property Prospects 2010 seminar organised by BCA and the Real Estate Developers Association of Singapore (Redas).

Going forward, she said the Government will continue to invest in infrastructure works. Public sector works will include large public infrastructure projects such as the Downtown Line Stage 3 and various major road works. She added that the industry can look forward to more tendering opportunities in building projects, including the construction of new HDB flats to meet the ongoing demand for public housing, upgrading and development of new educational and healthcare facilities, and major industrial projects such as the LNG Terminal, Fusionopolis 2A and Seletar Aerospace Park.

To sustain and grow the industry in the medium term, she urged the industry go beyond traditional construction. ‘It must move into the cutting edge of technology and build capabilities in the key growth area of Green Buildings,’ said Mrs Fu.

SOURCE: straits Times

The property market should improve this year due to progress on new mass transit routes and greater capital flows, but mitigating political risk will remain a key factor in ensuring a smooth recovery, says the Real Estate Information Center (REIC).

The strength of East Asia’s economy in part buoyed the Thai economy last year, helping the country to better cope with upheavals caused by the global financial crisis, the report said.

Economies such as China, South Korea and Taiwan, recovered quickly due to an increased influx of capital seeking the higher returns available in the region.

The rise in East Asia’s stock markets outperformed those in other regions, enabling investors to reap the gains and make investments in property, said the report.

Stimulus packages implemented in China and other countries including Thailand, aided the rebound.

More capital will flow into the region throughout 2010, especially in China whose economy is larger than Germany’s and is now ranked third in the world behind the US and Japan.

China’s economy is likely to exceed Japan’s within the next two years, the report said.

Thailand, however, is only likely to see a marginal rise in short-term capital inflows as overseas investors will remain cautious due to domestic political instability and regulatory risk relating to the Map Ta Phut issue.

While the capital flows will increase liquidity at financial institutions, banks will remain cautious over providing new loans to businesses.

The institutions are instead starting to focus on home loans, which are secured and offer lower risks than other types of loans, said the report.

Since the beginning of 2010, global oil prices rose above US$80 a barrel. If they continue this upward trend, transport and construction costs will rise.

Domestic inflation rates will be revised up in the first quarter and will be significant in the second quarter. It is possible that the government will adopt a monetary policy by gradually increasing the policy rate from the second or third quarter.

“Any impact from rising interest rates this year on the residential market will be minimal, but it will be greater next year if the rates increase further,” it said.

REIC said the Purple Line mass transit project from Bang Sue to Bang Yai is included in the Thai Khem Kaeng investment programme. Construction was scheduled to start this year and be completed within five years.

“When property developers and consumers see its [the Blue Line's] construction, they will be more interested in housing projects along the line. As a result, land prices will be likely to increase and more housing projects near the stations will add in the market.”

The government recently announced its plans to upgrade Thailand’s outdated railways which could include shifting the central station from Hua Lamphong to Bangkok’s outskirts.

Sales of low-end properties, priced at about one million baht, would be particularly active this year as developers plan to launch more than 10,000 units under the Board of Investment’s Home programme.

Baan Ua-arthorn low-cost housing projects will increase supply by another 40,000 to 50,000 units this year. REIC expects more than 80% of the low-end properties will be condominiums.

“There is a trend that Thais will have more than one house. Their second house will be used as a temporary residence near schools for their children or for investment,” the report said.

Developers are facing negative factors such as a slight decrease in purchasing power caused by a possible increase in inflation and interest rates. Stricter environmental regulations will also limit project development, but would improve the quality of life of residents in the long run, the report said.

SOURCE: Bangkok Post

Raimon Land CEO

The previously troubled company has almost completed a financial restructuring, resolved its “internal issues” and is ready to move forward with greater confidence, he said.

Mr Viriot was appointed CEO in March, replacing Nigel Cornick who resigned under a cloud of controversy and falling sales figures. At the time, the company postponed the launch of three projects and industry observers speculated that its flagship project The River, a 15-billion-baht 838-unit development, was in trouble.

Since then, the former vice-president of investments and acquisitions at Kuwait-based IFA Hotels and Resorts, Raimon Land’s major shareholder, has implemented a “sound, but substantial” rehabilitation plan that has cut the company’s operating costs by 40%.

The most significant part of the plan is to repay or refinance the developer’s short-term debt with banks, which stood at 1.67 billion baht at the end of the third quarter. The company expects the process to be completed by next March.

“That [starting to repay/refinance the debt] gave a lot of stability to the company and enabled it to look beyond the week after next,” he said.

Raimon Land in August bought back a 25% stake in Taksin Hotel Holdings, The River’s holding company, from Lehman Brothers Bangkok Riverside Development Ltd, which was unable to fulfil its debt obligations. This increased the developer’s stake in the company to 85%, with IFA holding 15%.

Raimon Land also slashed its marketing budget in 2009 to 4% of revenue from 11% the year before.

“We had to create a more efficient organisation to take care of fewer projects and get ready for a year that we knew would be tough,” he said.

In the first nine months of the year it reported a net loss of 55.6 million baht compared with a profit of 145.78 million for the whole of 2008.

As of September, the company had 9.57 billion baht in assets, liabilities of 6.91 billion, equity of 2.57 billion, and paid-up capital totalling 3.25 billion.

“While we will finish the year on a loss, Raimon Land now has a sound business plan with sound projections and we will continue to build our position within the market,” he said.

IFA increased its stake in the developer by 14.92% to 41.08% when Isthitmar Hotels Fze – a subsidiary of the beleaguered investment arm of Dubai World – divested its shares last August. The buyout effectively reduced the developer’s direct exposure to the Dubai market crash to zero, he said.

The developer is currently consolidating its assets as the final step of its rehabilitation plan. The firm currently owns from 51% to 100% of its projects.

“We realise this has caused some confusion in the market over whether we are a fee developer or an investment developer,” said Mr Viriot. “We’re currently somewhere in the middle and we will have to go one way or the other.”

After more than a decade of developing foreigner-focused projects, and having closed its sales office in Russia, the firm will now target Thai buyers.

“We will continue focusing on luxury but we are now looking at 28- to 40-year-old Thais … in Thailand’s biggest, most sustainable market, which is Bangkok.”

The firm will also focus on large-scale projects, such as The River. The 200,000- square-metre project with 105,000 sq m of saleable space has sold 62% of its units, passing the 9-billion-baht break-even point, he said.

With two years to go before transfer, Mr Viriot said he has no concerns about the project failing to sell out.

The value of The River is equivalent to Raimon Land’s six other projects in Phuket, Pattaya and Bangkok.

The developer has also acquired a plot on Phloen Chit Road for about 2 billion baht, where it plans to develop another large-scale property.

“These kind of projects may require partners simply because, due to their size of 150,000 to 250,000 sq m of floor area, they may include different components [residential, retail and commercial],” he said.

Outside Bangkok, Raimon Land is still selling completed units at Northpoint in Pattaya and The Heights in Phuket, which have about 20% of units left unsold.

SOURCE: Bangkok Post

Supalai Park

The 15-storey condominium will be built on 4 rai land plot near Seng-Ho Book Store facing main road. Unit spaces vary from 29.5 – 66 sqm.

Downtown Phuket

Open for reservation 2 days only at the sale office on Saturday 19th – Sunday 20th December, 2009. Price starting at a bit above 1 million baht or 3x,xxx baht for each sqm. Free wall type air conditioner, kitchen built-in furniture, water heater, safety glass shower screen. Choose for complete furniture packages* + special discount or double discount as much as 150,000-350,000 baht.

SOURCE: Phuket Index

Property prices

According to Colliers International estimates, 10,671 private homes are set for launch next year. And 46 per cent or 4,958 units will be in the core central region (CCR).

Prime projects that could hit the market include the former Farrer Court site, which CapitaLand and partners bought en bloc in 2007, and Wheelock Properties’s Ardmore 3.

Another 33 per cent or 3,498 units will originate from the rest of central region (RCR). The outside central region (OCR) will account for the remaining 21 per cent or 2,215 launch-ready units.

The distribution of homes already launched this year is almost exactly the reverse, with the bulk of units coming from the booming mass-market sector. Colliers estimates that by end-December, 13,542 homes will have been released, of which 43 per cent or 5,822 units will be from OCR.

About 33 per cent or 4,429 units will be from RCR, while 24 per cent or 3,291 units would be from CCR.

‘Developers are likely to be encouraged to release more mid-tier or high-end units in 2010,’ says Colliers research and advisory director Tay Huey Ying. She cites several reasons – signs of investors and foreign buyers returning, improved economic prospects and the opening of the integrated resorts.

The strong take-up rate at Marina Bay Suites’ recent preview has raised hopes. Of the 90 units released, 87 were sold and the average price ranged from $2,200-$2,500 psf.

Property

Backing this view, a recent study by Barclays Wealth and the Economist Intelligence Unit found that wealthy individuals here plan to allocate a larger share of their investment portfolios to property in the next two years.

The big question is how much developers can sell fancy homes for, as doubts linger over the sustainability of economic recovery. DTZ Southeast Asia research head Chua Chor Hoon is one of several observers who expect ‘more upside potential’ for high-end property prices in the coming year.

According to Urban Redevelopment Authority indices, prices of non-landed CCR properties are still some way below the 2008 peak – 16.8 per cent down at Q3. In comparison, non-landed OCR property prices shot up this year and were just 2.5 per cent short of the peak.

Deutsche Bank analysts wrote in a report on Monday that high-end prices could rise 5-10 per cent in the coming year.

But even as optimism grows, some players are quick to highlight uncertainties. JLL’s Dr Chua stresses that new demand for property has to be backed by global or regional economic growth.

Several economists have flagged the risk of bubbles forming in Asian property markets. The Singapore government introduced cooling measures in September.

The Monetary Authority of Singapore also said more action may be needed if recent measures to dampen speculation prove insufficient.

City Developments executive chairman Kwek Leng Beng told BT last month the private home market here ‘will slow down’, following the MAS warning and the return of the confirmed list.

This article was first published in The Business Times.