A more insightful industry view of National Development Minister Mah Bow Tan’s announcement was that the measures were drastic relative to the market recovery, described by some as still tentative. Judgment must wait several months to see how the market will behave. But underlying this lament is the barest hint that, perhaps, developers had been pushing their luck, stoking the sellers’ market by raising launch and relaunch prices by too much, too fast. (This newspaper had warned against the temptation.) This in turn drove the famous old anxiety into buyers, who piled in convinced the price spiral was achieving momentum. That may be true. Sales up to last month of 11,700 flats already far outstrip the full-year 2008 figure of 4,300. Prices across the condo classes have leapt by multiples of 10 per cent, to reach 30 per cent for quality developments.

Speculators with shallow pockets and a glint in their eye will be the first to be expelled from the market with the soft loan debarment. Good riddance. The restrictions will also send back to the HDB queue far too numerous of those ambitious young couples who are not ready for private property. This is fortuitous, too, for gradual social levelling up. The trade says the present rush is seeing many replacement buyers who had sold their homes in en bloc deals in 2007. Once they are off the market, upgraders will account for steady but not precipitate demand.

The Government’s concern in stepping in this soon is rightly to prevent property asset-price inflation. This it does by also increasing land supply. Once this is achieved, a mature market with demand-supply equilibrium and price stability should ensue. Nice in theory – and the timely intervention has a fair chance of making it work.

SOURCE: Straits Times

PROPERTY developers were sticking to their prices yesterday following the Government’s announcement of a slew of measures designed to cool the market.

At two of Singapore’s more eagerly anticipated launches, The Interlace and Hundred Trees, developers said they did not foresee any need for price adjustments.

A spokesman for CapitaLand said it was holding prices at between $850 and $1,150 psf for The Interlace at the former Gillman Heights site.

She noted that less than 5 per cent of buyers at the developer’s other new property – The Wharf Residence, launched earlier this year – had opted for the interest absorption scheme (IAS) abolished by the Government on Monday.

The scheme, popular among investors and speculators, allowed buyers to put down a deposit and make no further payments until the property was completed.

City Developments Limited’s spokesman Gerry de Silva played down speculation among property agents that CDL’s upcoming Hundred Trees site would be priced under $950 psf, saying that no price had been set yet.

Mr de Silva said the government measures would ‘have minimal effect on our plans to launch Hundred Trees and other developments’.

He also cited the low take-up rate of IAS among purchasers.

Buyers and analysts hope the measures unveiled by the Government on Monday – which include the removal of the interest-only housing loans (IOL) and a return to a confirmed list for land sales – will help keep out speculators and allow prices to more accurately reflect real demand.

However, analysts such as Citi economist Kit Wei Zheng forecast that even with fewer speculators, demand is likely to remain strong and prices continue to rise, albeit at a slower pace.

He cited recovery in the economy and job market and a shortage of HDB flats as factors keeping up prices.

Prospective homebuyer Clarence Khoo, 36, said he hoped the new measures would help to soften prices, but admitted that it would not affect his decision to buy property as he was buying for the long term.

Another potential buyer, Mr Darien Tan, 32, who works in the marine industry, fears that property developers will continue to keep prices high.

He has been looking for a suitable condominium unit since returning from Australia last year.

ERA Asia Pacific associate director Eugene Lim said there were no hints of buyers opting to let their options on new properties lapse in anticipation of lower prices in the future.

But PropNex chief executive Mohamed Ismail believed that developers would exercise greater caution because overly pricey properties may turn off buyers.

Royal Bank of Scotland analyst Fera Wirawan believed sentiment may be dampened further if buyers anticipate more cooling measures.

She noted that other measures introduced in the past included limiting permanent residents to one property loan, imposing a stamp duty on sellers and introducing a tax on property gains

SOURCE: Straits Times

(SINGAPORE) Some developers are proceeding with plans to launch their projects despite measures announced by the government on Monday to cool an overheating private housing market.

CapitaLand Residential yesterday began previewing at its office the Interlace condo to former owners of Gillman Heights from whom it bought the site for the 99-year leasehold project. Prices of units range from $850 to $1,150 per square foot, a CapitaLand spokeswoman told BT.

Likewise, GuocoLand is proceeding to preview its freehold Elliot at the East Coast project this weekend at an average price of about $950 psf. Prices of a typical three-bedroom apartment in the development will start from about $1.2 million. The low-rise condo, with a total 119 units, comprises eight blocks which will be five storeys high and a three-storey block.

City Developments is also understood to be rushing to get its showflat ready for a possible preview next weekend of its Hundred Trees condo on the former Hong Leong Gardens site in the West Coast area.

The government’s cooling measures include scrapping the interest absorption scheme (IAS) and restarting confirmed list land sales in first half 2010.

‘Knowing that the government is coming up with more land, developers who have even marginally profitable projects may want to clear the decks and launch their projects this year,’ said Knight Frank chairman Tan Tiong Cheng.

A developer said: ‘Most of us feel the impact on demand from the removal of IAS will be more psychological than real as only a minority of buyers have been opting for it in recent months in projects where we charge a price premium for the scheme.’

‘Yes, buyers may now take a longer time to make a decision but they will bite if they like the product and if it’s priced right,’ he added.

Agreeing, Mr Tan said: ‘Ultimately if the intention is to sell, they cannot fight the market impression that there must be a price adjustment.’

While removal of IAS will suck out some of the speculative demand from the market, developers remain confident of the fundamentals in the property market, and its attraction to investors in the current low-interest rate environment.

There is also consensus among analysts in stockbroking houses that the government measures will not derail the recovery in the property market. ‘(The) measures may dampen speculative sentiment but may not stop genuine private home demand if the trajectory of economic recovery continues,’ Citigroup noted in a report.

Analysts also observed yesterday that while the increase in private home prices seen in the past few months may have come to a standstill, developers are unlikely to cut prices by much either.

‘We believe that developers, buffeted by strong start-of-year sales, are unlikely to cut prices aggressively,’ noted DBS Vickers analyst Adrian Chua. ‘The key impact would be a slowdown in sales as speculative buying gets flushed out of the market.’

However, property counters such as City Developments Ltd (CDL), CapitaLand and Ho Bee were downgraded by a few analysts. As of yesterday’s market closing, CDL has lost 9.4 per cent from its closing price last week. Over the same period, Wing Tai and Allgreen have shed 9.5 per cent, Keppel Land 8.1 per cent, GuocoLand 7.4 per cent, and CapitaLand 4.1 per cent.

The Interlace comprises a total 1,040 units. For the preview that began yesterday, five blocks with 153 units were released. ‘The units comprise a selection from a full spectrum of unit types, from two-, three-, three plus study, four-bedroom apartments, townhouses and penthouses. The units range from 807 sq ft to 5,877 sq ft in size.

‘These units, located on different levels in the development, also offer various facings – towards the pool, towards the sea, and towards the greenery at HortPark,’ a CapitaLand spokeswoman said.

BT understands that the appointed agents for Interlace will begin marketing the project on Friday from a temporary showflat at the corner of Kim Seng and River Valley roads.

SOURCE: Business Times
By KALPANA RASHIWALA AND UMA SHANKARI

However, according to Jones Lang LaSalle, there are several factors that buyers need to consider when buying used luxury condominium units as divestment under the current market condition – where the levels of both old and new supply are high – can pose a big challenge.

“We have seen continued interest in used luxury condominiums offering relatively attractive prices, particularly in well-managed buildings. Some of these condominiums may be offered at prices as low as half of those commanded by units in newly completed buildings or under construction projects,” said Daonum Lilavivat, head of Residential Agency at Jones Lang LaSalle.

Findings from Jones Lang LaSalle’s recent market study indicate that newly completed or currently under construction luxury condominium units in Bangkok’s CBD are now offered for sale at prices ranging between Bt110,000 and Bt200,000 per sqm, whereas units in older luxury buildings (aged ten years and older) in the same area are available for sale at between Bt55,000 and Bt90,000 per sqm.

“Discussions with our customers who purchased condominiums in older buildings show that aside from lower prices, most of the older buildings in the luxury segment offer relatively larger common space and full recreational facilities. These amenities include large swimming pools, fitness/sauna rooms and tennis courts, which are not typically provided in many new condominium projects. In addition, some buyers prefer the more ‘cozy’ environment offered by older condominium buildings rather than the ‘hotel-like’ atmosphere in new buildings,” says Daonum.

Good time to buy for own occupation
Buying used luxury condominiums in the CBD for own occupation now is a sound decision, says Daonum. “The strong competition in the leasing market due to the rapid growth of new condominium supply has put downward pressure on rents. Many owners who bought condominiums for investment purposes many years ago may now find it difficult to let their units as most tenants prefer newer buildings. For this reason, these investors are keen to divest their holdings,”

She adds that many of these units offer attractive prices and good value for money for those who are looking to buy used condominiums for their own occupation.

Daonum’s view is supported by Jones Lang LaSalle’s new market study which provides an analysis of gross and net yields in the high-end Bangkok condominium market.

Dan Tantisunthorn, head of Research at Jones Lang LaSalle, says “In a study to be published shortly, we found that the average resale price and current borrowing rates have adjusted to a level resulting in a gross yield which would attract end-user buyers. At these same price levels and assuming no vacancy, investors can earn a net yield above long term ‘risk-free’ rates, despite the yield on some of these, such as the recent government bond issue, rising.”

Doanum believes buyers can expect a capital appreciation in the long term as there are less sites/land plots available for new developments, whilst development costs of future projects are likely to rise.

Nonetheless, investors looking to buy used units to let at this time must be very cautious, says Daonum. “Aside from the downward pressure on rents because of strong competition and tenants’ preference for newer buildings, an investor may also have to make a big cash outlay to renovate a unit prior to putting it up for rent.”

Quality of property management – a key factor to look at
Because of old age, the condition of some condominium buildings can deteriorate – so can their asset values. Therefore, apart from price and location, the quality of building/property management is another key factor that buyers must pay a lot of attention to.

“There are a number of older luxury condominium buildings that are well managed and have always been kept in a like-new condition. Units in these buildings are able to sustain their asset value despite the high levels of supply entering the market over the past few years, and have a higher potential to enjoy a capital appreciation once the market picks up,” says Daonum.

“The attitude of the condominium juristic person committee plays a vital role in determining how the building is managed. A committee with a forward-thinking outlook will not be reluctant to invest in property management, including the regular maintenance and improvement of common areas, communal facilities and all systems within the building,” Daonum says.

SOURCE: Property-report.com

Scheduled to be completed by end of 2009, Phase II comprises only five exclusive luxury villas with landscaped private gardens, heated lap pools, Jacuzzis and outdoor living spaces. Each of the villas is located on a plot varying in size between 1 and 2 rai.

With architecture inspired by traditional Lanna design, the villas incorporate a range of luxury facilities, including a sunken dining pavilion, a separate guest villa, and smart entertainment and home-management technology. Behind the villa there is a garage with space for two cars, a maid´s quarters and a laundry.

The show unit of Residences Villa is now open for visitors. For more information visit: www.residences-chiangmai.com

It is obvious to me why buyers should be looking to these locations. Not necessarily the people who want or need to be in the centre of everything and close to their workplace but the wider circle of buyers, those who wish to own a property in a Capital city as a stopover or those who do not need to be at the business centre of the city. The life of a river is ever moving, particularly in Bangkok where the river is still very much a working river and a hive of activity that never appears dull. Why therefore should a prospective condominium buyer not want to have as his window this great living canvas?

I can recall when London first opened up the great River Thames to residential development and the huge Victorian warehouses were first converted into apartments, and where the riverside did not suit warehouse conversion; modern tower blocks rose in their place. Many thought that the old dockside areas would never be seen as desirable places to live and again there were concerns about transport, however, now multi-million dollar penthouses are common place. This scenario has been repeated all over the world from Chicago to Cologne to CapeTown.

So why compare Bangkok to Singapore?
Because in the price of real estate there is no comparison. Current per square metre selling prices of similar type developments run at about four times the price in Singapore. Yet Singapore is still seen as an attractive proposition to the real estate investor Take a look at a copy of the Straits Times in particular the Sunday edition and see how many real estate agents there are. Now compare two similar ground breaking projects; One Shenton in Singapore and The River in Bangkok. One Shenton had a very successful launch and is being built to a very high specification employing all of the latest technology and positioned overlooking the Straits. The River is a fabulous twintower project designed by Hans Brouwer and being developed by Raimon Land located directly on the river, as the name suggests, next to The Peninsular and opposite The Shangri-La and Oriental Hotels. Both projects have stunning views yet prices of The River start at about 115,000 baht per square metre, a fraction of the prices now being asked for similar apartments at One Shenton. Little wonder The River’s launch has been one of the most successful in Bangkok’s history. It is also worthy of note that much of the interest in The River has come from overseas.Perhaps, at last, the investors are realising that in terms of capital growth Bangkok’s riverside offers much greater potential. There are of course those investors that still see Thailand as a potential risk. Once their doubts are put aside, just watch the prices, like the towers, go sky high!

SOURCE: bangkokpokerplayer.com

Ownership of some parcels of land, thought to be in the hands of nominees of foreign investors, was expected to be revoked, Mr Wichai said yesterday as the province moves to enforce foreign ownership curbs.

Inquiries by the province had discovered at least “four to five landlords might need to have their title deeds cancelled”, he said.

They were acting as nominees of foreigners trying to get around curbs on foreign land ownership.

Government help was needed to tackle the problem, he said.

The Department of Special Investigation (DSI) has asked land officials on the island to investigate 16 plots which they suspect are controlled by foreign businessmen through Thai proxies.

Most of the land, covering thousands of rai, is in tambon Rawai in Muang district.

The plots are owned by five property developers.

“We need to keep checking, but we can’t root out the whole thing ourselves,” Mr Wichai said.

The Phuket land office has issued up to 130,000 land title deeds and is now examining 1,000 applications more.

Tambon Choeng Talay in Thalang district is also popular with development companies part-owned by foreigners.

Chief of Choeng Talay tambon administration organisation Manot Pancharat said he supported the province’s attempt to get things right.

Land purchases had boomed in Phuket since last year after foreign investors became more interested in housing projects.

Among them are homestays, a type of lodging that provides tourists with an experience similar to that of Thai families.

Democrat MP for Phuket Chalermlak Kebsap said foreign businesses could exploit legal loopholes for their own interest, including tax avoidance.

However, he warned against too much scrutiny, saying it could affect legitimate development in Phuket.

Pol Lt Col Prawut Wongsinil, of the DSI, said a similar problem was occurring in Surat Thani province, where consultancies were giving foreigners advice on how to buy land and get around legal curbs.

Foreigners are suspected of colluding with Thai partners in land development projects which break foreign ownership limits, said the DSI, which is expanding its investigation to Samui island and other tourist provinces.

SOURCE: Bangkok Post
Writer: ACHADTAYA CHUENNIRAN
Published: 14/09/2009 at 12:00 AM
Newspaper section: News

With immediate effect, the interest absorption scheme (IAS) can no longer be offered with new properties for sale, National Development Minister Mah Bow Tan said in Parliament on Monday.

He added that the Government is also resuming land sales next year, a move that will increase the supply of new sites and further cool rising prices. It is doing this by re-introducing a confirmed list of sites that will be put up for sale according to a pre-determined schedule, regardless of developers’ interest.

The Government also announced it will not extend measures introduced in January’s Budget to aid developers in the recession. These included deferring property tax and allowing developers more time to complete their housing projects.

These measures come after weeks of speculation over how the Government would react to an unexpected property boom that has resulted in record sales volumes and a dramatic run-up in prices.

Developers sold 10,000 units in the first seven months of this year, more than the 4,300 units sold in the whole of last year. In July alone, they sold 2,767 units – the highest monthly tally on record.

Private home prices are now about 10 per cent to 20per cent above the lows in the first quarter of the year. At selected projects, prices have rocketed 30per cent. Experts said the immediate impact of the measures would likely be private home prices stabilising, or even slipping, for the rest of the year.

‘The moves will certainly take some wind out of the property market, but they will not kill it,’ said Cushman & Wakefield managing director Donald Han. ‘The Government wants to keep the momentum going, but at a slower rate, as we are indeed in a recession.’

The Government is also disallowing a close relative of the IAS – interest-only housing loans – with immediate effect. These loans are designed so that the buyer pays a very low instalment until the property is completed.

The removal of the two schemes applies across the board to all private residential developments, the Ministry of National Development said on Monday. The only exemption is for uncompleted private residential projects in which the units had already been offered for sale under the IAS before Monday.

Source: Straits Times

The Scheme, launched in March this year, allows low-income elderly living in smaller flats (2- and 3-room flats) to sell the remaining leases to the government in return for annuities.

In a written response to a question in Parliament, National Development Minister Mah Bow Tan said the HDB has received more than 2,000 queries, showing good interest in the scheme.

Out of the 409 applications as at end August, 82 have been approved and these applicants have received their upfront payout of S$5,000 and they will receive an average monthly S$570.

Seven per cent of the applications were rejected – most of these applicants had either enjoyed more than one housing subsidy, or had previously owned bigger flats or properties.

Another 17 per cent of applicants have been asked to delay their application till upgrading in their blocks or estates have been completed, to ensure a clear valuation on their flats.

Mr Mah said that in the meantime, the HDB will consider appeals on a case-by-case basis

SOURCE: ChannelNews Asia

With immediate effect, it will make it tougher for home buyers to borrow by disallowing interest absorption scheme and interest-only loans to prevent excessive speculation, National Development Minister Mah Bow Tan announced in Parliament on Monday.

This means that banks and developers will not be allowed to offer housing loans whereby the borrower only pays the interest and defers repayment of the principal to a later date.

Mr Mah also announced that the Government will reinstate land sales through its confirmed list system and increase the supply of sites under the “reserve list”.

Sale of state land under the confirmed list was suspended for the first half 2009 Government Land Sales (GLS) Programme to help stave off oversupply risk as the property market here was then on a downtrend.

Instead, state land was only made available under the ‘reserve’ list system for the first half of the year.

Under the reserve list system, the government releases a site for sale only if an interested party submits an application with a minimum price that is deemed acceptable.

By contrast, land parcels under the confirmed list will be tendered according to scheduled dates – which could translate to more residential property launches.

Mr Mah said speculation was trickling back into the property market and the measures were taken to prevent the overheating.

New home sales in Singapore have shot through the roof recently. Resale prices of many popular projects have also risen from the lows early this year.

SOURCE: Straits Times