Sunday, January 31, 2010

CNA: Second phase of Circle Line expected to draw 30% more shoppers

Second phase of Circle Line expected to draw 30% more shoppers
27 January 2010 

SINGAPORE : The second phase of the Circle Line opens in less than three months. And some businesses near the 11 stations are expanding their stores and recruiting new staff ahead of the opening. 

Paya Lebar Station will become the interchange station for the Circle and the East-West lines. And shopper traffic is expected to increase by some 30 per cent. 

Workers around the area are also looking forward to the opening as it will cut down travelling time. 

Going along the line, the Stadium Station - located between the National Stadium and Indoor Stadium - will provide a new transport option for eager concert-goers. 

One commuter said: "This place is quite central, near to town and I do not think there is an MRT around this area. The nearest one is Aljunied and that is quite a distance. So to have an MRT around here is a good idea." 

Another added: "I think (it is) good. It is easier to go to the stadium and leisure park." 



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CNA: Public housing in 21st century must meet changing needs: Minister Mah

Public housing in 21st century must meet changing needs: Minister Mah
By S.Ramesh, Channel NewsAsia 27 January 2010 

SINGAPORE: Singapore's National Development Minister Mah Bow Tan said public housing in the 21st century must evolve to meet changing needs. 

But the core mission of the HDB remains unchanged - that of providing Singaporeans with affordable quality homes and building cohesive communities. 

Speaking at the International Housing Conference in Singapore, Mr Mah noted the HDB will face increasing challenges due to shifting demographics. These include an aging population which may require further innovations in housing policies or building design. 

These include an aging population, which may require further innovations in housing policies or building design. 

In addition, with more new Singapore citizens, greater integration efforts will be required. 

Mr Mah said rapid globalisation and affluence may also prompt other lifestyle changes and with it, increased expectations of what public housing can provide. 

Singapore is also facing the steadily ageing profile of HDB flats and towns. So there will be an urgent need to upgrade, redevelop and rejuvenate older estates. 

Mr Mah said HDB must meet these challenges and continue achieving environmental, economic and social sustainability. This will contribute to Singapore's overall quest to provide a green and healthy living environment, through careful long-term planning. 

In the past half century, HDB achieved much for Singapore and garnered significant international recognition, including the UN Public Service Award. 

And he urged HDB to continue its relentless pursuit of sustainable public housing for the next 50 years and beyond. 



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Business Times: Home sales plunge in Beijing: report

January 28, 2010
Home sales plunge in Beijing: report

(BEIJING) Sales of new apartments and existing homes in Beijing fell some 70 per cent in the first three weeks of January from a month earlier, the local Beijing News reported yesterday.

The newspaper cited real estate agents as saying that home buyers were taking a wait-and-see attitude as the government has moved to douse speculation in the property sector, fuelling expectations that prices will fall.

Prices of existing homes have already started to dip as buyers gain the upper hand, the report added.

Conditions in the Beijing property market are not necessarily indicative of those in other cities, but the fall in transaction volumes and prices suggests that the government's measures to tame surging prices are beginning to gain some traction.

Along with trying to rein in bank lending, officials have also scrapped a tax policy that encouraged property buying and have discussed raising mortgage rates on acquisitions of second homes to discourage speculation. 



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Business Times: Henderson eyes US rental homes, raising US$400m

January 28, 2010
Henderson eyes US rental homes, raising US$400m
UK fund manager expects double-digit returns as home ownership slides

(LONDON) Henderson Global Investors is raising US$400 million to invest in rental apartments in the United States, where it sees potential for double-digit returns on the back of falling home ownership and cheap finance. 

US home ownership has fallen dramatically in the past six years, in the latest boom-bust real estate cycle, and could fall further, meaning more people looking to rent, the UK-based fund manager said on Tuesday. 

'We think the US apartment sector is best positioned for a recovery both in terms of fundamentals and financing,' Edward Pierzak, Henderson's chief property investment strategist for North America, said in an interview. 

The home ownership rate dropped two percentage points from 69.5 per cent in early 2004 to about 67.5 per cent at end-2009, and could fall further to 66 per cent in the next two years, he said. 

'You're really looking at two million households or so that could be entering the for-rent market, so it's a big plus for apartment owners,' Mr Pierzak said. 

An improving investment market for apartments could benefit listed residential real estate investment trusts such as Equity Residential and AvalonBay Communities. 

Henderson, which has £57.7 billion (S$131.4 billion) of assets under management, plans to launch its CASA V fund before end- March to acquire US apartments, and is targeting to raise US$400 million from US and international investors. 

'We think there is an opportunity in core apartment markets that can give you returns in the 10-12 per cent range with modest leverage of about 50 per cent,' Mr Pierzak said. 

Henderson is not looking at the Stuyvesant Town and Peter Cooper Village, however, due to the size of the project. 

Tishman Speyer and a unit of BlackRock decided on Monday to give up control of the 11,200 apartment Stuyvesant Town complex in Manhattan, after a default on the debt used to finance their US$5.4 billion purchase of it.

'Conceptually apartments in New York would be what we're interested in, but likely not at that size,' Mr Pierzak said, adding the fund will look to buy apartment buildings at lot sizes in the US$20 million-US$60 million range. 

Its favoured markets include coastal California, the Washington DC metro area, and south-east Florida. 

The apartments sector also benefits from the cheapest financing available for real estate in the US. Some apartments that qualify for a tax-exempt bond financing could bring borrowing costs to as low as 3 per cent, Mr Pierzak said. 

Other commercial real estate sectors such as offices, retail, and industrial properties are also starting to look attractive although their fundamentals remain weak, he said. 'You can get attractive cap rates on those properties, but you also have to recognise that vacancies as well as rental growth will be more challenged in the next couple of years.' 



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Business Times: Indian property IPOs expected to do poorly

January 28, 2010
Indian property IPOs expected to do poorly
Observers cite competition from large public sector offerings

(MUMBAI) Investors are more likely to choke on a glut of India property IPOs set to hit the market this year than gobble them up. 

Even though Godrej made a strong debut this month in the first Indian property listing in two years, the initial public offers of other developers could meet more restrained investor buying as they compete with a slew of large public sector offerings. 

At least 16 real estate firms have lined up plans for initial public offers to raise about US$6 billion, buoyed by an 81 per cent rise in the Mumbai stock index last year and as property buyers return. 

'If all the IPOs get bunched up, we have a problem. Everybody may not see the light of day,' said Jayesh Shroff, fund manager at SBI MF, which manages about US$8 billion worth of funds. 

What awaits India's property IPO rush may be exactly what happened to China's offerings in recent years. The Chinese property sector saw early success from some offerings several years ago, but a dozen or so that followed suffered as investors grew tired of the same old IPO story. 

And it could also play out as it did in India in 2007, when DLF and others floated, but are now among the worst market performers, trading way below their IPO prices, with market valuations sliding between 70-90 per cent. 

Godrej has already dropped 17 per cent from its Jan 5 debut high after its around US$100 million IPO. 

India's real estate industry, like the sector globally, was hard hit by the 2008 credit crisis after years of booming demand. 

Property prices doubled in the two years to 2007, fuelled by interest from foreign investors. 

But the sharp rise was followed by interest rate rises to calm inflation and the global financial turmoil, pulling down property sales by more than half. Left with unsold and incomplete projects, developers were forced to restructure spiralling debt obligations. 

The equity market rally since March threw a lifeline, and several real estate firms are again dusting off plans to raise public money. 

'Although many developers were able to defer repayments, high interest costs and requirement of funds for project execution are still a concern,' said Sushanto Roy, chief executive at Sahara Prime City, which plans a US$650 million IPO this year. 

A recovery in the property market has also been encouraging. 

A series of interest rate cuts and pent-up demand from a large urban middle class have helped push up prices by about 30 per cent from last year's lows in the first quarter. 

Indian companies sold shares worth US$17.5 billion last year, mostly by property and power sector firms. IPOs made a comeback in July after an 18-month drought, with 21 companies raising a total of US$4.1 billion since then. 

These numbers should be dwarfed this year, mainly by a government roadmap to raise funds through stake sales in state-run firms, as it strives to speed up reforms and cover a widening fiscal deficit in Asia's third-largest economy. 

So all eyes will be on the next property IPO, which could be DB Realty, which set a price for its US$325 million IPO, sources said this week. 

Others in the likely line-up include a US$650 million IPO by Lodha Developers, an US$830 million offering by Emaar MGF, an Indian joint venture of Dubai's Emaar Properties, and a US$650 million IPO by Sahara Prime City. 

Investors, still scarred by the sub-prime crisis, remain cautious of investing in a property market that is beset with red-tape, land disputes and difficulty in valuations due to the huge quality difference among India's developers. 

'If greed overtakes you and you price it very high, the IPO might fail,' Pranay Vakil, chairman of property services firm Knight Frank India, told Reuters Insider.

Mr Vakil is adviser to several of the upcoming offers. 



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Business Times: Lucky Plaza medical suites up for sale

January 28, 2010
Lucky Plaza medical suites up for sale

THE second phase of Orchard Medical Specialists Centre will be offered for sale and rent from tomorrow by Hong Property Investments. 

The fifth floor of Lucky Plaza has been transformed into an exclusive medical hub with occupants engaged in fields such as psychological medicine, dentistry and women's wellness. Since the first launch some two years ago, eight units have been sold and another 30 are tenanted. 

The remaining 18 units are now being offered for sale at average prices of $3,100 to $3,200 per square foot (psf) and for rent at $11 to $12 psf per month.

Knight Frank, which is marketing the units, said that with the renewed buying interest in high-end apartments at Orchard Road as well as the continued growth in medical tourism in Singapore, medical practitioners and retail investors can generally envisage the capital appreciation and the rentability of the medical suites in the mid to long term.

According to Knight Frank, at the nearby 99-year Mount Elizabeth Medical Centre, a 1,206 sq ft unit changed hands at $3,701 psf last month while another 893 sq ft unit was sold for $4,798 psf in November last year. 

Over at Novena Medical Centre, there were some transactions of the 99-year leasehold units in the range of $2,800 psf to $3,000 psf.

Rents of medical suites in the Orchard Road vicinity, such as at Paragon Medical Centre and Mount Elizabeth Medical Centre, are in the range of $14-$16 psf, Knight Frank said.



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Business Times: BoA decides not to sell Merrill funds

January 28, 2010
BoA decides not to sell Merrill funds

(HONG KONG) Bank of America plans to raise new money for Merrill Lynch's Asia property funds business instead of selling it due to a recovery in the real estate sector, sources said.

BoA was in talks with several private equity firms, including Blackstone Group and Apollo Investment Management, to sell management rights to its US$2.65 billion Asia Real Estate Opportunity Fund which the bank regarded as a non-core business, Reuters reported in July.

Despite negotiations lasting more than six months, no deal was reached because of disagreements over financial terms and the complicated structure of Merrill property funds, sources with direct knowledge of the matter told Reuters yesterday.

BoA has hired people in Beijing to raise money for a new Asia-focused property fund, the sources said, adding China remains a focus for the Merrill funds.

In China, Merrill invested a few years ago in the development of the Beijing Yintai Centre, a top-end complex where the luxury hotel Park Hyatt Beijing is located on the historic Chang An Avenue.

The sources, who were involved in the bidding process and have business ties with BoA, declined to be identified as they were not authorised to speak to the media.

'Basically there was a lack of interest from Merrill Lynch's part to go forward with the process,' said a prospective bidder, who asked not to be identified.

A BoA spokesman in Hong Kong declined to comment.

Bank of America took over Merrill at the end of 2008 during the financial crisis.

In October 2008, just two months before the deal went through, Merrill closed and launched the Asia property fund with focus on Japan, China, India and South Korea.

Investors, also known as limited partners, in the Merrill property fund include many rich families and some sovereign funds in the region, said one of the sources.

Property market transactions in Asia have risen in recent months as investor confidence improves and banks start lending.

A research report released last week by property consultancy firm DTZ, for instance, showed the value of property transactions in South-east Asia rose 25 per cent in the last three months of 2009 from the preceding quarter.

Despite a clear recovery in the sector, some analysts and government officials are worried that asset bubbles were forming due to the sharp rises in property prices.

Merrill is not alone making property investments in Asia.

Rivals, including Goldman Sachs and Morgan Stanley, are long-time players in some key Asian markets like China.

In March, Morgan Stanley raised US$6 billion for a new global property fund, including money from China Investment Corp, the sovereign wealth fund. 



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Business Times: KL office rents expected to hold steady

January 28, 2010
KL office rents expected to hold steady
The city's rental rates are among the region's most competitive
By PAULINE NG IN KUALA LUMPUR 

KUALA LUMPUR remains one of the region's most competitive office locations and with over nine million square feet of new supply over the next three years, average rental rates are expected to hold steady, said a leading property group. 

Rental rates of Grade A offices have rebounded to about RM7 (S$2.86) per sq ft after a 15 per cent drop for the greater part of last year. This was achieved despite the addition of 4.76 million sq feet of space from 14 new office buildings, said CB Richard Ellis Malaysia executive chairman Chris Boyd.

By the year's end, vacancy rates had stabilised at 13 per cent because the bulk of new supply was non-speculative and substantially pre-let prior to completion.

CBRE Malaysia does not regard the additional planned supply as excessive, but a 'tenant's market is expected to prevail' in the short term.

What would give the office segment a fillip is Kuala Lumpur getting back on the radar of international investors. According to Mr Boyd, this is already happening and was one of the driving forces behind the establishment of the local CBRE office -- the latest affiliate of the CBRE group.

'We have received more and more enquiries from international investors,' Mr Boyd, who used to helm Regroup Associates, said, adding that Kuala Lumpur's modern infrastructure, quality facilities and comparatively cheap rentals will help attract more investors. 

The company expects broad-based demand from various sectors to pick up this year following last year's liberalisation of foreign equity ownership rules, which did away with a tedious approval process - unless the transaction results in a dilution of bumiputra or government interests and the property costs RM20 million or more.

Although the RM3.5 billion worth from 28 major commercial transactions in the second half of last year mostly involved Malaysians, Mr Boyd is confident that further liberalising of the economy will pull in more local and foreign investments. 

Malaysia's leaders have hinted that the new economic model, which is to be announced next month, could substantially cut the restraints hindering the country's competitiveness so that private investors would be encouraged to invest in the domestic economy rather than overseas.

The services sector would continue to receive greater emphasis as Malaysia has lost most of its competitive edge in manufacturing. Financial services were one beneficiary, with a number of international players awarded licences to operate in Malaysia. These include Goldman Sachs, the Industrial & Commercial Bank of China, Aberdeen, Nomura and BNP Paribas which are expected to set up offices this year, and drive demand for Grade A buildings.

Malaysia has not marketed its real estate as well as its regional competitors, observed CBRE Asia chairman William Shee. Other consultants had previously criticised a tendency to changes policies in mid- stream.

As at the end of last year, the average transaction price for Kuala Lumpur offices was 14 per cent lower at RM814 psf from RM950 a year ago. Office capital values are expected to remain range- bound at between RM800 and RM1,200 psf. 

Partly as a result of state incentives, more green buildings are coming up, and Mr Boyd said these and 'really high spec' buildings could command rentals of RM8.50 to RM9 psf. 

Kuala Lumpur currently has an estimated 29.9 million sq ft of Grade A office space.



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Business Times: Sales of new homes fall unexpectedly in Dec

January 28, 2010
LATEST US DATA 
Sales of new homes fall unexpectedly in Dec
Numbers point to softening of housing recovery

(WASHINGTON) Sales of newly built US single-family homes fell unexpectedly in December, data showed yesterday, the latest indication that the government- led housing recovery might be losing some steam. 

The Commerce Department said that sales fell 7.6 per cent to a 342,000 unit annual rate from an upwardly revised 370,000 units in November. It was the second straight month that new home sales declined. 

Analysts polled by Reuters had expected new home sales to increase to a 370,000 unit annual pace from November's previously reported 355,000 units. 

New home sales for the whole of 2009 fell 22.9 per cent to a record low 374,000 units, the department said. 

The housing market recovery is showing some signs of fatigue after a surge in sales as first-time buyers rushed to take advantage of a popular tax credit, which had been scheduled to expire in November. 

It has since been expanded and extended until June this year. While analysts expected home sales to pick up as a result, they reckoned that the pace will not be as strong as witnessed with the initial tax credit. 

The housing market was the main catalyst of the most painful downturn in 70 years, and renewed weakness could hobble the economic recovery. 

Despite the slump in sales, there were a few bright spots in yesterday's report. The median sale price for a new home rose 5.2 per cent last month from November to US$221,300, the highest in seven months and the biggest rise since April 2009. Compared to December 2008, the median sale price fell 3.6 per cent. 

The number of new homes on the market last month dropped 1.7 per cent to 231,000 units, the lowest level since April 1971.

However, December's weak sales pace left the supply of homes available for sale at 8.1 months' worth, the highest since June 2009, from 7.6 months in November. 

New home purchases, while accounting for less than 10 per cent of the market, are considered a leading indicator because they are based on contract signings. 



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Business Times: Hiap Hoe, SuperBowl JV to open 2 hotels

January 28, 2010
Hiap Hoe, SuperBowl JV to open 2 hotels
By NISHA RAMCHANDANI 

PROPERTY developer Hiap Hoe and SuperBowl Holdings, which owns and manages leisure and recreational facilities, are investing $300 million to open two hotels in Balestier through their 50:50 joint venture company, HH Properties.

HH has appointed Wyndham Hotel Management - which is part of the Wyndham Hotel Group - to run the two hotels. The hotel group's portfolio consists of over 7,000 hotels and 11 brands.

The two hotels will be operated under the Ramada and Days Inn brands, which are new-to-market brands for Singapore. 

The 390-room Ramada Singapore at Zhongshan Park will have more than 6,400 square feet of meeting space and will be linked to an adjacent office block. The Days Hotel Singapore, also at Zhongshan Park, will have 405 rooms. Both hotels are slated to open their doors in 2014.

'Singapore is one of the most important business and leisure destinations in the Asia-Pacific region and we are thrilled to introduce our Ramada and Days Inn brands to the market,' said Tom Monahan, Wyndham Hotel Group's executive vice-president of international development. 'We are very excited to be working with HH Properties as we expand our global footprint.'

While Hiap Hoe and SuperBowl Holdings have worked together in the past on residential projects such as The Beverly, this is the maiden venture into the hospitality industry for both companies.

The Balestier site was awarded to HH Properties in August 2008, when HH Properties acquired the land for some $75 million. The land cost is included in the $300 million investment. 

Located opposite the Sun Yat Sen Nanyang Memorial Hall, it has a land area of about 190,000 sq ft and a gross permissible floor area of about 421,000 sq ft. HH Properties will also construct commercial developments on the site.

Teo Ho Beng, managing director of Hiap Hoe Group said: 'We have spent a considerable amount of time planning the project. We selected Wyndham Hotel Group to manage the hotels based on its strong brand portfolio and track record.'



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Business Times: Quotas under study for PRs buying resale flats

January 28, 2010
Quotas under study for PRs buying resale flats
Possible cap on PR proportion in every HDB neighbourhood and block
By UMA SHANKARI 

(SINGAPORE) THE Housing & Development Board (HDB) is considering setting a cap on the proportion of permanent residents (PRs) allowed in every HDB neighbourhood and block.

The possible move - which is now under study - was revealed yesterday by Minister Mentor Lee Kuan Yew, who was speaking at a dialogue session at the International Housing Conference. 

HDB, which celebrates its 50th year this year, now has in place an ethnic integration policy which seeks to prevent the formation of racial enclaves by setting the maximum allowable proportion for each ethnic group in every HDB neighbourhood and block.

There have also been concerns, of late, that purchases of resale flats by PRs have been pushing up prices. PRs are now allowed to buy HDB flats only on the resale market. 

Recent media reports have quoted housing agents on the ground as saying that cash-rich buyers - both locals and permanent residents (PRs) - are driving the recent rally in HDB resale flat prices and the resulting high cash-over-valuation (COV) levels. 

HDB resale prices hit a new record in Q4 2009, with prices climbing 3.9 per cent from the previous quarter. The median COV for all resale transactions doubled to $24,000 in Q4 from $12,000 in Q3.

Mr Lee also addressed concerns about the affordability of HDB flats.

'It (affordability) will always be an issue,' said Mr Lee. 'What is affordability, from the point of view of the buyer, and the point of view of the government that is subsidising you?'

Buyers, he said, always want cheaper and better flats. But the government has to price it at a level that is fair to the revenue it collects as well as fair to individuals - not only present buyers but also past and future buyers, Mr Lee added.

Mr Lee pointed out that HDB is now selling new flats for lower than their market values. This allows Singaporeans to benefit from rising asset prices as the economy grows.

Buyer expectations are also being affected by rising aspirations, Mr Lee said. But rising aspirations have to go hand in hand with rising productivity - which Singapore has not seen. 

Singapore, he said, has grown in the last five years mainly by importing foreign labour. But now Singaporeans are uncomfortable as they feel that there are too many foreigners. There are complaints that trains and buses are over-crowded with foreigners. Foreigners have also been blamed for driving up property prices.

'The answer is simple,' Mr Lee said. 'Check the flow of foreigners, raise your productivity, do the job better.'

Earlier in the day, Minister for National Development Mah Bow Tan said during his keynote speech that HDB faces increasing challenges in the 21st century. 

'The core mission of HDB remains unchanged: that of providing affordable quality homes and building up cohesive communities, ' said Mr Mah. 

But while HDB will keep that commitment, it faces challenges from shifting demographics and the steadily ageing profile of HDB flats and towns. For example, with more new Singapore citizens, greater integration efforts will be required, Mr Mah said. And as HDB flats and towns age, there will be an urgent need to upgrade, redevelop and rejuvenate older estates, he said.

And HDB also needs to minimise the impact of growth on the environment and to use resources efficiently, Mr Mah said. 

'HDB must rise up to meet these challenges and continue its efforts in achieving the three dimensions of environmental, economic and social sustainability, ' Mr Mah said.



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Straits Times Forum: En bloc sale panels already have a lifespan

Jan 28, 2010 
En bloc sale panels already have a lifespan 

I REFER to the letters on Monday by Ms Susan Prior ('Save owners from sword of Damocles') and Mr Augustine Cheah ('Loopholes in law').

Ms Prior suggests that a collective sale committee should have a limited lifespan. This is already provided for in the Land Titles (Strata) Act. The committee will automatically dissolve on expiry of the collective sale agreement. The agreement will expire if the requisite consent level is not attained within 12 months from the date of the first signatory.

The committee can also be dissolved by an ordinary resolution at a general meeting. Further, if no one has signed the agreement, the owners can dissolve the committee at any general meeting.

Mr Cheah claims that there had been no clarification or reply from the Ministry of Law to letters by many, including him, on purported loopholes in collective sale legislation.

Mr Cheah should know that what he says is inaccurate. The ministry has regularly responded to various letters on the matter.

The ministry has also previously responded to a Forum letter from one Mr Augustine Cheah (who is probably the same writer). The ministry's reply to Mr Cheah ('En bloc sales: Rights of all owners adequately protected') was published on Aug 21 last year.

As for Mr Cheah's call to tighten the legislation, the public is assured that the ministry has always actively considered feedback received, consulted industry experts and introduced amendments where appropriate. The ministry will continue to do so.

Chong Wan Yieng (Ms) 
Head, Corporate Communications 
Ministry of Law



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Straits Times: 65% satisfied with property agents: Poll

Jan 28, 2010 
65% satisfied with property agents: Poll 
By Dickson Li 

TWO out of three people are satisfied with the service they get from real estate agents but there is still room for improvement, according to a survey conducted by Ngee Ann Polytechnic. 

Of the 1,041 people questioned in the poll - 564 of whom had prior experience of property transactions - 64.6 per cent said they were either satisfied or very satisfied with the service they got from their agents.

Another 27.7 per cent felt neutral about the service provided, while the remainder were either very dissatisfied or dissatisfied.

Even among those who were satisfied, 71.1 per cent reported negative experiences of their property agents.

Chief among their complaints was failing to negotiate a 'good' price for the property. The second most common gripe was being given the 'wrong advice'.

Of the survey's respondents, 63.8 per cent felt that a property agent should have at least two years of relevant work experience before being accredited by a professional body.

The polytechnic' s real estate lecturer Nicholas Mak, who is the survey's research coordinator, said: 'Two years is an indicator of the standard a real estate professional accreditation body should require from its members.'

An overwhelming majority - 96.6 per cent - of respondents called on the Government to implement changes to the industry. 

The most popular proposed action was for the implementation of a property agent certification scheme. Although such a scheme might involve higher costs, 49.1 per cent of respondents did not mind paying a higher commission if they got experienced property agents.

Dr Tan Tee Khoon, chief executive of the Singapore Accredited Estate Agencies, acknowledged that despite a variety of measures taken towards self-regulation, 'there is still much to be desired of this industry'. 

Publication of the Ngee Ann Polytechnic survey, which was conducted in the middle of last year, comes before the expected publication of the Ministry of National Development' s proposed regulatory framework for the real estate industry.

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Straits Times: 'No' to more rental housing

Jan 28, 2010 
'No' to more rental housing 
By Rachel Chang 

BUILDING more flats for rent could ease the burden on younger Singaporeans starting out in life - just as it could help others invest their resources in developing their businesses.

The idea of increasing the Housing Board's pool of rental flats to help those Singaporeans concerned about affordable housing, was put to Minister Mentor Lee Kuan Yew at a conference yesterday.

But he was quick to disagree, arguing that it was tantamount to putting the HDB in a position of subsidising rents indefinitely. It would also create a 'dependency group' - those constantly dependent on the Government and on subsidies.

The right policy is to, instead, subsidise the price of the flat for the buyer, who then has an asset that will appreciate in value as the economy grows.

'I'll improve the surroundings, I'll improve the lifts, the conditions, I'll give you more space. But it is yours and you look after it. And we do not have rundown public housing like other countries which are rental (units),' he said.

The idea was put forward by Professor Deng Yongheng, director of the National University of Singapore's Institute of Real Estate Studies. He said that having more rental flats would help low-income earners, and also allow others to put their money into meeting 'entrepreneurship and other demands'.

Mr Lee said that for those needing resources for their businesses, there was 'nothing to stop you from taking your house, your flat, you go to the bank and say... I've got so much more to pay, this is my income, I need this capital to start a business'.

The HDB clarified later to the media, however, that an HDB flat cannot be used as collateral for a bank loan.

In his response at the dialogue, Mr Lee also said that young Singaporeans wanting to invest in business and not be burdened with financing a flat, could rent from the private sector:

'If you believe you can be a great entrepreneur, then rent a flat from somebody. All the HDB flats are now rentable.'

Mr Lee also disagreed with another idea, raised by Ambassador-at- large Tommy Koh, that the HDB could build retirement communities like those found in Australia and the United States.

Mr Lee said he had read an article by a US doctor, who had assets but who stopped his practice and went into such a home.

'This retirement home was like a hotel and there were other doctors with whom he could discuss things at an intellectual level... He is in that profession, so he has saved enough to pay for the facilities as if it were a hotel,' Mr Lee said.

'You want American standards of living, be an American doctor. Singapore cannot give you that. We haven't got that kind of economy, nor that kind of land. Not even the developer can afford to go and retire in that kind of situation.'



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Straits Times: HDB looks forward on its 50th birthday

Jan 28, 2010 
HDB looks forward on its 50th birthday 
By Jessica Cheam 

EVEN as Singapore's public housing agency looks back to celebrate its achievements over the past 50 years, it will face increasing challenges that mean evolving to meet changing needs.

The Housing and Development Board (HDB), which marks its 50th birthday on Feb 1, must meet these challenges while maintaining its three-pronged approach of environmental, economic and social sustainability, National Development Minister Mah Bow Tan said yesterday.

He was addressing more than 500 delegates from around the world at the opening ceremony of a three-day international housing conference hosted by the HDB and held at Suntec City.

'In this globalised world, we face many common challenges: climate change, migration, demographic shifts, shrinking resources, among others,' he told the conference. 'These changes impact all cities alike, large or small, developed or developing, sooner or later.'

The conference was a great opportunity for policymakers, architects and urban planners to exchange ideas.

The growing challenges that HDB will face include an ageing population, which may require further innovations in housing policies or building design, he said. Others included integrating the growing number of new Singapore citizens and the effects of rising affluence.

'As the public housing authority, HDB's key task is to find innovative ways to accommodate our people, taking these challenges into account,' he said.

Speakers at the three-day conference, which discussed themes such as environmental sustainability, include housing ministers from Spain, Finland and Australia, and senior government officials from the United States and Hong Kong.

Hong Kong's Secretary for Transport and Housing Eva Cheng said Hong Kong faced similar challenges as Singapore over land size and a growing population, and had ensured public housing for lower-income earners. She will be speaking at the conference today.

Addressing the audience, HDB chief executive Tay Kim Poh also acknowledged yesterday that HDB has 'achieved much that we are proud of', but it is also mindful of the 'challenges to housing that are shaped by the changing needs and expectations of our people'.



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Straits Times: Don't cast protest vote over rising flat prices: MM

Jan 28, 2010 
Don't cast protest vote over rising flat prices: MM 
By Sue-Ann Chia, Senior Political Correspondent 

THE current contentious issue on the affordability of public housing was given another airing by Minister Mentor Lee Kuan Yew who cautioned Singaporeans not to cast a protest vote against the ruling party over this.

As Singaporeans lament rising flat prices, he said they ought to understand that the Government sells them at a subsidised price, below market rate, so that they can own an asset that will appreciate in value over the years.

It adds to their wealth and this is an asset-enhancing policy Mr Lee believes citizens should not find fault with.

If they do, they must be 'daft', he said, at a dialogue during a housing conference as part of a series of events to mark the Housing and Development Board's 50th anniversary.

And if National Development Minister Mah Bow Tan is unable to defend this policy, 'he deserves to lose' at the next general election, he quipped, to laughter from the participants, including a chuckling Mr Mah.

But if Mr Mah loses to the opposition, he warned that Singaporeans better sell their flats fast as they would no longer be of any value.

Mr Lee's blunt remarks were in response to a question by dialogue moderator Tommy Koh, who pulled out a Straits Times report which said at least three opposition parties are keen to contest Tampines GRC, which Mr Mah helms, as they want to raise the affordability of public housing as an election issue to gain votes.

'It will always be an issue,' noted Mr Lee. 'They always want it cheaper and better.'

The Government, he said, has to price the flats at a level which is fair, not only to current buyers but past and future buyers, as it will affect property prices.

He went on to explain why the Government had put in place a five-year limit before people can sell their new flat, saying it was to prevent speculation in the property market.

'Because the moment you buy a flat, you can sell it to make a profit,' he said.

'We are giving you something more valuable than you're paying for. So we say you cannot sell it for five years.'

This philosophy of giving citizens an asset that will grow in value and give them a stake in the country was a recurring message in the 60-minute dialogue.

Asked why the Government placed such emphasis on housing the population in the early days after Singapore gained self-rule in 1959, Mr Lee, who was the Republic's first prime minister, said:

'We decided from the very beginning, everybody must have a home, every family will have something to defend. And that home, we developed over the years into the most valuable asset.'

It was also about giving people a clean place to live, as living conditions then were squalid and overcrowded.

To a question from Hong Kong's Secretary for Transport and Housing, Ms Eva Cheng, on letting the private sector play a bigger role, he said they cannot take over the housing responsibility.

'We give them land, they build, and they sell it below market price? Cannot be done,' he said.

'We give our buyer an asset which is below market price the moment he buys it. So there is no profit, it's a loss, but there's a strategy behind that loss.

'That loss is to give the man an asset which he will value, which will grow in price as the country develops, as his surroundings become better.'

He added: 'This is a social responsibility which we have undertaken and that's the reason why we are re-elected.'

Referring to the three opposition parties that are targeting Mr Mah, he said: 'If Mr Mah is not re-elected and these three wise men take over, then I say you better sell and get out quickly.'



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Straits Times: Separate ethnic quota for PRs

Jan 28, 2010 
Separate ethnic quota for PRs 
Move to prevent them from forming enclaves in public housing estates
By Kor Kian Beng 

THE Housing Board is considering introducing a separate ethnic quota for permanent residents to prevent them from forming enclaves in public housing estates.

Its spokesman disclosed yesterday that the HDB was considering tweaking the Ethnic Integration Policy (EIP) but did not elaborate on the details.

PRs and Singaporeans are now subject to the same quota under the EIP, which aims to maintain a healthy racial mix in housing estates by stipulating maximum proportions for the key ethnic groups.

The HDB's statement followed comments made by Minister Mentor Lee Kuan Yew during a dialogue at an event marking the HDB's 50th anniversary.

Asked by the moderator, Professor Tommy Koh, if the EIP would be expanded to include new Singaporeans, Mr Lee said the Government was doing so.

Said Mr Lee: 'We're not allowing new Singaporeans, whether from China, India or Malaysia or whatever, to congregate in the same tower blocks, which they are already beginning to do. They buy second-hand flats and they congregate.

'So we say 'no, no'. We have a record of how many new citizens living where, and we keep their numbers dispersed.

'It (EIP) is a very valuable instrument of communal harmony.'

The HDB spokesman clarified later that it was still considering the proposed change for PRs, whose numbers have risen in recent years.

The swell has triggered concerns of PRs forming enclaves in housing estates.

Last November, National Development Minister Mah Bow Tan said, in response to a query in Parliament, that the Government was monitoring the situation and would consider measures to prevent the congregation of PRs and foreigners in the housing estates.

Mr Mah also said PRs are already subject to the EIP, which was introduced in 1989. Latest official statistics show there are 533,200 PRs.

They own around 5 per cent of the nearly 900,000 HDB flats islandwide. PRs can buy only resale flats.

Under the EIP, proportions for the main ethnic groups - Chinese, Malays and Indian/Others - in each block and each precinct of around 10 to 12 blocks are subject to quotas. Sale of an HDB flat to a buyer from an ethnic group that has reached the block or the precinct limit is not allowed.

Over the years, disgruntled buyers and sellers have called for the HDB to tweak the quota or to abolish it completely.

Mr Lee said yesterday the situation was no different in the EIP's early years, when residents preferred neighbours of their own ethnic group. 

The audience got a clear sense of how seriously he viewed the EIP, in his reply to Prof Koh's question if he considered the scheme a 'successful experiment'.

Said Mr Lee: 'No, it was not an experiment.. . It was force majeure. We inflicted it on the people, we knew it would work, we knew it would be uncomfortable.

'I got the Malay MPs and the ministers together, explained it and I said this was the only way. If we didn't do this, we would remain separate communities and never integrate.'



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Thursday, January 28, 2010

CNA: HDB to construct its one millionth flat, capping 50 yrs of achievements

HDB to construct its one millionth flat, capping 50 yrs of achievements
By S.Ramesh, Channel NewsAsia 26 January 2010

SINGAPORE: Is there a role for Singapore's Housing and Development Board (HDB), now that the entire population has been housed? 

Prime Minister Lee Hsien Loong said the answer is "Yes" as the HDB is still responsible for providing good public housing and fostering social integration. 

Speaking at its 50th anniversary, Mr Lee also revealed that the board will celebrate half a century of achievements by building its one millionth flat this year. 

The HDB is a central part of the Singapore Story, said Prime Minister Lee. Over half a century, it housed a growing population and was integral in nation-building. 

Mr Lee said: "Two generations of Singaporeans have grown up in HDB flats. Public housing helped to mould our unique national identity and collective experience as Singaporeans. It created and shaped our communities and provided the foundation for our social stability and economic growth." 

But Mr Lee noted that the environment has changed and the aspirations of Singaporeans have risen sharply. 

He added: "Finding a roof over our heads is no longer the pressing requirement. The HDB flat is not just a shelter but also a key investment asset. People have many considerations in choosing their flats - they want the right flat, in the right locality, at the right time and at the right price. 

"Such high expectations are understandable since buying a flat is a major commitment for a young couple setting up a home together." 

And HDB is committed to providing high quality housing, even though it cannot accommodate every preference or expectation. 

The prime minister also emphasised a point expressed several times by other ministers and very much an ongoing concern amongst flat buyers in the rising property market. And that is the government's commitment to keeping HDB flat prices affordable for Singaporeans. 

But Mr Lee said the government has less control over prices in the resale market. 

He explained: "These resale prices are set by individual households who transact flats on a willing-buyer, willing-seller basis, and are affected by movements and sentiments in the wider economy, including in the private property market. 

"Hence, resale prices of HDB flats will fluctuate from year-to-year. But over the long term, the value of HDB flats depends on the strength of the Singapore economy." 

So provided Singapore continues to do well, Mr Lee is confident the flats will maintain their value and Singaporeans can enjoy an appreciating asset. 



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