Source : Channel NewsAsia - 8 Apr 2008
En bloc sales have been slowing down over the past few months, but it’s not just due to the recent tightening of the rules governing such transactions.
Amid the global credit crunch, property watchers said foreign investments have pulled back, and the overall downturn is pushing developers to look at other moneymaking options.
But they also noted that fundamentals remain strong in Singapore, and the current slowdown is due more to external factors.
Collective sales saw strong demand a few months ago, but developers are now changing tack in the tighter credit environment.
Those on the buying end of en bloc sales are choosing to hang on to their properties longer, delaying new project launches. They are also getting picky about additions to their landbank.
“They’ve got plenty to choose from. The most straightforward possibility for developers to partake would be going to government sale of site programme. A lot are more configured toward mass market, lower mid-tier level where we’re seeing some activity in the end-market purchases,” said Donald Han, MD of Cushman & Wakefield (Singapore).
Many said the current slowdown is largely due to the external environment, rather than the fundamentals of Singapore.
“A lot of buying that resulted in last round of en bloc came from overseas funds… We are rather small, in terms of available of units or land, so an amount which may not make an impact in another country will have a big impact on us. (Funds) either coming in or out have got that exponential effect on the market in Singapore,” said Dr SK Phang, a lawyer.
So with tightening credit conditions worldwide causing a dip in foreign inflows, Singapore’s property market is taking a hit.
But analysts said many developers took home huge profits in the past two years, and will definitely be able to weather stormy skies for now.
While there is little to be done about the external environment, analysts said en bloc rules can be further tweaked to allow the process to be speeded up.
Said Dr Phang: “The long timeline has to be shortened; it’s too long, the whole en bloc process. The law allows you 12 months to get 80 percent. And after that, the law allows you 12 months to file the ST (strata title). And when you do, the STB (Strata Title Board) may take short of 4 months or a long time of a year.
“Of course not every case is that long but if you look at the historical maximum permissible time, you’re looking at something about 2 years plus. And that’s a long time to wait for the money.
Given the volatile market conditions in Singapore, if it goes up, owners get concerned with replacement. If it goes down, developers (become) concerned. So we should try to manage the timeline and shorten it.”
The en bloc market saw more than a 100 deals valued at more than S$13 billion last year. - CNA /ls
Thursday, April 10, 2008
Amber Glades on the block again, at $18m discount
Source : Today - 9 Apr 2008
A day after the Royalville site off Sixth Avenue was relaunched at a much lower price, another en bloc site has been put back on the market at a significant discount from the heady prices its sellers were asking for less than six months ago.
The Amber Glades site on the East Coast is being relaunched today at an indicative price of $127 million, more than 12 per cent lower than the asking price of $145 million when it was first launched last October, according to its marketing agent Colliers International.
“Including an estimated development charge of $3.5 million, the price will work out to some $1,140 per sq ft per plot ratio,” said Mr Ho Eng Joo, executive director of investment sales at Colliers.
The 40,917 sq ft freehold residential site has a plot ratio of 2.8. Amber Glades, comprising two 10-storey residential blocks with a total of 63 units, currently stands on the land.
The site can be re-developed to accommodate a residential development comprising 88 units of 1,300 sq ft each, Colliers said.
Amenities can be found at the nearby Parkway Parade, Katong Shopping Centre and East Coast Park, while access to other parts of the island is available via East Coast Parkway and the new Kallang-Paya Lebar Expressway.
A day after the Royalville site off Sixth Avenue was relaunched at a much lower price, another en bloc site has been put back on the market at a significant discount from the heady prices its sellers were asking for less than six months ago.
The Amber Glades site on the East Coast is being relaunched today at an indicative price of $127 million, more than 12 per cent lower than the asking price of $145 million when it was first launched last October, according to its marketing agent Colliers International.
“Including an estimated development charge of $3.5 million, the price will work out to some $1,140 per sq ft per plot ratio,” said Mr Ho Eng Joo, executive director of investment sales at Colliers.
The 40,917 sq ft freehold residential site has a plot ratio of 2.8. Amber Glades, comprising two 10-storey residential blocks with a total of 63 units, currently stands on the land.
The site can be re-developed to accommodate a residential development comprising 88 units of 1,300 sq ft each, Colliers said.
Amenities can be found at the nearby Parkway Parade, Katong Shopping Centre and East Coast Park, while access to other parts of the island is available via East Coast Parkway and the new Kallang-Paya Lebar Expressway.
Fewer home loans taken up as property market cools further
Source : Straits Times - 9 Apr 2008
Mortgage default rate also falls but some banks see refinancing deals rise
The number of home loans taken up has fallen sharply in recent months as the property market continues to contract.
Only 4,200 new home loans were approved in January, up about 13 per cent on the 3,722 in December but down 21 per cent from the peak of 5,319 last August.
The Credit Bureau of Singapore figures also show that 2,544 second mortgages were taken up in January, a 31 per cent drop from the high of 3,698, also last August.
‘We expect the growth in new mortgages to slow further this year,’ said Credit Bureau general manager Mark Rowley.
Inquiries for new home loans have also dropped, down to 8,923 in February, the lowest since April 2006.
Mr Gregory Chan, OCBC Bank’s head of consumer secured lending, said: ‘We have observed that property buyers are becoming more cautious in their purchase decisions.’
United Overseas Bank’s (UOB’s) head of loans, Mr Kevin Lam, said that ‘in line with property sales transactions, our loan applications were slower in January and February’ but there was ‘a pick-up in market activity at the end of March’.
His counterpart at HSBC Singapore, Ms Alice Chia, said the bank has ’seen a reduction in applications for new home loans, which is reflective of sentiment towards the property market’.
But she pointed to one area where banks are getting increased business - more people are re-mortgaging their home to take advantage of the declining interest rate environment.
‘We have seen an increase in the number of refinancing applications over recent months,’ she said.
Maybank and OCBC have also encountered more home owners looking to refinance.
Ms Helen Neo, Maybank’s head of consumer banking in Singapore, said it launched financing packages in February ‘catering to customers seeking refinancing’ and has received ‘an encouraging response’.
However, Standard Chartered and UOB said they have not seen a significant increase in customers wanting to refinance.
The Credit Bureau figures also revealed certain more positive aspects of the mortgage market.
The number of delinquent account holders has fallen to 4,636, or just 1.63 per cent of total mortgage holders - the lowest in two years.
This allays concerns raised during the speculative frenzy last year that some buyers would overstretch by taking on loans they could not afford.
Mr Rowley said the lower delinquency rate is ‘a good sign’ that Singapore customers are creditworthy, even as loan amounts have risen steadily.
The increase in the number of home owners with significantly larger mortgages has also been striking.
There were 7,404 home owners with outstanding balances on their mortgages of over $1 million in January. This was an 81 per cent jump over February last year. This segment makes up almost 3 per cent of the total number of mortgage holders in Singapore.
Mortgage default rate also falls but some banks see refinancing deals rise
The number of home loans taken up has fallen sharply in recent months as the property market continues to contract.
Only 4,200 new home loans were approved in January, up about 13 per cent on the 3,722 in December but down 21 per cent from the peak of 5,319 last August.
The Credit Bureau of Singapore figures also show that 2,544 second mortgages were taken up in January, a 31 per cent drop from the high of 3,698, also last August.
‘We expect the growth in new mortgages to slow further this year,’ said Credit Bureau general manager Mark Rowley.
Inquiries for new home loans have also dropped, down to 8,923 in February, the lowest since April 2006.
Mr Gregory Chan, OCBC Bank’s head of consumer secured lending, said: ‘We have observed that property buyers are becoming more cautious in their purchase decisions.’
United Overseas Bank’s (UOB’s) head of loans, Mr Kevin Lam, said that ‘in line with property sales transactions, our loan applications were slower in January and February’ but there was ‘a pick-up in market activity at the end of March’.
His counterpart at HSBC Singapore, Ms Alice Chia, said the bank has ’seen a reduction in applications for new home loans, which is reflective of sentiment towards the property market’.
But she pointed to one area where banks are getting increased business - more people are re-mortgaging their home to take advantage of the declining interest rate environment.
‘We have seen an increase in the number of refinancing applications over recent months,’ she said.
Maybank and OCBC have also encountered more home owners looking to refinance.
Ms Helen Neo, Maybank’s head of consumer banking in Singapore, said it launched financing packages in February ‘catering to customers seeking refinancing’ and has received ‘an encouraging response’.
However, Standard Chartered and UOB said they have not seen a significant increase in customers wanting to refinance.
The Credit Bureau figures also revealed certain more positive aspects of the mortgage market.
The number of delinquent account holders has fallen to 4,636, or just 1.63 per cent of total mortgage holders - the lowest in two years.
This allays concerns raised during the speculative frenzy last year that some buyers would overstretch by taking on loans they could not afford.
Mr Rowley said the lower delinquency rate is ‘a good sign’ that Singapore customers are creditworthy, even as loan amounts have risen steadily.
The increase in the number of home owners with significantly larger mortgages has also been striking.
There were 7,404 home owners with outstanding balances on their mortgages of over $1 million in January. This was an 81 per cent jump over February last year. This segment makes up almost 3 per cent of the total number of mortgage holders in Singapore.
Prices of high end condos starting to fall as sales dwindle
Source : Straits Times - 9 Apr 2008
Downward trend may continue for next few quarters, experts predict
HOME prices are starting to fall, as several high-end properties begin to feel the squeeze of retreating buyers.
Sales of Singapore’s most expensive condominiums - all the rage last year - have dwindled to just a trickle this year.
And with plunging sales, prices have also started to dip, although official figures have yet to reflect this trend.
Early signs of the slide lie in the handful of caveats filed involving many luxury projects in the first quarter. These showed prices fell from the previous quarter, in some cases by up to 20 per cent.
In Districts 9 to 11, Singapore’s creme de la creme of residential locations covering Orchard, Holland and Bukit Timah, average prices have fallen by about 30 per cent since the beginning of the year, according to caveats.
They dropped to an average of $1,564 per sq ft (psf) between January and March from $2,023 psf in the preceding three months.
In luxury island enclave Sentosa Cove, almost all condos posted drops in average psf prices, ranging from 2 per cent for the Marina Collection to 23 per cent for The Azure.
Property experts say this could be because luxury home buyers are now selecting only the most competitively priced properties.
‘Market activity is very slow now, so any transactions that do take place are likely to be from people who have found attractive buys,’ said Mrs Ong Choon Fah, the executive director at property firm DTZ Debenham Tie Leung.
She said high-end properties in the traditional prime districts were more dependent on investor buying, so they could be more affected by the current global credit crunch and weaker sentiment.
‘A lot of people who bought luxury homes are also ’specuvestors’, so they may be happy making just a small profit and selling quickly,’ Mrs Ong explained.
The Government estimated last week that private home prices continued to climb in the first three months of the year, albeit at a slower pace. They rose 4.2 per cent, down from 6.8 per cent in the previous three months.
In the priciest segment, the core central region, the price gain dropped to 4.4 per cent from 7.5 per cent in the previous quarter. This region covers Districts 9 to 11, the Marina Bay area and Sentosa.
Anecdotal evidence from property insiders and caveats lodged, however, showed that prices at many projects fell rather than rose this year. At Scotts Square in Scotts Road, only two units have been sold so far this year - at an average price of $3,700 psf, down from $4,000 psf for 42 units in last year’s fourth quarter.
Similarly, at The Oceanfront @ Sentosa Cove, the most recent deals were in February, where three units were sold at $1,720 to $1,751 psf. Just six months before that, 15 units were sold at an average price of $2,480 psf.
Other high-profile, pricey condos, such as the Marina Bay Residences and The Marq on Paterson Hill, have yet to see a single caveat lodged this year.
But the story is not all bad. The Orchard Residences, which holds the title of Singapore’s most expensive condo, has sold only one unit this year - but at $4,700 psf, higher than most of its other sales.
Other older condos in areas such as Cavenagh or Balmoral may also be trading at higher prices from their previously low base, pushing up the overall prices for the whole district, suggested Mr Ku Swee Yong, director of marketing and business development at Savills Singapore.
But he said the price index for high-end homes may be under pressure in the next two quarters, now that ‘everyone wants a bargain’.
‘You only need developers to start giving discounts or people starting to buy lower-
floor units instead of penthouses. That will push the index down and put pressure on prices.’
Downward trend may continue for next few quarters, experts predict
HOME prices are starting to fall, as several high-end properties begin to feel the squeeze of retreating buyers.
Sales of Singapore’s most expensive condominiums - all the rage last year - have dwindled to just a trickle this year.
And with plunging sales, prices have also started to dip, although official figures have yet to reflect this trend.
Early signs of the slide lie in the handful of caveats filed involving many luxury projects in the first quarter. These showed prices fell from the previous quarter, in some cases by up to 20 per cent.
In Districts 9 to 11, Singapore’s creme de la creme of residential locations covering Orchard, Holland and Bukit Timah, average prices have fallen by about 30 per cent since the beginning of the year, according to caveats.
They dropped to an average of $1,564 per sq ft (psf) between January and March from $2,023 psf in the preceding three months.
In luxury island enclave Sentosa Cove, almost all condos posted drops in average psf prices, ranging from 2 per cent for the Marina Collection to 23 per cent for The Azure.
Property experts say this could be because luxury home buyers are now selecting only the most competitively priced properties.
‘Market activity is very slow now, so any transactions that do take place are likely to be from people who have found attractive buys,’ said Mrs Ong Choon Fah, the executive director at property firm DTZ Debenham Tie Leung.
She said high-end properties in the traditional prime districts were more dependent on investor buying, so they could be more affected by the current global credit crunch and weaker sentiment.
‘A lot of people who bought luxury homes are also ’specuvestors’, so they may be happy making just a small profit and selling quickly,’ Mrs Ong explained.
The Government estimated last week that private home prices continued to climb in the first three months of the year, albeit at a slower pace. They rose 4.2 per cent, down from 6.8 per cent in the previous three months.
In the priciest segment, the core central region, the price gain dropped to 4.4 per cent from 7.5 per cent in the previous quarter. This region covers Districts 9 to 11, the Marina Bay area and Sentosa.
Anecdotal evidence from property insiders and caveats lodged, however, showed that prices at many projects fell rather than rose this year. At Scotts Square in Scotts Road, only two units have been sold so far this year - at an average price of $3,700 psf, down from $4,000 psf for 42 units in last year’s fourth quarter.
Similarly, at The Oceanfront @ Sentosa Cove, the most recent deals were in February, where three units were sold at $1,720 to $1,751 psf. Just six months before that, 15 units were sold at an average price of $2,480 psf.
Other high-profile, pricey condos, such as the Marina Bay Residences and The Marq on Paterson Hill, have yet to see a single caveat lodged this year.
But the story is not all bad. The Orchard Residences, which holds the title of Singapore’s most expensive condo, has sold only one unit this year - but at $4,700 psf, higher than most of its other sales.
Other older condos in areas such as Cavenagh or Balmoral may also be trading at higher prices from their previously low base, pushing up the overall prices for the whole district, suggested Mr Ku Swee Yong, director of marketing and business development at Savills Singapore.
But he said the price index for high-end homes may be under pressure in the next two quarters, now that ‘everyone wants a bargain’.
‘You only need developers to start giving discounts or people starting to buy lower-
floor units instead of penthouses. That will push the index down and put pressure on prices.’
Sites relaunched at lower prices as collective sales agreement deadlines loom
Business Times - 09 Apr 2008
Property agents are expected to keep pushing out a steady stream of relaunched en bloc sales over the next few months, as they attempt a last hurrah before their collective sales agreements (CSAs) inked last year expire.
Asking prices for such sites this time round are about 10-20 per cent lower than last year. Agents hope developers will bite, given their strong participation in recent government land tenders.
'Whatever collective sales that went into the market in the third or fourth quarter of last year and which are not yet sold, you can expect their CSAs to expire around mid-2008 or Q3 this year. So the current second quarter is pretty much the only window of opportunity for the sellers and agents to make a last try,' a seasoned agent in the en bloc sales business says.
Data from Credo Real Estate show there were 14 en bloc sale sites launched in Q3 last year but which are still unsold, while another 30 launched in Q4 last year have yet to find takers. These include The Riverwalk, Elizabeth Towers, Cairnhill Mansion, Grange Heights, Chancery Court, Thomson View Condo, Villa delle Rose, Spanish Village, Estoril and Vista Park.
From the time the minimum 80 per cent consent level is secured for a CSA, agents have up to 12 months to find a buyer and submit an application to the Strata Titles Board for an order for the collective sale.
Says Colliers International executive director of investment sales Ho Eng Joo: 'We can expect to see a rush on the part of owners and agents to take another shot at the market. If you don't do that, the old CSA expires and any fresh attempt at an en bloc sale will fall under new rules that took effect last October - and these are a lot more onerous.'
Colliers yesterday relaunched Amber Glades along Amber Gardens with an indicative price of about $127 million or $1,140 psf per plot ratio, inclusive of development charges. This is about 15 per cent lower than the $1,345 psf ppr sought by Amber Glades' owners in October last year.
In recent weeks, Landmark Tower in Chin Swee Road, Pinetree Condo in the Balmoral area and Royalville in Bukit Timah have also been relaunched at indicative prices ranging from 10-20 per cent below what they had been offered at in Q3 or Q4 last year.
Typically, these sites are being relaunched under the existing CSAs and based on the same reserve prices as last year. However, this time round, owners' asking prices are closer to reserve prices, whereas last year, the asking prices may have been pegged at a significant premium to the reserve prices, market watchers say.
Some agents are also believed to be in discussion with owners who've signed a CSA to see if they are willing to sign a supplementary agreement to lower the reserve price.
Savills Singapore director Steven Ming says: 'The initial asking prices were a bit lofty when the sites were launched last year. That was when the market was still exuberant. As the sub-prime crisis set in, confidence weakened and home sales slowed. Developers have had to factor this in when pricing their bids for en bloc sites.
'They also have to take into account higher construction costs and with the ongoing credit squeeze, the opportunity cost for putting in more equity into the project.'
Knight Frank managing director Tan Tiong Cheng has this advice for en bloc sellers: 'Developers are no longer prepared to pay the price owners had expected last year, but if you can still collect a premium from an en bloc sale than if you were to sell your unit on your own, why not adjust your pricing and collect the windfall? You may also be able to take advantage of a more subdued market to shop for a replacement property.'
Besides the pressure of looming CSA expiry dates, market watchers point to another factor in the impetus for the current wave of en bloc sale relaunches: the strong bidding at recent state tenders, for instance, for a reservoir-fronting condo site in Yishun and a 'white' site at Serangoon Central. 'This has brought back a bit more confidence in the market,' says Credo Real Estate managing director Karamjit Singh.
'Property bigwigs like Mr Kwek Leng Beng and Mr Liew Mun Leong have also come out to say they remain confident about prospects for the Singapore property market, but that we need time for sub-prime to clear before we see activity coming back again. If there were a barometer to measure the mood of the day in the property market, April's measure appears to be slightly better than March,' he says.
Opinion:
Amber Glades, a freehold residential property located along Amber Gardens, has been relaunched for collective sale at an indicative asking price of S$127 million. Including of a DC of S$3.5 million, the price works out to S$1,140 per sq ft ppr, which is 15 per cent lower than the previous indicative.
The 40,917-sq ft site has a gross plot ratio of 2.8 and a maximum GFA of 114,577 sq ft
Pinetree Condominium site relaunched for sale by tender
Source : Channel NewsAsia - 31 Mar 2008
The freehold Pinetree Condominium site in prime district 10 has been re-launched for sale by tender.
The property in the Balmoral area currently comprises a five-storey block with 50 apartment units.
Consultants Jones Lang LaSalle, which is marketing the site, said it has an indicative asking price of S$128 million.
But if a neighbouring plot, which is presently housing some landed homes, is included, the total price increases to S$190 million.
Overall, the successful developer may be paying S$1,700 per sq ft per plot ratio.
Under the masterplan, the 41,361 sq ft property is zoned for residential use and has a gross plot ratio of up to 1.6. This means the new development can be up to 12 storeys high.
The site could be redeveloped into an exclusive residential development with a gross floor area of 66,178 sq ft, subject to approval. No development charge is payable.
Jones Lang LaSalle also said the land could be combined with an adjoining plot of landed properties to form a total potential land area of 81,303 sq ft. This will yield a combined gross floor area of 130,084 sq ft.
With this combined area, a developer could build 60 to 80 high-end apartment units of between 1,500 and 2,000 sq ft each.
The tender will close on 23 April.
The freehold Pinetree Condominium site in prime district 10 has been re-launched for sale by tender.
The property in the Balmoral area currently comprises a five-storey block with 50 apartment units.
Consultants Jones Lang LaSalle, which is marketing the site, said it has an indicative asking price of S$128 million.
But if a neighbouring plot, which is presently housing some landed homes, is included, the total price increases to S$190 million.
Overall, the successful developer may be paying S$1,700 per sq ft per plot ratio.
Under the masterplan, the 41,361 sq ft property is zoned for residential use and has a gross plot ratio of up to 1.6. This means the new development can be up to 12 storeys high.
The site could be redeveloped into an exclusive residential development with a gross floor area of 66,178 sq ft, subject to approval. No development charge is payable.
Jones Lang LaSalle also said the land could be combined with an adjoining plot of landed properties to form a total potential land area of 81,303 sq ft. This will yield a combined gross floor area of 130,084 sq ft.
With this combined area, a developer could build 60 to 80 high-end apartment units of between 1,500 and 2,000 sq ft each.
The tender will close on 23 April.
Pinetree back with lower en bloc asking price
Source : Business Times - 1 Apr 2008
PINETREE Condominium, which was put up for collective sale in September 2007, has been relaunched at a lower indicative price of about $1,700 per square feet per plot ratio (psf ppr).
This is about 20 per cent lower than the previous indicative price of $2,100 psf ppr seven months ago. The indicative asking price now is $128 million.
The property is being marketed by Jones Lang LaSalle (JLL). JLL associate director (investments) David Batchelor said: ‘Market conditions have changed.’ But on the residential collective sales market, he added: ‘I believe there is still interest but the market is more cautious.’
The 41,361 sq ft site at Balmoral Park has a 1.6 plot ratio. JLL said the site has the potential to be redeveloped into a residential development with a gross floor area (GFA) of up to 66,178 sq ft, subject to approval. Mr Batchelor said that currently, Pinetree Condominium is built up to a plot ratio of about 1.816 and added that there is no development charge payable.
The potential developer of the Pinetree site also has the opportunity to combine seven adjoining landed properties to form a total potential land area of 81,303 sq ft, yielding a combined GFA of 130,084 sq ft. This combined total will allow a developer to have a project with 60 to 80 apartment units ranging from 1,500 sq ft to 2,000 sq ft.
Mr Batchelor said the seven landed properties have a total indicative price of about $62 million, bringing the total land price to about $190 million. There is also a development charge of $46 million to $47 million for the landed housing properties.
In March 2006, Pinetree was on the market with an indicative price of around $59 million, or $888 psf ppr.
PINETREE Condominium, which was put up for collective sale in September 2007, has been relaunched at a lower indicative price of about $1,700 per square feet per plot ratio (psf ppr).
This is about 20 per cent lower than the previous indicative price of $2,100 psf ppr seven months ago. The indicative asking price now is $128 million.
The property is being marketed by Jones Lang LaSalle (JLL). JLL associate director (investments) David Batchelor said: ‘Market conditions have changed.’ But on the residential collective sales market, he added: ‘I believe there is still interest but the market is more cautious.’
The 41,361 sq ft site at Balmoral Park has a 1.6 plot ratio. JLL said the site has the potential to be redeveloped into a residential development with a gross floor area (GFA) of up to 66,178 sq ft, subject to approval. Mr Batchelor said that currently, Pinetree Condominium is built up to a plot ratio of about 1.816 and added that there is no development charge payable.
The potential developer of the Pinetree site also has the opportunity to combine seven adjoining landed properties to form a total potential land area of 81,303 sq ft, yielding a combined GFA of 130,084 sq ft. This combined total will allow a developer to have a project with 60 to 80 apartment units ranging from 1,500 sq ft to 2,000 sq ft.
Mr Batchelor said the seven landed properties have a total indicative price of about $62 million, bringing the total land price to about $190 million. There is also a development charge of $46 million to $47 million for the landed housing properties.
In March 2006, Pinetree was on the market with an indicative price of around $59 million, or $888 psf ppr.
Property fever here starting to cool
Source : Today - 4 Apr 2008
More signs of Singapore’s property market slowing: Tenders for a plot of government development land have closed, attracting one of the lowest bids in recent years.
The residential site bordering Choa Chu Kang Road and Woodlands Road on offer attracted just two bids. The highest offer came from an arm of Peak Properties, which is controlled by the Wee family. It offered $61 million, which works out to just $162 per sq ft (psf) per plot ratio.
Knight Frank research head Nicholas Mak said: “The current bid is one of the lowest in recent years.”
The low point came last month when just $78 psf was offered for land in Westwood Avenue. This was rejected by the Urban Redevelopment Authority (URA).
The last time residential land bids fell below $200 psf was between 2000 and 2002, at the height of Singapore’s decade-long property slump. It is not yet known whether the URA will accept the Peal Properties’ offer.
The Choa Chu Kang Road site can be potentially used to develop up to 240 condominium units or serviced apartments.
This tender may serve as a good benchmark for another nearby site in Choa Chu Kang Drive. Bids for this site close in May. Prices of completed units in nearby Maysprings condominium recently transacted at an average price of $530 to $630 psf.
More signs of Singapore’s property market slowing: Tenders for a plot of government development land have closed, attracting one of the lowest bids in recent years.
The residential site bordering Choa Chu Kang Road and Woodlands Road on offer attracted just two bids. The highest offer came from an arm of Peak Properties, which is controlled by the Wee family. It offered $61 million, which works out to just $162 per sq ft (psf) per plot ratio.
Knight Frank research head Nicholas Mak said: “The current bid is one of the lowest in recent years.”
The low point came last month when just $78 psf was offered for land in Westwood Avenue. This was rejected by the Urban Redevelopment Authority (URA).
The last time residential land bids fell below $200 psf was between 2000 and 2002, at the height of Singapore’s decade-long property slump. It is not yet known whether the URA will accept the Peal Properties’ offer.
The Choa Chu Kang Road site can be potentially used to develop up to 240 condominium units or serviced apartments.
This tender may serve as a good benchmark for another nearby site in Choa Chu Kang Drive. Bids for this site close in May. Prices of completed units in nearby Maysprings condominium recently transacted at an average price of $530 to $630 psf.
US$945b: IMF's estimate of losses from sub-prime crisis
Business Times - 10 Apr 2008
Banks will bear roughly half of the losses, the Fund says in a report
It's going to be an almost trillion-dollar meltdown. That's the message on the likely magnitude of the US sub-prime-related crisis from the International Monetary Fund (IMF). In its Global Financial Stability Report released in Washington yesterday, the IMF points out that the crisis is spreading beyond the US sub-prime market, to the prime residential and commercial real estate markets, consumer credit and the corporate debt markets.
The IMF loss estimates are in line with those put out by some private economists who have closely tracked the crisis, such as George Magnus of UBS, although others, such as New York University professor Nouriel Roubini, cite US$1 trillion as a minimum loss figure, with the maximum going as high as US$2.7 trillion in the worst case.
According to the IMF, of the US$945 billion of total losses, US$565 billion will be due to residential mortgage debt, US$240 billion will come from commercial real estate debt, US$120 billion from corporate debt and US$20 billion from consumer credit debt.
US$720 billion, or about 76 per cent of the total losses, will come from securitised debt - that is, debt that has been packaged into tradable securities.
Banks will bear roughly half of the sub-prime mortgage-related losses, with insurance companies, pension funds, money market funds, hedge funds and other institutional investors accounting for the rest. Globally, banks are estimated to have US$740 billion of net sub-prime exposure, 53 per cent of which is held by US banks and 41 per cent by European banks. Asian (including Japanese) banks hold about 5 per cent.
The IMF estimates potential losses of US$144 billion for US banks and US$121 billion for European banks. Losses of Asian banks are likely to be less than one-tenth of losses in Europe, it says.
It points out that most sub-prime-related losses appear to have been reported already, noting that through mid-March 2008, banks had reported US$190 billion in losses on US mortgage market exposure. However, it adds that much of that represents mark-to-market losses (losses arising from loans being valued at low prevailing market prices) and some could yet be recoverable in the future.
Still, the IMF says that US banks and government-sponsored enterprises could report a further US$49 billion in additional writedowns, while European banks could report as much as US$43 billion.
Nonbank financial institutions, including insurance companies, may yet also report sizeable additional writedowns.
However, the IMF urges that loss estimates should be treated with caution, because:
They depend on the quality of disclosure, and are sometimes based on estimates of exposures;
Aggregate losses are highly sensitive to bank exposures to different types of loans, which are again estimates. Different tranches of securities are also valued differently;
The timing of loss recognition is uncertain and the norms vary across countries; and
Loss estimates could be lowered by remedial measures such as the modification of mortgage loan terms.
On the ripple effects of the crisis, the IMF points out that emerging-market countries have been 'broadly resilient' so far. But it adds that some remain vulnerable to a credit pullback, especially where domestic credit growth has been fuelled from external funding and large current account deficits need to be financed.
However, this is not so much the case in Asia, where most countries have current account surpluses. Eastern European countries are the most exposed.
The IMF's report comes ahead of tomorrow's meetings of Group of Seven finance ministers. This will be followed by the spring meetings of the IMF and the World Bank, where the sub-prime crisis is expected to top the agenda.
With regard to policy measures, the IMF says 'the immediate challenge is to reduce the duration and severity of the crisis. Actions that focus on reducing uncertainty and strengthening confidence in mature market financial systems should be the first priority'.
Comparing the magnitude of the US sub-prime crisis to previous financial crises, the IMF points out that in absolute dollar terms, it is slightly larger than Japan's banking crisis of the 1990s.
But relative to GDP, the losses stemming from the sub-prime crisis would be around 7 per cent, which makes it much smaller than either the Japanese crisis or the Asian financial crisis of 1997/98, where the total losses came to 15 per cent and 35 per cent of GDP, respectively.
Banks will bear roughly half of the losses, the Fund says in a report
It's going to be an almost trillion-dollar meltdown. That's the message on the likely magnitude of the US sub-prime-related crisis from the International Monetary Fund (IMF). In its Global Financial Stability Report released in Washington yesterday, the IMF points out that the crisis is spreading beyond the US sub-prime market, to the prime residential and commercial real estate markets, consumer credit and the corporate debt markets.
The IMF loss estimates are in line with those put out by some private economists who have closely tracked the crisis, such as George Magnus of UBS, although others, such as New York University professor Nouriel Roubini, cite US$1 trillion as a minimum loss figure, with the maximum going as high as US$2.7 trillion in the worst case.
According to the IMF, of the US$945 billion of total losses, US$565 billion will be due to residential mortgage debt, US$240 billion will come from commercial real estate debt, US$120 billion from corporate debt and US$20 billion from consumer credit debt.
US$720 billion, or about 76 per cent of the total losses, will come from securitised debt - that is, debt that has been packaged into tradable securities.
Banks will bear roughly half of the sub-prime mortgage-related losses, with insurance companies, pension funds, money market funds, hedge funds and other institutional investors accounting for the rest. Globally, banks are estimated to have US$740 billion of net sub-prime exposure, 53 per cent of which is held by US banks and 41 per cent by European banks. Asian (including Japanese) banks hold about 5 per cent.
The IMF estimates potential losses of US$144 billion for US banks and US$121 billion for European banks. Losses of Asian banks are likely to be less than one-tenth of losses in Europe, it says.
It points out that most sub-prime-related losses appear to have been reported already, noting that through mid-March 2008, banks had reported US$190 billion in losses on US mortgage market exposure. However, it adds that much of that represents mark-to-market losses (losses arising from loans being valued at low prevailing market prices) and some could yet be recoverable in the future.
Still, the IMF says that US banks and government-sponsored enterprises could report a further US$49 billion in additional writedowns, while European banks could report as much as US$43 billion.
Nonbank financial institutions, including insurance companies, may yet also report sizeable additional writedowns.
However, the IMF urges that loss estimates should be treated with caution, because:
They depend on the quality of disclosure, and are sometimes based on estimates of exposures;
Aggregate losses are highly sensitive to bank exposures to different types of loans, which are again estimates. Different tranches of securities are also valued differently;
The timing of loss recognition is uncertain and the norms vary across countries; and
Loss estimates could be lowered by remedial measures such as the modification of mortgage loan terms.
On the ripple effects of the crisis, the IMF points out that emerging-market countries have been 'broadly resilient' so far. But it adds that some remain vulnerable to a credit pullback, especially where domestic credit growth has been fuelled from external funding and large current account deficits need to be financed.
However, this is not so much the case in Asia, where most countries have current account surpluses. Eastern European countries are the most exposed.
The IMF's report comes ahead of tomorrow's meetings of Group of Seven finance ministers. This will be followed by the spring meetings of the IMF and the World Bank, where the sub-prime crisis is expected to top the agenda.
With regard to policy measures, the IMF says 'the immediate challenge is to reduce the duration and severity of the crisis. Actions that focus on reducing uncertainty and strengthening confidence in mature market financial systems should be the first priority'.
Comparing the magnitude of the US sub-prime crisis to previous financial crises, the IMF points out that in absolute dollar terms, it is slightly larger than Japan's banking crisis of the 1990s.
But relative to GDP, the losses stemming from the sub-prime crisis would be around 7 per cent, which makes it much smaller than either the Japanese crisis or the Asian financial crisis of 1997/98, where the total losses came to 15 per cent and 35 per cent of GDP, respectively.
7 signs of a property slowdown
Buyers seem to be gaining ground again in the private homes market but consultants say it’s far from crashing yet
After rocketing to dizzying heights last year, the private homes market has stalled because of the global credit crunch - an external factor that took the market by surprise.
The withdrawal of the deferred payment scheme last year has also dampened demand somewhat.
Sales volumes and interest have fizzled out just as quickly as the market surged last year.
While many players hang on to the notion that strong fundamentals - low interest rates, for instance - will support the market, sentiment has fast melted away.
Is the property market slowing to a crawl? We examine the mounting evidence.
1 Growth in home prices weakens
The Urban Redevelopment Authority’s (URA’s) early estimate of first-quarter data showed a 4.2 per cent rise in private home prices against 6.8 per cent in the previous quarter and 31 per cent last year.
Consultants expect price growth to weaken. Prices, especially for high-end homes, might fall but not significantly as sellers are still reluctant to accept lower prices, said a seasoned property agent. ‘There’s no urgency to do so.’
2 Launches are held back
Developers have ample properties to sell but most continue to hold back launches. Some small ones have gone ahead but the response has been unimpressive.
With buyers and sellers choosing to remain on the sidelines as the global impact of a slowing United States economy remains uncertain, the market is largely quiet.
URA data showed that only 185 new private homes were sold in February, down from 328 in January. Last year, developers sold 14,811 new homes.
3 Collective sales have died down
This market is dead, for now at least, as developers stay away and new rules make it tougher for owners to sell en bloc.
So far this year, only one sale has been done compared with 26 in the first quarter of last year.
And one potential sale - that of Makeway View in Newton - was cancelled after the buyer, Bravo Building Construction, said it had found out that it would have to pay a higher-than-expected development charge.
Owners of some estates are starting to lower their price expectations.
Pinetree Condominium in Balmoral Park, for instance, was recently relaunched at a lower indicative price of $128 million - down from around $145 million last September, but still well above the 2006 price tag of $59 million.
4 Investor funds pull out or hold off
Islamic investment bank Kuwait Finance House, which agreed last December to buy 97 Goodwood Residence units for $818.4 million from GuocoLand, allowed the purchase option to lapse.
Both parties said last month that they were still in talks but did not provide clear reasons for the pullout. Industry sources had speculated that the fund’s price - a record for the condo’s area - was too high.
A recent DTZ Research report said some funds are holding off making investments, at least for the first half of this year, until the extent of the US slowdown and its global impact become clearer.
5 Sellers hand out discounts galore
In the resale market, sellers are getting more flexible. There are more desperate sellers in the market this year, property agents said.
Some want to sell one or two of their properties because they had bought some units under the deferred payment scheme, and payment is due in six months to a year, one agent said.
For new launches or sales of new units, some developers are also willing to give discounts when asked, while others offer stamp duty rebates to attract buyers.
6 Agents less sought after, ads dwindle
Property agents have more free time and are taking out fewer advertisements because of the poor response.
Last year, a seller’s unit could be marketed by five to six agents, with the deal going to the agent who garnered the best price.
But this year, a seller might go with one agent, said HSR Property Group’s executive director, Mr Eric Cheng.
On average, an ad for a reasonably priced unit could attract 12 to 15 calls last year. That is now down by half, he said. Prime, high-end homes have it worse, he added, noting that there could be no calls at all for some ads.
‘I have not been advertising since Nov 15 because I could see sales volume falling,’ said agent Andrew Soh.
7 Buyers toss in low bids to test the waters
Some developers have offered rather low bids in recent land tenders, which signals a slowing property market.
The Government in mid-March decided not to award a landed housing site in Jurong West as the bids were too low.
Then, the lowest bid for a Yishun condo site came in at just $95 per sq ft of potential gross floor area.
‘The developers are pricing in the risks of falling prices,’ said Knight Frank’s director for consultancy and research, Mr Nicholas Mak.
‘Given thin volume, they could also be hoping that there is no competition.’
Going forward, optimistic players are waiting for the market to regain some of its former glory in the next six months.
The pessimistic ones are prepared to ride out the whole year and possibly the next.
‘If volume remains thin, there is a chance that private home prices might weaken this year, but the market is not expected to crash,’ said Mr Mak.
Source : Sunday Times - 6 Apr 2008
After rocketing to dizzying heights last year, the private homes market has stalled because of the global credit crunch - an external factor that took the market by surprise.
The withdrawal of the deferred payment scheme last year has also dampened demand somewhat.
Sales volumes and interest have fizzled out just as quickly as the market surged last year.
While many players hang on to the notion that strong fundamentals - low interest rates, for instance - will support the market, sentiment has fast melted away.
Is the property market slowing to a crawl? We examine the mounting evidence.
1 Growth in home prices weakens
The Urban Redevelopment Authority’s (URA’s) early estimate of first-quarter data showed a 4.2 per cent rise in private home prices against 6.8 per cent in the previous quarter and 31 per cent last year.
Consultants expect price growth to weaken. Prices, especially for high-end homes, might fall but not significantly as sellers are still reluctant to accept lower prices, said a seasoned property agent. ‘There’s no urgency to do so.’
2 Launches are held back
Developers have ample properties to sell but most continue to hold back launches. Some small ones have gone ahead but the response has been unimpressive.
With buyers and sellers choosing to remain on the sidelines as the global impact of a slowing United States economy remains uncertain, the market is largely quiet.
URA data showed that only 185 new private homes were sold in February, down from 328 in January. Last year, developers sold 14,811 new homes.
3 Collective sales have died down
This market is dead, for now at least, as developers stay away and new rules make it tougher for owners to sell en bloc.
So far this year, only one sale has been done compared with 26 in the first quarter of last year.
And one potential sale - that of Makeway View in Newton - was cancelled after the buyer, Bravo Building Construction, said it had found out that it would have to pay a higher-than-expected development charge.
Owners of some estates are starting to lower their price expectations.
Pinetree Condominium in Balmoral Park, for instance, was recently relaunched at a lower indicative price of $128 million - down from around $145 million last September, but still well above the 2006 price tag of $59 million.
4 Investor funds pull out or hold off
Islamic investment bank Kuwait Finance House, which agreed last December to buy 97 Goodwood Residence units for $818.4 million from GuocoLand, allowed the purchase option to lapse.
Both parties said last month that they were still in talks but did not provide clear reasons for the pullout. Industry sources had speculated that the fund’s price - a record for the condo’s area - was too high.
A recent DTZ Research report said some funds are holding off making investments, at least for the first half of this year, until the extent of the US slowdown and its global impact become clearer.
5 Sellers hand out discounts galore
In the resale market, sellers are getting more flexible. There are more desperate sellers in the market this year, property agents said.
Some want to sell one or two of their properties because they had bought some units under the deferred payment scheme, and payment is due in six months to a year, one agent said.
For new launches or sales of new units, some developers are also willing to give discounts when asked, while others offer stamp duty rebates to attract buyers.
6 Agents less sought after, ads dwindle
Property agents have more free time and are taking out fewer advertisements because of the poor response.
Last year, a seller’s unit could be marketed by five to six agents, with the deal going to the agent who garnered the best price.
But this year, a seller might go with one agent, said HSR Property Group’s executive director, Mr Eric Cheng.
On average, an ad for a reasonably priced unit could attract 12 to 15 calls last year. That is now down by half, he said. Prime, high-end homes have it worse, he added, noting that there could be no calls at all for some ads.
‘I have not been advertising since Nov 15 because I could see sales volume falling,’ said agent Andrew Soh.
7 Buyers toss in low bids to test the waters
Some developers have offered rather low bids in recent land tenders, which signals a slowing property market.
The Government in mid-March decided not to award a landed housing site in Jurong West as the bids were too low.
Then, the lowest bid for a Yishun condo site came in at just $95 per sq ft of potential gross floor area.
‘The developers are pricing in the risks of falling prices,’ said Knight Frank’s director for consultancy and research, Mr Nicholas Mak.
‘Given thin volume, they could also be hoping that there is no competition.’
Going forward, optimistic players are waiting for the market to regain some of its former glory in the next six months.
The pessimistic ones are prepared to ride out the whole year and possibly the next.
‘If volume remains thin, there is a chance that private home prices might weaken this year, but the market is not expected to crash,’ said Mr Mak.
Source : Sunday Times - 6 Apr 2008
US financial crisis: Why the Fed rushed to the rescue
Timothy Geithner, president and chief executive officer of the Federal Reserve Bank of New York, testified before the US Senate Banking Committee last week on the US financial crisis. Below is an excerpt of his testimony.
THE intensity of the crisis we now face in United States and global financial markets is a function of the size and character of the financial boom that preceded it.
This was a period of rapid financial innovation - particularly in credit risk transfer instruments such as credit derivatives and securitised and structured products. There was considerable growth in leverage, greater reliance on ratings on structured credit products and a marked deterioration in underwriting standards.
The innovation in financial products was accompanied by a dramatic increase in the amount of financial intermediation occurring outside the core banking system. The importance of securities broker-dealers, hedge funds and mutual funds in the financial system rose steadily. Off-balance-sheet vehicles of various forms proliferated, and increased concentrations of longer-dated assets were held in funding vehicles with substantial liquidity risk.
The deterioration in the US housing market last summer precipitated a sharp rise in uncertainty about the value of securitised assets. Demand for these assets contracted dramatically and the securitisation market for mortgages and other credit assets stopped working. This increased funding pressures for a diverse mix of financial institutions. Uncertainty about the magnitude and the level of losses for financial institutions fuelled concern about credit risk in exposure to those institutions.
Part of the dynamic at work was that banks were forced to provide financing for - or take over - the assets in a range of structured investment vehicles and conduits financed by asset-backed commercial paper. As some investors attempted to liquidate their holdings of these assets, many of the traditional providers of unsecured funding to banks pulled back from their counterparties in anticipation of the potential withdrawals of funds by their own investors.
Market participants’ willingness to provide term funding even against high-quality collateral declined dramatically. As a result, the cost of unsecured term funding rose precipitously and the volume shrunk. Banks were funding themselves at shorter and shorter maturities. As unsecured term funding markets deteriorated, the premium on liquid marketable collateral - such as Treasury securities - rose considerably.
Even with the dramatic actions by the Federal Reserve and other central banks to address these liquidity pressures, the strains in financial markets persisted. In many respects, conditions worsened in February and last month.
Credit spreads on financial institutions widened, equity prices declined and market functioning deteriorated. By the early part of last month, the threat of a disorderly adjustment was growing.
What we were observing in US and global financial markets was similar to the classic pattern in financial crises. Asset price declines - triggered by concern about the outlook for economic performance - led to a reduction in the willingness to bear risk and to margin calls.
Borrowers needed to sell assets to meet the calls; some highly leveraged firms were unable to meet their obligations and their counterparties responded by liquidating the collateral they held.
This put downward pressure on asset prices and increased price volatility.
Dealers raised margins further to compensate for heightened volatility and reduced liquidity. This, in turn, put more pressure on other leveraged investors. A self-reinforcing downward spiral of higher haircuts forced sales, lower prices, higher volatility and still lower prices.
This dynamic poses a number of risks to the functioning of the financial system. It reduces the effectiveness of monetary policy, as the widening in spreads and risk premiums worked to offset part of the reduction in the Fed funds rate. Contagion spreads, transmitting waves of distress to other markets, from sub-prime to prime mortgages and even to agency mortgage-backed securities, to commercial mortgage-backed securities and to corporate bonds and loans. In the current situation, effects were felt in the municipal and student loan markets.
The most important risk is systemic: If this dynamic continues unabated, the result would be a greater probability of widespread insolvencies, severe and protracted damage to the financial system and, ultimately, to the economy as a whole. This is not theoretical risk, and it is not something that the market can solve on its own. It carries the risk of significant damage to economic activity.
Absent a forceful policy response, the consequences would be lower incomes for working families; higher borrowing costs for housing, education and the expenses of everyday life; lower value of retirement savings; and rising unemployment.
I believe that the Federal Reserve System’s response has helped reduce the risk of systemic damage to the financial system, and thereby helped mitigate a potential source of downside risk to growth. This in turn has helped mitigate the risks to the broader economy.
It is important to recognise that a substantial adjustment, recognition of losses and reduction in risk have already taken place. And a range of different prices of financial assets now reflects a very cautious view of the future.
The severity of the pressures in markets evident over the last few months is in part a reflection of the speed and force with which markets and institutions in our financial system adapt to fundamental changes in the outlook. This capacity to adjust and adapt is one of the great strengths of our system.
Nevertheless, we still face a number of challenges ahead. The seeds of this crisis took a long time to build up, and they will take some time to work through.
Source : Straits Times - 8 Apr 2008
THE intensity of the crisis we now face in United States and global financial markets is a function of the size and character of the financial boom that preceded it.
This was a period of rapid financial innovation - particularly in credit risk transfer instruments such as credit derivatives and securitised and structured products. There was considerable growth in leverage, greater reliance on ratings on structured credit products and a marked deterioration in underwriting standards.
The innovation in financial products was accompanied by a dramatic increase in the amount of financial intermediation occurring outside the core banking system. The importance of securities broker-dealers, hedge funds and mutual funds in the financial system rose steadily. Off-balance-sheet vehicles of various forms proliferated, and increased concentrations of longer-dated assets were held in funding vehicles with substantial liquidity risk.
The deterioration in the US housing market last summer precipitated a sharp rise in uncertainty about the value of securitised assets. Demand for these assets contracted dramatically and the securitisation market for mortgages and other credit assets stopped working. This increased funding pressures for a diverse mix of financial institutions. Uncertainty about the magnitude and the level of losses for financial institutions fuelled concern about credit risk in exposure to those institutions.
Part of the dynamic at work was that banks were forced to provide financing for - or take over - the assets in a range of structured investment vehicles and conduits financed by asset-backed commercial paper. As some investors attempted to liquidate their holdings of these assets, many of the traditional providers of unsecured funding to banks pulled back from their counterparties in anticipation of the potential withdrawals of funds by their own investors.
Market participants’ willingness to provide term funding even against high-quality collateral declined dramatically. As a result, the cost of unsecured term funding rose precipitously and the volume shrunk. Banks were funding themselves at shorter and shorter maturities. As unsecured term funding markets deteriorated, the premium on liquid marketable collateral - such as Treasury securities - rose considerably.
Even with the dramatic actions by the Federal Reserve and other central banks to address these liquidity pressures, the strains in financial markets persisted. In many respects, conditions worsened in February and last month.
Credit spreads on financial institutions widened, equity prices declined and market functioning deteriorated. By the early part of last month, the threat of a disorderly adjustment was growing.
What we were observing in US and global financial markets was similar to the classic pattern in financial crises. Asset price declines - triggered by concern about the outlook for economic performance - led to a reduction in the willingness to bear risk and to margin calls.
Borrowers needed to sell assets to meet the calls; some highly leveraged firms were unable to meet their obligations and their counterparties responded by liquidating the collateral they held.
This put downward pressure on asset prices and increased price volatility.
Dealers raised margins further to compensate for heightened volatility and reduced liquidity. This, in turn, put more pressure on other leveraged investors. A self-reinforcing downward spiral of higher haircuts forced sales, lower prices, higher volatility and still lower prices.
This dynamic poses a number of risks to the functioning of the financial system. It reduces the effectiveness of monetary policy, as the widening in spreads and risk premiums worked to offset part of the reduction in the Fed funds rate. Contagion spreads, transmitting waves of distress to other markets, from sub-prime to prime mortgages and even to agency mortgage-backed securities, to commercial mortgage-backed securities and to corporate bonds and loans. In the current situation, effects were felt in the municipal and student loan markets.
The most important risk is systemic: If this dynamic continues unabated, the result would be a greater probability of widespread insolvencies, severe and protracted damage to the financial system and, ultimately, to the economy as a whole. This is not theoretical risk, and it is not something that the market can solve on its own. It carries the risk of significant damage to economic activity.
Absent a forceful policy response, the consequences would be lower incomes for working families; higher borrowing costs for housing, education and the expenses of everyday life; lower value of retirement savings; and rising unemployment.
I believe that the Federal Reserve System’s response has helped reduce the risk of systemic damage to the financial system, and thereby helped mitigate a potential source of downside risk to growth. This in turn has helped mitigate the risks to the broader economy.
It is important to recognise that a substantial adjustment, recognition of losses and reduction in risk have already taken place. And a range of different prices of financial assets now reflects a very cautious view of the future.
The severity of the pressures in markets evident over the last few months is in part a reflection of the speed and force with which markets and institutions in our financial system adapt to fundamental changes in the outlook. This capacity to adjust and adapt is one of the great strengths of our system.
Nevertheless, we still face a number of challenges ahead. The seeds of this crisis took a long time to build up, and they will take some time to work through.
Source : Straits Times - 8 Apr 2008
Royalville condo relaunched for sale by tender
Source : Channel NewsAsia - 7 Apr 2008
The owners of Royalville, a freehold mixed development along Bukit Timah Road, are giving the collective sale market another try.
They have relaunched the property for sale by tender, with an asking price of S$305 million. Including a development charge of S$6 million, this works out to a land rate of about S$1,106 per square foot of gross floor area.
Royalville is made up of 93 residential units and 11 shop units. Some 85 per cent of the owners had agreed to the collective sale before new laws on such sales took effect in October 2007.
Royalville has a land area of 174,176 square feet. Based on the 2003 Master Plan, the site is zoned for residential use, with a gross plot ratio of 1.4. The new development can be up to five storeys high.
The winning developer may incorporate an adjoining drainage reserve of about 8,420 square feet into the site, enlarging the land area to 182,596 square feet.
The drainage reserve is currently under the charge of the official receiver who has also appointed Credo Real Estate to act in the sale.
The new development on site could accommodate a condominium project with a gross floor area of 281,198 square feet. This will yield 140 apartment units with an average size of 2,000 square feet each.
The tender closes on 9 May. - CNA/vm
Opinion:
Royalville, a 174,176-sq ft freehold residential property located along Bukit Timah Road, will be put up jointly with an 8,420-sq ft drainage reserve for collective sale. The combined indicative asking price is S$305 million. Including a development charge (DC) of S$6 million, the price works out to S$1,106 per sq ft per plot ratio (ppr), which is 10 to 15 per cent lower than the previous indicative.
The owners of Royalville, a freehold mixed development along Bukit Timah Road, are giving the collective sale market another try.
They have relaunched the property for sale by tender, with an asking price of S$305 million. Including a development charge of S$6 million, this works out to a land rate of about S$1,106 per square foot of gross floor area.
Royalville is made up of 93 residential units and 11 shop units. Some 85 per cent of the owners had agreed to the collective sale before new laws on such sales took effect in October 2007.
Royalville has a land area of 174,176 square feet. Based on the 2003 Master Plan, the site is zoned for residential use, with a gross plot ratio of 1.4. The new development can be up to five storeys high.
The winning developer may incorporate an adjoining drainage reserve of about 8,420 square feet into the site, enlarging the land area to 182,596 square feet.
The drainage reserve is currently under the charge of the official receiver who has also appointed Credo Real Estate to act in the sale.
The new development on site could accommodate a condominium project with a gross floor area of 281,198 square feet. This will yield 140 apartment units with an average size of 2,000 square feet each.
The tender closes on 9 May. - CNA/vm
Opinion:
Royalville, a 174,176-sq ft freehold residential property located along Bukit Timah Road, will be put up jointly with an 8,420-sq ft drainage reserve for collective sale. The combined indicative asking price is S$305 million. Including a development charge (DC) of S$6 million, the price works out to S$1,106 per sq ft per plot ratio (ppr), which is 10 to 15 per cent lower than the previous indicative.
Owners say enbloc sale of Tulip Garden has been called off
Source : Channel NewsAsia - 7 Apr 2008
The enbloc sale of Tulip Garden, a freehold development in District 10, appears to be off.
Tulip Garden was sold in July 2007 in a collective sale valued at S$516 million. The property is along the prime Holland Road and Farrer Road area.
Channel NewsAsia understands that owners are now waiting to hear more details from the developer.
Bravo Building Construction bought Tulip Garden at more than S$1,000 per square foot and the sale was scheduled to be completed by May.
However, earlier reports stated that Bravo Building Construction was delaying the completion date and there was some talk that it was trying to arrange for alternative financing.
Some owners of Tulip Garden have already received their share of the deposit for the sale.
According to earlier reports, Bravo Building Construction has called off another enbloc sale - that of Makeway View in the Newton area and is also said to be delaying the completion date of the sale of Pender Court off West Coast Highway. - CNA/vm
The enbloc sale of Tulip Garden, a freehold development in District 10, appears to be off.
Tulip Garden was sold in July 2007 in a collective sale valued at S$516 million. The property is along the prime Holland Road and Farrer Road area.
Channel NewsAsia understands that owners are now waiting to hear more details from the developer.
Bravo Building Construction bought Tulip Garden at more than S$1,000 per square foot and the sale was scheduled to be completed by May.
However, earlier reports stated that Bravo Building Construction was delaying the completion date and there was some talk that it was trying to arrange for alternative financing.
Some owners of Tulip Garden have already received their share of the deposit for the sale.
According to earlier reports, Bravo Building Construction has called off another enbloc sale - that of Makeway View in the Newton area and is also said to be delaying the completion date of the sale of Pender Court off West Coast Highway. - CNA/vm
Tulip Garden en bloc may be called off
Tulip Garden: The $516 million deal for the property worked out to a unit land price of $1,018 psf per plot ratio. The buyer had intended to build a 350-unit condo on the Holland Road site
Buyer Bravo will 'accept costly missed opportunity' if it's not granted payment extensions
Business Times - 08 Apr 2008
The owners of Tulip Garden met over the weekend and BT understands that most of them have taken the view to rescind the $516 million collective sale to an associate company of Bravo Building Construction - if the second 5 per cent instalment due to them is not paid by the deadline of midnight yesterday.
BT understands the owners could not accede to the Bravo unit's request for another extension to pay up the second 5 per cent instalment which was to have been paid yesterday, to June 7, as well as to extend the completion date of the transaction, which is when it would have to pay up the remaining 90 per cent of the purchase price, from May 28 to Aug 7.
However, Tulip Garden's owners, through their lawyers, are understood to have informed Bravo yesterday that the payment deadline will not be extended and that they reserve their rights to rescind the sale.
A Bravo spokeswoman said yesterday the consortium buying Tulip Garden is seeking an 'unconditional extension of time' for making the two payments, that is, it is not prepared to make any further payment to the sellers in exchange for the extensions, until June 7.
If the sale is rescinded, Tulip Garden owners will keep the $25.8 million or 5 per cent of the purchase price they had been paid so far, BT understands.
'If these extensions are not obtained, the consortium will accept this costly missed opportunity to develop a stunning 350-unit condo with unmatched features in a prominent Holland Road corner,' Bravo said in a statement.
Bravo has a minority stake in the consortium buying Tulip Garden. The en bloc sale of Tulip Garden was approved by Strata Titles Board in February.
In its statement, Bravo said that it and its majority consortium partners for the purchase of Tulip Garden intend to complete the purchase. Bravo did not identify the consortium partners. 'Since December 2007, major foreign institutional investors and a few local investors have expressed strong interest to form the consortium. The current turmoil in financial and stock markets matched with sporadic bad news have caused unforeseen delays in securing ultimate approvals to commit funds,' Bravo said in its statement.
Bravo also indicated that approval for Tulip Garden's sale from Strata Titles Board in February came earlier than anticipated. 'Coupled with the consortium's strategic decision to significantly increase equity to balance the current cautious lending by banks, the current deadlines for next payments have become too constricted and no longer practical,' it added.
BT understands that Tulip Garden owners declined to further extend the completion date of the sale of Tulip Garden as the STB had already given its order for the sale, binding all owners to a sale, and the sales committee does not have the powers to vary the completion date of the sale beyond the originally agreed May 28. The date was based on three months from receiving the STB order for sale, as stipulated in the sale and purchase agreement for Tulip Garden inked last year.
Assuming Tulip Garden's sale is rescinded, it may be a while before the prime District 10 site is back on the en bloc bandwagon. If owners wish to do a fresh en bloc sale, they would have to do it under revised collective sales rules that took effect in October last year and which are more stringent.
The $516 million deal for the property worked out to a unit land price of $1,018 psf per plot ratio. No development charge is payable.
Last month, the $162.8 million collective sale of Makeway View in the Newton area to another associate of Bravo was rescinded. BT reported that one per cent of purchase price paid by Bravo so far was forfeited.
Buyer Bravo will 'accept costly missed opportunity' if it's not granted payment extensions
Business Times - 08 Apr 2008
The owners of Tulip Garden met over the weekend and BT understands that most of them have taken the view to rescind the $516 million collective sale to an associate company of Bravo Building Construction - if the second 5 per cent instalment due to them is not paid by the deadline of midnight yesterday.
BT understands the owners could not accede to the Bravo unit's request for another extension to pay up the second 5 per cent instalment which was to have been paid yesterday, to June 7, as well as to extend the completion date of the transaction, which is when it would have to pay up the remaining 90 per cent of the purchase price, from May 28 to Aug 7.
However, Tulip Garden's owners, through their lawyers, are understood to have informed Bravo yesterday that the payment deadline will not be extended and that they reserve their rights to rescind the sale.
A Bravo spokeswoman said yesterday the consortium buying Tulip Garden is seeking an 'unconditional extension of time' for making the two payments, that is, it is not prepared to make any further payment to the sellers in exchange for the extensions, until June 7.
If the sale is rescinded, Tulip Garden owners will keep the $25.8 million or 5 per cent of the purchase price they had been paid so far, BT understands.
'If these extensions are not obtained, the consortium will accept this costly missed opportunity to develop a stunning 350-unit condo with unmatched features in a prominent Holland Road corner,' Bravo said in a statement.
Bravo has a minority stake in the consortium buying Tulip Garden. The en bloc sale of Tulip Garden was approved by Strata Titles Board in February.
In its statement, Bravo said that it and its majority consortium partners for the purchase of Tulip Garden intend to complete the purchase. Bravo did not identify the consortium partners. 'Since December 2007, major foreign institutional investors and a few local investors have expressed strong interest to form the consortium. The current turmoil in financial and stock markets matched with sporadic bad news have caused unforeseen delays in securing ultimate approvals to commit funds,' Bravo said in its statement.
Bravo also indicated that approval for Tulip Garden's sale from Strata Titles Board in February came earlier than anticipated. 'Coupled with the consortium's strategic decision to significantly increase equity to balance the current cautious lending by banks, the current deadlines for next payments have become too constricted and no longer practical,' it added.
BT understands that Tulip Garden owners declined to further extend the completion date of the sale of Tulip Garden as the STB had already given its order for the sale, binding all owners to a sale, and the sales committee does not have the powers to vary the completion date of the sale beyond the originally agreed May 28. The date was based on three months from receiving the STB order for sale, as stipulated in the sale and purchase agreement for Tulip Garden inked last year.
Assuming Tulip Garden's sale is rescinded, it may be a while before the prime District 10 site is back on the en bloc bandwagon. If owners wish to do a fresh en bloc sale, they would have to do it under revised collective sales rules that took effect in October last year and which are more stringent.
The $516 million deal for the property worked out to a unit land price of $1,018 psf per plot ratio. No development charge is payable.
Last month, the $162.8 million collective sale of Makeway View in the Newton area to another associate of Bravo was rescinded. BT reported that one per cent of purchase price paid by Bravo so far was forfeited.
Confirmed: Tulip Garden's en bloc sale to Bravo rescinded
Business Times - 09 Apr 2008
IT'S official. Tulip Garden's owners have rescinded the $516 million en bloc sale of the estate to a unit of Bravo Building Construction.
Lee & Lee partner Ow Yong Thian Soo, representing Tulip Garden owners, confirmed that the firm yesterday sent a notice of rescission of the sale- and-purchase agreement for Tulip Garden to Bravo's lawyers. 'We also informed them that the sellers will be forfeiting the 5 per cent of the transaction price paid to them so far. And our clients reserve all rights,' he said.
The notice of rescission was sent to Bravo after it failed to pay the second 5 per cent instalment by the deadline on April 7. Bravo had requested another extension of this deadline to June 7, as well as to extend the completion date of the transaction (which is when it would have had to pay up the remaining 90 per cent of the purchase price) from May 28 to Aug 7. Tulip Garden owners met over the weekend and most indicated they wanted to cancel the sale if Bravo missed the payment deadline on April 7.
Opinion:
The S$516 million collective sale of Tulip Garden, a freehold residential property located along Farrer Road, to a unit of Bravo Building Construction has been officially rescinded. The collapse of the en bloc transaction was down to the majority owners’ refusal to accept the developer’s request for an ‘unconditional’ extension of time of the next 5 per cent installment payment due to them.
IT'S official. Tulip Garden's owners have rescinded the $516 million en bloc sale of the estate to a unit of Bravo Building Construction.
Lee & Lee partner Ow Yong Thian Soo, representing Tulip Garden owners, confirmed that the firm yesterday sent a notice of rescission of the sale- and-purchase agreement for Tulip Garden to Bravo's lawyers. 'We also informed them that the sellers will be forfeiting the 5 per cent of the transaction price paid to them so far. And our clients reserve all rights,' he said.
The notice of rescission was sent to Bravo after it failed to pay the second 5 per cent instalment by the deadline on April 7. Bravo had requested another extension of this deadline to June 7, as well as to extend the completion date of the transaction (which is when it would have had to pay up the remaining 90 per cent of the purchase price) from May 28 to Aug 7. Tulip Garden owners met over the weekend and most indicated they wanted to cancel the sale if Bravo missed the payment deadline on April 7.
Opinion:
The S$516 million collective sale of Tulip Garden, a freehold residential property located along Farrer Road, to a unit of Bravo Building Construction has been officially rescinded. The collapse of the en bloc transaction was down to the majority owners’ refusal to accept the developer’s request for an ‘unconditional’ extension of time of the next 5 per cent installment payment due to them.
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