Private property prices to grow more slowly amid market uncertainty

Private property prices to grow more slowly amid market uncertainty


SINGAPORE : Private property prices will see slower growth in the first quarter of this year, amid the current upheaval in global financial markets and a possible US recession.


That is according to property consultants who said prices will be supported by rentals which will continue to climb higher this year.


There has been frenzied buying and selling in the financial markets, but according to consultants, that is not likely to be replicated in the property sector.


“What the uncertainty is doing is that it’s keeping speculative investors at bay and injecting realism into the minds of potential genuine purchasers. So, we’re unlikely to see the frenzied level of buying as we’ve seen in the first half of last year. So the net result is likely to keep price growth in check moving forward,” said Tay Huey Ying, Research & Consultancy Director of Colliers International.


According to the latest numbers from the URA, the number of private residential properties transacted fell to 328 in December, after hitting a high of 1,800 units in August last year.


“We suspect there will be more choices available for new projects from second half of February right up to the March and April period. That’s when I think we’ll see continued demand spillover into the market, particularly onto the mass as well as mid-end projects,” said Donald Han, MD of Cushman & Wakefield.


While that demand is expected to support prices in the mass market segment, property consultants said the current market turmoil may impact on the high-end segment.


Still, they believe that prices will hold up because of strong rentals.



“If you look at last year, rentals are expected to rise by as much as 40%. This year, we expect rents to go up by at least about 15-20 percent, so that would potentially provide a higher yield in terms of investing in Singapore residential property market,” said Han.


Private property prices were up by about 30% last year. – CNA /ls.


Source: Channel News Asia

MIT to make S’pore its second home

MIT to make S’pore its second home


It could send 400 faculty and students here by 2010 for joint projects




(SINGAPORE) Singapore is set to become the largest international research base for the Massachusetts Institute of Technology (MIT), enabling the Republic to benefit from the American institution’s illustrious track record of marrying teaching and research with innovation and entrepreneurship.


A tie-up with the National Research Foundation (NRF), in a research partnership called the Singapore-MIT Alliance for Research and Technology (Smart), could see MIT send as many as 400 faculty staff and students to Singapore to work in local laboratories by 2010.


Smart was officially launched yesterday by NRF chairman Tony Tan at the Singapore-MIT Alliance International Conference 2008 and fifth International Symposium on Nanomanufacturing.


First announced in 2006, it is part of NRF’s billion-dollar Campus for Research Excellence and Technological Enterprise (Create) project, which was set up in that same year to enhance research know-how in Singapore through joint activities with research agencies worldwide.


Besides MIT, the Swiss research agency ETH Domain and Israel’s Technion Institute of Technology have also been brought in under the Create programme.


MIT is no stranger to Singapore. In 1998, it established an academic exchange partnership here called the Singapore-MIT Alliance (SMA) that helped advance Singapore’s life sciences and biomedical economic thrusts. The level of partnership has now been heightened.


Dr Tan said: ‘If the companies founded by MIT graduates and faculty formed an independent nation, the revenues produced by the companies would make the nation the 24th largest economy in the world.’


This showed the contribution that research universities could bring to the economy.


Smart will kick off with two ‘inter-disciplinary research groups’, or IRGs, to conduct research on infectious diseases, and environmental sensing and modelling. These research disciplines were chosen because they are areas where both Singapore and MIT can add unique value.


For instance, in the study of infectious diseases, Singapore can provide access to pathogenic bacteria samples that cannot be found in the US. In environmental sensing and modelling, Singapore’s well-developed urban and toll policies will add insight for researchers.


Besides the IRGs, Smart will also create a new innovation centre linked to the Deshpande Centre for Technological Innovation at MIT, which helps take emerging technologies from the labs to the market.


Intellectual property from the joint research work in Smart could materialise in three or four years’ time, said Thomas Magnanti, dean of the School of Engineering at MIT.


Prof Magnanti, who is also the director of Smart, added that three more IRGs will be mooted next year, with all five to be operational by 2010.


‘Singapore will be a second home to MIT,’ said Prof Magnanti.


Source: Business Times

Strong bids expected for West Coast site

Strong bids expected for West Coast site


By Fiona Chan


A RESIDENTIAL site released for sale at West Coast Crescent yesterday is expected to draw a good response.


Property consultants said the 1.2ha plot could fetch between $94 million and $112 million.


This works out to $260 per sq ft (psf) to $310 psf of the site’s potential gross floor area which stands at 361,667 sq ft. These expected prices are slightly higher than the $248 psf of gross floor area fetched for a site at Boon Lay Way last month.


The West Coast plot was launched for public tender by the Urban Redevelopment Authority yesterday as part of the Government’s confirmed land sales programme, which identifies sites to be sold at a pre-determined date.


It is attractively located near schools – including the Japanese Supplementary School – as well the National University of Singapore, said market experts.


A new condominium built on the 99-year leasehold parcel ‘promises a view of the sea and greenery at West Coast Park and Clementi Woods’, said Mr Li Hiaw Ho, executive director of CB Richard Ellis Research.


He added that such a condo, which can be built to up to 36 storeys, would be only the second high-rise development ‘on this stretch of West Coast’, after Blue Horizon.


Mr Nicholas Mak, director of research and consultancy at Knight Frank, expects the site to attract three to six bids. About 290 to 300 condo units can be developed on the land, he said.


The breakeven cost for a future building on the site is likely to be about $650 to $690 psf, he added. ‘The new units in this proposed development could be sold at prices between $740 and $780 psf.’


Mr Li also pointed out that some units in adjacent Blue Horizon were sold at about $750 psf in the fourth quarter of last year. Sub-sales of uncompleted homes at nearby Varsity Park were also in that price bracket.


Source: Straits Times

Regent Garden owners deny trying to back out of deal

Regent Garden owners deny trying to back out of deal


By Lee Su Shyan


MAJORITY owners at Regent Garden have denied that they are ‘greedy’ and trying to back out of a collective sale they are challenging in court.


The 25 owners told The Straits Times that they only want the court to clarify if the agreement with Allgreen Properties can proceed even if the price undervalues their property.


They want to know whether the contract is still binding in a case where the development charge is wrong.


The owners are also upset that Allgreen paid more money to the six minority owners, who did not vote for the sale, than it did to those who backed it.


The 25 owners inked an agreement last April to sell their property in West Coast Road to mainboard-listed Allgreen for $34 million.


One of these owners is former MP Aline Wong, who stepped down from the chairmanship of the Housing Board last year.


But the owners are claiming that the price is too low as the actual development charge – which is much lower – was not obtained. They want damages of between $5.7 million and $6.685 million from Allgreen.


The damages claim is based on two revised valuation figures that use the correct development charge.


The owners wrote to Allgreen last month, claiming that the sale price of $34 million was a ‘mutual fundamental mistake’ as it factored in a far higher development charge.


Allgreen said last Friday that it intends to ‘vigorously contest this action, and the claims and allegations made by the majority vendors’.


The Straits Times understands from the majority owners that they are only ‘seeking clarification and fairness’ from the courts.


They want to know if the sale can go ahead at this ‘undervalue’ and not at ‘market value’.


They also query if minority owners can be entitled to additional payments from Allgreen but not share them with the majority owners.


Source: Straits Times

recession? WHAT RECESSION?

recession? WHAT RECESSION?


Thursday • January 24, 2008


Michael S Derby

— Dow Jones


The global market panic driving Tuesday’s United States Federal Reserve rate cut is rooted in the still controversial idea that the US economy has slipped into a recession.


Many market participants now take it as an article of faith that the US economy is, or will soon be, in a contractionary phase of economic activity. Some even argue that as long as it “feels” like a recession, it is one. But that sentiment obscures the reality that thus far, there is no definitive view among economists about how weak the economy is or might become.


That’s not to say anxiety is not riding high. The Fed, which cut interest rates by an unprecedented margin on Tuesday, has consistently downplayed and underestimated economic and market conditions over recent months. Clearly, policy-makers have grown more anxious.


Since September, the Fed has cut its key overnight target rate by nearly two percentage points and engineered novel mechanisms aimed at getting liquidity into financial markets. In turn, the institution’s good works have been washed away by weakening economic data, most notably on the employment and manufacturing fronts, and by a seemingly-endless stream of bad news from financial markets.


Views held by forecasters have been unusually diverse. In recent weeks, several major investment banks, including Goldman Sachs and Merrill Lynch, have officially endorsed the view that the US economy is contracting.


Merrill’s frequently-bearish chief economist David Rosenberg said the four factors watched by official business-cycle-dating body, the National Bureau of Economic Research, are each on the way down. Employment, manufacturing and retail sales, along with industrial production and income, all appear to be coming off cycle high points: Mr Rosenberg sees this as a clear sign of a recession.


What’s worse, “the healing phase involved in expunging all the excesses left over from a multi-year leveraged boom in asset values takes time,” Mr Rosenberg said. He reckons the current year will scrape by with an average growth rate of 0.8 per cent — the year will likely see three contractionary quarters — with 2009 limping by at a 1-per-cent pace.


Mr John Silvia, Wachovia Securities chief economist, sees 50-50 odds of a recession but believes if policy-makers move aggressively, a downturn need not take place.


Miller Tabak strategist Tony Crescenzi sees reasons to be hopeful. The monetary policy stance and the prospect of fiscal stimulus are reasons to believe any contraction will be short-lived. Low inventories, rising exports, healthy corporate cash positions and possible new mortgage refinancings now that rates are moving lower are other positives.


Mr Joel Naroff, who helms forecasting firm Naroff Economic Advisors, said the economic data now in hand “does not tell us we are in a recession yet”.


While he’s cautious about the outlook, he argued that Tuesday’s rate cut was forced as much by market expectations as anything else. It is entirely possible that the upcoming January jobs report may be stronger than many think, which could make the size of Tuesday’s action seem over the top, he said.


While Tuesday’s action clearly shows that Fed officials are at least mindful of worst-case outcomes, even there, one finds diversity. Mr William Poole, who will soon retire as president of the Federal Reserve in St Louis, Missouri, used his final vote as a Federal Open Market Committee member to say that the apocalypse is not now.


Mr Poole has been an unreliable guide on monetary policy, but he also represents the views of many when he argued that as bad as things are for markets, the real economy has not lost its bearings.


Source: Today Newspaper