HK houses going for HK$300m

HK houses going for HK$300m

 

Supply squeeze on luxury homes seen driving up prices by 25% this year

 

By JANE MOIR

IN HONG KONG

 

HOUSES at The Peak are fetching close to HK$300 million (S$53 million), and are still rising. This epitomises Hong Kong‘s very hot luxury property market, which is facing a tight supply squeeze. As a result, prices for top-tier homes are expected to skyrocket by 25 per cent this year alone.

 

In what is likely the most supply-challenged year since 1997, fewer than 200 units are expected to become available in ultra-high-end residential areas such as The Peak and the South Side, where prices for standalone houses are going for nearly HK$300 million.

 

In the last quarter of 2007 alone, luxury residential prices at The Peak rose by 11.8 per cent, according to data from property group Colliers International (Hong Kong).

 

The property firm anticipates growth of 25 per cent in the luxury sector this year. Moreover, supply is unlikely to become better next year and in 2010, it notes.

 

According to Ricky Poon, executive director of sales at Colliers in Hong Kong, prices at the top end of the market are already outstripping those seen during the previous property market highs of 1997.

 

‘In the super-luxury home area (where properties fetch HK$100 million and above), the prices are transcending the overall luxury market price,’ he noted. This would include houses that are in scarce supply in areas such as The Peak – in October, for example, one house there sold for HK$296 million.

 

‘There is limited land supply . . . all the developers are hungry for the prestigious locations,’ Mr Poon added.

 

Some developers have tried to trigger land sales by putting in applications for plots with the government, but the requests have been rejected.

 

‘The government has a high expectation for these types of locations,’ Mr Poon explained. ‘They expect more money for it.’

 

He said that the situation is unlikely to improve in the next three years, leading to a situation where stock will fall to as much as 59 per cent below historical averages.

 

On The Peak, for example, Colliers expects just 18 new houses to become available this year. On the South Side, it expects 11 new units to be completed during the year, while the Mid-Levels is likely to see 165 units become available.

 

The real estate firm estimates that just under 1,000 units in the residential sector will be completed in 2008, the majority being in the Residence Bel Air complex near the Cyberport development.

 

According to Mr Poon, among the top buyers of the super-luxurious homes are mainland Chinese. ‘I would say 50 to 60 per cent are mainland Chinese, and the rest are mainly second-generation wealthy or celebrities, with a few expatriates,’ he said.

 

Hong Kong‘s property market has seen a significant upswing on the heels of buoyant stock market activity and the Fed’s series of interest rate cuts.

 

And as inflation in the city increases and rents are pushed upwards, people are opting to buy into the residential sector.

 

In November, the number of sale and purchase agreements for residential units rose to 15,759, the biggest number of transactions in a single month since July 1997.

 

In the luxury sector, the number of sale transactions exceeding HK$10 million saw growth of 40 per cent between September and November compared with the year-ago period.

 

Source: Business Times

Some HDB residents unhappy despite freeze on S&C charges

Some HDB residents unhappy despite freeze on S&C charges

 

They feel rates are too high compared with charges for condo residents

 

By Mavis Toh

 

THE 14 town councils under the People’s Action Party are all freezing their service and conservancy (S&C) rates, but some HDB residents still feel the charges are too high.

 

Mr Richard Lim, 42, lives in a five-room flat in Pasir Ris, but pays more for parking and maintenance charges than some condominium residents.

 

The accountant pays $163.50 a month: $90 for parking and $73.50 in S&C fees.

 

What residents in private estates pay can go as low as $150, a check with 10 condominiums found.

 

Mr Lim said: ‘My friend who lives in a similar-size unit in a Bishan condo pays $200 and he gets so many more facilities.’

 

Writing to The Straits Times Forum recently, he asked why, despite fewer perks, HDB residents pay more than some condo residents: ‘Are they overcharging residents or are they not giving enough value for the amount we pay?’

 

His letter ignited discussions in at least three online forums, with many asking why S&C charges for HDB flats were only a little lower than those for private estates.

 

In Parliament last month, Dr Teo Ho Pin, coordinating chairman of the PAP town councils, announced there will be no hike in their S&C charges this year.

 

The move is in response to Finance Minister Tharman Shanmugaratnam’s call recently for them to follow the Government’s lead in freezing fees for its services.

 

S&C rates for Singaporeans living in public housing can range from $18.50 for a one-room HDB flat to $61.50 for a five-room unit. Non-Singaporeans pay up to $30 more.

 

S&C charges in HDB estates are collected by the town councils and go towards cleaning, grass cutting, lift maintenance and upkeep of common areas. Costs for cyclical work such as re-painting are also taken from this kitty.

 

A public housing resident who owns a car has to pay between $65 and $90 for a parking spot. This, according to HDB residents, is what causes the overall charge to rocket.

 

Parking charges are collected by the HDB which maintains the carparks.

 

In a Forum letter replying to Mr Lim, the HDB explained that, unlike private property, HDB parking spaces are not included in the selling price of the flat.

 

It said: ‘HDB parking charges are aimed at recovering the cost of providing and maintaining the carparks and help regulate demand so residents need not compete with visitors for lots.’

 

Mr Lim is now looking for a condo unit since the charges are not that much higher and he can enjoy condo facilities such as a swimming pool, clubhouse, playground, barbecue pit, gym, carpark and security for just a bit more.

 

Most condos charge a monthly fee of about $250, although some, like Ardmore Park near Orchard Road, can go as high as $1,250.

 

Those which charge below $200 include Normanton Park, Gillman Heights, Farrer Court and The Warren.

 

Condos usually collect money for a sinking fund, which is used for major repairs and improvements to the estate such as lift upgrading and re-painting.

 

Dr Teo, MP for Bukit Panjang, assured HDB residents that what they pay in S&C fees is ‘definitely value for money’.

 

‘We’ve many more covered linkways than condos and also amphitheatres and playgrounds,’ he said.

 

He added that the Government gives a grant every year to top up the S&C fund, making major projects like lift upgrading affordable.

 

Mr Charles Chong, an MP for Pasir Ris-Punggol GRC, said charges for condos are higher than for HDB units because condo residents pay more upfront when they buy their homes.

 

‘Besides, condos could also ask residents to fork out lump sums for major repairs when the sinking fund isn’t fat enough,’ he said.

 

Ms Eleana Teo, a director at Knight Frank Estate Management, said condos with more units can enjoy economies of scale and charge more affordable fees.

 

At Farrer Court, near Holland Road, which has 618 units, administration officer Mary Teo, 58, said the $160 a month she pays is ‘very low’.

 

‘We get our own jogging track, tennis courts and gym, and I’m paying less than some HDB residents,’ said the owner of a 1,500 sq ft unit.

 

Information technology specialist David Seah, 30, who lives in a five-room flat in Jurong West, agreed S&C and parking fees for bigger HDB units can add up to a hefty sum.

 

He pays $153 a month – $63 in S&C fees and $90 for parking.

 

‘The S&C charges for smaller flats are much lower and I think it’s fair,’ he said.

 

Mr Simon Chua, 34, owner of a four-room Bukit Batok HDB flat who pays $138 in monthly charges, has no complaints.

 

‘We never have to worry about having to fork out extra money for major upgrading work. I think we are well taken care of for the money we pay,’ he said.

 

Source: Straits Times

Sky-High parking

Sky-High parking

 

By Frankie Chee

 

PARKING the car is set to reach a whole new level – with a high-rise condominium where every apartment comes with its own private garage in the sky.

 

The Hamilton, coming up at 37 Scotts Road on the former site of Hotel Asia, will make this fantasy come true.

 

Residents of the 30-storey tower will be able to drive their vehicle into a special glass elevator that will lift the vehicle from the ground floor to their ‘porch’ on the same level as their living rooms.

 

The 56-unit development has not been launched yet. But when built, it will become the first residential high-rise in Singapore, and only the third in the world after developments in New York and Dubai, to have this vroom-with-a-view parking feature.

 

Ms Leny Suparman, director of developer Hayden Properties, said the feature offers ‘a unique way of living in a condominium yet with the advantages of a landed property’.

 

Motorists here have already become familiar with high-tech ‘stack’ parking, though it is not quite the seamless elevator ride The Hamilton promises.

 

At the Chinatown nightlife hub Club Street, the first fully mechanised public carpark was launched last month.

 

And MacDonald House in Orchard Road has had an elevator take vehicles to its carpark on the second and third levels after its refurbishment in June 2005.

 

Owning a unit at The Hamilton, complete with its own private parking bay, will not come cheap.

 

Hayden Properties is unable to give any price indication for its units – averaging 3,000 sq ft in size.

 

But according to the Urban Redevelopment Authority’s website, apartments in the vicinity have been going for around $4,000 per sq ft.

 

At The Hamilton, that could work out to about $12 million a unit.

 

In land-scarce Singapore, mechanised parking systems may seem the way to go, taking up less space than conventional parking lots.

 

A spokesman for the Land Transport Authority (LTA), which owns the M-Park@Club Street, said the mechanised carpark occupies 900 sq m and provides 142 parking lots.

 

A conventional multi-storey carpark would need a 2,000 sq m site to provide space for the same number of vehicles.

 

Hayden is a joint venture between local financial consultancy company KOP Capital and Emirates Tarian, a subsidiary investment company of the Emirates Investment Group.

 

While its car-porch-in-the-sky is a ritzy feature, not all motorists are sure they will like their cars riding up and down elevators.

 

‘What if the lift breaks down?’ asked regional foreign exchange manager David Hong, 44, who prefers to keep his wheels on the ground.

 

Source: Straits Times

What goes up stays up, what goes down also stays up

What goes up stays up, what goes down also stays up

 

I REFER to the news report, ‘Mortgage war breaks out as DBS and UOB offer new rates’ (March 8). It said that a mortgage loan war has broken out partially due to competition and also lower Sibor and SOR (3 per cent to 1.5 per cent) since 2007. However, the banks are not being fair to their existing customers as mortgage loan rates are not lowered for their existing customers.

 

In 2006, the interest rate of my HDB mortgage loan with UOB was raised three times from 2.6 per cent to 4.1 per cent. Inevitably, the reason given for the increase was the increase in interbank market interest rates. As I noticed that the interbank market interest rate had fallen steadily since last year, I wrote to UOB to request a revision in my mortgage loan rate. However, I was told that the bank was monitoring the situation and that no revision would be made to my loan. Instead, I was offered a new package that required me to pay a conversion fee of $500 and have my loan locked with the bank for a longer period of time.

 

When interbank market interest rates go up, banks revise our mortgage loan rate upwards almost immediately. However, when interbank market interest rates go down, no revision is made at all. Is this fair?

 

Yeo Heng Ngi

 

Source: Straits Times

En-bloc sales eroding our ‘sense of kampung’

En-bloc sales eroding our ‘sense of kampung’

 

PLEASE refer to last Friday’s article, ‘Some Gillman Heights owners fight on for their homes’.

 

Gillman Heights is an excellent example of what is happening on the collective property sale scene today:

 

Minority owners fight desperately to keep their homes;

 

Minority and majority owners find replacement value like-for-like, in terms of location, size and price, does not result in a win-win situation for sellers; and

 

Collective property sales create social tension in private housing estates, which erodes the fabric of society and our ‘sense of kampung’.

 

The bitter jeers and ugly scenes reported recently at the Bayshore Park extraordinary general meeting, where the minority were not allowed a proper hearing, are becoming typical of collective property sale meetings across the island: Neighbour is pitted against neighbour.

 

The increasing litigation that accompanies virtually all recent sales attempts is a symptom of a sickness from which society needs relief. This, coupled with an increasing awareness that, in Singapore, your home is not really your home and can be taken from you by your neighbours. All these factors erode our sense of home and innate security.

 

Finally, many sellers realise too late that, after they have signed on the dotted line, what they thought would be a windfall is actually a shortfall. It takes two to four years to get sales proceeds – by which time the market has negated profits and resulted in sellers having to downgrade or take a loan to pay for their replacement home. The dislocation to the elderly is especially poignant.

 

What price will we pay for eroding our sense of kampung? What price have we paid already?

 

Susan Prior (Ms)

 

Source: Straits Times