Public housing transactions not as high as 6 months ago

Public housing transactions not as high as 6 months ago


SINGAPORE : There is no slowdown in the public housing market, but National Development Minister Mah Bow Tan has said the number of transactions may not be as high as six months ago, as the market is now more balanced with an adequate supply of new flats being offered by the Housing and Development Board.


He was speaking to the media at the sidelines of a constituency event on Sunday.


Mr Mah said, “The economy is still strong but because of the uncertainty, because of what’s happening overseas, people are a bit more cautious, (and) supply and demand is a bit more balanced.


“I think people realise that there’s adequate supply coming on stream, they don’t have to panic, we’re pushing out more Build-To-Order flats. Those who can afford to wait, they’ll wait.”


Meanwhile, Mr Mah also gave an update on the cycling warden trial in Tampines.


He said a townhall forum was held with residents last week and talks are still underway with the Traffic Police and the Land Transport Authority.


He expects the decision to be made before the end of June on whether the trials will be stopped, extended for another six months to a year or made a permanent feature. – CNA/ms


Source: Channel NewsAsia

Singapore’s first airport hotel has 75% occupancy target

Singapore‘s first airport hotel has 75% occupancy target


SINGAPORE: Singapore’s first airport hotel has opened its doors to guests, nearly 30 years after Changi Airport began operations.


Although the 320-room Crowne Plaza Changi Airport has just opened for two weeks and not all the rooms are ready, it is already meeting its occupancy target of 75 percent for the full year.


Room rates at the hotel start from about US$200 – just below the prices at the premium Orchard Road belt. But with the city less than a half hour’s ride away, the need for an airport hotel seems less apparent.


The airport hotel management, however, disagrees with this view.


Mark Winterton, general manager of Crowne Plaza Changi Airport, said: “Everybody needs an airport hotel. Location is everything. Business travellers these days are savvy, their time is conserved and they want to get in, get out.


“Singapore is a hub – people fly in for meetings and they don’t want to trail. It may only be 15 to 20 minutes from the city, but people don’t have 15 to 20 minutes these days.”


While the hotel is looking at all sectors, it is primarily targeting business travellers and those coming for meetings and conventions. It is also getting transit passengers, air crew and those doing business nearby.


“There is a market for this. There is an awful lot of business in this side of the island. We’ve had great response from the corporate companies in Changi Business Park, and we’re working with the Expo and the CAAS,” said Mr Winterton.


The hotel is also working with authorities to offer a direct check-in system which will likely be available within the next few months.


One of the biggest challenges that the airport hotel faced was finding good staff as 200 service staff were needed. After nine months and a gruelling two-day walk-in session which attracted some 1,500 applicants, everyone is finally in place.


And while there were some delays – the hotel’s soft opening had to be pushed from March to May – Mr Winterton said it is par for the course.


The hotel is now expected to officially open in September.


Source: Channel NewsAsia

They are giving up shop to collect rent

They are giving up shop to collect rent


After 28 years, Wui Tai Departmental Store in Ang Mo Kio Central will call it a day at the end of this month.

The 1,600 sq ft samfoo garment shop, which caters to older women and men, started a closing-down sale three weeks ago.


Owner Gino Heng, who took over the shop from his parents five years ago, has decided to rent out the shop space instead.


‘Inflation is one of the main reasons,’ explained the 33-year-old.


‘Takings have been down because of increasing costs, so we prefer to collect a fixed rental for at least the next two years.’


He owns the shop space and has found a tenant whose lease starts from August at $15,000 a month.


Before the sale started, the store’s net profit had dropped by 20 per cent compared to the same period last year.


The average net profit a month last year was $9,000.


The store’s goods and manufacturing costs have increased by between 25 and 35 per cent, but retail prices have been adjusted upwards by only 10 per cent.


‘We have to consider the buying power of our customers,’ said MrHeng, explaining why he did not raise prices to match the increased production costs.


‘When times are bad, shops like ours which sell non-essentials are the first to be affected.


‘If customers already hold back when we don’t increase prices, it will be worse if we do.’


He added that it is hard giving up the business after so many years, but he feels ‘it’s time to quit’.


‘There’s no point holding on if there’re no better prospects in it,’ said the holder of a diploma in building and property management.


Mr Heng, who is single, has no fixed plans for his future yet.


‘I’m still young, so I can look for a job. It’s tough running your own business,’ he said.


Source: Straits Times

On the market

On the market 

In this weekly column, we bring you a sampling of homes on offer. In the spotlight this week: State-owned bungalows for rent


114 King’s Avenue


What it is: A two-storey bungalow


Monthly guide rent: $4,000


Open house: June 21


This colonial house has a land area of 16,684 sq ft and a built-up area of about 4,200 sq ft. The main building has two bedrooms on the second floor and another room on the first floor that can be used as a living room or a third bedroom.


The house also has three bathrooms and a detached servants’ quarters. It is located amid lush greenery next to Sembawang Park.


Bidding starts on June 23 and closes on June 27.


Inquiries: Mr Ganesan Kannan, 8157-0942








9 Orange Grove Road


What it is: A two-storey bungalow


Monthly guide rent: $20,000


Open house: June 28


A classic black-and-white bungalow, this 5,264 sq ft house has 44,261 sq ft of land area and is located opposite Shangri-La Hotel, within walking distance of Orchard Road.


It comes with three bedrooms in the main house and three more in the outhouse. There is also a swimming pool and a tennis court.


Bidding starts on June 30 and closes on July 4.


Inquiries: Mr Keh Peng Leong, 9833-2422








18 Evans Road


What it is: A single-storey bungalow


Guide rent: $13,000


Open house: June 21


Formerly used as a kindergarten, this bungalow off Bukit Timah Road was recently converted for residential use.


It now has three bedrooms and a guest room in the main house, with two more bedrooms in the outhouse.


Bidding starts on June 23 and closes on 27.


Inquiries: Mr Keh Peng Leong, 9833-2422



Source: Straits Times

Aussie properties offer lower prices, higher returns

Aussie properties offer lower prices, higher returns 

Values in major cities are set to double every seven to 10 years on average


More Singaporeans are going Down Under in search of viable property investments – and for good reasons.

Singaporeans are cashing in on a market where prices of equivalent properties are cheaper compared to l options here, and returns on investment are high.


The average capital growth rate in major Australian cities is about 7.7 per cent, meaning properties double in value every seven to 10 years on average. Rent yields in Australia are about 5 per cent on average.


Property values in major cities such as Sydney, Melbourne and Brisbane are also set to increase as they are currently facing net immigration, rising demand for housing and a housing supply shortage.


‘Australia is not building houses fast enough and unless locals start living in tents, demand is set to continue rising,’ said Mr Sean Parker, director of sales and marketing at JL Property Group.


Property agents are especially optimistic about growth in the Sydney market. Mr Parker described Sydney as a market ‘primed for growth’.


Rents in Sydney rose 24 per cent last year due to a supply shortage. Rent yields in Sydney are currently at an average of 4 to 6 per cent.


Melbourne, another popular location, is seeing rapid property price escalations, with prices increasing by as much as 30 per cent over the past 18 months, driven largely by the owner-occupier market.


This is due to the location of several reputable universities in Melbourne.


Despite this, properties located a relatively short 4 km away from Melbourne’s central business district are obtainable for an affordable A$500 to A$600 per sq ft, or about S$650 to S$780 per sq ft.


Investors looking for an alternative to these bustling cities might consider the more laid-back Gold Coast in Queensland, one of Australia’s major tourist attractions.


While average rent yields are similar to the rest of Australia at about 5 per cent, rental prices escalate during peak tourist periods, for example during the Formula One season, said Mr Jeremy Thoo, general manager of Austpac International.


‘Returns on properties in the Gold Coast are more cyclical and volatile compared to cities like Sydney and Melbourne, where renters will lease the property for longer periods. Tourists usually lease for about a week at most,’ he said.


Recent high-profile luxury projects in the Gold Coast include the Circle On Cavill, a waterfront project launched last year by the Sunland Group. Touted as ‘Australia’s tallest twin towers’, prices start from A$499 per sq ft, or about S$649 per sq ft.


Mr Thoo advises investors to consider whether they feel capital growth or returns on investment is more important before making a choice.


‘Cities like Sydney are the equivalent of districts nine and 10 here,’ he said. ‘Properties there appreciate in value rapidly, but might have lower rent yields due to their higher cost. However, a property in a more suburban area like Darwin can have very high returns.’


Mr Thoo points out that the Australian market offers investment options such as serviced apartments, which are not available locally. As these are often rented to hotel chains, they offer higher returns than typical residential apartments.


He also notes that apartments tend to have higher rent yields of about 4 to 6 per cent, compared to houses which have yields of 2 to 4 per cent.


‘Apartments are a more hassle-free investment,’ he said.


One challenge Singaporeans face when investing in Australia is knowing who to trust. Mr Parker said buyers should look for property marketeers with a positive track record.




Varied options

‘Cities like Sydney are the equivalent of districts nine and 10 in Singapore. Properties there appreciate in value rapidly, but might have lower rent yields due to their higher cost. However, a property in a more suburban area like Darwin can have very high returns.’

MR JEREMY THOO, a general manager of Austpac International



Source: Straits Times

Choose the right mortgage deal to save more

Choose the right mortgage deal to save more


YOU are what you write – if you are a journalist.


After a while, friends start to label you by certain stories you write. Last week, one blithely introduced me to his mother as ‘Grace Ng, the Transparent Mortgage Rates Reporter’.


That bizarre introduction unleashed a torrent of questions from Mrs X, who was about to refinance her fixed-rate mortgage. She was counting on the discomfited Miss TMRR (yours truly) to tell her exactly why ‘everyone says a transparent-rate mortgage is the cheapest’.


The encounter made me realise that even some financially savvy Singaporeans might not be clued in on how to make the most of mortgage packages as interest rates change.


When rates head south, you can benefit by taking up a mortgage linked to publicly available rates such as the Singapore Interbank Offered Rate (Sibor). This benchmark rate is used by banks to determine mortgage rates for home loans, as it is the cost at which banks borrow funds from each other.


Banks such as United Overseas Bank, OCBC and Standard Chartered offer packages with rates linked to the Singapore Swap Offer Rate (SOR), which is made up of the Sibor plus lending costs incurred by the banks.


The three-month Sibor has been falling steadily, dropping from over 3.5 per cent last year to as low as 1.24 per cent in late April this year. This means some customers have been enjoying rates of about 2 per cent for the first few months of their loans. Not surprisingly, many customers have either taken up new Sibor-linked packages, or refinanced from a fixed-rate package to a Sibor-linked one.


But if rates are high and look set to climb higher, it is best to lock in a rate through either a fixed-rate mortgage for a few years, or at least a rate linked to the 12-month Sibor, which is fixed for a full year.


The three-month Sibor was gyrating within a tight range but is now climbing to about 1.43 per cent. The 12-month Sibor has moved up sharply to 2 per cent.


Singapore rates track the United States Federal Reserve rate, currently at 2 per cent. But the latter looks unlikely to climb sharply in coming weeks. Opinions are divided over whether the Fed will raise rates to curb inflation or lower them further to stave off a deep recession in the US.


So what do you do when rates in both the US and Singapore are relatively flat, the local property market is softening and the economic outlook is uncertain?


It depends on the type of customer you are.


New home-buyers will face higher fixed-rate mortgage prices. This is because local and foreign banks alike jacked up their rates last week to an average of about 3.7 per cent annually for three years.


This raises the cost of locking in mortgage rates for several years. It also makes packages with rates linked to the Sibor, which is still relatively low, look more attractive than fixed-rate loans.


If you are an existing customer with a loan whose value is less than $300,000 and you switch to a lower-rate loan, penalties such as cancellation fees could wipe out any savings from refinancing, notes Mr Bryan Ong of mortgage consultancy


But if your loan value far exceeds $300,000, you could still save a great deal by sticking with a Sibor-linked package until the three-month Sibor exceeds 2.5 per cent to 3 per cent, he added.


Many will remember that, just a year ago, such packages were actually more costly than fixed-rate ones. In June last year, for instance, when the 12-month Sibor was 2.56 per cent, DBS’ package stipulated 3.81 per cent for the first year, which factored in a mark-up of 1.25 per cent added by DBS.


Those looking to sell their investment properties in the coming months might want to keep to a three-month SOR loan until they offload their properties, as shorter-term rates are currently lower than long-term ones.


But for those taking a wait-and-see attitude, it might make more sense to take up a 12-month Sibor-linked package, so as to lock in the current low rates. That could give you some peace of mind until the middle of next year, when it will probably be clearer just how bad the economic slowdown in the US and Asia is likely to get, and where rates are headed.


Banks are now differentiating their products by varying the lock-in periods and the penalty fees for cancelling a package within the first year. Some banks offer rates as low as 1 per cent of the total loan quantum, while others charge up to 2 per cent.


Others, like Standard Chartered, have introduced interesting features such as a guarantee that the three-month SOR will not exceed the 2.98 per cent annual rate for the first two years.


Singaporeans like Mrs X will always be quick to leap after the cheapest rate in town. But rather than just eye-balling the current teaser prices, customers should also scrutinise the general rate trends, as well as cancellation penalties, to make sure they get the best package, be it a fixed or floating rate mortgage, all year round.


Source: Straits Times