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Developers reach out to potential buyers with private viewings and ‘Tatler crowd’ parties

THOSE ultra-luxury, ultra-pricey condominiums that make the headlines these days look like anyone’s dream home but if you think you might get a glimpse inside one of these dream homes, think again.

Exclusive is the word here - especially when it comes to marketing.

Viewing property at this level means entering a rarefied world of ‘Tatler crowd’ parties, private viewings of expensively decorated show suites, discreet dinners for potential buyers and auctions that ensure the in-crowd remains desirable.

Take Keppel Land, which recently invited two prominent figures in society, spa and beauty chain owner Ponz Goo and eye specialist Steve Seah, and a third mystery person, to unleash their personal decorating styles on show suites at its Ritz Residences. A series of invitation-only parties were then thrown for friends and possible buyers.

Keppel Land’s deputy general manager of marketing and residential properties, Mr Albert Foo, said the idea was to let potential buyers have a sense of how their friends would decorate a unit.

The parties were meticulously planned and executed. ‘We don’t stint on the catering and entertainment, and attention is paid right down to the grooming and deportment of the sales staff,’ he said.

No surprise, then, that some of the parties cost around six figures while furnishing the show suites each time typically required upwards of $200,000.

Mr Foo also said the marketing and sales of Keppel Land’s 16 quality bungalow plots at the much-coveted Cluny Hill area were very much an exclusive operation.

‘Privacy is very important for that segment of the market, so deals were done over dinner one on one or in small groups,’ he said. Oh, and by invitation only, of course.

Other developers also taking the no-expense-spared approach to wooing the well-heeled buyer.

City Developments (CDL) recently made headlines with its invitation-only parties at a $6 million show suite opposite its St Regis Residences project at Tomlinson Road. But with discretion very much standard operating procedure at this level, it is no surprise that developers are not keen to talk about how they woo the super-rich. Both CDL and SC Global declined to comment.

‘It is understandable why these developers want to keep things under wraps. You are talking about selling to the rich and the famous and you need to keep it discreet to appeal to them,’ said Mrs Ong Choon Fah, executive director of DTZ Debenham Tie Leung.

Mr Vincent Chong, associate director of residential sales at Colliers International, said the plush but private approach is ‘all about perception, about creating the impression of luxury and exclusivity’.

Naturally, that impression is achieved when ‘you have private functions where guests arrive in Rolls-Royces and you can be seen in the company of the who’s who crowd’, he added.

Mr Chong also cited the recent move by Sentosa Cove to put 12 plots of bungalow land at Sentosa Cove’s Southern Precinct on auction as an example of creating that desired perception.

It will be the first sale conducted here by Christie’s Great Estates, part of the renowned fine art auction house and a firm that lists only the finest properties on its books.

Interested bidders must pre-register before attending the sale - a move that keeps out the curious while also underlining the exclusive nature of the plots.

Source : Straits Times - 4 July 2006

HDB flats: Up 1.1% Private homes: Up 1.6%

THERE was good news on the home front for the second quarter with prices of both HDB and private properties going up, though neither are going through the roof yet.

Prices of HDB resale flats rose 1.1 per cent in the April-June quarter - their fastest pace in two years - and a marked contrast with the next-to-nothing 0.2 per cent rise in the first quarter.

But prices are still below the levels before anti-cashback measures - which aimed to stop people from artificially inflating prices to get a bigger loan - kicked in last year, and analysts say the recovery will be gradual and could keep a lid on low-end condo prices.

Still, initial Urban Redevelopment Authority estimates showed that private home prices rose 1.6 per cent in the quarter, pushing levels to the highest point since the third quarter of 2001.

Luxury homes led the way, with some spectacular results, consultants said. A unit at St Regis Residences in Tanglin Road sold for more than $3,000 per square foot, 25 per cent above the previous record of $2,400 per square foot achieved in 1997.

Several high-value deals and strong demand could have spurred the rise with more new launches and better take-up rates, said consultancy CB Richard Ellis. New launches, for instance, comprised about 2,800 new homes in the period, up from 2,111 in the previous quarter.

But the activity in that area was not matched in the mass market sector, which remained largely insipid, said consultancy Knight Frank.

Buyers of mass market private homes tend to be HDB flat upgraders, so weak HDB resale prices flow on to poorer demand for these homes.

This in turn could keep the mass market, which is still largely stagnant, in check for a while longer.

While HDB resale prices are up, the rise appears fragmented, with resale levels still about 3.6 per cent below those in the first quarter last year.

That was before the anti-cashback measures took effect. These measures were behind the huge 4.8 per cent price dip in the second quarter last year.

There was something of a recovery in the second quarter this year. The good take-up for relatively scarce, well-located HDB resale flats and the slower release of new flats via HDB’s walk-in-selection programme seemed to have lifted resale prices, said Mr Eugene Lim of property firm ERA Singapore.

HDB launched 897 units in the second quarter, compared with 3,297 units a year ago.

ERA figures showed that some flats sold at $5,000 to $20,000 above valuation, though this ‘phenomenon’, as Mr Lim calls it, is limited to highly select units - four- and five-room resale flats near MRT stations, on high floors and in good condition.

HDB resale prices could rise by 3 to 6 per cent this year, say consultants, compared with a 4.7 per cent fall last year. Private home prices are tipped to rise 4 to 8 per cent, up from a 3.9 per cent increase last year and 0.9 per cent increase in 2004.

Source : Straits Times - 4 July 2006

Current rise in HDB prices may not be enough to lift mass market segment

PRIVATE home prices may be rising steadily, but 99-year leasehold suburban condominiums that form the backbone of Singapore’s property market are largely being left behind while the climb is being led by the red-hot luxury housing segment.

The prices of these ‘mass market’ homes are still stuck in the doldrums - and are likely to remain there for a while, despite the highest rise in two years in Housing Board (HDB) resale prices in the second quarter, say property consultants.

In the past, the mass market has been the driving force of any property market rally as HDB upgraders trade in their five-room and executive flats for these entry-level private condominiums.

But persistently low resale prices for HDB flats have dampened demand for mass market projects, which have seen very little price movement over the past three years even as prices of high-end homes hit record highs.

Prices of suburban condominiums have hovered between $450 and $500 per sq ft (psf) since 2003, while luxury home prices are now averaging $1,670 psf and are expected to rise by up to 20 per cent this year.

And even though HDB resale prices are now on the rise, this may not be enough to jump-start the mass market, analysts said.

Initial estimates released by HDB yesterday showed that resale prices for the second quarter rose by 1.1 per cent, significantly higher than the 0.2 per cent rise in the first quarter and the biggest increase in two years.

‘A rise in the HDB resale index usually indicates that affordability has increased, therefore making the entry to the mass market easier,’ said Mr Joseph Tan, residential director at CB Richard Ellis.

But he pointed out that HDB resale prices are still about 3.6 per cent lower than in the first quarter of last year. Prices then took a nosedive after ‘anti-cashback’ measures were announced by the Government in a bid to stop HDB home buyers overstating flat prices to get larger loans.

Lower HDB resale prices and the recent property downturn have made potential upgraders less willing to ‘go out and snap up condos’, said ERA Singapore assistant vice-president Eugene Lim.

‘Owning private property is still an aspiration for many people, but they are more careful nowadays compared to a few years ago,’ he said.

‘Those who bought their HDB flats during the property market peak are probably still sitting on negative assets and are unwilling to cut their losses. As long as they don’t sell them, it’s just a paper loss.’

Analysts also noted that other factors - such as a lack of supply of new suburban condominiums and rising interest rates - are still holding back the mass market and therefore a broader property market recovery.

Knight Frank’s director of research and consultancy, Mr Nicholas Mak, pointed out that one key reason stopping HDB home owners from upgrading is simply that there is nothing good to buy in their preferred area.

Only one major mass market project, GuocoLand’s 625-unit The Quartz at Buangkok, has been launched this year. Of the more than 200 units released by GuocoLand since May, slightly more than half have been sold.

‘Upgraders as a group tend to be less mobile, especially if they have children who go to school near their HDB estate,’ said Mr Mak.

‘So if there is no supply, no new condos being launched in the area, chances are the HDB residents won’t want to move across the island and will just stay put.’

As of last month, there were about 1,300 mass market units that had been launched that had remained unsold, he said.

Another major factor tempering upgraders’ demand is rising interest rates, which translate into higher mortgage rates, said ERA’s Mr Lim.

‘Mass market buyers tend to be more price-sensitive, so higher home loan rates will take away buyers sitting on the fence,’ he observed.

Source : Straits Times - 4 July 2006

Teng Fuh is appealing High Court decision that it hasn’t proven govt’s ‘bad faith’

A PROPERTY development company is appealing against a court decision that the government does not have to return some land for the price paid in 1983.

The company, Teng Fuh Holdings, alleges that it suffered a great injustice because nothing had been done following the sale of the land to the government for $4.2 million more than 22 years ago.

The land, which was acquired for general redevelopment, is situated at Mukim 25 Lots 498, 348 and 350 at 20-22 Geylang Road. It is estimated to be worth about $80 million now.

The compensation sum of $4.2 million was awarded to Teng Fuh on the basis of the market value of the land in 1973 - 10 years before the actual transaction.

After the land was acquired, Teng Fuh remained a tenant, paying more than $21,000 per month in rent, according to Savills, the property consultant acting for Teng Fuh.

Over the years, Teng Fuh is estimated to have paid more than $5.5 million in rent for occupying the land since its acquisition - an amount higher than the compensation it received.

In 2004, Teng Fuh wrote to the Ministry of Law seeking the return of the land but the request was refused. Teng Fuh then sought judicial review, alleging bad faith on the part of the government.

The case failed to persuade the High Court, which dismissed its application as out of time, with no satisfactory reason for the delay.

The Rules of Court say that application for leave to quash any proceeding must be made within three months of the date of the proceeding.

While agreeing that the three-month period ought to run from the time the Ministry of Law responded to an inquiry by Teng Fuh, the court held further that the ministry should have been contacted within a reasonable time.

In giving judgment, Judge Andrew Phang said that Teng Fuh ought to have contacted the ministry by latest 1993 - when the Kallang development guide plan was issued. Even if the application had not been out of time, it would still have been dismissed, as Teng Fuh had failed to meet the standard of proof required.

The court found that change of purpose over time was itself not evidence of bad faith.

The land was included as a ‘Comprehensive Development Area’ in the 1985 Master Plan, indicated as a ‘Residential’ zone in the 1993 Kallang Development Guide Plan, and rezoned part residential, part open space and part beach area pursuant to the 1998 Master Plan.

In its judgment, the court emphasised that latitude and flexibility must be accorded to the acquiring authority as land is a valuable resource in Singapore and the Land Acquisition Act was promulgated for public benefit.

The court in fact found that Teng Fuh’s application was a ‘blatant attempt at private profiteering in total disregard of the wider public benefit’.

Noting that the land is now worth ‘multiples of $4.2 million’, the court found that the return of the land at $4.2 million would result in an ‘unjustifiable windfall’ to Teng Fuh.

Teng Fuh is said to be involved in the development of private residential properties such as Gallop Ridge, Balmoral Condominium and Holland Peak.

The appeal against the High Court’s decision is due to be heard by the Court of Appeal in late October.

Source : Business Times - 4 July 2006

68% more sought to buy commercial property in the year before CPF change

The Central Provident Fund Board’s changes to schemes relating to property purchases may have little impact on the market, but some will lament lost opportunities for investment nonetheless.

Perhaps spurred by the impending demise of the Non-Residential Property Scheme (NRPS) - which allowed Central Provident Fund (CPF) members to use their savings to buy commercial property - a CPF spokesman said 760 people had applied for the scheme since its abolition was first mooted a year ago. The number of people may be small, but it is an increase of 68 per cent from the year before when 453 applied.

The CPF Board decided to drop the NRPS because under the CPF Investment Scheme, members can still invest in commercial property. In addition, CPF said the take-up rate of NRPS had been low and the number of new applications had declined over the years.

It is not known what type of commercial properties have been bought under NRPS, which allowed for a wide range, including offices, shops and industrial space. Chesterton International’s head of research and consultancy Colin Tan says it is more likely to be office space. ‘The jump in numbers could be due to higher numbers buying strata offices as the very positive market sentiment during that period was that office properties are finally on their way up and in a big way.’

CPF figures also show that the number of members who had used CPF savings to buy more than one property was surprisingly small - 50,337 as of May this year. This represents 3.4 per cent of all CPF members under the housing scheme - about 1.46 million.

>From July 1, CPF has introduced new restrictions on the use of savings to buy second (or more) homes, and this too will give people fewer investment options.

As of March 31, the number of members who had taken part in CPF’s Public Housing Scheme was about 1.3 million. The net amount withdrawn was $75.6 billion. The number of participants in the Residential Properties Scheme - for private property - was less at 218,000, though the net amount withdrawn was $43 billion. Almost $120 billion has been used to buy property, but this will change in the future.

Propnex chief executive Mohamed Ismail reckons most people using their CPF savings for a second home, especially those who live in public housing, buy private residential property because it is seen as an investment. ‘An HDB flat is not seen as a second property.’

Still, to what the extent the intended effect of this restriction - which is to curb over-investment in property - is realised will depend on Singaporeans’ appetite for property investment. And some are hungry.

Source : Business Times - 4 July 2006