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Corporate purchases of private units also at new peak

Companies and foreigners upped their share of caveats lodged for private home purchases in the first quarter of this year, according to an analysis of caveats by estate agents DTZ Debenham Tie Leung.

Companies accounted for 8 per cent, or 538 of the total 7,042 caveats lodged for private homes in the first quarter of the year, up from a 6 per cent share in the preceding quarter.

The 538 homes that companies bought in Q1 this year is an increase of 15.2 per cent from the preceding quarter and the highest quarterly figure ever captured by the Urban Redevelopment Authority’s Realis caveats data, which go back to Q1 1995.

During the height of the last major bull run in Q2 1996, companies bought 462 private homes while the figure for Q3 1999, a year that saw a short-lived property rally, was 413.

Companies include both entities incorporated in Singapore and overseas and these buyers would include property funds as well as high-net-worth individuals who set up offshore companies to purchase properties for tax or confidentiality reasons, suggests DTZ executive director Ong Choon Fah.

Some of the caveats for private homes lodged by companies are for collective sale deals.

Among the caveats lodged by companies in the first quarter were 35 caveats for Amaryllis Ville, 24 for The Fernhill, 12 for Water Place and 11 for Marina Bay Residences.

Mrs Ong expects corporate buyers like funds to continue growing in importance as private residential property buyers. ‘Traditionally, overseas property funds buy offices in Singapore, but with opportunities becoming more limited, they will increasingly turn to the residential sector,’ she added.

DTZ’s analysis of caveats lodged for private homes captured by the Realis system also shows that foreigners (including permanent residents) snapped up 1,938 private homes in the first three months of this year.

While this is up just marginally from the 1,934 caveats lodged by foreigners in the preceding quarter, it is nonetheless the highest level of foreign purchases in a quarter ever captured by Realis.

Foreigners also upped their share of private home purchases to 27 per cent in Q1 this year, a figure that has been previously surpassed on just one other occasion. That was in Q4 1995, when foreigners accounted for 32 per cent or 1,534 of the total 4,781 caveats lodged for private homes.

DTZ also observed that while the number of private apartments and condos that foreigners bought from developers in the primary market declined 21 per cent quarter-on-quarter to 540 in Q1 2007, the number of apartments/condos foreigners picked up in the secondary or resale market rose 13 per cent to 1,315 over the same period. ‘This was the largest number of resale apartments that foreigners purchased in a quarter. Foreigners accounted for a 32 per cent share in overall resale condos/apartments transacted. This trailed only Q4 1995, when the share was 48 per cent,’ DTZ said.

‘Unlike new projects, private homes in the secondary market are usually ready for lease. This therefore attracts foreign investors who wish to have a share in the current buoyant leasing market. Similarly, resale properties are valued by foreigners who are new in Singapore and require immediate accommodation. There are also some who have received permanent residence and are keen to own residential properties, partly as rents have been rising,’ DTZ observed.

Projects that saw a high percentage of caveats lodged by foreign buyers in the secondary market in Q1 included Costa del Sol, Caribbean at Keppel Bay, The Nexus, Cuscaden Residences, Pebble Bay and Leonie Gardens. Districts 10, 9 and 15 were the three most popular locations for foreigners who bought condos and private apartments in the secondary market in Q1.

As for foreigners who purchased condos/apartments directly from developers in the primary market, the three most sought-after districts in Q1 were 9, 10 and 11, followed by 15 and 1.

Tribeca, Residences @ Evelyn, RiverGate, St Regis Residences, Waterfall Gardens and Marina Bay Residences were among the projects that saw a high proportion of foreign buying in the primary market in Q1.

The 540 condos/apartments that foreign buyers purchased from developers in Q1 accounted for 28 per cent of developer sales of non-landed homes during the period.

Indonesians and Malaysians continued to be the largest groups of foreign buyers of overall private homes in Q1 this year, accounting for 21 per cent and 19 per cent respectively of caveats, followed by buyers from India, with a 14 per cent share. Indian nationals picked up 275 private homes in Q1 this year, an increase of 13 per cent from Q4 last year.

Buyers from the United Kingdom were the fourth-largest home buying market in Q1 (9 per cent share) followed by mainland China (5 per cent). Australians lodged caveats for 100 private homes in Q1, up 15 per cent from the preceding quarter. Koreans also continued to increase their investments in private residential properties in Singapore, picking up 96 homes in Q1, reflecting a 30 per cent quarter-on-quarter increase and a 380 per cent year-on-year jump.

Source : Business Times - 5 Jun 2007

UrbaneSpaces takes on the niche market of design-centric properties, reports CHARMIAN KOK

STEPPING into the two-storey shophouse represented by local real estate agency Urbane Spaces, one immediately feels the striking difference in the design and ambience. Urbane Spaces’ owner Hajar Ali describes the property her company markets as ‘very unique and architecturally distinguished’. More than that, the company takes niche real estate one step further by combining it with a tongue-in-cheek philosophy and approach.

‘Our marketing and press releases have always had a slightly intellectual slant to them, and we see it not merely as a marketing tool but part performance art, part social commentary,’ Ms Ali tells BT.

In its last press release, UrbaneSpaces blindfolded its clients before taking them to view the properties. ‘A lot of Asians are really paranoid about revealing property so we used that as a parody,’ she explains. ‘It was also a way to tell our clients that they have to trust our taste to select the best properties for them.’

In fact, the company’s philosophy borrows from the ideas of Situationist International - an avant garde philosophical movement in the 1960s which believed that art should be incorporated seamlessly into daily living.

UrbaneSpaces was founded slightly more than a year ago by Ms Ali, who saw the increasing demand for design-centric properties in the market. ‘I felt there was a niche market which was not being met, while there was a growing awareness among home owners in design. At the same time, there was also an emergence of interesting architecture and design in Singapore with a lot more design-centric properties on the market,’ says Ms Ali.

Her foray into real estate was somewhat ’serendipitous’, as Ms Ali tells BT that she was initially between doing her degrees when she decided to give real estate a shot. After six months into the business, she chanced upon a uniquely designed property while searching for an apartment for one of her clients. It was then that she saw a growing number of well designed properties available in the market and decided to specialise in design-savvy properties.

However, after a few years into the business Ms Ali felt that she needed more control over the branding of the company and founded UrbaneSpaces. ‘When I decided that this was what I wanted to do, I realised that there were no estate agencies that specialised in design. I thought that I had a pretty good eye for them, so I decided to start my own agency.’

Since then, UrbaneSpaces has targeted the niche market of the design-conscious in the real estate market. Being mainly Internet-based in the beginning, UrbaneSpaces slowly became a strong clientele-based company, mostly on referrals and the word of mouth. This is important for the company as Ms Ali prefers to know that both she and the clients have similar taste in design and architecture to prevent wasting each others’ time.

Her client base represents an eclectic mix of people from all walks of life and even includes ‘a young Middle Eastern royalty’, according to Ms Ali. ‘It is important for the company to stay small and niche,’ she says, when asked about expansion plans for the future. Although not intending to grow in size or take the mainstream route, UrbaneSpaces will grow in other ways. To remain at the forefront of its business while staying niche, UrbaneSpaces is exploring the possibilities of offering marketing consultancy services.

‘We hope to work with developers on the positioning of the property, developing marketing collaterals and conceptualising the show flats,’ Ms Ali says. Traditionally, these would be done by an advertising agency which may not understand real estate market trends well.

Ms Ali believes that her firm will be more value-added to developers as ‘we are attuned to what the market is looking for and abreast of trends. Furthermore, we have been constantly working with design-savvy customers who constantly give us honest feedback about marketing campaigns.’

In addition to expanding her company’s services as a real estate agent, Ms Ali is also looking into bringing in an exclusive limited edition furniture line for her clients. ‘This furniture will be designed by Casa Colombo and a Lebanese designer,’ explains Ms Ali, ‘and will complement the design-centric properties that we are marketing.’ The furniture line will be available in two to three months, and customers will be allowed to ‘experience’ them in an informal cafe set-up.

The company also does not rule out expanding into other countries. Before the recent war in Lebanon, Ms Ali was considering the possibility of opening an office there. She also intends to team up with similarly minded estate agents in other countries to tap their domestic markets.

Having established itself as the boutique real estate agency with an eye for uniquely designed properties, UrbaneSpaces is now receiving calls from property owners who only want their properties to be marketed exclusively to the design-savvy market instead of being mass-marketed. As such, the company is getting access to properties that are not available on the open market. This is a testament of UrbaneSpaces’ success in tapping the niche market.

‘I believe our business is highly sustainable as the market demand for design-centric property is growing and is being propelled by both locals and foreigners. Increasingly, we see clients coming to us who want well-designed properties and are not scandalised by paying top dollar for it.’

Source : Business Times - 5 Jun 2007

‘Of course, it will continue but up to a certain point. Singaporeans are reactive - ‘Oh, I better hold on, I don’t sell, I want to make more money.’ An Englishman taught me 40 years ago, when you have good profit, you shouldn’t be greedy, you should get out. Let the next person take the higher risk and make some profit. Nobody can tell when is the peak, when is the rock bottom…’

MR KWEK LENG BENG, executive chairman of the Hong Leong Group, when asked about how long the collective sale frenzy can be sustained

‘Office property will continue to go up because we have very limited supply. We are so successful in attracting multinationals and many companies when the economy is good… Don’t forget we’ve gone through about 10 years of difficult times, when we had retrenchments and we had to deal with so many problems one after another, including Sept 11, bird flu. Now, we have passed all these, we are on a new platform. The opportunity is there for the private sector to take advantage of. The Government has created an environment very conducive to doing business.’

MR KWEK, on how long high office rental prices will continue. He confirmed that City Developments, the publicly listed property arm of Hong Leong Group, was interested in bidding for a prime 1.02ha Marina Bay site opposite One Raffles Quay.

Source : Straits Times - 5 Jun 2007

Buyers with money from collective sales drive up prices as much as $20k above value

It is becoming a sellers’ market in the public housing sector.

Given the private housing property boom, it was just a matter of time before prices of resale Housing Board flats swung upwards.

The recent spate of private estate collective sales has unleashed a group of cash-rich house hunters, many of whom are opting for high-end resale HDB units. These buyers can afford to pay top dollar.

Meanwhile, rising rentals for HDB units - as much as 35 per cent in the past year - mean fewer owners want to sell their homes, while hard-hit tenants are starting to look for flats to buy.

Those selling their flats expect prices to climb further.

For example, many executive flats - which in recent years have not been popular because of their relatively higher prices - are now selling for about $20,000 above their value, say property agencies.

This was almost unheard of as recently as a year ago.

In one deal handled by Propnex, an 18-year-old executive flat in Hougang changed hands last week for $388,000 - $22,000 above its value.

This factor - a flat’s prevailing valuation - affects the market because the portion of its selling price above its value has to be paid in cash instead of through a buyer’s Central Provident Fund savings or through a home loan.

Also, until recently, the resale market for HDB flats has been relatively sedate compared with that for private property, where long queues have formed for new projects, like during the 1990s boom.

Private property prices rose by 10.2 per cent last year, and 4.6 per cent from January to March.

Meanwhile, prices of resale HDB flats only inched up 1.8 per cent last year and 1.3 per cent in the first quarter.

The senior vice-president of HSR Group, Mr Donald Yeo, told The Straits Times: ‘It used to be that four people would respond to each HDB property advertised. Now, it is about 12 to 18 people.’

Mr Albert Lu, managing director of C&H Realty, went as far as to say: ‘There is a shortage of HDB flats for sale.’

Immigration officer Muhammad Ridzuan Jaapar sold his three-room flat in Toa Payoh about two months ago for $205,000 - $15,000 above its value - within a day.

He said: ‘My wife’s parents took about six months to sell their executive flat last year. I was surprised I could sell my flat in one day.’

Another flat owner, Mr Sim Hock Seng, 50, sold his four-room flat in Marine Parade for $355,000 - $50,000 above its value - in April. The hawker bought an executive maisonette in Bedok Reservoir Road for $365,000.

Meanwhile, the heat of the competition has got to agents, with some refusing to ‘co-broke’, or deal with other agents, because it is now easier to sell flats on their own.

C&H Realty’s Mr Lu said: ‘For agents serving home buyers, it is difficult now to find a flat to buy. When it is easy to sell a flat, the (sellers’) agents do not want to co-broke.’

Under co-broking, if the seller and buyer are represented by different property agents, they pay commissions to their own agents.

For the resale of an HDB flat, a seller typically pays his agent a 2 per cent fee, while a buyer typically pays 1 per cent.

If a housing agent represents both the buyer and seller, he gets to collect commissions from both parties.

Realtors predict that prices will continue to rise for the year, but they caution that not all flats will generate equally keen interest.

While the boom is felt for flats closest to the city centre - like those near Tiong Bahru, Redhill and Queenstown MRT stations, for example - the prices of resale flats in outlying areas or newer towns such as Punggol or Sengkang will continue to face pressure because the HDB is building new flats there.

Source : Straits Times - 4 Jun 2007

Buyer City Developments planning legal action against 63-year-old who is uncontactable now

He was the last one left in the 140-unit private estate, and property developer City Developments (CDL) - which bought over Lock Cho Apartments - wants to take legal action against him.

Mr Chan Kin Foo busted the original mid-May deadline - and an extension to May 25 - to move out of the estate at Jalan Raja Udang in Balestier.

Mr Chan, 63, however, is uncontactable now.

CDL said this is putting a strain on its redevelopment work. ‘Any further delay will result in an increase in our holding costs and an undue delay in executing redevelopment,’ said a CDL spokesman.

This is the second time in three months in which a property developer decided to take ex-owners to court for refusing to move out of their home after it was sold en bloc.

The first was in April - when a family of four refused to leave their unit at Lincolnsvale estate in Surrey Road, which was bought over by Sim Lian Land.

Lock Cho Apartments consists of two blocks of walk-up apartments and two blocks of high-rise units. The site was purchased in a collective sale with two other neighbouring sites - Comfort Mansion and an eight-unit apartment - on March 31 last year for $156.3 million.

Mr Chan and three other owners did not sign the collective sale agreement.

This sale was subject to the approval of the Strata Titles Board (STB), which was given on Nov 14 last year. CDL has paid out the sale amount in full.

Late last month, The Straits Times was able to speak to Mr Chan, who said he lived alone in his unit.

He had said he did not agree to the sale because he felt his walk-up apartment deserved more money than the apartments in the high-rise blocks.

According to Credo Real Estate, which handled the sale, Mr Chan received about $900,000.

Other residents received from $840,000 to $1.3 million, which is 60 to 90 per cent of their current market prices, Credo said.

Residents were also told to vacate by May 13, which they all did, except for Mr Chan.

He continued to return to his apartment - his home for the past 30 years - even though he was now trespassing.

He was finally barred from entering the premises - and his apartment - at about 2am on May 24 by the estate security guard.

Since then, he has not returned or contacted CDL.

The developer extended its deadline to May 25 for him to at least contact it for the handing over of his keys, which he did not do.

‘We are left with no choice but to refer this matter to our solicitors,’ said its spokesman.

CDL said it had sent adequate legal notices to inform Mr Chan that he had to leave and hand over his keys.

The law firm that handled the Lock Cho Apartments sale, Rodyk & Davidson, said that Mr Chan was a ‘passive objector’ to the sale: He did not sign the sale agreement or file an objection before the STB when he could do so.

The law firm said it had sent letters to persuade Mr Chan to sign title transfer documents but he failed to do so.

Further notices were sent informing him that it would be seeking an STB order to appoint a representative to sign the documents on his behalf. The law firm received no word from him and it went ahead with this move.

On Oct 23 last year, the STB authorised a representative to sign the documents for Mr Chan and the $900,000 from his unit was ‘paid into the High Court’, in accordance with the Strata Titles Act.

According to a property lawyer that The Straits Times spoke to, a possible legal action CDL might be taking is an eviction order to dispossess Mr Chan from the unit.

Mr Chan could also be liable for damages in the form of bank interest chalked up by CDL due to the delay.

Source : Straits Times - 4 Jun 2007