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Q My Mother-In=Law is very ill and she has not made a will. She has a house and a bank account under her name.

If she dies, how does the law distribute her assets?

She has three sons. One is single, one is married with two sons. Both are working.

The third son, who died this year, divorced in 1992 and is survived by his former wife and two daughters. One is married, the other is single and both are working.

A I AM assuming your mother-in-law is a widow and that she is a Singapore citizen or a Singapore domicile.

Since she has not made any will, the provisions of the Intestate Succession Act will apply if she dies without leaving a will. In legal terms, she is said to have died intestate.

Under the Intestate Succession Act, if she dies and her spouse has died earlier, all assets held in her sole name will be distributed equally amongst all her children.

The Act states that if one of those children is dead, his share will be distributed to his children in equal shares.

It means the sale proceeds from the house and the bank account will be pooled and divided into three equal portions: one to the unmarried son; another to the married son (who has two sons); and the third portion to the two daughters of the deceased son in equal shares.

The divorced wife will not get any share.

Ang Kim Lan DirectorGoodwins Law Corporation

Advice provided in this column is not meant as a substitute for comprehensive professional advice.

Source : Sunday Times - 29 Jul 2007

In an unprecedented move, the Urban Redevelopment Authority (URA) has created its own index involving a

Category 1 represents 20 per cent of all office space, and it shows that median rents increased by 12 per cent to $9.50 psf based on lease commencement date and 13.9 per cent to $10.33 psf based on contract date between April and June.

Squeeze

Although property consultants that BT spoke to welcomed the new data, a variance in figures was noted. Most had reported that prime rents had increased by around 20 per cent in the second quarter of this year (quarter-on-quarter) with average prime rents ranging between $10.50 psf to $13 psf.

Click here for URA’s release on Q207 real estate statistics

Explaining the difference, a spokesman for the authority said: ‘URA only uses IRAS (Inland Revenue Authority of Singapore) records of all actual contracted rentals in the computation of the data, whereas, from what we know, some property consultants use estimates of achievable rents in addition to actual contracted rentals in the computation of statistics.’

The URA did not name the buildings in Category 1 but said that these were ‘largely consistent’ with those selected by property consultants. For Category 2, median rents rose 5.9 per cent to $4.48 psf based on lease commencement and 8.8 per cent based on contract date respectively.

Colliers International director for research and consultancy Tay Huey Ying said: ‘URA could probably improve on (the categories) further by spelling out the specific buildings to avoid ambiguity. In addition, Category 2 is a rather broad definition and information related to office space in this category may not be too meaningful to the general public.’

Ms Tay added that Colliers had more than 70 office buildings in its Grade A office

There were other variances in data. CB Richard Ellis recently reported that the vacancy rate in the core and fringe CBD areas dropped to a new low of 2.7 per cent and 3.8 per cent while Grade A vacancy stood at 0.5 per cent.

The URA data show that vacancy fell to 5 per cent for Category 1 and 8.7 per cent for Category 2 in Q2.

CBRE’s executive director for office services, Moray Armstrong, declined to comment on the figures but said the next two to three years could be ‘difficult’. He added: ‘This is a time to avoid sensationalism and take on a practical and sober view of what is happening in the market.’

The numbers are however difficult to ignore.

Chesterton International head of research and consultancy Colin Tan estimates that average absorption rate since 2005 to Q2 2007 has been about 565,000 sq ft per quarter or about 2.26 million sq ft per annum. Supply of 641,000 sq m from H2 2007 to 2010 however, translates to about 6.899 million sq ft or about 1.97 million sq ft per annum. ‘This is not much because historically we have been able to easily absorb up to four million in good years,’ he said.

‘There are some consultants and media who are guilty of exaggeration, but you also shouldn’t be giving people a false sense of security either.’ Perhaps the best indication of market sentiment will come from those directly involved with leasing, and Cushman & Wakefield managing director Donald Han said: ‘Some tenants will not consider leasing outside of Category 1 because it is a totally different proposition.’

Source : Business Times - 28 Jul 2007

Shadow of speculation on record home sales, prices

The prices are climbing but developers are poised to sell more private homes than ever before. There is also evidence to show that speculative activity has been accelerating by the quarter.

The Number At a Glance

The property mania that has gripped Singapore of late has been captured in hard, official numbers.

Developers sold 9,385 uncompleted private homes in the first six months of this year, less than a thousand units shy of the record 10,363 units sold through all of last year, according to latest official figures. Market watchers expect the eventual sales for 2007 to range between 14,000 and 18,000 units, assuming that the US sub-prime mortgage woes do not have a contagion effect here.

As expected, the prices have been rising fast. The Urban Redevelopment Authority’s (URA) price index for private homes shot up 8.3 per cent in Q2 over the preceding quarter. This means that the index has risen 13.5 per cent for the first six months of this year.

A straw poll of property consultants by BT suggested that the full-year price increase could come in between 23 and 30 per cent. So prices still have between 8 and 15 per cent to climb in the second half.

The downside risk remains from the correction in the US sub-prime market. ‘Unless this spreads into global financial markets, the Singapore property market is unlikely to be affected in the immediate term,’ Jones Lang LaSalle’s head of research (South-east Asia) Chua Yang Liang says. ‘Meanwhile, we are watching the market very closely,’ he added.

One aspect that bears watching is the surging speculative activity. Subsales islandwide jumped 67.4 per cent to 1,254 units in Q2. More than half the subsale deals in Q2 were in the Core Central Region (CCR), which includes districts 9, 10, 11, Downtown Core (including Marina Bay) and Sentosa.

Islandwide, subsale deals accounted for 9.7 per cent of the total private housing deals in Q2. During the same period last year, such deals made up just 2.6per cent of the pie. Still, the latest figures are way short of speculative fever that raged in Q21996, when 28 per cent of total private residential transactions involved subsale deals.

Knight Frank director Nicholas Mak reckons that the share of subsale deals will continue to grow gradually but is unlikely to reach the levels seen in 1996. ‘Back then, the ease of getting 95 to 100 per cent bank financing for property purchases was a key reason fuelling speculative activity. Nowadays banks are more cautious,’ he says.

Going forward, subsale activity may find another engine. It may be driven not so much by the prospect of big, instant gains but by those who bought their homes on deferred payments and reach the point where they have to pay the bulk of their purchase price, says DTZ Debenham Tie Leung executive director Ong Choon Fah. ‘So rather than fork out more money, they may just sell their units since the market has gone up so much in the last couple of years or so since they bought them,’ Mrs Ong reckons.

Subsales involve projects that have yet to receive a Certificate of Statutory Completion, while resales, which are also secondary market transactions, cover completed developments.

The total number of resales jumped 40.2 per cent quarter on quarter to 6,514 units in Q2. This brought total secondary market transactions in Q2 to 7,768 units, up 44 per cent from the preceding quarter and, according to Knight Frank, a level not seen before in the private property market.

Also interesting is the breakdown in the price index for non-landed homes by regions. In all three regions - CCR, Rest of Central Region (RCR) and Outside Central Region (OCR) - the price gains in Q2 over Q1 were higher for completed homes than for uncompleted ones, reversing the general trend seen for at least the past couple of years.

‘The trend reversal seen this quarter across all markets is reflective of the urgent demand for completed residential properties for immediate occupation by those who have sold their homes through en bloc sales looking for replacement properties,’ Colliers International director Tay Huey Ying said.

In tandem with URA’s earlier flash estimate, non-landed homes in RCR (including places like Bukit Merah, Queenstown, Geylang, Toa Payoh and Katong) posted the biggest price gains in Q2, with an overall (both uncompleted and completed homes) increase of 8.1 per cent, followed by CCR (up 7.9 per cent ) and OCR - which covers suburban mass-market locations like Woodlands, Clementi, Jurong, Hougang, Tampines and Bedok - rising 7.2 per cent.

Ms Tay argues that the price recovery in this region can be attributed not just to a general filtering-down effect from the higher-priced tiers, but also to investors buying units in older developments with en bloc sale potential such as Neptune Court, Ivory Heights, Lakepoint Condominium and Clementi Park.

DTZ’s Mrs Ong reckons that the rate of price gains may moderate in the second-half. ‘Developers who bought their sites through en bloc sales in 2006 and earlier, before the surge in land prices seen this year, can probably sell their new projects without setting benchmark prices. Developers are likely to be more sensitive in pricing their projects so aggressively until things are clearer.’

Source : Business Times - 28 Jul 2007

Rising sentiment filtering down to other areas

Some say that rentals for private homes islandwide have never risen so much from one quarter to another over the past decade.

Check Out The Rents

Uptrend 07Q2

Not surprisingly, it was the Core Central Region (CCR) - which includes prime districts 9, 10, 11, Downtown Core (including Marina Bay) and Sentosa - that posted the biggest increase in rents for condos and private apartments in Q2 over the preceding quarter. They rose 12 per cent.

But the buoyant demand for housing in the prime areas continued to filter down to the rest of the market in Q2, as reflected in a 10 per cent rise in URA’s rental increase for the Rest of Central Region (RCR) and a 9.4 per cent hike in the Outside Central Region (OCR).

OCR covers suburban mass-market locations like Woodlands, Clementi, Jurong, Hougang, Tampines and Bedok, while RCR includes areas like Bukit Merah, Queenstown, Geylang, Toa Payoh and Katong.

Knight Frank said that, based on its research, rentals for properties in the East Coast, Thomson and Bishan areas grew by a strong 10 to 12 per cent quarter-on-quarter in Q2 this year, matching the rental growth seen in the CCR.

‘Noticeably, more foreign companies and expatriates are becoming more concerned with rising housing rentals and costs. Nonetheless, their top priority is to be able to enrol their children in international schools here, where the supply of teachers and space for students is far more inelastic when compared to rental properties,’ Knight Frank director (research & consultancy) Nicholas Mak said.

URA’s 12 per cent rental index hike for the CCR in Q2 was much higher than a 7.6 per cent gain registered in Q1.

CB Richard Ellis executive director Li Hiaw Ho said: ‘The slew of en-bloc sales in the past two years being concentrated in the CCR has led to a shortage of apartments for rent in the region, as reflected in this region leading the pack in terms of the increase in the rental index for non-landed properties in Q2.

‘This uptrend is expected to continue as developments which have been collectively sold give way to redevelopment. Some of the major en-bloc sales in the prime area in Q2 include Leedon Heights, Himiko Court, Elmira Heights and Fairways Condominium.’

URA’s overall rental index for private homes in Q2 was up 10.4 per cent from the preceding quarter, and 31.2 per cent higher year-on-year.

‘This is the highest quarter-on-quarter, and year-on-year growth since URA made rental data available to the public. Nonetheless, as of Q2 2007, private residential property rentals are still about 21.4 per cent lower than the all-time high in Q1 1996,’ said Knight Frank’s Mr Mak.

Source : Business Times - 28 Jul 2007

Public housing sees filter-down effect from private property market

SHAKING off years of stagnation, the HDB market gained momentum in the second quarter of 2007, as it saw a ‘filter-down’ effect from the red-hot private property market.

Upswing HDB 07Q2

Data released by the Housing Board yesterday showed that the number of HDB resale transactions in the second quarter climbed to 8,700 - up from the 6,300 in the first three months of the year.

HDB’s resale price index also rose at a relatively faster clip from April to June, climbing some 3 per cent - up from 1.3 per cent in the first quarter. The index was boosted by the majority of flats fetching more than their market valuations.

As much as 70 per cent of all resale HDB flats fetched more than their valuations in the second quarter, HDB said. The overall median cash-over-valuation (COV) was about $7,000. Analysts said that all the signs are pointing towards a recovery in the HDB market.

‘Some 70 per cent of flats are selling above valuation - it seems that the market is seeing an upswing,’ said Eugene Lim, ERA assistant vice-president.

PropNex chief executive Mohamed Ismail welcomed the ‘modest’ increase as the HDB market has been lagging behind the private property market for the last few quarters. ‘The current price index (108.0 points) is no match for the peak in 1996 (136.9 points), but is good news for most HDB owners,’ he said.

Market watchers said that the increase in HDB resale prices was largely expected as the market is seeing a ‘filter-down’ effect caused by rapidly rising private home prices.

‘Home buyers who are priced out of the private property market will be looking at the larger flat types like the 5-room and executive flats,’ said ERA’s Mr Lim.

‘They, in turn, will push those who are priced out of buying larger flats into buying smaller flats like the 4-room units.’

Official data shows that private home prices have climbed 13.5 per cent since the start of the year. Property analysts said that one reason for the heightened demand is the recent slew of en bloc sales in the private property market.

En bloc sellers have been snapping up HDB flats as replacement private homes get more expensive.

HDB’s data identified Bishan, Bukit Merah, Bukit Timah and Marine Parade as four HDB resale ‘hot spots’ where buyers are willing to fork out significantly more COV for their flats.

These areas, which are closer to town, might be more popular with en bloc sellers used to living near the city centre, analysts said.

With the release of the new data yesterday, the Housing Board also upped the ante by giving median rental figures for HDB flats for the first time ever.

The data was released to counter recent reports that certain flats were being sub-let at very high rents. Such cases, HDB said, were very few and confined to flats with ’special attributes’. While HDB flat rentals have risen, they remain affordable in most cases, data shows.

Median rents range from $1,000 to $1,400 for a 4-room flat and $1,100 to $1,500 for a 5-room unit. Executive flats are going for anywhere between $1,100 and $1,900.

More HDB homeowners have jumped on the sub-letting bandwagon. The number of sub-letting approvals climbed to 3,600 in the second quarter, from 2,400 in the first quarter.

For the full year, HDB resale prices could climb by 8-10 per cent, analysts said. Resale volume for the whole year is expected to come to 30,000-33,000.

Source : Business Times - 28 Jul 2007