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Overall turnover in the sector expands by 15.6 per cent in second quarter

SINGAPORE’S services sector racked up a robust second quarter, thanks to the booming property and financial sectors.

Overall business receipts for the three months ended June 30 were up 15.6 per cent over the same period last year, according to the Department of Statistics.

Financial services, real estate and business services were among the sectors that enjoyed bumper growth but economists were not optimistic that such robust expansion will be sustainable.

Fortis Bank strategist Joseph Tan said: ‘The main question is how the sub-prime activity in the United States will affect the market. If it is risk-averse, we will be negatively affected if trading volume falls.’

Financial services led the way with a 35.6 per cent rise in turnover, thanks mainly to brisk business in banks, stock brokers, funds managers and investment advisors.

The related field of insurance rose 28.2 per cent. If the financial and insurance sector figures were stripped out of the overall picture, services industry growth in Singapore was still 10.5 per cent.

United Overseas Bank economist Alvin Liew believes, however, that those two sectors are still key to further strong expansion. ‘Growth without financial services remains rather strong, but because financial services registered strong growth, if it slows, the overall robust growth seen here might not be sustainable.’

Real estate, excluding developers, grew by 27.2 per cent, which, in turn, came on the back of robust 19.2 per cent first-quarter growth.

The bumper figures stemmed from the dramatic recovery in the housing market but experts are divided over whether the good times will roll for much longer.

Mr Liew feels real estate ‘can be expected to do well over the next 12 to 18 months’, while Mr Tan believes demand could dry up.

‘A lot of the positive vibes in the property markets have been driven by gains in the equity markets,’ he said.

‘If activity in the markets slow down, real estate activity could slow down too.

‘But there are two trends in the sector. Fundamental demographic demand, such as with the integrated resorts and inflow of migrants, will continue to drive demand over time. But cyclically, we can expect retardation of demand as speculative buying and positive sentiments slow.’

Leasing services, a related field, also enjoyed a good quarter, with receipts up 12.7 per cent, thanks mainly to more business for firms leasing land and water transport gear.

Education services were up 15.9 per cent while business services rose 15.6 per cent. This sector covers fields such as legal and architecture but it was the 36.8 per cent surge in market research and management consultancy firms that really gave the sector a boost.

Transport saw growth across all sectors reflecting the higher returns from freight as regional trade boomed. Receipts in storage and supporting services rose 12.4 per cent.

Economists expect the services sector to grow fairly strongly for the rest of this year and into 2008.

Source : Straits Times - 28 Aug 2007

I READ with interest the article, ‘Complaints against unethical housing agents on the rise’ (The Sunday Times, Aug 26). Allow me to share my recent experience.

I put up my HDB flat for sale two weeks ago, with the intention of handling the transaction myself.

Since then, I have received tonnes of calls from property agents and some of the tactics they employ are an eye-opener for me.

The most common calls are from agents who ask to co-broke. When they realise that I am the seller, they ask for details of the flat before ending with their most important question - whether I will be paying them a commission should they bring potential buyers for a viewing.

Some never call again when I reply ‘no’, while others will still bring the buyers in.

If a buyer expresses interest in my flat, the agent asks for the final asking price. Say I quote a figure of $300,000. The agent then asks if I will agree to reflect a price of $303,000 in the documents and pay him $3,000, as ‘the buyer needs to show a higher price for loan purposes, and is willing to pay the commission on your behalf’.

Common sense tells me that this is untrue. Chances are the buyer will simply be told that the seller is asking for $303,000 and, if the deal is sealed, the agent ends up with commission from both sides.

Another tactic - an agent even put up an advertisement for the sale of my flat, even though I have not engaged one.

I discovered this when I posed as a buyer and pretended to make a viewing appointment.

It is interesting that PropNex’s CEO called for the Government to step in, as this case involved a PropNex agent.

I strongly urge all buyers to consider bypassing agents and approach owners directly where such an option is available.

Otherwise, their viewings will be limited to properties that the agents have ’shortlisted’, which are likely those where sellers are willing to pay a commission.

Worse, the price that they pay may have been inflated to build in the seller’s commission.

Tan Bee Hong (Ms)
 
Source : Straits Times - 28 Aug 2007

I CANNOT agree more with Mr Heng Cho Choon’s letter, ‘Law Society should pay clients of errant lawyers’ (ST, Aug 25).
The Law Society of Singapore should make it compulsory for law firms to have proper insurance coverage to protect clients’ money.

The society could ensure that law firms hold proper insurance coverage before it renews the practising certificate of lawyers. The quantum of coverage could be based on the annual business turnover of the law firms.

A potential client could ask to see a law firm’s insurance coverage before deciding to engage its services. If the coverage is inadequate, he could ask for an enhanced coverage or go to another law firm that could provide him with one.

It is time for the society to look into this suggestion or come up with other solutions for compensating clients who have lost huge sums of money owing to the acts of dishonest lawyers.

Nelson Quah
 
Source : Straits Times - 28 Aug 2007

Amendments to CPF Act to help ex-spouses divide their matrimonial assets

DIVORCED couples will soon find it easier to divide their matrimonial assets in a “smooth and equitable” manner, thanks to changes to the Central Provident Fund (CPF) scheme.

From Oct 1, an ex-spouse no longer has to wait for her husband to turn 55 and be eligible to withdraw his CPF. These rules, passed under the CPF (Amendment) Bill in Parliament yesterday, now allow the immediate transfer of CPF monies to the ex-spouse’s CPF account, so long as the latter is a citizen or Singapore Permanent Resident.

There is also no need for the member to set aside the prevailing minimum sum and Medisave minimum sum first before distributing the rest to his ex-spouse.

Manpower Minister Ng Eng Hen said the aim was to “facilitate the division of matrimonial assets under the Women’s Charter, provided there is no leakage from the CPF system”.

The House also approved changes to allow family members to support one another financially, including raising the top-up limit to the prevailing minimum sum. Previously, this was pegged to the individual recipient’s minimum sum level, which would have been much lower.

Another change involving divorced couples will allow for the immediate transfer of a property to the former spouse. Currently, when a member uses his CPF to buy property and a court orders the ownership to be transferred to the ex-spouse, the member must return, in cash, to the CPF account whatever amount is due to it. With the change, this is no longer necessary.

Instead, a charge will be placed on the amount of money used to buy the house, such that if the ex-spouse sells the house later, that money will be refunded to the member’s account.

And to help more Singaporeans have enough for old age, members will be allowed to transfer funds from their ordinary account to their grandparents’ retirement account, if both parties meet the top-up criteria. Previously, they could only do so using cash. Top-ups will also be allowed to spouses and siblings under-55 using CPF or cash from January.

Members of Parliament welcomed the changes, but asked for more public education measures. Agreeing that the changes were complex, Dr Ng said simple cartoons would be used to convey messages and more roadshows would be organised. He will also deliver a ministerial statement in Parliament on Sept 17.

Source : Today - 28 Aug 2007

Bill aims to protect interest of minority and majority owners through step-by-step policy

THE law on en bloc sales looks set to be beefed up, on the back of lessons learnt from the many tussles of the past year.

When the Bill to amend the Land Titles (Strata) Act was introduced yesterday in Parliament, it contained far more rules than the Ministry of Law (MinLaw) had proposed five months ago.

This, on the back of over 400 suggestions it received during public consultation in April and May. Then, the ministry called for a further round of focus group discussions with stakeholders.

The result? Not only a new balance between the interests of minority owners objecting to a sale and that of their majority neighbours — MinLaw’s stated intention from the start — but also, a step-by-step policy to govern en-bloc sale proceedings.

The current lack of regulations has led to growing complaints by residents about the conduct and validity of collective sale agreements. At Gillman Heights in Telok Blangah, for example, objections have been filed to the Strata Titles Board about how the sale is being apportioned, among others.

The new rules attempt to address this by involving owners in the important decisions of an en-bloc sale — from the formation and composition of the sale committee, to the governance of the committee’s proceedings.

One of the new “main purposes” of the 42-page Bill is to enable any subsidiary proprietor who has signed a collective sale agreement to retract his agreement to sell.

This can be done within a cooling-off period, similar to provisions for timeshare and direct sales here and property transactions elsewhere, such as in Australia.

For future en-bloc sales, owners have five days and can exercise this right only after signing the agreement the first time. In theory, this would address complaints that owners are forced to sign agreements. For example, Today has reported on such complaints at Minton Rise in Hougang.

Another requirement, devised to tackle allegations of duress or misrepresentation, is to ensure a lawyer is present when an owner signs an agreement, if done in Singapore — so that the legal terms and liabilities are explained and the latter’s doubts addressed.

Even so, the en-bloc sale committee must now list all the important elements of the agreement to owners: The reserve price, the apportionment method, the fees payable to lawyers and marketing agents, and so on.

Bernard & Rada Law Corporation associate director M Kumaran, who oversees his firm’s en-bloc cases, believes lawyers will welcome the new Act because of the clarity of the procedures.

“When you have greater room for judgment calls, there’s a greater risk all round,” said Mr Kumaran, who cited two other areas where there is greater transparency under the Act.

The first is as simple as publicising the minutes of the sale committee meetings within a certain period, while the other is as significant as regulating the mode of sale.

MinLaw has revised the Bill so that every sale launch must be by public tender or auction. While the sale committee can engage in follow-up negotiations with any bidder, a sale by private treaty must be concluded within 10 weeks of the close of the tender/auction. Otherwise, the committee must go back to the tender results or launch again.

This helps owners to know better if they are getting the best sale price, said Mr Kumaran.

In his experience, buyers prefer private treaties because it gives them more control of the bidding process. While popular developments are more competitively sold through tender, it is also not uncommon for these to be concluded via private treaty before the end of the tender, he said.

Research director Nicholas Mak of property consultancy Knight Frank believes the en-bloc process “may be lengthened” with the additional requirements to be met and with greater involvement of owners.

For example, the decision to form a sale committee and the election of its members can only be done at a general meeting of the management corporation, not on an ad-hoc basis.

The committee must bring up the appointments of the property consultant and the lawyer at a general meeting before it makes its decision. Owners can even decide to take away these decision-making powers.

MinLaw has also specified the eligibility criteria for election to the sale committee, and made clear it cannot use the funds of the management corporation for its activities.

Other feedback MinLaw has considered includes the additional consent requirement by owners. It had proposed, in addition to the threshold of 80-per-cent consent based on share value, that 80-per-cent consent by number of units also be required.

It has now amended this second requirement to 80 per cent by area, and 90 per cent if the development is less than 10 years old. This will largely apply to mixed developments with residences, offices and shops, mitigating the shift in interests from commercial owners’ to those of residents.

Source : Today - 28 Aug 2007