Upper East Coast Properties Looking Bright

Spillover from East Coast has led to prices at Upper East Coast and Bedok to rise, but some projects saw a big jump because of en-bloc rumours.

Upper East Coast:


Bedok:

Foreign Population Crosses 1mil

Estimated foreign population crossed 1 million mark in Jun this year, which grew by 14.9% over a yr, and in the same period, S'pore residents increased by 1.9%. With these, S'pore total population rose by 4.4% to 4.68mil.

Mid-yr Population Estimates:

Date	Total Population ('000) [ Resident & Non-Resident ]	Singapore Residents ('000) [ SC & PR ]
2006	4,483.90	3,608.50
2007	4,680.60	3,675.10
Chg %	4.39	1.85

* SingStat-Population *

Aug US New Home Sales Down

US Aug new homes sales slid 8.3% (lowest in 7 years) at 795k units, down by 21% from a year ago. Median sales price has also dropped by 7.5% compared to a year ago. Inventory fell 1.5% to 529k units.

2Q07 GDP growth at 3.8%, better than 1Q07 at 0.6%.
2Q07 PCE (Personal Consumption Expenditures) price index increased by 4.3%. Minus off volatile food & energy prices, the core PCE increased by 1.4%.
2Q07 consumer spending higher by 1.4%, but slower than 1Q07 increase at 3.7%. Aug figure rose by 0.6% which was higher than Jul increase of 0.4%.

* Bloomberg-Home Sales , CNBC-GDP , Bloomberg-Spending , CNBC-Buy House? , RadarGaga-HPI *

More En-bloc Sales

On-going en-bloc sales:

(1) Chateau Eliza at Mt Elizabeth: $115m - $120m ($2130 - $2222 psf ppr)
Site area 17 997 sf, GFA 54 000 sf and no DC payable.

(2) Toho Garden in Yio Chu Kang: $60.8m ($580 psf ppr)
Site area 86 881sf, plot ratio 1.4 and est DC payable is $9.7m

(3) Vista Park in South Buona Vista Road: $3265.7m ($680 psf ppr)
Site area 319 248 sf, 99-yr leasehold and est DP payable is $37.3m

(4) Katong Mall at East Coast Rd: Est value $175m ($600 - $650 psf)
Site area 78 158 sf, 99-yr leasehold, plot ratio 3.6

* AsiaOne-En-bloc *

Booming Vietnam

Amid booming economy, Vietnam is experiencing crunch in residential properties, office space, hotel rooms, etc. The Asian Development Bank projects Vietnam's economy to grow by 8.3% this year and 8.5% in 2008.

High-end home prices average about US$177 psf in Hanoi, and US$270 psf in Ho Chi Minh City. The Lancaster in Ho Chi Minh City was launched 3yrs ago at average of US$185.8 psf, but recently broke a record of US$464.5 psf. Foreigners, however, are not allowed to buy properties in Vietnam, unless they are residents and even then, they can only buy leasehold.

Vietnam's population is at 86 million and the average age is 24. They are spending money and this generates a growing consumer market.

Short Term Office Site

2nd 15-yr lease office site at Tampines is up for sale to ease the office crunch.
Location: Tampines Ave 5, near Tampines Regional Center
Site Area: 1.15ha
Max GFA: 11 520 sm

The 1st site at Scotts Road received 11 bids and drew a top bid of $37m or $219 psf ppr.
Location: Scotts Rd, near Newton MRT
Site Area: 1.04ha
Max GFA: 15 666 sm

Expectations for Tampines site:
- Mr Donald Han, MD of Cushman & Wakefield: $17.3m - $20m (ie $140-$160 psf ppr)
- Mr Nicolas Mak, Dir of Knight Frank: $24.8m - $32.2m (ie $200 - $260 psf ppr)

* URA-Tampines *

*** Updated on 6 Nov 07 ***

Tampines site received only 1 bid of $10m ($80.6 psf ppr), way below the expectations.

Aug CPI at 2.9%

Aug CPI: 104.5
Mth-to-Mth: 0.3% (Last mth: 2.1% due to GST hike)
Yr-to-Yr: 2.9% (Last mth: 2.6%)
1st 8mths 2007: 1.3%

Top 3 highest increase on yr-to-yr:
1) Healthcare 6%
2) Recreation & Others 4.4%
3) Transport & Communication 3.4%

As oil prices hit record highs, inflation is expected to rise further.

* SingStat-Aug CPI , AsiaOne-CPI , RadarGaga-Jul CPI *

*****

Ouch! My pocket!

26 Sep 07:
While inflation for Healthcare continues to be on the top list ... ...

$2b will be used to build more medical facilities over 8 years to cater for growing & greying population and to tackle emerging problems such as gambling addictions. "The expansion in infrastructure will in turn push up our operating budget which will have to be jointly funded by all the stakeholders: government, employers and patients."

* AsiaOne-Speech , AsiaOne-Medical , CNA-Medical *

*Gulp* We pay for growing old, we pay for increasing population, we pay for gamblers, and not forgetting we oso pay for more contagious, more advance, and more common viruses and illnesses.

Why are we seeing more people falling sick or getting illnesses at a younger age than the older generation? Are we getting more vulnerable to diseases/viruses? Are we getting more unhealthy due to the food we take or the way that food are produced? Are we getting more cautious that we rush to clinic/hospital at a slightest discomfort? Are we getting into the habit of labeling that we give names to every illnesses & then setup specialisation centres?

If one has unfortunately gotten a long-term or serious illness and is not financially sound, one either depletes his/her savings on medical and leaves little for old age; or suffers & dies at a younger age (than forecast). So, does the money that we work so hard for really give us a chance for enjoyment?

Fed Cut Interest Rates by 0.5

Stocks rose upon US Fed announcement of a 0.5 cut in its lending rate, in view of tightening credit-market and housing slump that will affect the US economy. The interest rate was cut from 5.25% to 4.75% which was the 1st cut in 4 years.

With this,
- US$ declines to 15-yr low
- Oil price raises to record high above $82/barrel

* Bloomberg-Fed , Bloomberg-Asia Stocks , CNBC-US$ , CNBC-Oil *

*****
Many must hv popped the champagnes and watch the bull runs today ... ...

Major CPF Changes

(1) Work Longer
(A) Re-employment Legislation (wef 2012)
From 2012, employers are to offer re-employment for those reaching 62 to work till age 65, and later to 67.

(B) Workfare Increase (wef Immediate)
Workfare Income Supplement (WIS) will increase from current $100/mth, and the 1st payout will be in Jan 2008.
(i) >60 years old: $200/mth
(ii) 56-60 years old: $150/mth

(2) CPF Returns
(A) Extra Interest Tier (wef Jan 2008)
Additional 1% interest rates for the 1st $60k in combined accounts (max $20k from OA). Interest earned will go into SA or RA.
(i) CPFIS Restrictions (wef Apr 2008)
The 1st $20k in both OA and SA will not be allowed for CPFIS.
Money already invested will not be affected.
(ii) OA Remains at 2.5%,
Also no change to HDB concessionary loan interest rate.

(B) SMRA Interest Rates Peg to Government Bonds (wef Jan 2008)
SMRA will peg to the yield of the 10-year S'pore Government Securities (10Y SGS) + 1%. The Government will keep 4% floor for the 1st 2 years, after which, the 2.5% floor rate will apply for all accounts.

(3) Draw-Down Age (DDA)
2007: 62
2012: 63
2015: 64
2018: 65

For those affected by deferment of DDA:
(A) D-Bonus
- For those age 50-57 in 2007 (Payout for age >55 on May 08, the rest will receive it at age 55)
- Capped at $30k
(i) 54-57: 5% of RA
(ii) 52-53: 4% of RA
(iii) 50-51: 3% of RA

(B) V-Bonus
- For voluntarily deferment
- Bonus will be given for each year of deferment, up to age 65
- 2% of RA, and capped at $30k

[Note: OA-Ordinary Account, SA-Special Account, RA-Retirement Account, SMRA-Special, Medisave and Retirement Accounts]

* MOM-CPF Reforms , MOM-Reforms (Slides) , AsiaOne-CPF , MrBrown-CPF *

Internation Schools Here Are Expanding

To cope with rising expat population in Singapore, at least 4 international schools are expanding their campuses and 1 new player is setting up a campus here next year.

- Australian Int'l School at Lorong Chuan will expand by mid 2008 to increase its intake by another 840 students. Currently, it has 1750 students from 40 countries. Waiting list: 400 students.
- Canadian Int'l School's 4th campus at Tanjong Katong will open for 1000 students this week. A central campus at Jurong West, which will have a capacity for 2000 students and be ready by Aug 2009, will house all students from its current 3 campuses of 1600 students. Waiting list: 200 students.
- The Global Indian Int'l School has about 4000 students in its Queentown and East Coast campuses. It is looking into setting up a 3rd campus in central S'pore.
- DPS Int'l School at Upper Serangoon has 1300 students from 28 countries, and planning a 2nd campus early 2008 in the east.

A new international school from Bangalore's National Public School, NPS Int'l School, will open for enrollment in Jan 2008.

1st Major UK Victim of Credit Crunch

Bank of England has pledged to provide emergency funds to Northern Rock as customers flocked its 76 branches to withdraw their savings last Friday. The UK's 3rd largest mortgage provider is the nation's 1st major victim of the global credit crunch and the nation's biggest bailout of a financial institution in 30 years. This shows that credit crunch can cripple a firm even without direct exposure to the US sub-prime mortgage market.

* Bloomberg-NR , BBC-NR *

*****
R things getting out of control with credit crunch???

18 Sep 07:
It is great to see the community is supporting the bank ... Bloomberg-NR.

Jul Retail Sales

Retail sales fell by 14.7% (to $2.6b) in July after Great S'pore Sale & pre-GST spike in June ($3b). Yr-on-yr retail sales dropped about 1.7%, mostly due to large fall in motor vehicles sales. Most retail sectors, however, posted higher sales over a year.

* SingStat-Retail Sales *

S'pore Labour Statistics

Jobs created:
1H07: 1113 800 (1H06: 81 500)

Job vacancies:
2Q07: 37 400 (1Q07: 32 200)

Unemployment rate:
2Q07: 2.3% (1Q07: 2.9%)

Wage increase (yr on yr):
2Q07: 8.5% (1Q07: 5.5%)

Labour productivity (yr on yr):
2Q07: 0.4% (1Q07: -1.3%)

Unit labour cost:
2Q07: 5.7%

Wages increase has achieved its largest rise in 2Q07 since 7yrs ago. However, a higher labour costs could damp the economy. 2Q productivity has risen by 0.4% which helped to ease the rise in overall unit labour cost.

Demand for Shophouses

Steep demand for shophouses has led to an increase in sale prices and rents, as SME companies turning to them due to short supply of office and high office rents.

8 shophouses in Telok Ayer St sold for $18.6m in Nov05, fetched $35m in Mar this year. Also, in an en-bloc sale of 4 units (6311sf) at Tras St, the transacted price was $7.7m in Nov06.

Shophouses rents at downtown areas (Tras St, Boon Tat St, Amoy St, Telok Ayer St) are commanding at $5-$6 psf/mth now, while fringe areas such as Beach Rd, rents have up from $2-$3 psf/mth to $3-$5 psf/mth.

However, shophouses rents are still much cheaper than office rents, which can be at $12-14 psf/mth in CBD and at $6-$8 psf/mth in fringe areas.

*****
Tink i saw tis in the newspaper recently, SingPost sold their HDB shop at Clementi Central at $8m. Also, SingPost reported in their annual report 06/07, the Hougang South shop was sold at $2.2m and Marine Parade shop at $5.7m.

CDL Won Iconic Site at Beach Road

The hotly contested Beach Road site, viewed by the players as the last major iconic site in town, was awarded to CDL-led consortium at $1.689b. This works out to $1068.60 psf for the potential GFA of 146 827 sqm.

To be known as South Beach, the 3.5ha site of 99-year leasehold shall hold premium office space, 2 hotels, shops and city residences. 2 tower blocks of 45 and 42 storeys will be built and the 4 conserved military buildings will be restored by 2012.

* CDL-News , URA-Award , URA-Images , AsiaOne-News *

*****
Nice, nice and vy good location ... ... if oni i got $$$ to buy :( .

Strata Landed Homes

What are strata-titled landed homes or cluster housing projects?

Strata-titled homes are homes like terraces/bungalows build on a land that is owned and shared by all the owners (just like condo). Thus these homes come with strata titles and not land titles. Communal facilities and security features may be included in a project.

With such a title, these cluster projects can go for collective sales if minimum consensus is reached (ie 80% for projects >10yrs, and 90% for projects <= 10yrs). Owners are not allowed to tear down and rebuild their houses, or make any A&A. However, foreigners may find it easier to get approval to buy these landed homes.

Some cluster housing projects:
(1) Bungalows @Hua Guan Ave
6 FH bungalows from 4200 - 4500 sf. ~$1,280 psf of built-up area or >$5.4m.
(2) Dunsfold 18 @Dunsfold Dr
18 FH bungalows from 4,155 - 4,499 sf. ~$780 psf of built-up are or >$3m.
(3) Siglap 33 @Siglap Hill
6 FH bungalows from 3,498 - 4,284 sf.
(4) Westmont @West Coast Rd
9 FH terraces and 2 semi-D. Terraces from 2,820 - 3, 498 sf, Semi-D from 2,949 - 3,079 sf.
(5) Dalla Vale @Springleaf Ave
60 semi-D from 3,218 - 3,261 sf, >$2.1m.
(6) Lornie 18 @Lornie Rd
18 FH bungalows from 4,392 - 4,930 sf, ~$1,150 psf of built-up area or >$5m.
(7) Hillcrest Villas @Hillcrest Rd
168 LH terraces, ~3,100 sf.
(8) Illoura @Old Holland Rd
28 FH Semi-D, ~4,000 sf, >$4.5m.
(9) Kings' 8 @Kings Rd
8 FH detached house from 4,898 - 5,414 sf, >$5.25m.

US August Jobs Data

The surprised 4000 US job cuts in Aug, 1st time in 4 years, has set fear that the recent market turmoil has spread to a wider US economy. Economists are expecting Fed to cut interest rates soon, which has been held for over a year at 5.25%.

Ave hourly earnings rose to US$17.50, a 0.3% increase fr July and up 3.9% on yearly basis. Unemployment rate continue to hold at 4.6%.

* Bloomberg-News , BBC-News , AsiaOne-Rates *

*****
My guess for interest rates cut: 0-0.25% ... ...

Economy Forecast

A quarterly survey of 18 economists by the Singapore Cenral Bank forecast Singapore economy growth at 7.5%, up from 6% in June poll. In his National Day Rally speech, PM Lee raised the annual growth forecast for the next 5 to 10 years to 4%-6%, up from 3%-5%.

Forecast for 2007:
- Growth 7.5% (up fr June's 6%, and 2006 at 7.9%)
- Construction 15%, Financial Services 13.5%, Manufacturing 7.2% and non-oil domestic exports 6.2%
- Unemployment 2.5% (2Q at 2.4%, lowest in 6 years)
- Inflation 1.5%
- S$1.50 against US$1

Q2 private home prices at its fastest pace in 8 years, while office rents in CBD are at 10 years high. Economists forecast GDP to expand 6.5% in 2008.

Quote:
"Despite the rosy prospects, we believe in “Being Prepared”, as the scouts would say."
~ Goh Chok Tong (Chairman, Senior Minister) in MAS' 2006/2007 Annual Report

* MAS-Opening Remarks , AsiaOne-Economy *

*****
For tis yr, the outlook still rosy provided tt the sub-prime mortgage thingy is under ctrl. Now banks are oso more cautious in their lending.

* AsiaOne-Banks *

HDB Lease Buyback Scheme

The proposed HDB lease buyback scheme could benefit as many as 25k elderly. It is to supplement the retirement savings of older, low-income owners while allowing them to continue living in their homes.

The Government will shorten the lease to 30yrs and buys back the remaining lease. Should the owners outlived the 30yrs, they will still have a place to stay, but may not be their own homes.

The amount of the buyback will subject to market value, and the payouts will be in 3 parts. To encourage people to sign up for the scheme, Government will give out a subsidy to owners.

Eligibility:
1) >=62 yrs old, AND
2) Own 2 or 3-room unit, AND
3) Have had only 1 HDB subsidy.

Payouts:
1) Initial lump sum,
2) Monthly installments over a fixed number of years,
3) An insurance plan that will give owners an income for life after (1) & (2) run out.

* AsiaOne-Buyback , AsiaOne-Retirement , iProperty-Resale *

*****
I do wish tt the Govt opens up the scheme so tt more elderly are eligible for it, such as remove the condition of 'hv had only 1 HDB subsidy'.
2 & 3-Rm flats gonna be hot again ... ...

Development Charges Revision

Development Charges (DC) is a tax on the enhancement in land value arising from the change of land use or increase in development intensity.

When compared against the Jul07 DC table (which has already reflected the latest 70% DC levy), the percentage of average rates changed are as follows:

Group A - Commercial: 42%
Group B1 - Landed Residential: 11%
Group B2 - Non-landed Residential: 58%
Group C - Hotel & Hospital: 23%
Group D - Industrial & Warehouse: 2%

[Note: In Jul07, there was an unexpected DC increment fr 50% to 70%. Usually, DC is reviewed and revised in March & September annually]

* URA-DC , URA-DC Table , URA-Grouping , CNA-DC , SLA-Jul DC Incr *

*****
Guess the en-bloc sale will slow down even more (cum Govt's new legistration on en-bloc sale procedure) and relieve a bit on the mkt supply crunch.

* AisaOne-Enbloc Changes , CNA-Enbloc Changes , CNA-Effect *