THE latest Citi Financial Quotient (Fin-Q) Survey by Citigroup on Singaporeans’ financial well-being and attitudes has found that general sentiment is perking up in tandem with the economic outlook and improving financial markets.

According to the survey, more Singapore residents are willing to invest and grow their wealth, albeit with greater caution.

Of the 40 per cent of respondents who ceased investing during the financial crisis, 13 per cent have resumed investment, while 31 per cent are open to doing so once an appropriate opportunity arises. Furthermore, one in five respondents continue to prefer holding their savings in cash or near-cash equivalents.

Additionally, survey findings also hinted at a resurgence in risk appetite.

Respondents who were investing or open to investing showed the most preference for equity instruments such as stocks as part of their portfolio (54 per cent), while 28 per cent picked mutual funds and unit trusts.

Lower-risk instruments such as corporate and government debt attracted 19 per cent each, with 20 per cent showing interest in buying property for future sale and rental yield as a potential area of investment.

However, respondents allayed their willingness to invest with increased wariness, with 25 per cent claiming greatly increased levels of caution, and 42 per cent saying that they were a little more cautious with their investment decisions.

The increased caution jibes with the survey’s findings that only 39 per cent of its respondents believe that the worst of the financial crisis is over.

Results also showed that Singapore residents’ top three financial concerns were rebuilding their savings, meeting monthly expenses, and greater retirement savings.

Six out of ten of those surveyed felt that their finances had been affected by the recent crisis, while 39 per cent said that their retirement savings had suffered serious losses due to it.

Respondents also recognised that their Central Provident Fund (CPF) monies required supplementation with their own retirement savings, with 73 per cent indicating that CPF funds will provide ‘only some’ or ‘very little’ of their necessary income in later years.

Following the financial crisis, Singaporeans continue to have concerns about how they spend. Three- quarters indicated that they had reduced non-essential spending, with 48 per cent putting off trips.

Shrikant Bhat, head of wealth management at Citibank Singapore, commented: ‘The survey accurately reflects the current investor sentiment in Singapore. With confidence and stability returning to markets, there is a discernible increase in willingness amongst investors to assume a little more risk.

‘However, it is also true that investors are asking a lot more questions about the products they buy and are making more informed investment decisions,’ he added.

Source : Business Times – 5 Jan 2010

JTC is looking to overcome Singapore’s chronic land shortage problem by using two radical land-optimisation concepts.

The industrial land agency has come up with what it terms the ‘cluster industrial complex with mega-hoist’, and the ‘plug-and-play factory’.

The first proposes the use of mega-hoists – commonly used in port operations – which would permit containers to be hoisted from ground level to the ‘doorstep’ of each floor of a complex and eliminate the need for ramps.

This mechanism is better equipped for multi-storey buildings and enables JTC to consider constructing taller ones on a plot of land, reducing land usage by 0.5ha.

JTC’s existing pioneering stack-up facility, Woodlands Spectrum, has a plot ratio (the gross floor area of a building divided by the site area) of 2.04, but a mega-hoist in a stack-up facility would take this ratio to 2.5.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak described the concept as ‘radical’ but not necessarily without problems. ‘With many small users, there might be a long queue for the hoist during certain peak hours, resulting in a bottleneck,’ he said.

Savills’ director of industrial services Dominic Peters expressed similar concerns. ‘Given time taken with a hoist, it may not be as productive as a typical ramp.’

The second concept, the plug-and-play factory, is designed for industries such as oil, gaS and aerospace, where operations cannot be conducted in multi-stacked facilities.

It greatly reduces the quantity of land used for an industrial development via the use of shared services and what is called co-location.

Companies have to share a centralised ‘backbone’ that comprises warehousing and logistic facilities, as well as a workers’ dormitory.

Factories are located alongside, with each plugging into the backbone’s services. Such an integrated facility would enable more factories to be built on a smaller piece of land, with land use cut by 35 per cent.

Mr Peters added that ’stand-alone facilities are important due to business secrecy’ and confidentiality, and competition may not favour co-locating.

It is thought that the centralised housing for foreign workers envisaged by the approach may provide a solution to the ongoing problem of finding suitable accommodation for migrant workers.

JTC is currently conducting a feasibility study of the two concepts, which it expects to conclude by the end of the year. Ms Josephine Loke, director of land planning at JTC, said that the key is ensuring operating costs did not increase for industrialists.

She disclosed that the techniques would most likely be tested in Jurong first and, if successful, then rolled out to industrial areas in the east.

Source : Straits Times – 5 Jan 2010

HOUSING Board (HDB) resale flat prices continue to climb ever higher, with prices in the fourth quarter of last year setting a new record.

Flash estimates released by the HDB yesterday show prices rose by 3.8 per cent in the fourth quarter, bringing last year’s total price rise to about 8 per cent – a surprise outcome for many property experts who had predicted price falls at the start of last year.

The Resale Price Index (RPI) hit 150.7 in the fourth quarter, up from the third quarter’s 145.2 and far beyond the previous peak of 136.9 achieved in the fourth quarter of 1996.

HDB flat prices have risen almost 40 per cent over the past three years.

Private home prices put on an even more impressive 7.3 per cent rise in the fourth quarter of last year compared to the third. This came on top of a 15.8 per cent gain in the third over the second quarter.

Urban Redevelopment Authority estimates released yesterday showed private home prices rose about 1.7 per cent over the whole of last year.

Analysts say the skyward rise in prices is down to demand outpacing supply.

A quicker-than-expected economic recovery during the year and a booming immigrant population, with many new families and expatriates relocating to Singapore post-economic crisis, contributed to the strong demand.

PropNex chief executive Mohamed Ismail said that permanent residents easily made up 20 per cent of his agency’s total HDB sales.

At C&H Realty, this group of buyers account for as many as 50 per cent of all HDB resale transactions, revealed managing director Albert Lu.

Mr Patrick Grove, executive chairman of online portal iproperty.com.sg, said an interesting trend to emerge was the increase in foreigners interested in Singapore properties.

The portal’s traffic from foreign countries grew by up to 20 per cent month-on-month during the second half of last year. This compares to 5 per cent to 10 per cent growth for Singapore-originated searches.

‘There’s more demand for homes now that the worst of the economic crisis is over. Low interest rates are also a key factor, as it’s more affordable than ever to buy a property,’ added Mr Grove.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak pointed out that continued recovery in private home prices meant some home buyers were being priced out of this market, and had to turn to HDB resale flats.

‘As long as the prices of suburban condominiums remain relatively high, there will be space for resale flat prices to expand,’ he said.

Analysts do not see any end in sight to the increase in HDB values. They are predicting price rises in the range of 8 per cent to 15 per cent for HDB flats for 2010.

Mr Lu reckons prices will rise about 3 per cent each quarter. But PropNex’s Mr Ismail predicts a slowdown in the rate of increase – to about 2 per cent during the first quarter of the year.

Despite further flat supplies set to come onstream during the year, Mr Mak expects prices to gain another 8 per cent to 15 per cent this year.

HDB yesterday moved to address supply concerns by announcing it would launch more build-to-order (BTO) flats this year if there was ’sustained demand for new flats’. It would, it added, ‘ensure that there is an adequate supply of flats to meet prevailing housing needs’.

Some 1,300 new flats are to be launched for sale today by HDB in Choa Chu Kang and Hougang.

As an indication of the red-hot demand for homes, there was an overwhelming response to a recent launch by HDB of BTO flats at Dawson, where some flats were more than 11 times oversubscribed.

Industry observers are unsure whether BTO flat supply will have a significant impact on the current high level of demand, given that such flats typically take three to four years to complete.

‘BTO flats do not provide immediate roofs over heads, so resale flats will continue to be in high demand. But the supply of new flats will go towards stabilising HDB resale price increases,’ said Mr Ismail.

Source : Straits Times – 5 Jan 2010

PRIVATE home prices shot up 7.3 per cent in the final three months of last year, allowing 2009 to finish in positive territory after a horror start.

Yesterday’s flash estimates indicated that prices overall increased by 1.7 per cent last year and it was all down to the final, frantic six months.

The 7.3 per cent jump in the October to December period built on a stellar 15.8 per cent surge in the third quarter – the biggest quarterly rise in 28 years and one that ended 12 dismal months of price decline.

‘In a bad year, we still managed to show a 1.7 per cent rise in prices. There’s certainly optimism in the Singapore property market,’ said Cushman & Wakefield managing director Donald Han.

That low overall figure is a stark reminder of how last year shaped up as a year of two halves, with dire results early on and a surge in the second six months.

Mass market housing was the star segment with record levels reached.

The Urban Redevelopment Authority (URA) data yesterday showed that non-landed home prices in the suburbs edged up 5.8 per cent in the fourth quarter. This is far lower than the 16.1 per cent climb in the third but it brought the full-year increase to 11.2 per cent.

‘If you want to go for deep discounts, you can’t find them now in the mass market,’ said Mr Han.

HDB resale prices – up 8 per cent last year to a new high – are helping to support mass market prices, experts said.

Prices of non-landed homes on the city fringes rose 9.5 per cent in the fourth quarter and were up 3.1 per cent overall for the year.

But prices for non-landed city centre homes were down 2 per cent for 2009 although the 7.1 per cent increase for the fourth quarter points to a recovery.

CBRE Research executive director Li Hiaw Ho said the good response to selective high-end projects launched in the fourth quarter, such as Marina Bay Suites, Cyan and Parvis, had fuelled the price rise.

The robust estimates from the fourth quarter last year have boosted confidence for this year, among the experts at least.

Ngee Ann Polytechnic lecturer Nicholas Mak said the 7.3 per cent rise, while smaller than the third quarter’s, was still ‘quite significant’, indicating that there is still sufficient momentum in the market to push prices higher this year.

The Shore Residences in Katong – launched on Jan 1 after a late December preview – did relatively well, selling 183 units out of 338 units that were released.

Overall, experts believe that by the end of the year, prices may have surpassed the previous peak.

Private home prices may rise by about 10 per cent to 12 per cent this year, with a slightly lower increase in the mass market segment and better upside in the high-end segment, experts forecast.

CBRE Research tips a smaller overall rise of 5 to 10 per cent.

PropNex chief executive Mohamed Ismail said prices will head up as more developers will be launching smaller units at higher prices on a per sq ft basis, especially from the second quarter.

While rises are tipped from every quarter, most agree that prices will moderate this year.

Much of the pent-up demand has been satisfied, said DTZ head of South-east Asia research Chua Chor Hoon.

‘There will be less panic or euphoric buying in view of the price increases…in 2009 and the possibility of more government measures if prices run ahead of economic fundamentals.

‘Affordability is a constraining factor in the mass market segment and any price increase in this segment will depend on the job market.’

Source : Straits Times – 5 Jan 2010

THE financial market rebound has put a spring in the step of Singaporeans. They are now showing a greater willingness to take risks with their money.

Investors who had sought refuge in cash and steady yield products like bonds are now looking for higher returns and ways to better grow their wealth, according to a new Citibank survey.

It found that 44 per cent of people who stopped investing in the midst of the economic crisis have now either resumed investment activity or are open to it once the right opportunity arises.

A further 36 per cent of the 400 respondents to the online poll conducted in October last year said they stayed invested throughout the meltdown, while around 20 per cent continue to hold their savings in cash.

The survey findings indicated that for current investors or those open to investing, there appears to be a return in risk appetite.

Shares were the preferred investment for this group, with 54 per cent opting for stocks as part of their portfolios while 28 per cent picked mutual funds or unit trusts.

Lower-risk instruments such as bonds and fixed deposits attracted 19 per cent each. About 20 per cent indicated they had considered buying an investment property.

‘With confidence and stability returning to markets, there is a discernible increase in willingness amongst investors to assume a little more risk,’ said Mr Shrikant Bhat, Citibank Singapore’s head of wealth management.

At the same time, the willingness to invest was also balanced with greater caution, the survey found.

About 40 per cent of respondents said they were a lot more cautious while 42 per cent indicated they were a little more cautious in their investment decisions.

Mr Bhat noted that investors are asking a lot more questions about the products they buy and are making more informed investment decisions.

‘They are also more likely to view their investments within the framework of a holistic portfolio over a longer-term horizon,’ he said.

Financial advisers say the survey bears out what they are seeing on the ground, with investors turning more positive with the better economic outlook.

‘We are getting more calls from clients who are looking to invest,’ said Mr Sani Hamid, director of wealth management at Financial Alliance.

The return of risk appetite is, however, gradual. ‘There is still a lot of retail money sitting on the sidelines which has not come back yet,’ Mr Sani added.

Ms Carol Seah, chief executive of Wynnes Family Office, said some clients are now more cautious, while at the same time more active in their investments because they are becoming ‘more aware’ of what is going on in the aftermath of all the volatility during the financial crisis.

The Citi Fin-Q Survey also showed that the top three financial concerns of Singapore residents are rebuilding their savings, meeting monthly expenses and greater retirement savings.

Source : Straits Times – 5 Jan 2010

Property sales ended the final quarter of last year with a whimper rather than a bang as prices of private homes grew at a slower pace from the previous quarter.

According to preliminary data from the Urban Redevelopment Authority (URA), private residential property prices rose 7.3 per cent in Q4, but this is only about half of the 15.8-per-cent growth posted in Q3 last year. Overall, the property price index increased 1.7 per cent for the full year.

Even with the seemingly moderated Q4 growth rate, this translates to a rise of 18.3 per cent for the index in the second half of last year, a sharp rebound after a dip of 14.1 per cent in the first six months of the year, noted CBRE Research executive director Li Hiaw Ho.

“The good response to selective high-end projects launched in the fourth quarter contributed to this upward surge in home prices,” he added. These projects included Marina Bay Suites, Cyan at Bukit Timah and Parvis at Holland Hill.

Referring to the 7.3-per-cent increase in the price index, PropNex chief executive Mohamed Ismail said it is a sign of “sustainable growth”.

The slowdown in the pace of price increases was most noticeable in the suburban Outside Central Region (OCR) where home prices rose 5.8 per cent compared to 16.1 per cent posted in the third quarter

“This could be contributed by the drop in the number of new major suburban projects launched at relatively high prices,” said Ngee Ann Polytechnic lecturer Nicholas Mak.

CBRE’s Mr Li noted that prices of non-landed homes in OCR have increased by 11.2 per cent for the whole year, outperforming those in the Rest of Central Region and Core Central Region, which rose by only 3.1 and 2 per cent, respectively.

“This is not surprising because some of the mass market and city fringe 99-year leasehold projects have seen their prices cross the $1,000 per sq foot barrier because of their near-city location or if they are near an MRT station,” he added.

Another factor that could contribute to the slow down in price growth was the decline in the level of speculation, added Mr Mak. The proportion of subsales fell from 11 per cent of total transactions in third quarter last year to 10.7 per cent in the fourth quarter, based on current available data.

The Singapore Government introduced measures to curb speculation in the property market last September.

Property analysts say that even with the slowdown in the growth of property prices in the fourth quarter, the figure is not insignificant and indicates that there is still sufficient momentum in the market to push prices to higher levels this year.

“It is projected that by the before the end of 2010, the previous peak in private home prices achieved in mid-2008 could be surpassed,” said Mr Mak.

CBRE’s Mr Li said that more high-end projects, acquired through earlier collective sale activity, are expected to be launched in the first half of this year.

Source : Today – 5 Jan 2010

They rose 7.3% in Q4, while HDB resale prices also continued to climb

Private home prices continued their ascent in Q4 last year, climbing an estimated 7.3 per cent from the previous quarter. This sent prices for 2009 up 1.7 per cent from a year ago, defying bleak prognoses of double digit falls when the financial crisis unfolded.

Resale prices for public housing were also on their way up in Q4, rising 3.8 per cent from the previous quarter. Year-on-year, the index gained 8.1 per cent to hit a record high.

With economic skies clearing, property consultants expect to see further price increases across the property market this year. For private housing, more activity could also come from the prime segment.

‘More high-end projects, acquired through earlier collective sale activity, are expected to be launched in the first half of 2010,’ said CB Richard Ellis executive director Li Hiaw Ho.

Knight Frank managing director of residential services Peter Ow foresees demand returning to the high-end sector, particularly from investors in China and India.

The market outlook has improved sharply from the same time last year.

Then, market watchers worried about the economic downturn and credit crunch were predicting a 10 to 20 per cent drop in the official private home price index for 2009.

That could have materialised if not for an unexpected pick-up in mass-market home sales, which gradually spilled over to the mid to high-end sectors.

In Q3 last year, the benchmark index shot up by 15.8 per cent from the preceding quarter, reversing a year-long decline.

And according to flash estimates from the Urban Redevelopment Authority (URA) yesterday, the index continued to rise in Q4, but at a slower pace, gaining 7.3 per cent from Q3. This brought the index back to a point between Q3 and Q4 2007.

Prices of homes in the rest of central region (RCR) led the growth in Q4, increasing 9.5 per cent from a quarter ago. Prices in the core central region (CCR) and outside central region (OCR) rose 7.1 per cent and 5.8 per cent respectively.

‘The good response to selective high-end projects launched in the fourth quarter contributed to this upward surge in home prices,’ said Mr Li.

For instance, based on URA data for November, 87 units at Marina Bay Suites were sold at a median price of $2,159 psf and 61 units at Espada were taken up at a median price of $2,322 psf.

OCR home prices rose much less in Q4 compared with Q3, when they had jumped 16.1 per cent. Ngee Ann Polytechnic real estate lecturer Nicholas Mak suggested this was because developers launched fewer major suburban projects at relatively high prices.

For full-year 2009, the private home price index notched a 1.7 per cent gain, underpinned by a strong price increase of 11.2 per cent from the OCR region. Prices in RCR grew 3.1 per cent while those in CCR shrank 2 per cent. The index had lost 4.7 per cent in 2008.

Consultants are anticipating larger price increases as the economy recovers. CBRE’s Mr Li believes that residential sales will ‘move at a moderate pace’ this year – 8,000-10,000 new homes could be sold and prices could rise 5-10 per cent.

Knight Frank’s Mr Ow expects private home prices to post an average growth of 10 per cent this year, while Mr Mak foresees a 10-20 per cent increase.

As for the public housing market, the economic whirlwind last year did not stop prices from hiking. Going by HDB flash estimates for Q4, the resale price index reached 150.7 points, up 3.8 per cent from the previous quarter and 8.1 per cent from a year ago.

‘Average prices in the HDB resale flat market continue to gather strength,’ said Mr Mak, attributing this to strong demand from newly-formed families, permanent residents and home seekers who got priced out of the private home market as prices there rose.

Mr Mak believes that HDB resale prices will climb another 8-15 per cent this year, while Prop-Nex CEO Mohamed Ismail tips further growth at 5-8 per cent.

HDB said yesterday that it will offer 1,300 build-to-order (BTO) flats in Choa Chu Kang and Hougang for sale today.

The agency ‘will continue to launch more BTO projects in 2010 if there is sustained demand for new flats’.

Source : Business Times – 5 Jan 2010