LICENSED moneylenders who exploit HDB resellers are advised to curb their activities: The Ministry for National Development (MND) is keeping a close watch on you.

In Parliament yesterday, National Development Minister Mah Bow Tan said: “HDB flats are not meant for short-term profit-taking. They are not meant to be used as collateral for loans, whether to legal or illegal moneylenders.”

He was referring to the unscrupulous practice whereby credit companies work with real- estate agents who connect them with homeowners – for a fee.

A legal loophole allows moneylenders to file a caveat on a flat, which means that they get first bite of profits when the flat is sold.

Mr Mah added that existing measures are inadequate to deal with the problem. He was responding to questions from Madam Halimah Yacob (Jurong GRC), who asked about the MND’s move to regulate real- estate agents more tightly.

Since 2007, the Inland Revenue Authority of Singapore, which licenses real-estate agencies, has received a total of 154 complaints against errant agents.

The MND is also considering “strengthening the regulatory framework…and to raise professional standards in the industry”, the elements of which will be announced “shortly”, said Mr Mah.

However, Madam Halimah pointed out one major loophole which may prevent errant agents from being reported.

“If you are the real-estate agency, I think there will be less reason for you to find fault with your own agents, because that will affect your name.”

Source : AsiaOne – 28 Apr 2010

Market watchers have welcomed proposed changes to the en bloc sale regulations tabled in Parliament on Monday. They said the move is timely and could help stabilise property prices.

Farrer Court was among 111 estates sold at the peak of the en bloc market in 2007.

This year, there are only four deals so far and analysts expect the market to pick up as developers replenish their land bank.

The four en bloc sales this year are Changi Complex, Diamond Tower, Culford Garden and an industrial plot at Jalan Ampas.

And developers may well benefit from proposed new rules that will speed up the collective sale process, such as reducing the number of Extraordinary General Meetings required.

Christina Sim, director, Investment, Capital Markets, Cushman & Wakefield, said: “The truth is that the gestation for en bloc sales is just far too long usually when you get an en bloc ready for marketing. The market may have moved down to ease up and to shorten the gestation period is a good thing for the developers.”

Smaller developers, currently priced out of the state land market, may also benefit.

Observers also support rules to make it harder to restart an en bloc process after a failed attempt, including a two-year restriction period.

Tan Hong Boon, deputy managing director, Credo Real Estate, said: “This is a safeguard to the owners to minimise interference into their lives for certain projects or owners are too eager to re-initiate the en bloc process right after the failure. With that higher requirement for requisition, I think that ensures that there is sufficient interest from the owners to move ahead within the two-year period.”

The first re-try to convene an Extraordinary General Meeting to reappoint a sale committee will need the backing of at least 50 per cent share value or total number of owners.

For second or subsequent re-tries during the two-year period, 80 per cent will be needed.

Currently, the requisition threshold is set at 20 per cent by share vale or 25 per cent of the total number of owners.

Analysts said the changes may push up potential land supply and curb runaway property prices.

Some market watchers said about 50 developments are currently in the process of preparing for collective sale and they expect about 20 sites, mostly small and medium ones to hit the market by the end of the year.

Some of the potential en bloc sales this year include Neptune Court, Mandarin Gardens and Meyer Place.

The 528-unit Laguna Park at Marine Parade is also expected to convene an EOGM to elect a sale committee on May 2nd.

The deal fell through last year when they could not find a buyer for the property at S$967 million.

Source : Channel NewsAsia – 26 Apr 2010

The Urban Redevelopment Authority (URA) has launched the first sale site from the upcoming Jurong Lake District.

It launched the sale by public tender after a developer committed to bid at least S$350 million for the land parcel.

The site located at Jurong Gateway Road was made available for sale via the government’s reserve list system since November 2008.

The 99-year-leasehold site has a maximum permissible gross floor area of some 107,000 square metres.

Of that space, at least 30 per cent must be set aside for office use.

The remainder can be utilised as commercial, hotel and or residential space.

The development has a maximum building height of 160 metres above mean sea level and must be completed within eight and a half years.

URA said the land parcel is part of the Jurong Lake District that’s set to be the biggest commercial hub outside the city centre.

It is strategically located next to the Jurong East MRT station in the heart of the Jurong Gateway commercial precinct.

URA added that the site will be an attractive business location outside the Central Business District.

Several government agencies, including the National Development Ministry and its statutory boards, will also relocate their offices to the Jurong Lake District in the near future.

Source : Channel NewsAsia – 26 Apr 2010

ONE easy way to make Cash Over Valuation (COV) more transparent for all resale flat buyers and sellers is for the Housing and Development Board (HDB) to provide better statistics. Currently, the only statistic given by HDB is the median COV.

However, any student of statistics would tell you that a median value without a reported range is almost useless.

Perhaps HDB can learn from the three public universities. The universities report their entry Grade Point Average cut-off median score, the 10th percentile, and the 90th percentile. If HDB were to give these statistics as well, the public would be able to make a better decision.

For example, it makes a big difference if the median was $50,000 with a 10th percentile of $0 and a 90th percentile of $100,000 versus the same median with the 10th percentile at $40,000 and the 90th percentile at $60,000.

This data would paint a more complete picture of the COV.

Source : Today – 26 Apr 2010

The Singapore office market stabilised in the first quarter of this year.

Overall rentals dipped only 1.5 to two per cent compared with the previous three months.

Analysts said they expect rents in the central business district to fall further, as office tenants choose higher quality space.

Market watchers also believe that demand will not keep pace with new supply coming on stream.

Marina Bay Financial Centre and Asia Square will soon be dotting Singapore’s skyline, creating brand new Grade A office space.

Analysts said this will create a flight to quality, where office tenants take advantage of lower leasing rates and the prestige of locating in newer buildings.

Observers said this could affect the Raffles Place district.

“The grade A space market is a very niche market, so the tendency is that the newer landlords in the newer buildings like Marina Bay will have to look to the current Grade A tenants, and so you may see a hollowing out of tenants, Grade A tenants, moving from maybe Raffles Place to the new schemes in Marina Bay,” said Colin Tan, director of Research & Consultancy at Chesterton Suntec International.

Still, for now, demand for prime office space has been holding steady in the first quarter.

According to DTZ Research, the average occupancy rate for Grade A property space islandwide improved to 92.4 per cent, a 0.7 percentage point increase from the previous quarter.

Overall vacancy rates have also stabilised at 12 per cent.

Going forward, analysts said there will be a supply of 2.5 million square feet of office space per annum over the next three years.

“We expect to see demand continuing to grow, but I think it’s not going to be sufficient to match the supply that’s going to come onstream so we expect vacancy rate to go up again and also we forsee that rents are going to fall by about five to 13 per cent in the CBD for this year,” said Chua Chor Hoon, senior director of Research at DTZ.

According to DTZ Research, office rents are expected to bottom sometime in 2011 or by the end of the year, if the economy grows more strongly than expected.

Source : Channel NewsAsia – 1 Apr 2010