Govt will not implement measures to stimulate property sector

Govt will not implement measures to stimulate property sector

 

SINGAPORE : The Singapore government will not introduce measures to stimulate demand or prop up prices artificially in the property sector.

 

Speaking at an industry event on Wednesday, National Development Minister Mah Bow Tan said such efforts are not sustainable. However, the government will study suggestions by market players on how to help the property sector.

 

Developers are feeling the heat from the economic downturn, credit crunch and poor consumer confidence, and many new project launches have been shelved.

 

To boost property demand, some developers hope the government could relax some of its policies, such as reviving the Deferred Payment Scheme, reducing the development charge rate and introducing property tax exemptions.

 

But the national development minister said there are limits to what the government can and should do.

 

Mr Mah said: “We cannot dictate to banks that they should extend loans to companies or individuals with weak financial standing. Any measure seen to be knee-jerk or excessive might even weigh market sentiment down further.

 

“It is in our interest to ensure that the property prices move in line with economic fundamentals, as it affects home ownership, asset values, retirement savings and other sectors of the economy.”

 

Mr Mah said the government will not hesitate to act if needed. It could roll out public sector projects which have been deferred to boost the industry when construction costs come down, and the pressure on manpower and building materials ease.

 

The deferred projects are worth some S$4.7 billion. They include the construction and upgrading of schools, civic and community institutions, as well as other public infrastructure.

 

Mr Mah said a number of major projects secured in past years will also create jobs and sustain capital spending in the economy.

 

Together, the real estate services and construction sectors accounted for about 9.6 per cent of overall GDP and 13 per cent of total employment in Singapore in 2007.

 

The Real Estate Developers’ Association (REDAS) said market stability and restoring confidence are important in helping the sector weather the economic storm.

 

REDAS added that developers should take this opportunity to improve their products and get ready for the next upturn.

 

“Pricing alone does not lead to sales volume; sentiment and confidence leads to sales volume. A tripatite plan of action is needed between developers, financiers and the government through moderating new supply, shoring demand and introducing fiscal measures to help ease funding for the industry,” said Simon Cheong, president of REDAS.

 

The association said it will work closely with the government to provide timely market feedback. Despite the tough times, REDAS also hopes developers will continue to drive sustainable development.

 

Source: Channel NewsAsia

Singapore cuts GDP forecast, says economy could contract in 2009

Singapore cuts GDP forecast, says economy could contract in 2009

 

SINGAPORE: Singapore on Friday further downgraded its growth forecast for this year and said the economy could contract in 2009, after weaker than expected third-quarter GDP figures.

 

Next year, the city-state expects its GDP to range between a contraction of 1.0 per cent and growth of 2.0 per cent, in view of increased uncertainties in the external environment.

 

In a statement released on Friday, Singapore’s Ministry of Trade and Industry (MTI) said it has also moderated the GDP growth forecast for 2008 downwards to around 2.5 per cent.

 

This year’s growth forecast was earlier revised from 4 to 5 per cent to around 3 per cent in October.

 

MTI said economic growth in the developed economies had slowed down, with several countries already in recession.

 

Consumer and business confidence indicators across the major economies are weak. The contraction in global demand has hit regional economies too.

 

As a result, Singapore’s trade volumes and other indicators of regional demand, including visitor arrivals, have fallen.

 

MTI said all these developments would further dampen Singapore’s economic growth in the remaining months of 2008.

 

In releasing its third quarterly report, MTI said Singapore’s GDP contracted by 0.6 per cent in year-on-year terms.

 

On an annualised quarter-on-quarter basis, growth declined by 6.8 per cent, compared to a fall of 5.3 per cent in the second quarter.

 

MTI said the largest contraction came from the manufacturing sector, with the decline led by the electronics and biomedical sciences (BMS) segments.

 

It said growth in the services sector had started to moderate. Services-producing industries grew by 5.3 per cent in the third quarter, compared to 7.1 per cent in the previous quarter.

 

MTI said the plunge in stock markets worldwide since mid-September and disruptions in the global credit markets started to affect many of the services and trade-related sectors, especially financial services, wholesale trade, and transport and storage.

 

It added that Singapore’s economy is expected to face a broad-based slowdown in 2009, with the financial services sector expected to remain weak in 2009.

 

For 2009, inflation has been revised downwards from 2.5 to 3.5 per cent to 1 to 2 per cent, due to falls in global commodity prices and the lower than expected annual values of public housing properties.

 

The Monetary Authority of Singapore says it is comfortable with the current monetary policy stance, and has no plans to change it before the next review.

 

Source: Channel NewsAsia

Singapore’s economy could shrink by as much as 1% in 2009

Singapore’s economy could shrink by as much as 1% in 2009

 

Singapore’s economy could shrink by as much as 1 percent next year, the first full year contraction since 2001.

 

Giving its forecast today, the Ministry of Trade and Industry, or M-T-I, says next year’s economic performance will likely come in between minus 1 and plus 2 percent.

 

MTI says Singapore’s economy is expected to face a broad-based slowdown next year, due to increased uncertainties in the external environment.

 

Speaking in a briefing this morning, MTI Permanent Secretary Peter Ong said the ministry expects weak or no growth in many key sectors in the Singapore economy, well into next year.

 

“Our financial services sector will feel the impact more keenly in the next few quarters. Markets will remain volatile in the coming months. In the domestic lending segment, there are already signs of easing in demand for credit alongside the broader slowdown in the economy. The declines in property prices will also affect the real-estate related sectors of the economy. Global travel will also see weak growth next year, which will affect our hotels and restaurants sector, as well as our retail sales.”

 

Mr Ong said the government has lowered its official growth forecast for this year once again — the 4th time this year.

 

It’s now expecting GDP expansion to be around 2.5 percent, down from an earlier forecast of 3 percent.

 

GDP in the third quarter shrank 0.6 percent on-year and 6.8 percent from the previous quarter.

 

MTI said the largest contraction came from the manufacturing sector while growth in the services sector has also started to moderate.

 

Analysts such as OCBC economist Selena Ling say this suggests fourth quarter growth will be negative as well.

 

“We do think that Q4 growth is going to be negative, if anything it’s probably going be a sharper contraction compared to the 0.6 percent drop year-on-year that we saw in Q3. I think it’ll be a combination of a broadbased weakness. Manufacturing is obviously going to be weak due to the holiday season weakness and then on the services side also because of all the bad news that we’ve been hearing out of the equity markets and from the corporate sectors as well.”

 

Despite the weak outlook, the government said the fundamentals of the economy remain strong and that Singapore continues to have a strong pipeline of investments.

 

In fact, the Economic Development Board says it’s on track to meet the fixed asset investment target of 17 to 19 billion dollars set at the start of this year.

 

The labour market however is expected to come under increased pressure given the fragile economic conditions.

 

MTI expects the jobless rate to climb next year with more layoffs to come, especially in the financial and manufacturing sectors.

 

Source: 938Live

Experts hope for stimulus package for property market in Budget

Experts hope for stimulus package for property market in Budget

 

SINGAPORE : Property watchers and players in Singapore are increasingly hoping for some help from the government to boost the sluggish residential sector.

 

New private home sales this year look set to hit their lowest levels since the 1997 Asian financial cisis. And the outlook is weak, amid the global downturn.

 

Only 3,900 new private homes have been sold year to date. Property watchers said this could be the first time in 11 years that sales for the year totalled below 5,000.

 

Consultants from Chesterton Suntec International pointed out that property advertisements have come down to a trickle, a signal that developers recognise that buyers will not be easily persuaded. This situation is unlikely to change before the year runs out.

 

Property agents said they are hoping for some market stimulus in the upcoming Budget announcement, while developers said they want some help in cushioning the impact of a poor market.

 

“We’re looking forward to the government’s proposed Budget in January for stimulus package, a package that could revive the activity in the residential property market,” said Donald Han, managing director of Cushman & Wakefield.

 

This could be in the form of reviving schemes that have helped the market in the past.

 

Han said: “One of them obviously is for the return of deferred payment. We’re also looking to any reduction in rental levels. Property tax rebates could come from landlords to tenants to reduce occupancy costs.

 

“You’ll see some measures in the past which address downturn period, a cycle like what we’re experiencing right now.”

 

Developers are also hoping for a reversion on new rules like earlier stamp duty payments, and the way the development charge is calculated. They said property tax concessions for vacant land as well as rebates for office buildings would also help.

 

Colin Tan, the head of Research and Consultancy from Chesterton Suntec International said deferred payment is already available on most projects currently on sale, and without it, projects coming on in 2009 and 2010 may see even weaker sale conditions.

 

However, some analysts said the government may have other priorities on its plate.

 

“We saw about 3 or 4 years of very active transactions and price action in the property market, so some degree of consolidation is healthy. In that sense, maybe we should be looking for stabilisation instead of further stimulation,” said Tai Hui, regional economic research head of Southeast Asia at Standard Chartered Bank.

 

Some argued that for now, the bigger picture may be more important.

 

David Cohen, director of Asian Economic Forecasting at Action Economics said: “More important than any fine-tuning in the tax system will be the timing of turnaround in global activity which Singapore doesn’t really have a control over.”

 

The Budget will be announced in January next year.

 

Source: Channel Newspaper

As buildings go up, so does the noise:

As buildings go up, so does the noise:

 

Despite tighter rules and fines, more Singaporeans are complaining aboutdin from work sites

 

THERE has been a steady increase in the number of complaints on noise from construction sites.

 

In the first 10 months of the year, the National Environment Agency (NEA) received 11,327 complaints.

 

Last year, there were 9,230 — a 50 per cent jump from 2006, when 6,160 complaints were received.

 

Minister for the Environment and Water Resources Yaacob Ibrahim gave this update in a written reply to a Parliamentary question by Ang Mo Kio MP Lam Pin Min.

 

Dr Yaacob said one of the reasons for the increase in complaints could be the corresponding jump in construction activity in Singapore. The number of construction sites went up by 22 per cent to about 6,100 last year.

 

Another reason could be higher public expectations for a quieter environment, he added.

 

The Minister said the NEA had tightened the permissible noise limits during night-time and on Sundays and public holidays since October last year.

 

The agency had also doubled the maximum fine for construction noise violations from $20,000 to $40,000.

 

It also takes action against errant contractors who repeatedly violate the permissible construction noise limits by issuing them work restriction orders, limiting their operating hours at the construction sites.

 

As at press time, NEA was not able to reply to Today’s questions on the number of contractors that were found to have repeatedly violated the permissible noise limits in 2006, 2007 and the first 10 months of this year.

 

Neither was it able to say how many work restriction orders had been issued, nor the number of contractors fined and the range of these fines for the same period.

 

The Minister pointed out that noise pollution cannot be eradicated completely as Singapore is a highly urbanised and compact city.

 

He assured the public that his ministry will work closely with the NEA and relevant agencies and stakeholders to review the regulatory framework for construction noise regularly.

 

He added that all complaints against construction noise will be investigated.

 

The public can call the NEA hotline at 1800 2255 632 at any time.

 

Source: Today Newspaper

Retail rents under pressure

Retail rents under pressure

 

Landlords and their retail tenants are seeking the same present from Santa as Christmas approaches — a return to the good times.

 

The shop tenants are worried that there will be a dip in consumer spending as a result of the economic downturn. Meanwhile they are still paying top dollar for retail space.

 

While market watchers say they certainly are not expecting rents to rise in the final quarter of this year, some retailers are actually holding out for concessions.

 

But for the property companies which provide the shops, there is the additional problem of increasing supply: Next year Singapore’s prime shopping district of Orchard Road will welcome four new malls.

 

Among them is the four-storey Mandarin Gallery which is set for a $200 million facelift. It is due to open next October, with 130,000 sq ft of retail space. Rents there range from $12 to $60 per square foot, and about half of the space has already been leased.

 

The landlord, :Overseas Union Enterprise, says it will find ways to help tenants cope with the tougher business climate, but it says cutting rents may not be the best thing to do.

 

The others are Orchard Central, due to open in the first quarter of next year, ION (mid-2009), and 313@Somerset, which is set to open by the end of next year.

 

Many tenants along the shopping belt are locked into their rental rates for up to three years, with the option to negotiate new deals thereafter. And analysts say high-end retailers tend to have the upper hand during such negotiations.

 

Mr Nicholas Mak, director, consultancy & research, at property firm Knight Frank, said: “If the landlord feels that a tenant is important, a part of the mall’s image that he is trying to build, he may be a bit more flexible in the negotiations.”

 

With festive shopping ahead, analysts say landlords might prefer to wait a little, but they expect retail rents to drop by 1 per cent this quarter.

 

Source: Today Newspaper

URA opens two sites for tender

URA opens two sites for tender

 

AS THE slump in demand for state land continues, the Urban Redevelopment Authority (URA) opened applications yesterday for two sites on the reserve list.

 

Prior to yesterday, only one out of the 20 sites on this year’s reserve list — on which sites have to receive an acceptable bid to trigger the tender process — had been sold.

 

And analysts Today spoke to expect the latest land parcels — at Dakota Crescent and Seletar Road respectively — to be similarly left on the shelf for some time.

 

Said Chesterton SuntecInternational director Colin Tan:“I think URA is just going through the motions … There’s no point talking about (the attributes of) any site now. Everything looks a bit gloomy now.”

 

Located beside the Geylang River, the 1.7-hectare site at Dakota Crescent — designated for residential development — sits on the fringe of the city and near the future Singapore Sports Hub. It can generate a maximum permissible gross floor area (GFA) of about 60,164 sq m.

 

The land parcel at Seletar Road is earmarked for a mixed commercial and residential development. Situated at the junction of Yio Chu Kang Road and Seletar Road, the 2.1 ha site has a maximum permissible GFA of about 29,400 sq m.

 

The market has turned drastically in recent months. With banks reluctant to lend, developers also face difficulties in offloading properties on their hands amid sluggish sentiments.

 

As such, any application is unlikely, much less a bid that would meet the URA’s pre-determined — and undisclosed — level. Said Mr Tan: “I cannot see developers pouring money into something when they are not selling.”

 

Knight Frank research director Nicholas Mak added that developers are also wary that market conditions would turn worse next year.

 

====Said Mr Mak: “When developers buy sites, they do so based on future demand … At this point in time, the chances of these sites being triggered for tender is slim, at least for the rest of this year. Everybody is expecting a downturn, nobody would be rushing in to buy the land.”

 

====The uncertain market conditions saw the Government put the brakes on its land sales programme on Oct 31. Among other measures, it moved most of the land sites on its confirmed list — on which sites are released for tender without the need for a price trigger — to the reserve list.

 

====In addition to the Dakota Crescent and Seletar Road sites, four more sites on the reserve list are due to be made available for sale by the end of the year.

 

====Responding to ====Today=== =’s queries on whether it expects to receive any bids for the Dakota Crescent and Seletar Road sites, a URA spokesman said the Government “does not speculate on the bids to be received for the Reserve List sites”. She reiterated that the reserve list system was a “market-led approach whereby a site will only be released for sale if an interested party submits an application with a minimum price that is acceptable to the Government”.

 

Source: Today Newspaper

Private homes sales last month hit a low

Private homes sales last month hit a low

 

YOU might have noticed that there are fewer ads for home launches.

 

Perhaps you have also overheard that some condominiums in a prime area just went for a price you could only dream of a year back.

 

Yesterday, official data bore out the coffee-shop talk that has been making the rounds.

 

Reflecting weak consumer confidence, private homes sold and launched last month plunged to their lowest since June last year, when the Urban Redevelopment Authority (URA) started providing the figures monthly.

 

Only 112 new homes were sold, down by a steep 70 per cent from last month’s 376 units.

 

The number of new units launched dropped by about 80 per cent to 159 units compared to last month’s 767 units.

 

“The financial turmoil has created a great amount of volatility in the markets and buyers now are extremely cautious, refraining from committing in such volatile times,” said Credo Real Estate managing director Karamjit Singh.

 

Just look at the attendance at showflats: The number of visitors has fallen :significantly compared to the same period last year, said HSR Property Group chief executive Patrick Liew.

 

The impact is evident in the :high-end residential market: Only four units changed hands, with the highest price going to a unit in Orchard Scotts at $2,407 :per square foot (psf).:

 

:In the resale market, two units of The Sail @ Marina Bay, a luxurious project that commanded an average of $1,750 psf this time last year, were sold last month for under $1,000 psf: One went for $926 psf and the other, at $986 psf, according to the Singapore Institute of Surveyors and Valuers database, which is updated whenever a successful transaction is recorded.

 

:In these volatile times, foreign investors — who often target Singapore’s luxury property segment — seem to be standing on the sidelines.

 

:“Some of my foreign clients feel it is not a good time to buy a local property now; theyexpect prices to drop further in the next six to nine months,” said Mr Lionel Ng, associate president of Dennis Wee Group.

 

Developers, too, have scaled back.

 

Chesterton Suntec International’s consultancy and research head Colin Tan pointed out that there have been fewer advertisments on property launches.

 

“Those that needed to launch their projects have already done so, and for developers that are undecided, they have decided to hold back their launches because of weak sentiments,” he said.

 

ropNex spokesman Adam Tan said recent news of retrenchments and possible :wage freezes have spooked consumers into cutting back on big-ticket items, including property.

 

:But the URA data suggest that the market for lower-range private homes remains rather active, asabout 80 per cent of the 112 homes sold transacted at below $1,000 psf.

 

For example, eight units of The Peak @ Balmeg — located along Pasir Panjang Road — were sold at a median price of $988 psf.

 

HSR’s Mr Liew feels the mass market will remain resilient amid the downturn, although he foresees next year’s private homes sales falling by :10 to 15 per cent compared to this year.

 

“The sluggish sales momentum is likely to remain for the rest of the year, as macro factors such as economic recession and retrenchment will erode consumer confidence,” said CBRE Research executive director Li Hiaw Ho.

 

“It may well be that the fourth quarter will see a total sales volume of around 500 units, a level that was last seen in Q1 2003.”

 

Source: Today Newspaper

Launches of private homes in October drops almost 80% on-month

Launches of private homes in October drops almost 80% on-month

 

SINGAPORE: Only 159 private homes were launched in October this year – the lowest in more than a year.

 

The slide of almost 80 per cent from the 767 units launched in September was due to poor economic conditions, and the technical recession that has hit Singapore.

 

October’s figure was even lower than the 194 units launched in August 2008, which was traditionally a slow period due to the seventh lunar month.

 

The central region made up almost half of the new launches in October, at 74 units.

 

The number of new homes sold in October also fell to 112 units from 373 a month ago.

 

Homebuyers stayed out of the market in October as confidence was shaken by financial turmoil and news of job cuts. And buyers were only willing to spend on properties that offered value for money.

 

“Price is a factor in today’s market. Projects priced well in very good locations have a strong take-up,” said the head of research and consultancy at Jones Lang LaSalle, Chua Yang Liang.

 

Analysts expect the housing market to stay weak.

 

Dr Chua said: “This pendulum effect we see in supply and demand will continue going into (the) next few months as developers try to ascertain what the demand is. Buyers being sensitive to market news will continue to fluctuate in their behaviour.”

 

Analysts also said new home sales could hit lows not seen since the 1997 Asian financial crisis.

 

“Taking into consideration the continued lack of activity in the next two months going into the end of 2008, we expect total home sales to hit just above 4,000, potentially below 4,500. It will probably be the first time in almost 11 years that new home sales take-up will hit below 5,000,” said the managing director of Cushman & Wakefield, Donald Han.

 

Experts said the earliest recovery could be in mid-2009, if the global economy and stock markets pick up.

 

Dr Chua said: “We have to see the global economic situation coming to more stable conditions before the buyer market would stabilize. Global economic fundamentals must return (and) stock markets must be predictable.”

 

Source: Channel NewsAsia

New home sales in Singapore fell 70% in October

New home sales in Singapore fell 70% in October

 

New home sales in Singapore slumped 70 percent in October compared to September as home buying sentiment continued to moderate.

 

According to URA data, developers sold 112 new and uncompleted private residential homes last month, versus the 380 units sold in September.

 

They launched 159 units for sale, compared to 767 in September.

 

The most expensive unit sold was at the Orchard Scotts development at Anthony Road, which went for 2,407 dollars per square foot.

 

Director of Reseach and consultancy at Knight Frank Nicholas Mak noticed that there were no units sold above 4,000 dollars per square foot in October.

 

This has been so since June.

 

Executive Director at CBRE Research Li Hiaw Ho predicts the sluggish sales momentum will remain for the rest of the year, and this will have a downward effect on prices overall.

 

Source: 938Live