Category: Property

Singaporeans anxious over high home prices

Some city state residents blame influx of foreigners
Reuters Mar 30, 2011

Wendy Cheng has been trying to buy a home for over two years but without success.

Cheng and her American teacher husband cannot afford property on the open market where a government-built apartment can fetch as much as S$700,000 (HK$4.3 million), and they have been unsuccessful in balloting for flats available from the state at a lower price.

At her last attempt to buy an apartment directly from Singapore’s Housing Development Board (HDB), she was given a queue number of 1,983 for the 200 flats offered, which meant she could get one only if 1,783 of the people before her dropped out.

“It’s like trying to win the lottery,” she said of her efforts to buy her own place, a predicament shared by an increasing number of young Singaporeans who feel they can no longer afford homes, unlike their parents’ generation.

With general elections likely to be called soon, soaring property prices in Singapore pose not just an economic risk but a political issue that could erode support for Prime Minister Lee Hsien Loong’s ruling People’s Action Party.

Singapore private home prices rose 17.6 per cent last year despite government attempts to cool the market in February and August. Resale prices of HDB apartments that house more than 80 per cent of the population gained 14 per cent.

The city state’s median household income rose a much smaller 3.1 per cent, or 0.3 per cent after adjusting for inflation, to S$5,000 a month last year. Singapore, Asia’s second-largest financial centre after Hong Kong, has one of the world’s highest rate of home ownership at 87 per cent, thanks to a home-building programme to provide cheap housing for its citizens that began in the late 1960s.

But the HDB is building fewer flats and charging more for them. Prices of both resale HDB apartments and private property have also soared due to an influx of foreigners in recent years.

“The high property prices, especially for private homes, is a festering source of disappointment, unhappiness and perhaps anger among voters,” said Eugene Tan, a law lecturer at Singapore Management University. “Parents are also concerned with how their children are going to afford comparable homes in the future. The angst and anxieties are made worse by the view that foreigners are pushing up property prices.”

Foreigners now make up 36 per cent of Singapore’s population of 5.1 million, up from around 20 per cent of 4 million people a decade earlier, after the government made it easier for foreigners to work in the country.

Besides the large foreign influx, many Singaporeans also blame higher property prices on the sharp drop in HDB construction after the government agency moved to a build-to-order policy several years ago.

Singapore’s lively internet community, more critical of the government than the city state’s newspapers, note the sharp rise in immigration coincided with a drop in new dwelling homes built by the HDB.

According to HDB data, the government agency completed an average of 3,600 apartments a year between 2006 and 2008 compared with more than 11,000 flats per annum in 2001 to 2005.

“Our pay hasn’t doubled but the prices of flats have more than doubled, even for new HDB flats,” said Cheng is a 32- year-old former teacher who switched to part-time work after she had a baby last year. Her family is living with her parents.

Kelvin Tay, chief investment strategist for Singapore at UBS’ private bank, said property prices were supported by low interest rates and the market could correct sharply if borrowing costs rose to more normal levels of around 3.5 per cent.

The city state’s banks at present pay less than 0.2 per cent annual interest on deposits, while homebuyers can get housing loans for as little as 0.8 per cent per annum for the first year and about 1.5 per cent thereafter. Inflation, meanwhile, is running at 5 per cent.

The low mortgage rates have made prices affordable.

For example, after paying a minimum downpayment of 20 per cent for a S$1 million apartment in the suburbs, the going price for many newly launched flats, a person can borrow S$800,000 over 30 years and pay around S$2,500 a month, assuming a housing loan rate of 1 per cent per annum.

The monthly payments soar to around S$3,600 a month if the rate rises to 3.5 per cent per annum, according to an interest rate table provided by propertyguru.com.sg, a popular internet housing site.

The government is aware Singaporeans are concerned about high home prices, and has stepped up construction of HDB apartments and increased subsidies for first-time homebuyers in the lower-income groups.

It also introduced tough new measures on January 13 that included tougher borrowing limits and a hefty stamp duty of 16 per cent of the selling price for those who buy and sell within 12 months, aiming to clamp down on speculators. New private homes sales remained high at 1,101 flats in February compared with 1,209 in January.

HK's millionaires up by 164,000, but so is number earning under HK$3,500 a month

HK’s millionaires up by 164,000, but so is number earning under HK$3,500 a month
May Chan
SCMP Mar 09, 2011

The property boom and market rebound added 164,000 new millionaires to Hong Kong last year – the biggest increase since Citibank started to analyse residents’ wealth in this way eight years ago.

In the same year, Hong Kong reported 1.26 million people making less than HK$3,500 a month.

Together, the numbers paint a stark picture of a big wealth disparity in the city of seven million.

Citibank yesterday announced the latest findings of its annual survey on the number of Hongkongers with liquid asset of more than HK$1 million.

The city had 558,000 millionaires by the end of last month, up 42 per cent on 2009. This is a record high, in terms of absolute number and the growth rate since Citibank started the survey.

These people now make up 10.8 per cent of the city’s adult population, and the millionaires are getting younger. The average age of the group went down by five years to 46, and the average age of the 164,000 new additions to the list was only 40.

The surge in personal wealth can be attributed to the city’s booming property market. Of the new millionaires, 29 per cent said they made their first million dollars through property transactions – compared with only 8 per cent in 2009.

Most of the newly rich, about 47 per cent, made their fortune last year from investments in the capital market – such as stocks, funds, currency trade and yuan-related investment products. A year ago, the figure was 55 per cent.

Simon Chow wing-charn, Citibank Global Consumer Group’s deputy country business manager, expected the number of millionaires would grow in the next few years because of a strong economy.

He noted the millionaires generally were positive about this year’s property market, with 20 per cent saying they planned to buy property this year, up 8 per cent from 2009.

“The new millionaires tend to be younger, and they are still in the workforce,” Chow said. Twentysomethings should be optimistic about the future – 4 per cent of the new millionaires were aged 21 to 29, he said.

The survey also showed a positive relationship between the level of wealth and the level of happiness. Respondents with less than HK$100,000 of liquidity averaged 5.75 on a scale from 0 to 10 in terms of happiness, while those with HK$5 million or above scored 7.83.

The survey was conducted by the Social Sciences Research Centre of the University of Hong Kong, with 4,626 adults interviewed by phone from December last year to February.

The number of millionaires in Hong Kong, according to survey data, had increased from 260,000 to 558,000 during the period of 2003 to 2010, with a sharp decline in 2008 from 414,000 to 348,000 due to the global financial crisis.

At the same time, the number of Hongkongers earning HK$3,500 or less a month grew steadily in the past decade, from 1.186 million in 2001 to 1.26 million in the first half of last year, according to a study of Census and Statistics Department figures by the Council of Social Service. The projected percentage of poor people went from 17.2 per cent in 2005 to 18.1 per cent in the first half of last year.

According to the latest statistics from the United Nations, Hong Kong’s Gini coefficient – a measurement of social inequality – stood at 0.53, the highest in Asia last year.

Chua Hoi-wai, the council’s business director for policy advocacy, said he was worried that the income gap would escalate with inflation.

“The increase in salary of the poor can hardly catch up with the inflation rate,” he said. “They can hardly manage to pay for their basic needs, so it is next to impossible that they should have spare money for investment and build up their wealth.”

76 Tips for Home Indoor Allergen Control

Authored by Tom Hefter

The following tips have been provided to promote health and wellness and to assist residents, outside of our service area, in the removal of dust mites and indoor allergens from their living environment. These tips are not intended to replace professional mattress cleaners. Always consult your physician when allergies persist.

1. Encase mattresses, pillows, and box springs, within zippered plastic covers, specialty coated fabrics, or finely woven (pore size < 10) vapor permeable fabrics. NOTE: plastic covers make for noisy sleeping areas and it’s possible that dust mite colonies will continue to thrive within your mattress. All you are doing is placing a barrier between you and them. 2. Most widely reported is the suggestion to use non-allergenic, impermeable synthetic fiberfill pillows (easier to wash than feather, kapok, or foam). *** Recent research, reported at the 56th Annual Meeting of the Allergy, Asthma, and Immunology (AAAAI), shows that synthetic pillows may contain more pet allergens than feather pillows. Regardless of its material, if your pillow is washable, wash it regularly. 3. Thoroughly vacuum mattresses, especially seams, perimeter cording, top, bottom, and sides at least once per week using a vacuum equipped with a certified HEPA filter. 4. Vacuum the mattress then use a hair dryer, blowing on high and hot, placed upon different areas of the mattress, will effectively remove moisture and kill some of the dust mites. NOTE fecal pellets and other microbial allergens will still remain. 5. Launder sheets, pillow cases, and mattress pads in very hot, soapy water at a temperature of between 130o-140o F. However, this also requires raising the temperature of your water heater as most water heaters have a preset temperature to avoid accidental scalding (most important if young children are in the home). Additionally, keep in mind that guanine in dust mite feces is not water soluble. 6. After laundering, hang sheets and bed linens outdoors on a clothes line and in direct sunlight. Continue reading “76 Tips for Home Indoor Allergen Control” →

More Ayn Rand

aston_martin_one_77_images_001

“In the name of the best within you, do not sacrifice this world to those who are its worst. In the name of the values that keep you alive, do not let your vision of man be distorted by the ugly, the cowardly, the mindless in those who have never achieved his title.

Do not lose your knowledge that man’s proper estate is an upright posture, an intransigent mind and a step that travels unlimited roads. Do not let your fire go out, spark by irreplaceable spark, in the hopeless swamps of the approximate, the not-quite, the not-yet, the not-at-all. Do not let the hero in your soul perish, in lonely frustration for the life you deserved, but have never been able to reach.

Check your road and the nature of your battle. The world you desired can be won, it exists, it is real, it is possible, it is yours.”

~ Part Three / Chapter 7 This is John Galt Speaking

Ayn Rand

“The world you desired can be won, it exists, it is real, it is possible, it is yours. But to win it requires total dedication and a total break with the world of your past, with the doctrine that man is a sacrificial animal who exists for the pleasure of others. Fight for the value of your person. Fight for the virtue of your pride. Fight for the essence, which is man, for his sovereign rational mind. Fight with the radiant certainty and the absolute rectitude of knowing that yours is the morality of life and yours is the battle for any achievement, any value, any grandeur, any goodness, any joy that has ever existed on this earth.”

~ Ayn Rand’s last public speech (New Orleans Nov 1981)

Ng Teng Fong (1928 – 2010)

The king of Orchard Road
Legendary property tycoon was Singapore’s richest man

ngtengfong

MR SIMON Cheong remembers the day he was discussing the vagaries of the property market with real estate tycoon Ng Teng Fong a couple of decades ago.

‘I was a young banker then, and we were sitting in his office debating supply and demand. Mr Ng then said to me, ‘You sit there arguing with me but just look at my showroom. It is packed,” recalled the chief executive of property developer SC Global.

‘As a young banker, I was analysing things to death but he cut out all the jargon. He could see through noise and spot trends, true hallmarks of a real entrepreneur.’

Mr Cheong, 51, who is president of the Real Estate Developers Association of Singapore (Redas), added: ‘In land tender, he was a world leader. As a property player, he was world class. By any standard, he was clearly an icon.’

Indeed, Mr Ng – who died yesterday aged 82 after suffering a brain haemorrhage late last month – was one of the most astute property men Singapore has seen.

Ranked by Forbes for the last three years as the country’s richest man, with an estimated fortune of US$8 billion (S$11.3 billion), he founded Far East Organization, Singapore’s largest private property developer.

Survived by his wife, two sons and six daughters, Mr Ng did not have much formal education, and was comfortable speaking mainly Hokkien and Mandarin.

That did not stop him from being nicknamed the King of Orchard Road, for his properties that sprouted one after the other in the shopping strip from the 1970s.

The oldest, Far East Shopping Centre, was followed by Lucky Plaza, Far East Plaza, Pacific Plaza. The newest, Orchard Central, opened just last year.

His hotels included the Orchard Parade Hotel as well as the Fullerton Hotel, which turned the old General Post Office into a grand new landmark on the Singapore River.

With subsidiary Sino Group, Mr Ng also became the largest overseas Chinese investor in the Hong Kong property market.

In all, his property empire spanned more than 1,000 hotels, malls and condominiums here and in Hong Kong.

Elder son Robert is in charge of his Hong Kong operations, while younger son Philip oversees Singapore.

In the mid 1990s, the late tycoon moved in to buy Yeo Hiap Seng, a household name for soft drinks and canned food, when the founding Yeo family became mired in factional squabbles.

Yeo Hiap Seng deputy chairman S. Chandra Das said Mr Ng belonged ‘to the pioneer group of Singapore businessmen who didn’t become rich overnight’.

‘He became a tycoon because of his foresight and vision,’ he said.

Mr Ng was born in a small village in Putian, in China’s Fujian province. The eldest of 11 children, he came to Singapore with his family when he was six. He had little formal education, and at an early age was helping at his father’s soya sauce factory and even worked as a bicycle repairman for a while.

Although the family hoped that he would take over the business, the young Ng dreamt of building and selling houses.

By 1962, he had saved enough money to develop a small housing estate behind Serangoon Gardens – 72 single-storey terrace houses which he sold at $20,000 apiece.

He never looked back.

Minister Mentor Lee Kuan Yew has held him up as a role model for entrepreneurs.

‘Ng Teng Fong never went to university (but) I think he has a pretty powerful computer up there when figures are concerned,’ said Mr Lee in 1996.

GK Goh Holdings chairman Goh Geok Khim remembers Mr Ng as someone ‘who spent a lot of time just looking at properties in Singapore’.

‘He lived, breathed and dreamt property. Architects who expected to go for dinner after showing him plans…ha ha…no such thing. He would go over everything with them with a fine tooth comb,’ he said.

Tycoon Kwek Leng Beng, executive chairman of the Hong Leong Group, said he used to be active with Mr Ng in Redas in the 1980s.

‘He was a man who worked extremely hard, day and night,’ he said in a statement. ‘We used to study the property market together at his office while we were dealing with property matters.

‘More often than not, we would find that we were still deep in discussion long after the official Redas meetings were over and everyone else had left.’

In fact, Mr Ng was so passionate about his business that he not only worked 18 hours a day, but also reportedly would take a penlight along when he went to the occasional movie with his wife so that he could do his planning and calculations in the dark.

Fellow hotel and property developer Ong Beng Seng said that although Mr Ng lacked formal education, he made up for it with business acumen and gut feel.

‘He was a legend in property and real estate development and left behind a great legacy.’

Mr Cheong agreed. ‘He went into the Hong Kong property market in a big way in the 1970s when even Hong Kong players dared not.

‘They thought he was crazy. Today, just look at what he owns in Tsim Sha Tsui,’ he said referring to Sino Group’s string of properties in one of Hong Kong’s busiest tourist belts.

Mr Ng was a tycoon who guarded his privacy jealously, and never liked to have his picture taken. As he told The Straits Times in 1981: ‘I’m an ordinary working man. And I often take my $2 mee from the Newton hawker centre after work.

‘If my picture appears in the papers, people will know who I am. I am rich and someone may kidnap me.

‘If someone kidnaps me and I’m killed, all my companies will collapse. And what will happen to my family? I have my worries.’

He had a penchant for racehorses and Rolls-Royces, but he rarely granted interviews. When he did speak to reporters, he delivered piquant quotes.

In a 1996 interview with Apple Daily, the Hong Kong Chinese-language newspaper, he was asked to explain his unerring property picks.

His response: ‘If you want to be in the property business, it is not possible to invest in every region.

‘You open the map. If you can’t see the place (because it’s too small) but only the name, that’s the place to invest in…Singapore and Hong Kong are the best examples.’

On an earlier occasion, in 1984, he said he was not a risk-taker, but ‘a long-term entrepreneur’.

He said he did not believe in developing projects only when the property market was buoyant and laying off people when it was down.

‘It is like saying Singapore Airlines will fly to Hong Kong only when the weather is good, and won’t fly when the weather is bad,’ he said.

His son Philip gave an insight into his father in a speech at the Global Leadership Congress two years ago.

‘My father is a mentor, but a tough one. As you know the term, tough love,’ he said.

‘When I was younger, he’d always tell me, ‘I have to tell you, even if it hurts because only I can tell you. When you’re at the position you’re in, everybody’s going to say nice things to you.”

Moving Schedule

Thursday
Inspect property – done

Friday
Collect keys- done
Visit new home to tailor furniture location – decide which furniture to stay in old home- done
Clean new home and remove debris- done
Do laundry- done

Saturday
Change Locks- done
Visit and clean new home, register Octopuses – done
Locate handover manuals and documents
Decide what to hand carry and pack into rimowa
Decide what clothes and items to give to charity
Pack Home – Kitchen, Bookshelves, Tea, Records and CDs, Clothes, Toilets
Indicate what items are fragile, and label each box as to where it should be placed in the new house
Dismantle TV and Hifi and Computer
Dismantle Fish Tank

Sunday
Make a final inspection of the house checking for any left items
Move in the morning
Set up Fish Tank
Set up Computer
Set up TV and Hifi
Set up boxes
Hang clothes in wardrobes
Visit drycleaners
Enjoy

Hong Kong’s incredible shrinking flats revealed

Hong Kong’s incredible shrinking flats revealed
Olga Wong and Joyce Ng
SCMP Sep 27, 2009

Buyers of flats in Hong Kong are getting less and less for their money as common areas included in the floor area quoted by developers eat into their living space.

Because of this practice – described by the head of a leading property agency as a “trick” to lower flats’ price per square foot – their actual size has shrunk by as much as 22 per cent since the 1980s. For example, a new flat listed as being 700 sq ft has only as much space as a 530 sq ft flat built in the 1980s.

In many cases buyers do not know what common areas they are paying for. While price lists and sales brochures list lift lobbies and clubhouses as examples of common areas, others are never disclosed. They include architectural features, planters, space for watchmen, rooftops, pathways to car parks and covered walkways, say architects and surveyors who have worked in the field for more than 20 years.

Some developers are even charging buyers for “green” features the government has exempted from a building’s gross floor area in an effort to make developments more environment-friendly.

The efficiency rate of new flats – gross floor area divided by internal floor area – is as low as 68 per cent.

Shih Wing-ching, chairman of property agency Centaline Holdings, described the practice as a developers’ trick to lower the apparent price of the flat.

“The larger the flat’s size, the lower the per-square-foot price,” he said.

Consumer Council chief executive Connie Lau Yin-hing said it was time to tell consumers exactly what they were buying.

“After all, buyers expect to pay only for what they can enjoy, and they need to pay for the maintenance of the common areas too,” Lau said.

The Sunday Morning Post commissioned a study of the efficiency rates of 23 housing estates built since 1980. The estates covered were built by several big developers, and include the city’s 10 biggest residential developments.

Data collected from developers, banks and the Rating and Valuation Department show the efficiency rates of estates built in the 1980s – including Taikoo Shing in Eastern district, and Whampoa Garden and Telford Garden in Kowloon – are as high as 90 per cent, meaning a flat’s internal floor area is 90 per cent of its gross floor area. (Gross floor area – a flat’s interior plus an apportioned share of common areas – is crucial because developers and buyers alike base their calculation of a flat’s price per square foot on it.)

The efficiency rate began to drop in the 1990s, when it fell to around 80 per cent, and the trend has continued. Flats built in the past 10 years are only 70 to 75 per cent efficient. The rate is even lower on some of the newest estates. At Victoria Towers in Tsim Sha Tsui, developed by Cheung Kong (Holdings), the rate is as low as 68 per cent; at Island Resort in Chai Wan, developed by Sino Land, it is as low as 69 per cent.

Using the latest definition for saleable area endorsed by the government, the efficiency rates of estates sold this year are just above 70 per cent.

It ranges from 71 per cent to 73 per cent for the flats of Silver Lake at Wu Kai Sha, in the northeastern New Territories; at Le Prestige in Lohas Park, part of the new town of Tseung Kwan O, the rate is 75 per cent. If balconies and utility platforms are taken out of the calculations, the efficiency rates at these estates are between 68 per cent and 72 per cent.

While the government has endorsed guidelines issued by the Real Estate Developers Association concerning the definition of a home’s saleable area, no attempt has been made to standardise the meaning of gross floor area.

The government and the association admit there is no standardised definition of gross floor area, meaning developers are free to include whatever they want in a building’s common area. Although developers are now required to inform buyers about the amount of common area included in a flat’s gross floor area, they are not required to provide an exhaustive list of the common area’s constituent parts.

Common areas account for as much as 22 per cent of gross floor area in newly completed estates, our research shows.

“Having controlled the saleable area, it’s time for the next step,” said Raymond Chan Yuk-ming, chairman of the public and social affairs committee of the Hong Kong Institute of Surveyors.

He proposes limiting the types of common area that can be included.

“It would be more reasonable if owners were asked to pay for facilities that they really appreciate and enjoy,” he said.

Louis Loong Hon-biu, secretary general of the developers association, said common facilities add value to estates and therefore to flats.

Shih, of Centaline, said the government should set a definition of gross floor area.

Developer Swire Properties said it would welcome a standardised definition of gross floor area since it would enhance transparency and consistency.

A spokeswoman for Cheung Kong (Holdings) said the company followed association guidelines.

Despite the controversy, owners who buy flats “off plan” – meaning before they are built – and only find out later how small they are seldom complain.

Sai Kung district councillor Chan Kai-wai said he had received complaints about flats sold in Tseung Kwan O, but the buyers refused to talk to the media.

“Who would undermine the resale value of their own property,” he asked.

HK$24.5m for one-bedroom flat sets record

Yvonne Liu
SCMP Sep 15, 2009


A one-bedroom flat in a luxury development in Tsim Sha Tsui has fetched a whopping HK$30,025 per sq ft, setting a record in Hong Kong.

A Hong Kong businessman who owns a trading firm has paid HK$24.5 million for an 816 sq ft flat on the 56th floor of The Masterpiece for his own use, according to Centaline Property Agency, which concluded the deal. The price is a record for a one-bedroom flat.

The useable area of the apartment is just 590 sq ft, similar to flats in mass residential projects.

Thomas Chan, Centaline sales director, said the buyer was willing to pay the high price because the flat offered views of Victoria Harbour and was centrally located.

In 2007, the average price of one-bedroom flats at The Arch, above Kowloon Station, was HK$17,000 per sq ft.

The 64-storey The Masterpiece in Hanoi Road was developed by New World Development and the Urban Renewal Authority.

It is the second-tallest residential building in Hong Kong after The Cullinan, above Kowloon Station.

The one-bedroom flat is the smallest unit in the project.

“The buyer could get a second-hand luxury flat with at least 1,500 sq ft and three bedrooms in Mid-Levels” for the price, said Koh Keng-shing, managing director at Landscope Surveyors and Landscope Realty.

Even though average prices at housing estates such as Taikoo Shing are still down from their 1997 peak, property agents said luxury residential prices had already exceeded their 1997 levels. The city’s most expensive flat is a 7,088 sq ft unit at Branksome Crest in Mid-Levels, which sold for HK$240 million, or HK$39,786 per sq ft, in December 2007.

Flats previously peaked at about HK$20,000 per sq ft in 1997, Koh said.

The most expensive residential property in the city is a 3,300 sq ft house at 8 Severn Road on The Peak, which sold for HK$285 million, or HK$56,800 per sq ft, in June last year, making it the most expensive residential dwelling in Hong Kong and also Asia.

The new luxury developments in non-traditional luxury residential areas such as Tsim Sha Tsui and Kowloon Station are fetching higher prices than apartments in Mid-Levels and other high-end residential areas.

“Those projects have attracted new demand from mainland buyers and local investors, not the local end-users,” Tsang said. “Some of the projects are overpriced. It may be risky for the buyers.”

Tsang had confidence in the market outlook for luxury residential developments in traditional luxury areas as the supply was expected to remain low in the next few years.