December 11, 2008
High-end projects take a knock, suburban condos edge higher
High-end prices fall 12-28%, while mass market projects climb 1-7%:
study
By KALPANA RASHIWALA

(SINGAPORE) Fresh data on home transactions compiled by Credo Real
Estate confirms that prices of high-end housing projects have fared
far worse than suburban condo prices between second-half 2007 and
second-half 2008.

Credo's study shows that average prices of high-end projects
generally posted declines, ranging from 12 to 28 per cent during the
period. In contrast, the average prices of units in selected projects
in the mass market generally rose 1 to 7 per cent.

Market watchers note that high-end residential property prices
climbed much earlier during the bull-cycle and the price gains
recorded were also much steeper. In contrast, mass-market home prices
have lagged. 'So what goes up faster during the bull-run also tends
to fall faster during the downturn; its physics,' as one seasoned
residential property consultant put it.

Credo Real Estate managing director Karamjit Singh feels that high-
end condo prices tend to be more elastic in relation to property
cycles compared with mass-market projects.

This is partly due to differing buyer profiles in the two
segments. 'Suburban condo buyers usually make their purchases for
their own use and less as a tool for investment or speculation,
unlike buyers in the high-end segment,' Mr Singh says.

'Prices are not a perfect science at the high-end due to the profile
of the rich and foreign buyers who make up a good proportion of
demand. They're less price sensitive and the products are less
homogeneous; if there's something they like, even if it is priced at
a premium, they're quite happy to buy it,' Mr Singh says.

Agreeing, another property consultant says that during the downward
slide, 'investors, if they need to keep themselves liquid, will exit.
In many cases, they may still make a profit even if price drops, as
they entered the market early. But even if they need to cut losses,
they will. Suburban home buyers, however, are likely to have
purchased for their own occupation or upgrading, so they can't sell
so readily.'

Credo's Mr Singh points out that the dramatic volatility in high-end
prices over the past three years has also been shaped by the large
number of prime district en bloc sales in 2006-07. This led to a
chunk of the physical stock being withdrawn and driving high-end
prices up astronomically. On the flip side, this global crisis in
2007-08 has actually impacted the rich much more than the man in the
street, thereby dampening demand for high-end homes.

Credo's sample looked at Four Seasons Park condo, Ardmore Park and
Cairnhill Crest in the Orchard Road belt, which showed average
transacted prices fell 27, 12 and 17 per cent respectively in H2 2008
over H2 2007.

At Sentosa Cove, Credo's sample basket comprised The Azure, The Berth
and The Oceanfront condos. The declines were 22 per cent for The
Azure and 28 per cent for The Oceanfront. The sole unit transacted
this half for The Berth was at $1,590 psf, down 5 per cent from the
$1,679 psf average price achieved for 20 deals in H2 last year.

In the city centre, the average price at Marina Bay Residences fell
17 per cent to $1,985 psf in H2 2008 with five deals done. At The
Sail @ Marina Bay, the average price slipped 14 per cent to $1,811
psf, with 42 deals in H2 2008.

In the mid-priced segment - defined as the low-$1,000 psf price
range - One Amber, Sky@Eleven and The Tessarina - saw average
transacted prices fall 19, 21 and 17 per cent respectively.

However, suburban Singapore demonstrated greater price resilience.
Average transacted prices of eight of nine projects studied in the
west, east and north posted 1 to 7 per cent gains in H2 2008 over H2
2007.

Credo's analysed caveats captured by Urban Redevelopment Authority's
Realis system up to early November. 'We selected projects we felt
symbolise their respective location-based categories, are large
enough with sufficient transactions relative to the project size to
reflect a clear trend, and were ideally not affected by en bloc sales
initiatives last year as that could distort price patterns,' Mr Singh
explains.

Property analysts generally expect the trend of high-end home prices
being less resilient than mass-market prices to continue in 2009.

However, DTZ executive director Ong Choon Fah argues that the decline
in the high-end segment has to slow down at some stage. 'There has to
be a price gap between the mass-market and high-end; otherwise, we'll
start seeing a trade-off and demand may shift to the upper segments
under market dynamics,' Mrs Ong says.

Overall current thin private residential transaction volume is being
caused by a 'price mismatch between unwilling sellers and unwilling
buyers' and the stalemate is expected to last 'until repricing takes
place', Mrs Ong says.

'The uncertainty has to go away first. Companies will make a lot of
decisions after the Singapore Budget in January.'

'Hopefully after that, some of the dust will settle and things will
get clearer.'

Agreeing, the seasoned property agent said: 'It's easier to match
buyers and sellers when things are more stable and we should start to
see volumes improving from mid-next year.'

13 Dec, 2008
Lower Sibor attracts more home buyers
0.9% rate sees more interest but analysts warn of risks
By Gabriel Chen

INSTALMENTS for many home loan borrowers are set to fall after the
all-important interest rate at which banks lend funds to one another
nosedived to about 0.9 per cent this month.

Many home loan packages are pegged to this rate - known as the three-
month Singapore Interbank Offered Rate (Sibor) - so when it goes
down, so do Sibor- linked home loan instalments.

According to economists, the three-month Sibor should remain at these
depressed levels into the new year.

OCBC Bank economist Selena Ling said the three-month Sibor is
reacting to a couple of factors.

One is the widespread market expectation that the US Federal Reserve
will cut its Fed funds target rate to 0.25 per cent from 1 per cent
at its meeting on Tuesday.

The Sibor closely tracks this rate.

Another factor: continued measures by the Singapore authorities to
pump liquidity into the system, against a backdrop of global and
domestic recession.

In September, the three- month Sibor spiked to 2 per cent as the
global credit crunch hit home here. Banks were afraid to lend to one
another for fear of not getting repaid.

With the rate coming down sharply, more and more home buyers are
looking at Sibor- linked loan packages.

Mr Geoffrey Ying, head of the mortgage division at financial advisory
firm New Independent, estimates that six out of every 10 customers he
is seeing are enquiring about Sibor-linked packages not only for high-
end units, but also for HDB flats.

A year ago, when Sibor was significantly above 1 per cent, only three
or four customers out of 10 would show interest.

It is easy to see why Sibor- linked packages have become the talk of
the town, given the potential savings.

Suppose you want to buy an HDB flat. The best rate in the market is
the 2.6 per cent annual rate for those qualifying for an HDB
concessionary loan. This rate is pegged at a level 0.1 percentage
point above the prevailing CPF ordinary account interest rate.

By comparison, at Standard Chartered Bank, for example, if you choose
a two-year lock-in, its Sibor-linked package works out to Sibor plus
a spread of - in this case - 0.95 per cent.

So if three-month Sibor stands at 0.9 per cent, you pay an annual
rate of 1.85 per cent - lower than the HDB concessionary rate.

Still, financial experts say homebuyers must be careful. When Sibor
falls, borrowers with a loan pegged to it gain as they will be paying
a lower interest rate. But conversely, if the benchmark rate heads
up, mortgage instalments also rise.

'We think though, that Sibor still has the potential to spike up,
given that risks still remain out there,' a United Overseas Bank
spokesman said.

Borrowers need to think carefully about choosing between two loan
options, experts say.

Since January 2003, when banks were first allowed to provide loans
for HDB flats, many homebuyers have opted for Sibor-linked packages
as Sibor was very low, said Mr Leong Sze Hian, president of the
Society of Financial Service Professionals.

In June 2003, the three-month Sibor bottomed out at 0.5625 per cent,
but then surged to as high as 3.56 per cent three years later.

Mr Leong said that historically, the HDB rate of 2.6 per cent has
been lower than rates for Sibor-linked packages.

More importantly, homebuyers with an HDB concessionary loan who
switch to a bank loan cannot go back to the HDB if bank rates
suddenly rise above the board's 2.6 per cent concessionary rate.

Experts think that banks are far more inclined than the HDB to
repossess properties in the case of loan default.

'During the economic slowdown, there'll be people who'll struggle to
meet monthly payments. Sure, Sibor- linked rates are low now, but if
you want certainty, you'll choose HDB's,' said Mr Patrick Lim,
associate director of financial advisory firm PromiseLand.

Take Mr David Lee, for instance. The 35-year-old engineer said that
even though he is paying more now because he chose an HDB
concessionary loan, he is not going to switch to a Sibor- linked
package any time soon.

'I don't mind the slightly higher rate for peace of mind,' he said.

Mrs Ong-Ang Ai Boon, director of the Association of Banks in
Singapore, is on record as saying that 'repossession would be a last
resort, after all other measures have failed'.

14 Dec, 2008
Crunch time for borrowers
Banks are being more conservative, say observers, but lenders deny
tightening credit
By Tan Dawn Wei

Are banks here starting to play Scrooge when dishing out consumer
loans?

Financial institutions are not admitting to it, but they appear to
have turned shy in granting loans, especially for property and motor
vehicles, some observers say.

'We do feel they are a shade conservative now. It used to be easy if
you wanted to buy a second property,' said Mr Eugene Lim, associate
director of real estate firm ERA Asia-Pacific.

'Now, they actually pay more attention to the buyer - like the
stability of his income, whether the household is one or dual
income,' he said.

Property loans, which used to take three days to be approved, may now
take a week, noted MrReeve Ho, senior vice-president of property firm
HSR International.

There is now more to-ing and fro-ing in processing loans too, he
observed.

'In the past, they would give the nod if all the documents were in
order. Now, even with all the documents in order, they may grant a
smaller loan,' he said.

The Monetary Authority of Singapore (MAS) allows a home buyer to take
a loan of up to 90per cent of the home's purchase price or valuation,
whichever is lower.

But banks are granting 60 to 70per cent of the price, said those in
the property business.

ERA's Mr Lim added that a salaried applicant with not more than one
property, and hence less likely to be a speculator or to be
overstretched, would find it easier to get a loan than someone whose
income is commission-based.

Car dealers said a credit crunch is hitting vehicle buyers too, with
rejection rates estimated to have gone up from 15 to 25per cent.

But banks such as DBS, OCBC, UOB and Citibank insisted that it is
business as usual and they have not tightened credit.

'Our prudent consumer credit assessment process helps us evaluate the
applicant's ability to service a credit facility such as a car or
housing loan, regardless of market conditions,' said a UOB spokesman.

'These credit facilities should never become a financial burden to
our customers, in good or bad times. Customers with good credit
records and stable income should not face problems getting a credit
facility from us.'

Citibank said it continues to see steady growth for its credit card
and personal credit line, Ready Credit, applications.

'While we are cognisant of the environment, we make every credit line
assignment tailored to the individual customer's situation.

'We continue to use rigorous credit criteria which take into account
credit history, sources of income and employment status, among
others,' said Mr John Denhof, its business director for credit
payment products.

While the latest data from the Credit Bureau of Singapore shows that
most credit card and personal loan holders are still managing to pay
their bills on time, defaults will likely rise given what happened in
the downturn which followed the 2003 Sars outbreak.

The bureau estimates that the rate of default and bad debts could
more than double next year if the unemployment rate balloons.

Already, the delinquent rate for personal loans rose from 3.39per
cent in July to 4.24per cent in September.

Banks also wrote off 0.21per cent of personal loans in September, up
from 0.16per cent in July. The record was 1.08per cent in June 2004.

Mr Song Seng Wun, regional economist at CIMB-GK, is not surprised
that banks appear more cautious.

'Banks are not social welfare institutions. When there's so much
uncertainty about the length and depth of the recession, lenders will
look carefully at who they lend to,' he said.

Long-time customers should not have problems with credit lines. 'It's
really a case of how well the bank knows you,' he said.

Dec 14, 2008
More move-in apartments available
Number of completed condos with unsold units is set to increase with
the downturn
By Joyce Teo, Property Correspondent

As the property market heads into a down cycle, there will be more
and more completed condominium developments with unsold units.

At the end of the third quarter, the number of unsold units in
completed non-landed developments stood at 759, up from 461 a year
ago.

'This number may increase given the weak homebuying sentiment which
is expected to persist,' said Knight Frank director of research and
consultancy Nicholas Mak.

Buyers can buy these unsold units directly from the developers.

Going ahead, there could also be a pool of sellers of newly
completed, unoccupied developments eager to let go of their units.
Because of the economic uncertainty, some owners of newly completed
developments may be looking to offload their property instead of
holding on to a big investment.

Although most of the projects targeted for completion next year
received a good take-up rate during the good years in 2006 and last
year, some of them would have been sold at high prices.

'Some buyers who have stretched their financial limits and bought
multiple units may sell these units on the resale market, so
potential buyers will have more choices,' said Mr Mak.

For example at The Sea View, a recently completed condo near the
bustling Parkway Parade mall, there are unoccupied high-floor units
going for $930 per sq ft (psf). Caveats filed this year showed that
deals had been done at $1,000 psf and above.

Other recently completed condos that still have new units available
include Lakeshore in Jurong West, Icon in Tanjong Pagar, Park Infinia
at Wee Nam in Lincoln Road and St Regis Residences Singapore in
Cuscaden Road.

The advantage of completed homes is that they offer immediate
occupation, be it for owner-occupiers or for investors looking for
immediate rental returns.

Retiree Khin May Myint, 69, who bought a 1,200 sq ft unit in the 99-
year leasehold Lakeshore at $920 psf in October, said: 'We feel more
secure buying directly from developers as everything is new and in
good condition.'

The price she paid was much higher than when the development was
first put up for sale at $460 psf in late 2003.

She paid close to resale prices, she said, but the developer had more
units for buyers to choose from.

A potential buyer who declined to be named said: 'I like new units
because they have no history. I am sure there are other superstitious
buyers out there who do not like to buy a home that has been occupied
and gives off bad vibes.'

On top of the new projects, there are also older developments with
unsold units.

The 230-unit Rafflesia condo, opposite Raffles Institution in Bishan,
received its temporary occupation permit in 2003 but still has
several vacant units. Caveats lodged for the 99-year leasehold condo
this year showed that deals were mostly done below $900 psf, not far
from its launch price of $750 psf to $800 psf back in 2000.

Developer Far East Organization is offering the new units at $900
psf, but they come with a guaranteed 4-per-cent annual rental yield
for three years and a one-year warranty on defects. The 12-month
liability period for defects usually comes only with new condos.

Some developers may lease out unsold units before selling them. Such
units would be good for those looking for instant rental yield, said
property experts.

But those looking to move into new apartments should check if the
units had been leased out previously, they said.

Mr Mak said some developers of completed projects may lower the
prices of unsold units while others may have a policy of not lowering
prices.

Still, as competition increases, some projects may be re-priced, he
said. Dec 14, 2008
property
More move-in apartments available
Number of completed condos with unsold units is set to increase with
the downturn
By Joyce Teo, Property Correspondent

As the property market heads into a down cycle, there will be more
and more completed condominium developments with unsold units.

At the end of the third quarter, the number of unsold units in
completed non-landed developments stood at 759, up from 461 a year
ago.

'This number may increase given the weak homebuying sentiment which
is expected to persist,' said Knight Frank director of research and
consultancy Nicholas Mak.

Buyers can buy these unsold units directly from the developers.

Going ahead, there could also be a pool of sellers of newly
completed, unoccupied developments eager to let go of their units.
Because of the economic uncertainty, some owners of newly completed
developments may be looking to offload their property instead of
holding on to a big investment.

Although most of the projects targeted for completion next year
received a good take-up rate during the good years in 2006 and last
year, some of them would have been sold at high prices.

'Some buyers who have stretched their financial limits and bought
multiple units may sell these units on the resale market, so
potential buyers will have more choices,' said Mr Mak.

For example at The Sea View, a recently completed condo near the
bustling Parkway Parade mall, there are unoccupied high-floor units
going for $930 per sq ft (psf). Caveats filed this year showed that
deals had been done at $1,000 psf and above.

Other recently completed condos that still have new units available
include Lakeshore in Jurong West, Icon in Tanjong Pagar, Park Infinia
at Wee Nam in Lincoln Road and St Regis Residences Singapore in
Cuscaden Road.

The advantage of completed homes is that they offer immediate
occupation, be it for owner-occupiers or for investors looking for
immediate rental returns.

Retiree Khin May Myint, 69, who bought a 1,200 sq ft unit in the 99-
year leasehold Lakeshore at $920 psf in October, said: 'We feel more
secure buying directly from developers as everything is new and in
good condition.'

The price she paid was much higher than when the development was
first put up for sale at $460 psf in late 2003.

She paid close to resale prices, she said, but the developer had more
units for buyers to choose from.

A potential buyer who declined to be named said: 'I like new units
because they have no history. I am sure there are other superstitious
buyers out there who do not like to buy a home that has been occupied
and gives off bad vibes.'

On top of the new projects, there are also older developments with
unsold units.

The 230-unit Rafflesia condo, opposite Raffles Institution in Bishan,
received its temporary occupation permit in 2003 but still has
several vacant units. Caveats lodged for the 99-year leasehold condo
this year showed that deals were mostly done below $900 psf, not far
from its launch price of $750 psf to $800 psf back in 2000.

Developer Far East Organization is offering the new units at $900
psf, but they come with a guaranteed 4-per-cent annual rental yield
for three years and a one-year warranty on defects. The 12-month
liability period for defects usually comes only with new condos.

Some developers may lease out unsold units before selling them. Such
units would be good for those looking for instant rental yield, said
property experts.

But those looking to move into new apartments should check if the
units had been leased out previously, they said.

Mr Mak said some developers of completed projects may lower the
prices of unsold units while others may have a policy of not lowering
prices.

Still, as competition increases, some projects may be re-priced, he
said. Dec 14, 2008
property
More move-in apartments available
Number of completed condos with unsold units is set to increase with
the downturn
By Joyce Teo, Property Correspondent

As the property market heads into a down cycle, there will be more
and more completed condominium developments with unsold units.

At the end of the third quarter, the number of unsold units in
completed non-landed developments stood at 759, up from 461 a year
ago.

'This number may increase given the weak homebuying sentiment which
is expected to persist,' said Knight Frank director of research and
consultancy Nicholas Mak.

Buyers can buy these unsold units directly from the developers.

Going ahead, there could also be a pool of sellers of newly
completed, unoccupied developments eager to let go of their units.
Because of the economic uncertainty, some owners of newly completed
developments may be looking to offload their property instead of
holding on to a big investment.

Although most of the projects targeted for completion next year
received a good take-up rate during the good years in 2006 and last
year, some of them would have been sold at high prices.

'Some buyers who have stretched their financial limits and bought
multiple units may sell these units on the resale market, so
potential buyers will have more choices,' said Mr Mak.

For example at The Sea View, a recently completed condo near the
bustling Parkway Parade mall, there are unoccupied high-floor units
going for $930 per sq ft (psf). Caveats filed this year showed that
deals had been done at $1,000 psf and above.

Other recently completed condos that still have new units available
include Lakeshore in Jurong West, Icon in Tanjong Pagar, Park Infinia
at Wee Nam in Lincoln Road and St Regis Residences Singapore in
Cuscaden Road.

The advantage of completed homes is that they offer immediate
occupation, be it for owner-occupiers or for investors looking for
immediate rental returns.

Retiree Khin May Myint, 69, who bought a 1,200 sq ft unit in the 99-
year leasehold Lakeshore at $920 psf in October, said: 'We feel more
secure buying directly from developers as everything is new and in
good condition.'

The price she paid was much higher than when the development was
first put up for sale at $460 psf in late 2003.

She paid close to resale prices, she said, but the developer had more
units for buyers to choose from.

A potential buyer who declined to be named said: 'I like new units
because they have no history. I am sure there are other superstitious
buyers out there who do not like to buy a home that has been occupied
and gives off bad vibes.'

On top of the new projects, there are also older developments with
unsold units.

The 230-unit Rafflesia condo, opposite Raffles Institution in Bishan,
received its temporary occupation permit in 2003 but still has
several vacant units. Caveats lodged for the 99-year leasehold condo
this year showed that deals were mostly done below $900 psf, not far
from its launch price of $750 psf to $800 psf back in 2000.

Developer Far East Organization is offering the new units at $900
psf, but they come with a guaranteed 4-per-cent annual rental yield
for three years and a one-year warranty on defects. The 12-month
liability period for defects usually comes only with new condos.

Some developers may lease out unsold units before selling them. Such
units would be good for those looking for instant rental yield, said
property experts.

But those looking to move into new apartments should check if the
units had been leased out previously, they said.

Mr Mak said some developers of completed projects may lower the
prices of unsold units while others may have a policy of not lowering
prices.

Still, as competition increases, some projects may be re-priced, he
said.

December 15, 2008
Banking and the art of mortgage lending
By SIOW LI SEN

THE Monetary Authority of Singapore (MAS) has said recently in
response to BT queries that it won't intervene when it comes to
repossession of a home if the mortgage is in default. To put the
issue into context, BT posed the question following actions by
regulators in the UK and US (which were agreed to by the financial
institutions there), to hold off on home foreclosures and also
forgive part of the debt in some cases.

That's because mortgage arrears in the US and UK are reaching tidal
wave proportions threatening to throw millions of people out on the
streets.

British lender Royal Bank of Scotland, which is now 60 per cent
government owned, said that it would not repossess the homes of
mortgage customers who default until six months after they first fall
into arrears.

Other UK mortgage lenders have already committed to waiting three
months before repossessing customers' homes, under an agreement
announced by British Finance Minister Alistair Darling last month.
Mortgage arrears and repossessions in the UK have risen sharply this
year, reflecting the economic slowdown as well as a sharp rise in
borrowing costs in the wake of the credit crunch.

The UK Council of Mortgage Lenders said that there were 168,000
households in arrears at end-September, up 8 per cent from end-June.
A total 11,300 homes were repossessed in the three months to Sept 30,
an increase of 12 per cent on the previous quarter.

In the US, banks including Bank of America, JP Morgan and Citigroup
have agreed to stop home foreclosures and forgive debt for owner
occupiers. One report said more than 2.2 million homeowners are
estimated to be more than 60 days late on their mortgage payments,
and one in six homeowners owes more on a home than it's worth.

The situation is much less dramatic in Singapore.

The Monetary Authority of Singapore said borrowers here getting into
trouble over their home loans is not a big problem. The MAS said it
does not expect this to balloon either, even as Singaporeans are
bracing for a prolonged downturn.

'Non-performing housing loans are currently low. While we expect
these to rise, the increase will not be significant,' it said.

'Banks in Singapore do not generally repossess a property once a loan
is in default. Repossession is usually a final step after exhausting
other avenues with the borrower, such as restructuring the loan. MAS
does not intervene in such commercial decisions by the banks.'

Last month in its financial stability review, MAS noted that the
proportion of housing loans that is delinquent is low, at less than
one per cent, and most housing loans have low loan-to-value ratios.

It makes sense that the regulator not intervene in a commercial
matter, if a decision to foreclose was taken only after all possible
attempts have been made to help out the unfortunate borrower. On a
personal level, to be driven out of one's home is traumatic.

Households are much better placed to face the current economic
slowdown relative to their position before the Asian financial
crisis, the MAS has said.

But it did say that the impact is not uniform across different
household income groups. 'There is likely to be distress among those
who are retrenched or those who rushed into the recent property boom
and leveraged up beyond their means.'

* Earning goodwill

Foreclosures and bankruptcies will rise as recession hits, there's no
getting around it. Banks can alleviate the impact by putting their
affected distressed borrowers in touch with the relevant bodies which
can offer aid. A helping hand can prevent tragic outcomes. It's not
charity but one step, among others, to ensure responsible lending
policies.

As for the MAS, while the approach now is not to intervene, this may
not mean a hands off approach on its part if the situation were to
get significantly worse. Like its peers, the MAS is probably finding
that the timing for intervention is a craft which cannot be learned
but an art which must be finessed so that moral hazard does not
become the result.

December 15, 2008
Laguna Park clears hurdle

APPROVAL for an enbloc sale by owners of Laguna Park apartments
crossed the 80 per cent threshold on Friday, Channel News Asia
reported yesterday. This allows the owners of the 30-year-old
condominium to proceed to market the site, which has a total land
area of about 667,000 sq ft.

The asking price is $1.2 billion - or $1.8 million to $2.3 million
per unit, down from the more than $3 million some owners were hoping
for last year.

The move to sell started in early 2007 but hit a snag as some
residents held back in the hope that the bull market would last, CNA
reported. Most of the development's 528 units are between 1,500 and
1,700 square feet.

Figures from property consultancy group CB Richard Ellis released
last week show that only seven collective sales worth a total $371
million have been sealed this year, against the record $12.4 billion
from 111 transactions in 2007. The collective sales market was
dormant this year as developers remained mindful of the lukewarm
response to new residential launches, rising construction costs and
tighter credit measures, CBRE observed.

December 16, 2008
Developer sales perk up with new launches
Launch momentum may continue; price becomes key factor to move sales
By ARTHUR SIM

(SINGAPORE) The launch of new developments helped pull up developer
sales to 192 units in November, up from just 112 units in October.

The number of units launched by developers increased from 159 units
in October to 382 units in November.

Urban Redevelopment Authority's (URA) monthly real estate data also
revealed that the number of launch-ready units hit 6,512 units in
November, a marginal rise over October but an increase of 3,840 units
from a year ago.

Rosewood Suites in Woodlands by EL Development (ELD) sold 42 units in
November, the most units sold, followed by Newton Edge (34 units) and
RV Suites (19 units).

ELD is a unit of local builder Evan Lim & Co. Managing director Lim
Yew Soon said that the pricing - at an average of $580 psf - 'may be
on the low side' but added, 'We expect construction costs to come
down next year so we took a bit of a risk with a lower margin'.

Still, Mr Lim conceded that, 'the price may not be sustainable in the
long run', and ELD could begin to raise prices.

He also believes that a price war among developers is not likely
because most developers bought sites at about the same price. 'And
unless a developer goes bust, there is no reason for them to sell at
a loss,' he added.

PropNex CEO Mohamed Ismail said that prices for existing developments
in the same area such as Casablanca are going for between $500-$550
psf. He said that Rosewood Suites is 'extremely attractive in today's
market' especially considering that new public housing flats are
about $300 psf with Design, Build and Sell Scheme (DBSS) flats at
about $450 psf.

PropNex was the marketing agent for Rosewood Suites and Mr Ismail
added that most of the buyers were HDB upgraders.

Both Newton Edge and RV Suites are in the core central region (CCR)
and Colliers International director for research and advisory Tay
Huey Ying noted that more than half the 382 units launched were in
the CCR.

She added: 'Developers have been stepping up launches of prime
properties since August 2008, in a reversal of the first half's trend
where developers tended to hold back launches of prime properties.
This could be an indication of weakening holding power amongst
smallish and mid-tier developers with prime development sites.'

Ms Tay believes developers are likely to continue with the current
launch momentum and could launch some 450-500 new units in December
2008, bringing the total launch volume for 2008 to some 6,500 units,
less than half of last year's launch volume of more than 14,000
units.

Ms Tay expects developers' sale volume to hover between 150-200
units. This would bring sales volume for the year to less than 4,500
units, or less than a third of last year's volume of more than 14,000
units.

Other developments that registered better sales in November were
Evania at Upper Paya Lebar Road and a landed housing project at
Andrews Terrace.

CBRE Research executive director Li Hiaw Ho said: 'Price remains a
critical factor to move sales, as seen by the good response to these
projects.' He also said that prices for units in Evania have
apparently been reduced from above $800 psf when it was first
launched in March to $610 psf-$650 psf.

Knight Frank director (research and consultancy) Nicholas Mak expects
home-buying sentiments and launch activity to remain subdued until
after the Chinese New Year in January.

'Buyers will remain very cautious even if some re-pricing sets in,'
he added. 'Since the economic drag is expected to persist into 2009,
developers may be increasingly open to considering creative marketing
tactics and soft discounts to attract buyers,' he added.

Already, Knight Frank notes that the lowest priced non-landed unit
sold in November was in Rosewood Suites at $512 psf while the highest
priced non-landed unit is Orchard Scotts, which sold for $2,006 psf
(The highest-priced unit sold in Orchard Scotts was $2,407 psf).

DTZ executive director Ong Choon Fah also reckons the market is
seeking 'clarity' on the economy and could wait for the January
Budget measures before moving.

And while some hope for the return of the deferred payment scheme,
Mrs Ong believes that if it is brought back, 'It won't be in its
former form'.

December 16, 2008
Low Keng Huat Q3 profit trebles
Nine-month earnings double; higher development profit from associate
firms
By EMILYN YAP

PROPERTY and hospitality group Low Keng Huat (Singapore) yesterday
reported a net profit of $12.95 million for the third quarter ended
Oct 31, 2008 - more than treble the $3.75 million for the previous
corresponding quarter.

This drove earnings per share for the quarter to 1.75 cents, up from
0.51 cents in the year-ago period. Higher earnings came on the back
of a near doubling in revenue to $52.26 million from $26.45 million.

For the nine months ended Oct 31, Low Keng Huat's net profit surged
105 per cent from a year ago to $23.36 million.

The higher earnings were mainly due to higher development profit from
associated companies. Contributions from projects such as the one-
north Residences, Duchess Residences and Regency Suites had
increased, while those from Domain 21 had dropped.

Low Keng Huat also benefited from lower construction losses, partly
because it managed to recover some cost increases.

Net earnings in the nine months would have been higher if not for
lower profits from the hotel and investment segments.

Net profit before tax and minority interests for the hotel business
dropped as concessionary income from gaming centre operations fell.
Overall hotel revenues were also lower as the weaker Australian
dollar shaved revenues from Duxton Hotel Perth.

Investments also booked a lower net profit before tax and minority
interest. This was due to the sale of some quoted equities which had
to be marked to market.

Group revenue in the nine months soared 66 per cent from a year ago
to $148.09 million, driven largely by an increase in construction
revenue. There was a higher percentage of completion for ongoing
projects and new projects - the Hardrock Hotel at Sentosa and Meritus
Mandarin Hotel - had also started.

Low Keng Huat said that it is 'in a strong financial position'. Its
net gearing as at Oct 31 was 15.4 per cent, lower than the 24.2 per
cent at end-January.

The group also expects its two hotels in Perth and Ho Chi Minh City
to perform well despite more challenging economic conditions in
Western Australia and Vietnam.

Low Keng Huat won a $295 million project last month to construct a
shopping mall cum bus interchange complex at Serangoon Central. Its
order book as at November was $900 million.

The counter gained one cent to close at 13.5 cents yesterday.

December 16, 2008
S'pore property firms make their mark
By UMA SHANKARI

KAZAKHSTAN might not be very high up on the list of places for
Singaporean property companies to venture into, but some home-grown
players in the real estate field - including Jurong International,
Surbana Corporation, and CapitaLand and its subsidiary The Ascott
Group - have made their mark on the country's landscape.

'As the ninth-largest country in the world and ranking 11th with the
largest proven reserves of both oil and gas, Kazakhstan certainly
cannot be ignored,' said a spokesperson for Jurong International.

'Kazakhstan has strong oil and natural resource industries,' said
Tony Soh, deputy chief executive of Ascott Hospitality, Ascott's
hospitality management arm. 'We remain optimistic on the long term
potential of the serviced residence industry in Kazakhstan.'

Jurong International was active in Kazakhstan from 2004-2006,
providing consultancy services for an IT Park and the National Centre
for Biotechnology in Astana, the capital of Kazakhstan. Right now,
the company has no projects on the ground in the country, but is open
to doing more work there, it said.

The feather in Jurong International's cap when it comes to Kazakhstan
is the National Centre for Biotechnology in Astana, a world-class
research facility. The centre aims to serve as a catalyst for the
nation's foray into the competitive biotechnology industry.

Designed over three phases, the 28,000 sq m centre will house
laboratories, offices, R&D facilities, a vivarium, a greenhouse, a
conference centre, accommodation and other amenities to promote
research and innovation.

Another Singaporean consultancy group, Surbana Corporation, has also
done consultancy work in Kazakhstan. And CapitaLand, Singapore's
biggest property developer, last year announced that it was venturing
into Kazakhstan as well.

In April 2007, CapitaLand said that it has entered into a Memorandum
of Understanding with Eurasia Logistics Limited, a major Russian
logistics property developer, to build 16 logistics properties
comprising up to a total of five million sq m of space across the key
cities of Kazakhstan, Russia and Ukraine.

CapitaLand chief executive Liew Mun Leong said then that the deal was
part of his group's strategy to seek opportunities in fast-growing,
oil-rich countries which include Kazakhstan.

CapitaLand's serviced residence unit Ascott has also secured
management contracts for two prime serviced residences in Kazakhstan -
one in Astana and the other in Aktau, a city in the oil-rich western
region by the Caspian Sea. The contracts were awarded by Tsesna
Corporation, a well-established conglomerate in Kazakhstan.

The 200-unit Ascott Astana and the 120-unit Citadines Aktau, which
will both be built by Tsesna Corporation, are targeted to open in the
second half of 2010.

Doing business in Kazakhstan does not come without its challenges,
companies say. Kazakhstan is reputed to be quite tough on its
business negotiation stance.

'Hence for our contract negotiations, we have been extremely
careful,' said the Jurong International spokesperson. 'But the
positive side to this is that the authorities honour their agreements
and fulfil their obligations, and because they are very committed to
globalisation, they are fast learners and should be making some
headway soon. The Kazaks are also warm-natured and hospitable and
expect you to down vodkas by the glasses!'

December 16, 2008
2008: The year the bubble burst

(LONDON) Property prices collapsed worldwide in 2008 as hyper-
inflated housing bubbles finally burst, brutally punctured by the
global credit crunch - and the slump could continue for two more
years, experts say.

The strains had begun appearing in mid-2007 when overstretched US
homeowners began to default on loans known as 'sub-prime', a term
virtually unknown outside the United States until 2008 when it became
a byword for the financial crisis.

These 'bad' loans had been re-packaged by banks and sold on. The
number of institutions which had invested in them only became clear
this year, and they started a chain reaction which led to banks
refusing to lend to each other.

When in September the US government seized control of the giant
mortgage companies Fannie Mae and Freddie Mac - which between them
account for half of the US home-loan market - the depth of the
combined effects of the credit crunch and the housing slump came
sharply into focus. 'The system has gone into a really brutal
reversal,' said Philippe Waechter, director of economic research at
Natixis Asset Management. 'The financing of property has become much
more traditional and a lot more cautious.'

Both the commercial and residential property markets are essentially
caught in a 'perfect storm'. Potential buyers have been deprived of
credit by banks which have become far more cautious about lending.
And buyers are holding off because they expect prices to fall even
further, or shying away from major purchases while unemployment is
rising.

Aaron Guy, real estate analyst at investment bank Collins Stewart in
London, said: 'Before the credit markets dried up, 70-80 per cent of
the purchase of each building was financed by credit and the
remaining equity was in plentiful supply. So if you take a 10-storey
building, you can take away seven and a half storeys of its debt
financing and 2.5 storeys of equity is also more scarce and
expensive. Among the banks I speak to there is very little desire to
lend to commercial property and many won't lend at all. We expect
this will continue as far as we can foresee into 2009 and it could be
more than two years before the property market recovers.'

The biggest falls in house prices came in countries where banks lent
the most, especially the US and Britain. A global study by British
estate agents Knight Frank showed US house prices plunged by 20.6 per
cent in the third quarter of 2008, compared with their peak last
year. In Britain, they were down 10.3 per cent over the same period.

While the slide in prices has been fastest recently in Britain,
Norway, Canada and Lithuania, the study shows that more than half of
all the countries surveyed showed falls in the third quarter compared
with the preceding three months.

Nicholas Barnes, head of international research at Knight Frank,
said: 'It is now clear that no part of the world is likely to escape
the credit crunch as property prices start to fall in more and more
parts of the globe.' While eastern Europe is resisting the trend
better than some parts of the world, prestige projects are biting the
dust amid the crisis - work on the 600-metre Russia Tower in Moscow
was halted in November.

Asia has not been spared either. In Hong Kong, the third-quarter fall
was 2.5 per cent and in China, house prices fell 0.1 per cent,
prompting the government to exempt property transactions from stamp
tax and value-added tax to boost the ailing market.

In Spain, property developers have been falling like dominoes. One of
the biggest, Metrovacesa, had boldly bought the London headquarters
of British bank HSBC last year. But the ailing company was forced to
sell the building back to the bank at a loss of 290 million euros
(S$577.8 million).

So when will the gloom lift? Mr Waechter, of Natixis, says it will
not be soon. 'I don't think the property market will improve before
2011 or 2012,' he said. The Organisation for Economic Co-operation
and Development agrees. 'The ongoing adjustment in housing markets
still has a long way to go,' said Jorgen Elmeskov, the director of
policy studies in the economics department.