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Archive for September 20th, 2008

374 households at Tivela precinct to enjoy extensive warranty scheme

Posted by luxuryasiahome on September 20, 2008

374 households of the newly-completed Tivela precinct in Sengkang Central are among the first to benefit from a more extensive warranty scheme.

The Housing and Development Board’s (HDB) ASSURE 3 was introduced for new flats launched for sale from 2005.

It covers selected defects in the units for between five and 10 years from the completion date of the flats.

Fixing defects such as spalling concrete, ceiling leakages and water seepage from external walls would cost flat owners several hundred dollars.

But these will be covered under the ASSURE 3 scheme, for new flats launched from 2005.

HDB will pay for repairs if defects occur within the 5 to 10 year warranty period, depending on the nature of the problem.

Prior to this, flat buyers only enjoyed a one-year Defect Liability Period.

Handing over the warranty certificate to residents, Senior Minister of State for National Development Grace Fu said the HDB does not expect the number of complaints on defects to rise. And the scheme will not be extended to older flats.

She said: “The warranty comes about because we really look at it from design stage on, so we can only do this for new projects that are coming on stream.”

Still, older units will not be left out. They stand a chance to be upgraded under the HDB’s Home Improvement Programme, which will include water-proofing and retrofitting of toilets, among other things.

Meanwhile, Ms Fu’s tour on Saturday also covered shops at Compassvale Link – the first commercial cluster leased out under HDB’s master tenancy plan.

These shops were opened in the middle of this year.

The Kopitiam group is the master tenant for the area which oversees 15 shops – including 24-hour foodcourts, bakery and supermarket.

It is hoped such arrangements will allow more flexibility in coping with changing market trends – and benefit customers.

Jeffery Lim, assistant director, Operations and Business Development, Kopitiam Investment, said: “For example, we have two bakeries. This actually creates competition and reduces the price level, and this inevitably becomes a cost saving to the residents.”

HDB will consider extending the master tenancy concept to other neighbourhoods.

Source : Channel NewsAsia – 20 Sep 2008

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What should you consider when buying your first property?

Posted by luxuryasiahome on September 20, 2008

There’s no place like home. Buying your first home is exciting and here we look at what you need to consider in making the right decision.

Firstly, know why you are buying your first property. Perhaps it is because you want your own space away from parents, family or flat-mates – you want your independence. You may want to enjoy your own style, hobbies, your way of living and not be compromised into fitting in with other people. You may want your privacy and have control over your own living space. Know what you want so that you know what to look for.

Where do you want to live exactly? Pinpoint on a map where you need to get to on a regular basis and how long you are prepared to travel. You will then have an area to base your search on.

How much do you want to spend? You need to be realistic. How much per month can you afford on a mortgage? Be exacting in working out your figures – you will need to prepare a budget of all your outcomes and remember to include an emergency fund. If you own a property there will be some maintenance now and again and as the owner, it will be up to you to fix it. With a budget in hand work out what purchase price you can afford. From that, look at property above that figure by up to 25%.

Decide what you need in your property. How many bedrooms do you want? Do you need an allocated parking space? Do you want to redecorate or renovate? Do you want a garden? How important is the area? Do you want to have a room to let out?

When you know what you want then prioritise them. You may be able to buy a two bed property a little further out of town rather than a one bed property in town. As you look at properties your priorities may need adjusting. You may be lucky to find the property that ticks all boxes or you may need to compromise on one or two.

Begin your search by using the internet. There are many search engines available and from there you can see photos, map, descriptions, prices and will have an idea of whether the property is worth viewing. It may be useful and time efficient to simply drive past properties so that you can decide if you want to view them. Photos of a property’s interior and exterior are limiting and do not show you the type of road or neighbouring amenities.

When you arrange to view a property try not to arrange too many viewings on one day. It is easy to mix the properties up and you need to have a fresh mind for each property so that you can appreciate both it’s good points and bad points. Take notes on each property, especially if the owner is present. It will be difficult to say your true thoughts if the owner can hear them!

Take your time. It is a buyer’s market. First time buyers with a mortgage secured are very desirable and every seller will be keen to sell to you.

Buying your first home will be an achievement. Enjoy the process and reap the rewards.

Susy Copus writes for the UK Property Search Engine, Wheres My Property. Susy also writes for Renovate Alerts who find property to renovate and Property Money Maker.

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Property risks back in spotlight

Posted by luxuryasiahome on September 20, 2008

Developers with overseas exposure stay upbeat amid downturn.

THE property business has come full circle for listed developers here. A few years ago, with land prices on the upswing and intensifying competition in Singapore, many property companies ventured overseas into untapped markets in search of better returns. Their overseas units flourished. And for the past few years, these units have been fattening the bottom lines of many property firms here.

While the going was good, there was a tendency, when it came to evaluating such companies, to overlook the commonly-acknowledged risks inherent in developing markets – such as changing regulatory environments and the tendency of foreign investors to flee when the going gets even a bit rough. But now, with the property markets in China (and to a lesser extent Vietnam) taking a beating – in part due to government actions – those risks are being thrown into the spotlight once again.

Last week, China Vanke, China’s largest listed property developer, reported a 35 per cent drop in its August real estate sales. The developer also reportedly cut prices in Nanjing, Guangzhou, Shanghai and Beijing by as much as 20 per cent. Soon after, news emerged of other developers following suit with substantial price cuts.

There are no signs of the Chinese government stepping out to halt the slump in the property market. In an announcement by the People’s Bank of China in late August, the central bank continued to call on commercial banks to tighten their lending to property developers and restated its curbs on bank loans directly for land purchases by developers.

‘We think recent price cuts could further depress pricing of residential properties and lead to prolonged weakness in an already ailing China property market as other developers may undercut prices for their properties and buyers are likely to avoid the market on concerns of further price cuts,’ said OCBC Investment Research analyst Foo Sze Ming.

In Vietnam, prices could also head south. Like in China, the government in Vietnam is fighting inflation with various regulatory measures to cool the economy. A liquidity crunch also means that smaller and non-reputable developers could be forced out of the market.

Many Singapore-listed property companies have targeted China, Vietnam, and also India, another emerging market, for expansion over the past few years. Now, with the property market in Singapore taking a pause, developers with large stakes in these emerging markets, such as CapitaLand, Keppel Land and GuocoLand, have to assure investors that they have not over-stretched themselves.

Partly in response to the negative newsflow about China’s property market over the past few weeks, property stocks with exposure in that country have been punished by the market over the past week. Adding to the problem was the current global stock market turmoil.

But looking ahead, analysts are throwing their weight behind those developers who have stayed put in Singapore. Kim Eng Research, for example, said yesterday that its picks for the sector are Singapore-centric property developers City Developments and Wing Tai as beta plays for a recovery in the Singapore property market in the future.

On their part, developers with assets in emerging markets have been pointing to the strong fundamentals in these countries. Growing middle classes, increasing disposable incomes and housing affordabilities as well as rapid urbanisation are all key drivers for real estate demand, they say. Some also point out that their overseas exposure is not as large as their presence in the relatively more stable Singapore.

‘CapitaLand’s exposure in China is a balanced one with exposure to the residential, commercial, retail, serviced residence and financial services sectors across multiple regions,’ said Lim Ming Yan, chief executive of CapitaLand China. As at June 30, 2008, CapitaLand’s assets in China came to some $7.4 billion and accounted for 27 per cent of CapitaLand’s total assets.

CapitaLand’s presence in Vietnam, on the other hand, is much smaller, the developer said. ‘CapitaLand is relatively early in expansion in Vietnam and our current exposure is just under one per cent of the group’s total balance sheet,’ said Chen Lian Pang, chief executive for South-east Asia for CapitaLand Commercial.

Similarly, both Keppel Land and GuocoLand have stressed that their portfolios are balanced.

Some developers, sitting on a pile of cash, are also taking this opportunity to hunt for distressed assets they could pick up at bargain prices. ‘I am still looking to buy in those markets (China and Vietnam) but only if the price is right,’ a developer told BT. If smaller developers are forced to sell because of refinancing or other issues, bigger companies could buy assets and wait for the market to turn around, he said.

CapitaLand shared the view. With its strong balance sheet, the developer is in a very good position to take advantage of the current market to continue to expand selectively in China and Vietnam, it said.

Source : Business Times – 20 Sep 2008

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SICC’s new clubhouse on hold as costs rise

Posted by luxuryasiahome on September 20, 2008

General committee has decided to halt all major construction for six months, president writes in circular

THE spiralling costs of construction have thrown yet another spanner into the development plans of the Singapore Island Country Club’s (SICC) new $90.3 million clubhouse at its Upper Thomson Road location.

The general committee has decided to halt all major construction for six months to ‘take a breather’ and ‘wait for the building industry to cool down’, wrote the club’s president John Kirkham in a circular to members dated Sept 15. This means the 25,000 square metre facility is now likely to open in end-2010 or even later.

‘Unparalleled escalating costs of construction have made estimating for our new projects a nightmare. The cost of oil, raw materials and shortage of labour has put the building industry into a frenzy,’ Mr Kirkham said in the note that was mailed out to all 7,500 members earlier this week.

Three months ago, members had given the go-ahead for a revised budget of $90.3 million to build the new clubhouse, which will feature a spa, wellness centre, restaurants and other facilities. This was already 50 per cent higher than the original $60 million budget, which was approved in April 2007.

The new budget, deemed necessary then because of the sharp rise in construction costs, comprises a new project cost of $81.1 million, plus an additional $9.2 million for improvements to architectural and mechanical and engineering works.

Even with the new budget, all five tenders received for the clubhouse exceeded it by 15 per cent or more, said Mr Kirkham, who marks his first full year as club president this month.

The team in charge of the project has begun talks with all the tenderers to see how they can bring down costs to fall within the budget. There is also a possibility that the clubhouse could sport a different design.

Piling work, meanwhile, has begun on the clubhouse site and this will be completed as planned, said Mr Kirkham, after which all further work will be stopped for six months to allow the development task force to assess the situation and come up with new recommendations.

‘The general committee will only proceed upon completion of all technical details and if costs are in line with the budget,’ he wrote in the latest SICC annual report, which was also distributed earlier this week.

Besides Upper Thomson Road, SICC has another location at Sime Road. Development on the golf courses at both locations will also be put on hold for six months, said Mr Kirkham. The works are estimated to cost about $55 million.

Members are likely to discuss the club’s plans at the annual general meeting on Sept 30.

Source : Business Times – 20 Sep 2008

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S’pore River glows as light-up brightens night-scape

Posted by luxuryasiahome on September 20, 2008

THE Singapore River was awash with light last night, bringing to life the first of the Government’s plans to transform the country’s night-time look.

Pyrotechnics, music and a carnival accompanied the unveiling of hundreds of lights along the waterway’s banks.

With the flick of a switch by Trade and Industry Minister Lim Hng Kiang, the Read and Cavenagh bridges came alive in a wash of colours.

A school of ‘jellyfish’ – underwater lights – started to glow in front of the Asian Civilisations Museum, giving the river a subtle gleam. And the pedestrian underpasses linking Clarke Quay and Boat Quay started to shimmer.

Yesterday’s big light-up marked the end of the first phase of a Singapore River makeover announced in March.

The project, which the Singapore Tourism Board (STB) would only say cost less than Orchard Road’s $40 million renovation, covered Empress Place, Clarke Quay and Boat Quay. By March next year, the works will be extended to Robertson Quay and Kim Seng Bridge.

Mr Lim said: ‘The lighting enhancements not only highlight the unique architectural features of the river by night but also improve the river experience for diners and partygoers.’

Last night’s light-up was the start of a larger drive by the Urban Redevelopment Authority (URA) to beautify the city’s night-scape. Other areas where lighting will be enhanced include Marina Bay and Bugis.

URA chief executive officer Cheong Koon Hean, who was behind the project, said: ‘Good lighting can help create a captivating night scene that enhances our city’s appeal. It enlivens our experience and appreciation of our city.’

The URA, however, also said it is important to consider the environment while brightening the night sky. In the Singapore River’s case, energy-efficient LED lighting was used, said the STB.

Yesterday’s spectacular event marked the start of the inaugural Singapore River Festival, which will include shows, parties and concerts in the lead-up to the Formula One Grand Prix next weekend.

Source : Straits Times – 20 Sep 2008

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How Asia will be hit

Posted by luxuryasiahome on September 20, 2008

And how it can seize the opportunity and surge forward

WE NOW have a perfect storm with the perfect ingredients — easy liquidity, poor alignment of incentives, inadequate assessment and management of risks, greed, and lack of due diligence.

The surge of the energy price — a bubble of its own — was the catalyst. To fight inflation, the United States government hiked interest rates. The housing bubble burst and mortgage default surged. With property foreclosures and defaults in mortgage payments, mortgage-backed securities were now viewed as high risk with low value. When large investors holding them attempted to unload their holdings, the action spiralled into even lower valuations.

But, the bad news did not stop there. At the beginning of the sub-prime crisis, the US government did not take decisive actions; instead, it still played the interest rate game. Fundamentally, the US borrowed too much. One could counter that by producing a lot of income growth. Unfortunately, with globalisation, the US economy now only made up about a third of the world economy. Thus, the US monetary authorities could not readily generate a surge in the US economy.

The recent spate of write-downs of losses arising from bad investments was the right thing to do, but, they came a little too late in the game. Without a clean revelation, investors were suspicious, especially after seeing some losses. The result is a systemic large-scale markdown of the real value of many financial instruments, largely stemming from fear.

The US government’s attempt to alleviate fear in the financial markets by bailing out some, but not all, had the unintended consequence of heightening investor suspicions. Trapped investment banks now found refinancing capital even more expensive. One after another, the banks had to either create a bailout (call it accepting a fire sale) or file for bankruptcy.

What this means for Singapore

The financial turmoil has real consequences on the economy. If we get up in the morning and find that our financial assets have dropped by $200,000, what would we do? We would scale down our expenditures, perhaps not dining out and having a simple home-cooked meal instead. The financial meltdown drags down our consumption levels. The high cost of capital also discourages corporate investment. We have a severe economic downturn in real terms.

Asians are affected in two ways. First, the slowdown in US consumption and investment affects our exports, and thus our earnings. Second, the losses in the US suffered by Asian banks and other financial institutions damage their books and their ability to lend. Tighter credit curtails investment. (We hasten to add that not all Asian banks are affected equally. For example, Singapore banks have insignificant exposure to Lehman’s instruments while Japan and Taiwan banks have billions. Credit is available in Singapore in a prudent manner.)

Lessons to be learn

This is not a simple storm and it will take time for it to pass. It is not clear what the best course of action should be. Yet, a few things are clear.

First, financial institutions should make clear what they have suffered and recognise the losses. The Japanese financial firms’ coming-out action in this regard is the right move, although it does not spare them from negative market reactions to the exposure. But not doing so will only heighten investors’ fear and worsen the current credit crunch.

Second, real fiscal economic stimulations to counter financial market over-reaction are not really nonsensical.

Third, with the weakened US aggregate demand, the pan-Asian market will be more important. Asian economies should seize this chance to strengthen the interreliance on each other’s consumer and credit markets; it is time to further foster the pan-Asian market concept.

Fourth, we should learn from this crisis. It teaches us to recognise the need to evaluate how and where financial innovations and policy initiatives will challenge our regulation and market systems. In the sub-prime case, the noble initiative to encourage home ownership and fancy financial engineering created a breakdown in the otherwise sound public regulations and monitoring system of the US.

Finally, for me, I hold on dearly to the maxim: Do not invest in what you do not know.

Source : Weekend Today – 20 Sep 2008

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