Property News

[Good news for Bears]

Only 25 units sold at a loss in 7 months. What happened to the large numbers who were supposed to dump their DPS purchased properties. And the 25 units sold at losses may not even be due to dumping related to DPS. Even those who purchased this year made an average profit of $175k.


Property subsales - who wins and who loses
For those who sold in the first seven months of this year, close to 97% came out ahead

(SINGAPORE) Sentiment in the Singapore property market is now far from bullish, but data shows that nearly 97 per cent of those who have sold private apartments and condos in the subsale market in the first seven months of this year have made profits.

Only 3 per cent incurred losses, an analysis of caveats by Savills Singapore shows.

For those who turned a profit, the average gain per unit came to $417,563 or 36.5 per cent. Generally, the longer the holding period, the bigger the gain.

Subsale deals are seen as a proxy for the level of speculative activity in the market. On average, those who had bought their units in 2004 and sold them in the subsale market this year made the biggest gain, averaging nearly $692,000, or an 84 per cent profit. They are followed by those who had picked up units in 2005, who recorded an average gain of about $645,200 or 62 per cent from selling their homes in the subsale market this year.

In absolute dollar terms, the smallest average gain of around $175,600 was by those who bought their units this year, reflecting a holding period of just a few months.
The profit or loss in the calculation is the difference between sale and purchase prices and does not take into account stamp duty and other expenses.

'The fact is that longer holding periods allow for larger gains, shorter holding periods for smaller gains. This is consistent with the fact that real estate is a long-term investment. Investors with short exit time frames should look for alternative instruments,' said Savills Singapore's director of marketing and business development Ku Swee Yong.

Savills' analysis was based on 1,040 caveats for subsale transactions from Jan 1 to July 31 this year captured by Urban Redevelopment Authority's Realis system as at Aug 19. Of these, 821 had previous caveat records dating back to 2003 and Savills compared the latest subsale price of each unit with the earlier price paid by the seller to work out the profit or loss.

Citylights, Varsity Park Condo and The Sail @ Marina Bay had the most subsales in the first seven months of this year - 63, 47 and 45 respectively. The Sea View and City Square Residences had 30-plus subsales each. Park Infinia at Wee Nam, The Calrose, Icon and The Raintree each had 20-odd subsales.

Subsales, often seen as a gauge of speculative activity, refer to secondary market deals in projects that have yet to receive their Certificates of Statutory Completion. This may be anywhere from three to 12 months after the project receives its Temporary Occupation Permit (TOP).

Market watchers note that many of the projects topping the subsale chart this year had either received TOP or are close to receiving TOP. Some of the units that changed hands in the subsale market could have been purchased on deferred payment schemes from developers in the past. Typically, such schemes run out when the projects get their TOP and that is when buyers have to pay the chunk of the purchase price to developers.

The deferred payment scheme was scrapped in October last year to discourage speculative buying.

Of the 25 loss cases for subsale deals done this year, sellers of about half the units had themselves bought theirs in the subsale market, while the other half had made direct purchases from developers. For instance, the four units sold in the subsale market at a loss this year at City Square Residences had all been picked up in the subsale market last year.Looking ahead, Savills' Mr Ku expects subsales to maintain at current levels, that is, about 150 units a month. Those who want to sell now will have to expect lower profits, he said.

'Whether in good or bad times, there will still be subsale losses from people being forced to make untimely sales due to corporate liquidation, bankruptcy, divorce,' Mr Ku added.
In cases where investors are sitting on potential losses, Jones Lang LaSalle Singapore's head of residential, Jacqueline Wong, said: 'My advice to my clients, who are usually foreigners, have bought in prime districts and are well off, would be, 'If you can, hang on. It will be just a temporary paper loss. Singapore has a lot of things going for it in the mid term'.'

Another seasoned property consultant said: 'A lot will depend on your entry price vis-a-vis other owners, especially in a big development. If a lot of them bought at say $1,000 psf from the developer and you got your unit later for $1,800 psf in the subsale market from an earlier buyer, you're in a disadvantageous position. If the market dives, the earlier buyers could offload their units at much lower prices than your cost price.

'On the other hand, everybody may be in the same boat. Say, if you've bought into a small project of 30 units and everyone's bought at about the same price, and if there's not much competition from surrounding projects, chances of prices going down substantially may be lower because everyone's locked in at the same threshold.'

Source: Business Times

[Ha Ha HA HA]

Nice try... The article is about long term investment starting from 2003. The average profits has actually crashed from 692.000 to 175.000 

And the DPS was scrapped only last year so the TOP for these developements will be 2009 and 2010. That's when the real damage is done... And it doesn't help that the recession is taking a turn from bad to worse next year....

[Can someone]

call the zoo-keeper. There is an Ostrich running loose in these threads. hehe

[yes yes-yes]

the ostrich does not know that macro conditions have changed and that global growth is slowing and will have effect on most asset classes incl real estate. Yes property prices will come off.

[Accept it]

Nice try... The article is about long term investment starting from 2003. The average profits has actually crashed from 692.000 to 175.000 

And the DPS was scrapped only last year so the TOP for these developements will be 2009 and 2010. That's when the real damage is done... And it doesn't help that the recession is taking a turn from bad to worse next year....

The fact that  investors who bought in the last few months when the doom and gloom was already widespread  can still make an average of $175k in profits  shows how resilient the market is. Come on bears, face it, the market is going to dissapoint you guys ONCE AGAIN.

[Face what?]

Prices will come off. Mr Dhanabalan said that the ill effects of the sub-prime and credit crunch issues will take at least two years. We have not seen the worst yet in property prices.

[Face your]

Prices will come off. Mr Dhanabalan said that the ill effects of the sub-prime and credit crunch issues will take at least two years. We have not seen the worst yet in property prices.

...ass

[Good news for bears]

And come 2011, the US makes a strong recovery and then bears will have to wait for another 10 years. Looks like they will keep waiting forever.
Home prices stable till 2010: Wing Tai

It is in no rush to launch Ardmore Park sites despite softening market

By Fiona Chan, Property Reporter


Units at Anderson 18 are being rented out as redevelopment is on hold. -- PHOTO: KNIGHT FRANK

PROPERTY developer Wing Tai Holdings is in no hurry to launch the two sites it owns in the prestigious Ardmore Park area: the Ardmore Park condominium and Anderson 18.

Wing Tai chairman Cheng Wai Keung said yesterday that although home prices are softening, he expects them to remain mostly stable until at least 2010.

This is because projects that are being completed this year and next were originally sold at relatively low prices in 2005 and 2006, so there is no urgency for buyers of these projects to unload their units.

'Developers are also quite strong financially, so if they can hold and allow the orderly release of units, I do not see prices dropping drastically,' he told reporters and analysts at the release of Wing Tai's full-year results.

Beyond 2010, however, the situation may change. Projects to be completed then were launched at 'very high prices' last year, and if the economy does not improve by then, these expensive apartments may flood the market while financially strong developers will probably also weaken, Mr Cheng said.

But he added that while prices have softened, it is not because Singapore's economic fundamentals have worsened but rather because 'traders', or speculators, have left the market. 'I maintain that fundamentals are sound,' he said.

In fact, Mr Cheng said he is prepared to hold out for prices to reach $4,000 per sq ft (psf) again at Ardmore Park. 'Even at the peak, when they were talking about $4,000 psf, I still think that was relatively cheap, compared to values in the world and in Singapore.'

He added that Wing Tai owns two of the three sites to be launched in the Ardmore Park area. SC Global has the third, The Ardmore. 'We are the ones who will set the price; if we never lower prices, how can it lose value?'

For now, Wing Tai has already locked in construction costs for Ardmore Park and is renting out the units in Anderson 18 rather than tearing down the building for redevelopment.

In the meantime, the developer may launch some of the other sites in its land bank this year or next, said Wing Tai's chief operating officer Tan Hwee Bin.

Belle Vue Residences in Oxley Walk will be launch-ready next month, while a 99-year leasehold site in Alexandra Road near the Redhill MRT Station will obtain all the necessary approvals by the year end.

Ms Tan said the group will position the Alexandra Road condo as a mid-tier project minutes away from Orchard Road, and may bring to it some of the features it has used in its high-end Draycott8 development.

For the past year, slower home sales have taken their toll on the performance of the property and retail group.

Wing Tai's fourth-quarter net profit fell 60 per cent to $96.3 million, dragging down full-year net profit 40 per cent to $229.4 million. Revenue more than halved both in the fourth quarter, to $107.3 million, and in the full year, to $428.2 million.

Earnings per share dropped to 30.11 cents for the year to June 30, from 53.12 cents the previous year. Net asset value per share slipped to $2.03 as at June 30, from $2.07 a year ago.

Wing Tai is proposing a dividend of six cents per share for the year, comprising a first and final dividend of three cents and a special dividend of three cents.
     

[Obviously]

those who bought at the peak in 2007 will go into forums to talk up the market. Prices were bubbly in 2007. Global conditions have taken a turn for the worse and yet he is in a state of denial. Property prices will come off. We do not have to be stoopidz and buy in a falling mkt. The S'pore economy will slow down. The credit crunch have also affected the pockets of potential tourists. The number of tourists coming into S'pore are also dwindling.

[Property for Rich]

This is how the rich become richer and can afford 1.8 million Rolls Royce. And they always remain invested in property - both in good and bad times.

She banks on health for wealth

Besides expanding her health-care business, Cheryl Baumann invests in property and art

By Lorna Tan

She was born Bi Xiaoyan but changed her name to Cheryl Baumann when she swopped her Chinese citizenship for a German one.

Born in Beijing, Dr Baumann had initially wanted to follow in her mother's footsteps as a writer. Her father was an actor.

She graduated with a Bachelor of Arts degree from Peking University in 1991 but changed her mind and decided to pursue a law degree in Germany instead.

She studied law at the University of Cologne and was admitted to the German Bar in 2005.

She also obtained her PhD the same year. That was when she became a German citizen and changed her name.

She visited Singapore in 1997 and thought that she might explore business opportunities here after completing her law studies.

Last year, she married a 55-year-old Singaporean businessman whom she had met in 2005. He prefers not to be named.

Though she is not medically trained, Dr Baumann, 40, decided to set up the Singapore Medical Group (SMG) the same year. Its first subsidiary is The Lasik Surgery Clinic at the Paragon, which has since done more than 30,000 eye operations.

The group has expanded to include the Singapore Sports Medicine Centre, the Singapore Vision Centre, The Dental Studio, the Singapore Aesthetic Centre and The Cancer Centre in Singapore. Last year, it opened two lasik clinics in the Philippines.

'Being an entrepreneur has always been in my blood,' said Dr Baumann. 'Business is like a creation where one adds value to an idea and packages it so that customers are willing to pay for the idea or services.'

She considers SMG, which broke even after six months of operations, as her best investment.

Noting that Singapore has one of the world's highest rates of myopia, she and her husband saw an opportunity to offer lasik services here and in the region.

'Singapore is stable and people are getting wealthy. Besides buying luxury items, they will also want to make themselves prettier, healthier and fitter so we should not go wrong with such a business,' she said.

In the coming months, she plans to expand the group into Vietnam, China and Japan. Her husband is an adviser to SMG. They have a three-month-old son, Matthew Huang.


Q What are your money habits?

I am very careful with money but I'm also a great believer that one must take the time to enjoy one's wealth and not be a slave to the idea of hoarding.

Money in itself is useless unless you invest it, and the challenge is how to invest it wisely.

Having money is having freedom but it can also be a burden.

For instance, money can easily make one arrogant and it can also attract jealousy.


Q What financial planning have you done for yourself?

I invest in properties, business and savings. They all take equal importance and, depending on market conditions, I may shift the quantum around.

Savings provides the least returns but it is also the most liquid. As the saying goes, 'cash is king' in a very bad market.

I don't touch the stock market as I don't like the buy and sell mentality. I like to put money in investments that yield long-term returns. I collect art because I am passionate about it, but it is also an investment for me.

We have set up a trust fund for Matthew.


Q Tell us about your property investments?

I have two properties at Sentosa Cove and three condos in Orchard Road. I also have homes in China. I was 30 when I started investing in Chinese properties. I have two apartments in Beijing and one in Shenzhen.

To me, property is a very safe investment. If you don't need the money, don't sell it and just keep it for the long term. Sooner or later, prices can only go up, especially when land is very limited and the population is growing.

But you must ensure that you have the holding power or you don't touch it. Investment is always connected with risk. Q Any other investments?

We have quite a big art collection of more than 50 paintings that is worth about US$4 million (S$5.7 million).

Art, if acquired correctly, provides the best returns.

My hubby started collecting paintings in the 1970s while I started a few years ago.

We have Asian and modern contemporary pieces. We have a painting by Colombian painter W. Gracia valued at more than US$300,000, and one by a Peruvian painter which is worth over US$250,000.

I commissioned a painting in Beijing for about S$16,000 two years ago.

I recently heard that a similar one was sold at a price that is 10 times higher.

I buy art because I enjoy it, but it is also good to know that when I need the money and sell it, I won't lose. It's like a bonus.

We also collect Chinese antique porcelain which includes Tang horses and celadon, as well as antique and new Persian carpets.


Q Moneywise, how were your growing-up years like?

I come from an above-average family and I'm the only child. My father is a film actor and my mum, a writer. We lived in a three-bedroom apartment in Beijing.

Although they taught me the importance of money, they also impressed upon me the value of family, friendship, loyalty and honesty.

The biggest influence on me has been my granduncle, who was my role model. His name is Gu Mu and he was a high-ranking official of China in the 1980s.

He is acknowledged as the architect of China's modernisation under the late Deng Xiaoping's regime. He is now in his 90s. I grew up watching him negotiate project deals. Now, as an adult, I realise that he dealt mainly on a national level and that they were huge money deals.

I still remember how he would stress to me to always pay attention to money details such as cashflow and cost control, as they always affect the success of a project.

I also learnt about generosity and the importance of giving back to society.


Q Your best investment to date?

The SMG is doing very well.

I've added the vision and cancer business divisions to balance that of the lasik services.

I like the health-care business as it touches people's lives and I will continue to invest in it. My vision is to make SMG one of the largest of its kind in the world.

If we believe - and I do - that Singapore's brand of medicine is world-class, then it is logical that a Singapore health-care group could become an international player with world-class repute.


Q What's your retirement plan?

I'm at the top of my career and at my best age. Retirement is the last thing on my mind.

Ask me again in 20 years and perhaps I will tell you I want to circumnavigate the world on a yacht.


Q And your home now is...?

I live in a 3,000 sq ft condo on Orchard Road.


Q And your car is ...?

I finally bought my dream car, a Rolls-Royce Phantom Silver, last year for $1.8 million. In addition, I have a black Mercedes S280, a black Lexus GS300 and a dark green Porsche Cayenne.

lorna@sph.com.sg

[curious cat]

I was curious so I thought I'd look up his company's stock price trajectory.  He does sound so cocky ('We are the ones who will set the price; if we never lower prices, how can it lose value?'), so surely his stock price has held up well?  Well, not exactly, it's down by two thirds over the year...

[who'd have guessed]

And come 2011, the US makes a strong recovery and then bears will have to wait for another 10 years. Looks like they will keep waiting forever.
Home prices stable till 2010: Wing Tai

A property company not seeing anything negative about the property sector..... hmmmm wonder why.

How's his stock for this year........... I heard a rumour that stock prices are a leading indicator, you know, the markets peak into the future?

[Kubes.SG]

People have been challenging me to state my net worth because I reckon these Singapore Property Company Chairmen are generally old fools making silly statements disconnected from reality, and I go on about SG property bubbles and busts. 

My personal net worth is approximately SG$1.63 billion.   As many know I have been bearish on Aust property (and of course SG) and over the last 12 months have sold some of our properties there.  We have kept one property that is well located though it gets a terrible rental ROR, and have part-ownership of another with 2 siblings, but will consider selling when we get the right buyer.  I have set the price of each of these properties at AU$1.0 billion and do not plan to lower the prices on either.  Of course there are many other assets but these two are the most substantial.

So for the doubters of my investment savy and advice, if you can beat my net worth of SG$1.63 billion, well done. 

[3.63B]

People have been challenging me to state my net worth because I reckon these Singapore Property Company Chairmen are generally old fools making silly statements disconnected from reality, and I go on about SG property bubbles and busts. 

My personal net worth is approximately SG$1.63 billion.   As many know I have been bearish on Aust property (and of course SG) and over the last 12 months have sold some of our properties there.  We have kept one property that is well located though it gets a terrible rental ROR, and have part-ownership of another with 2 siblings, but will consider selling when we get the right buyer.  I have set the price of each of these properties at AU$1.0 billion and do not plan to lower the prices on either.  Of course there are many other assets but these two are the most substantial.

So for the doubters of my investment savy and advice, if you can beat my net worth of SG$1.63 billion, well done. 

My net worth is 3.63 billion and all  made from being a long term investor in property.So you should join my camp and it will help you make that additional 2 billion.

[Services Industry]

Singapore's Q2 services sector rises 13.3% on-year
Posted: 27 August 2008 1426 hrs


SINGAPORE: Singapore's business receipts for services industry in the second quarter rose 13.3 per cent from the same period last year, spurred on by strong showing in the transport, business and IT sectors.

Excluding financial and insurance services, the index rose 13.9 per cent from a year earlier, the Department of Statistics said in a statement released Wednesday.

On a quarter-to-quarter basis, total business receipts increased a marginal 1.3 per cent.

Revenue from water transport services surged 17.8 per cent on-year while turnover of air and land transport services were up by 15.2 per cent and 9.5 per cent respectively.

Telecommunications services industry expanded some 10.3 per cent as compared to the same quarter last year due to high revenue reported by courier, mobile cellular and internet access service providers.

The IT services industry experienced a 25.9 per cent growth as IT consultancy firms and IT development companies recorded brisk business during the quarter.

The business services industry had a turnover increase of 16.7 per cent while the insurance services was up 22.6 per cent.

Real estate reported a moderate 3.9 per cent growth after eight consecutive quarters of double digit growth.

- CNA/yb