Complete Property Market Updates of Singapore

DOWNSIZING is one way of fighting soaring rents, but expatriate Diana Cloe and her husband moved downstairs instead, going from their 24th-floor condominium apartment to a similar-size unit on the fourth.

The step down came after their landlord raised the rent for their 2,900 sq ft Anderson Road flat by 40 per cent in April.

They moved down 20 floors to a flat that costs $8,200 in monthly rent - 20 per cent higher than what they were forking out.

Expats who have been complaining about rising rent are feeling vindicated by a recent global survey.

The ECA International survey showed Singapore rising 10 places to rank as the ninth-most-costly Asian city for expats.

Private home rentals have jumped by 32.2 per cent since January, compared with 14.1 per cent for the whole of last year.

Ms Cloe’s American husband, a global development manager who did not want to be named, said: ‘The rents are crazy. My housing allowance was $7,000 but my company was gracious enough to up it.’

Mr Ervin Scully, head of corporate leasing at Knight Frank, said soaring rents have prompted many multinationals to increase expat pay by up to 30 per cent.

Indian expat Sonya Madeira said her boss increased the pay of all 13 employees by 10 per cent after a discussion on the rising cost of living.

Ms Madeira, associate director of Eastwest Public Relations, said the rent for her 1,600 sq ft Pasir Panjang flat doubled to over $3,000. ‘Prices are up but our salaries are not going up at the same pace, so it’s still a bit difficult to manage,’ she said.

Ms Madeira said her family might leave Singapore if rent hits $5,000.

The British and American chambers of commerce are concerned about the rise in rentals.

But Mr Terry O’Connor, president of the British chamber, said the Government’s recent ‘cooling measures’ such as axing the deferred payment scheme has helped redress the situation. But this may not be enough to retain some expats.

Brand consultant Simon Faure-Field, 37, was hit by the doubling of both his office and home rents.

His High Street office now costs $10,000 a month but he renewed the lease as alternative locations were equally expensive.

However, when the rent for his 1,400 sq ft Bukit Timah apartment doubled to $5,000, he moved to a similar-size apartment in Pasir Ris for $3,000.

He said: ‘I can live in Dubai for the same amount. But there, my company can charge up to thrice the price for our services.’

Top 10 The most expensive cities in Asia

1 Seoul

2 Tokyo

3 Yokohama

4 Kobe

5 Hong Kong

6 Taipei

7 Beijing

8 Shanghai

9 Singapore

10 Guangzhou

Source : Straits Times - 2 Dec 2007

THE buzz in the property market these days is all about the price recovery in the suburban areas.

Cheaper private homes on the outskirts of town are seeing a rebound in prices and rentals, as the strong market sentiment at the top end filters down.

Homebuyers have started turning out in force for these entry-level condominiums. Many have sold en bloc and are seeking replacement units.

Apart from the central Orchard Road area, a popular collective sale district is the East Coast, which has seen nearby Upper East Coast Road become one of the biggest hot spots for home seekers.

Some projects in the district, which stretches from Upper East Coast Road to Bedok North Avenue 4, have rocketed in price, by up to 65 per cent, since January.

Figures from consultancy Savills Singapore show that overall home prices in the area climbed by 20 per cent to 65 per cent between January and August, depending on the specific street.

This compares with a rise of about 10.3 per cent for all suburban areas in the first six months of this year, according to the Urban Redevelopment Authority.

But Savills’ director of business development and marketing, Mr Ku Swee Yong, was quick to add that some of the Upper East Coast projects have seen such large jumps in price because of ‘collective sale rumours’.

‘The general price increase is nowhere near 65 per cent overall,’ he said.

Rentals in the Upper East Coast have also soared, supporting the price increases. Average asking rents jumped 13.7 per cent in July and August, on top of a 4.7 per cent rise in the previous three months, said Savills. They average $3.07 per sq ft (psf), or about $3,000 for a 1,000 sq ft unit.

Mr Ku noted that the Upper East Coast is benefiting from a spillover in demand from nearby Districts 14 and 15, which include Marine Parade, Katong and Telok Kurau.

Several estates there have gone en bloc, forcing the sellers to seek new homes. Many of them have been priced out of the increasingly expensive East Coast properties, so they have shifted their focus to cheaper homes further east.

This situation is similar to that in town, where city-fringe areas such as Newton and Novena have benefited from the record number of collective sales in the Orchard Road area and its surroundings, said Mr Ku.

He added that even more developments in the vicinity are expected to go en bloc soon. These could include Ocean Park, Rich East Gardens, Bagnall Court and the two Eastern Lagoons.

Apart from the collective sale draw, Mr Ku noted that the Upper East Coast profits from its proximity to Changi Airport and East Coast Park, as well as various golf courses, including Tanah Merah Country Club and Laguna National Country Club. All these are attractive to ‘mobile professionals’, he said.

He predicts that by the end of next year, new benchmark prices will be achieved for the area. These could go up to $1,100 psf for the Bedok South Avenue 3 and Bedok Camp areas, and up to $1,700 psf from Siglap Centre to Bedok South Avenue 1.

Source : Sunday Times - 30 Sept 2007

We’re not greedy, we’ve been ’subsidising’ tenants with low rates since 2003, they say.

RETIRED doctor S.M. Soon, 62, is one happy landlord.

She collects $16,000 a month from her tenant at Emerald Hill, which means she doesn’t have to use her own funds to top up her monthly mortgage payments.

But things weren’t always so rosy.

From 2002 to last year, the monthly rent from her 5,000 sq ft Peranakan house was $12,000, and she was coughing up $4,000 every month to service the loan and pay for maintenance.

‘Prices are just returning to what they were 10 years ago. For us landlords, it’s not always Sunday,’ said Dr Soon.

Tenants have been crying foul over soaring rents which have shot up by 31.2 per cent over the past year.

Last week, The Sunday Times featured a family whose rent rose from $2,400 to $7,200 when the lease ended this year.

In the end, the family had to move from Jervois Road near the city to the East Coast area, and still pay rent that is twice as much.

But landlords are also keen to debunk their greedy image.

In a letter to The Straits Times’ Forum page last week, Madam Yeo Boon Eng pointed out that expatriates had been enjoying extremely low rents since 2003 and owners were ’subsidising’ tenants before the increase in rents.

She is now charging her tenant $2,100 for a corner terrace house in Yio Chu Kang, up from $1,600 last year.

She said her tenants did not complain or bargain. But if they did, she would have stood her ground and they would have had to look elsewhere.Nine of the 12 landlords who spoke to The Sunday Times said they, too, collected very low rents in the past few years.

The higher prices are not arbitrary, they argued. They simply reflect property prices now and are a function of demand.

It is only recently that landlords are seeing returns on their investments, with rental yields exceeding monthly instalments.

Said Dr Soon: ‘It’s not a matter of raising prices because we’re greedy. We get whatever the property will fetch in the market.

‘I wouldn’t dare ask for $16,000 if the market rent is $10,000.’

Retired lecturer H. Chu, 65, who is renting out three properties in Holland Grove View, Binjai Crescent and Eastwood, said: ‘Landlords are not unreasonable. It’s just that there are too many people at this time who want a place.’

He didn’t even have to raise the rent on his Binjai Crescent bungalow; the tenant offered him $8,500 this year, instead of the $5,600 he was paying.

‘He knows the market,’ he said.

Property agent Andrew Tan, 51, agrees. The only landlords he would call greedy are those with ‘moving targets’.

This year alone, he has dealt with five landlords who kept upping their prices even after letters of intent had been signed by prospective tenants. Among the landlords contacted by The Sunday Times, none admitted to doing this. Most said they try to keep their existing tenants.

Said Dr Soon: ‘It makes sense to keep a good tenant, instead of waiting another month for another tenant to come along and paying commission fees to the agent.’

She said she charged her existing tenant $16,000 when she could have put her property on the market for $20,000.

But no matter how much of a ‘discount’ existing tenants get, they are bound to be unhappy about the sudden rent hikes. And landlords are peeved by the attention the more vociferous tenants get.

‘When tenants were enjoying low rents, nobody thought about the landlord. It’s not that prices have gone up drastically. It’s that, in the first place, they went down so much,’’ said housewife V. Wong, who is in her 50s.

Her 1,800 sq ft apartment at Central Green in Tiong Bahru used to fetch $4,300, which meant she had to chip in about $800 to meet the mortgage payments and taxes. Now she rents it out at $6,800.

Ultimately, the sums have to add up.

Said landlord Ms Y. Tan, an accountant who is in her 60s: ‘Who wants to charge low rents? We’re not running a charity.’

Ups and downs

‘When tenants were enjoying low rents, nobody thought about the landlord. It’s not that prices have drastically gone up. It’s that, in the first place, they went down so much.’ HOUSEWIFE V. WONG, on why tenants are unhappy about the sudden rent hikes.

Source : Sunday Times - 23 Sep 2007

EVEN though property costs and wages are on the rise, Singapore remains cheaper than global cities in the region such as Hong Kong and Tokyo, said Trade and Industry Minister Lim Hng Kiang.

Nevertheless, the Republic cannot afford to be complacent, said Mr Lim. ‘We have to maintain vigilance over our costs, as excessive cost increases will dampen our growth prospects,’ he said.

Mr Lim was speaking in Parliament yesterday in response to MPs’ concerns about the impact of rising business costs on Singapore’s economic competitiveness.

In response to questions on this issue from Mr Liang Eng Hwa (Holland-Bukit Timah GRC), Mrs Josephine Teo (Bishan-Toa Payoh GRC), Dr Muhammad Faishal Ibrahim (Marine Parade GRC) and Madam Halimah Yacob (Jurong GRC), he laid out proactive steps that the Government has taken to address supply constraints.

Also, citing as examples London and New York, which are thriving hubs despite their high costs, Mr Lim said ‘competitiveness is more than offering low costs alone’, but also about value creation. In this respect, Singapore has attributes that economies in the region cannot easily replicate, such as its livability.

Also Mr Lim pointed out that in the past three years, the consumer price index has increased at an annual rate of 1 per cent, while overall unit labour cost actually declined at an annual average rate of 2.2 per cent. ‘However, in recent quarters, we have seen increases in property prices and rentals, as well as wages,’ he noted.

He cited recent moves to release land for temporary office space as well as provide more public flats for rental.

The Ministry of National Development (MND) also released additional information on property prices and rents ‘to allow the public and businesses to make more informed decisions on property purchases and rentals’.

And the MND has been putting out an ample supply of land with more than 42,000 private residential units and 640,000 sq m of office space to be completed by 2010.

The Government is also looking at ways to help more Singaporeans such as older workers and women take advantage of the strong employment market and rejoin the workforce.

Despite media reports of ’sky-high’ office rentals, Mr Lim said although the median prime office rent in the second quarter was $9.50 per sq ft per month, the median rent in other locations, accounting for about 80 per cent of office space here, was less than half of that.

Mr Lim also quoted studies which showed that Singapore remains cheaper than other global cities in the region.

A survey on global office market rentals by consultants CB Richard Ellis showed that Singapore was 30 per cent cheaper than Hong Kong, and 50 to 60 per cent cheaper than Tokyo.

Source : Straits Times - 28 Aug 2007