Our top Singapore and regional property stories
HDB to focus on rejuvenating older towns despite $2.02 billion deficit
With first-timer demand for flats already fulfilled, the Housing Board can now focus on rejuvenating older estates.
The HDB manages 26 towns and housing estates, of which some are decades old, while others are newly built. But even as new Build-To-Order (BTO) launches are rolled out, the agency remains committed to upgrading existing estates.
According to a report by Channel NewsAsia, the HDB expanded its upgrading programme during the financial year 2014 / 2015 to more towns, resulting in the upgrading segment registering a deficit of $574 million, up from $568 million in the previous financial year.
“The theme of estate rejuvenation is going to be an ongoing process. The public flats programme has been around (for) more than 40 years. We also have some estates which are ageing, even some of the non-mature estates; it’s actually a necessary part of urban renewal,” said SLP International Executive Director Nicholas Mak.
Deficit from homeownership — comprising the gross loss on disbursement of CPF housing grants, the sale of flats, and the expected loss for flats currently under development — stood at $1.75 billion, down nine percent from the previous year.
Overall, the HDB saw its net deficit before government grants increase to $2.02 billion from $1.97 billion previously.
Meanwhile, industry watchers have noted that application rates in recent sales exercises indicate that the backlog for first-time applicants has been significantly reduced, which could see the HDB recalibrating its flat allocation.
“They left the majority of the numbers to sell to families — those buying under the family scheme. (As for) singles, there were flats for them, but application rates for singles were extremely high. Because of the limited number of flats made available, the application rate was also quite high,” said Eugene Lim, Key Executive Officer at ERA Realty Network.
“So I think going forward, HDB is likely to recalibrate the number of flats it is putting on-stream to cater to these groups which, particularly, have higher application rates, so as to balance the table.”
The HDB launched five BTO sales exercises for the financial year ending March 2015, offering nearly 20,000 flats across 27 projects.
PropertyGuru expands footprint in Indonesia
PropertyGuru is expanding its footprint in Indonesia following the acquisition of RumahDijual.com, one of Indonesia’s leading property websites, for an undisclosed sum.
Founded by Indonesian Yohanes Aristianto, the name RumahDijual translates to “house for sale”.
This latest acquisition, coupled with the real estate portal’s Rumah.com site, cements PropertyGuru’s market leadership in Southeast Asia’s most populous country of 256 million people.
In a statement, the group said it sees tremendous upside opportunity in Indonesia, due to its booming population growth, an emerging middle-class, rapid urbanisation, and rise in mobile Internet consumption.
According to consulting firm Frost & Sullivan, Indonesia will have around 1.7 billion connected devices in 2020, with over 470 million mobile subscribers and over 200 million active Internet users. Meanwhile, data from comScore shows that 43 percent of total time spent on property portals in Indonesia is now spent on PropertyGuru, double that of its closest competitor.
Currently, Rumah.com and RumahDijual.com have a combined 5.5 million property seekers viewing over 30 million property pages each month, making Indonesia the group’s second biggest market in terms of traffic.
“Indonesia is strategically important for PropertyGuru because it is the largest, and one of the fastest growing property and digital markets in Southeast Asia,” said Steve Melhuish, Group CEO and co-founder.
“Together with our local partner, Emtek, we have earmarked tens of millions of dollars in the coming years to bring further innovations to the Indonesian market, to help solidify our market leadership.”
Over the past two years, Rumah.com has invested in several innovations, such as a recent mobile app refresh, a website revamp in Q3 2015, and the incorporation of a mobile calculator. As a result, consumer visits to the website have grown 22 percent year-on-year, with mobile traffic growth of 53 percent.
This year, PropertyGuru also acquired project marketing solution, ePropertyTrack, after receiving a S$175 million investment from a consortium.
S’pore ranked outside top 5 for real estate prospects
Japan and Australia remain the favourite countries for real estate development and investment, according to the Emerging Trends in Real Estate Asia Pacific 2016 forecast jointly published by the Urban Land Institute (ULI) and PwC.
Tokyo, Sydney, Melbourne and Osaka took four of the top five spots for promising markets in the Asia Pacific. Ho Chi Minh City was rated fifth.
The study, which surveyed 343 real estate professionals, ranked Singapore 11th for investment prospects and ninth for development, out of 22 regional markets. The rankings were attributed to a slow residential market here, mainly due to government actions in 2013 to stem soaring home prices.
“Given the current sentiments of Singapore’s property market, we’re seeing local players becoming more involved at a regional and global level as they explore, increase and diversify investments into other major markets such as Japan and Australia,” said Yeow Chee Keong, Real Estate & Hospitality Leader, PwC Singapore.
He added: “The residential market will continue to hope for an increase in the level of transactions, and that will be dependent on whether there will be modifications made to the cooling measures.”
Despite the tepid enthusiasm, the Emerging Trends report noted that “Singapore is always a market where institutions are looking to buy,” adding that a number of major property purchases are expected to be completed before the end of 2015.
Home prices may drop 8% in 2016
Prices of homes in Singapore could continue to slide next year and fall by up to eight percent, compared to a drop of about three percent in the first 10 months of 2015, revealed JP Morgan.
With declining residential values, consumer prices have dropped steadily in the past 12 months. This raises fears of deflation, which happens when the inflation rate drops to below zero percent.
“Overall, it makes for a fairly challenging outlook for domestic demand,” said Aditya Srinath, chief of ASEAN equity research at JP Morgan, as cited in a report by AsiaOne.
But the looming interest rate hike in the US could help some sectors of Singapore’s economy. However, this could be offset by gloominess in China, and weaker domestic consumption.
In addition, the city-state is experiencing a patch of slow growth, as it is not easy to transition an economy from being heavily reliant on foreign workers to one that is geared towards higher productivity, but with limited foreign manpower.
Given the situation, JP Morgan has taken a cautious view on investing in Singapore, rating the country as underweight for 2016, Srinath added.
Xenophobic sign at condo
Xenophobia has reared its ugly head at the Alam Prima condominium at Seksyen 22, Shah Alam, in Selangor, Malaysia after an Australian man was greeted by a banner no tourist wants to see.
“Foreigner you are not welcome to stay here…!” read the sign hanging at the building’s lobby.
“As a result of the banner, I didn’t feel comfortable there and I only slept there. I left the apartment early in the morning each day and returned quite late at night because I didn’t want to be there,” said Wayne Parry, who rented a unit at the condo via Airbnb, a website where people can list, find and lease accommodation in a residential property.
After spending the seven nights he had already paid for, he subsequently moved to another place within Kuala Lumpur for the rest of his stay, a report by Malay Mail Online said.
Despite being put off by the banner, Parry said he did not experience any bad incidents at Alam Prima during his short stay, and noted that the owner even told him the sign was not intended for Australians.
According to Norhayaty Ariffin, a member of the condominium’s joint management committee, foreigners are only allowed to stay as guests for up to three months, and residents should inform the management if an expat intends to reside there for a long period.
Residents of the 440 units are also not permitted to use their homes as ‘hostels’, so as to prevent bad incidents from happening, as foreigners are “not necessarily knowledgeable of local culture and customs”.
This has been part of the condo’s rules since 2012, and none of the residents have objected to it, she added.
Meanwhile, there are also other Malaysian condominiums that have a no-foreigner policy. In 2013, Malay Mail Online reported that a property in Bandar Sri Subang, Petaling Jaya prohibited African tenants, while another one at Seri Kembangan, Selangor prohibited even visits by African nationals.
Australia unveils new foreign investment rules
Earlier this month, Australia introduced new investment rules aimed at cracking down on foreigners unlawfully owning residential properties and improving scrutiny on acquisitions of farmland from overseas, reported Reuters.
In May, the government unveiled plans to fine and even jail foreigners who violate rules allowing them to purchase new residential properties and not existing homes. The new regime will see foreigners who illegally buy Australian real estate face up to three years’ imprisonment or fines of A$135,500 for individuals and A$675,000 for companies.
“New civil penalties supporting divestment orders and ensuring people who break the rules do not profit from their actions also come into effect,” noted Morrison. “These include forfeiting any capital gains made on the divestment of a property, and fines for third parties who knowingly assist foreign investors in breaking the rules.
“Under these new arrangements, foreign investors who fail to comply with the foreign investment rules will not be able to profit from doing so,” he added.
For the first time, fees on foreign investment applications will be levied. Australia also tightened scrutiny and transparency of foreign ownership of agricultural production, amid concerns of valuable assets going into the hands of foreigners.
Morrison revealed that a new agricultural land foreign ownership register has been created, with any attempt by a foreigner to increase their cumulative farmland investment to over A$15 million (S$15.45 million) to be screened by the national regulator. Previously, the Australian Foreign Investment Board only screened foreign investment for the acquisition of agricultural land over A$252 million. Direct interests in agribusinesses that are valued at A$55 million and above will also be sent to the Foreign Investment Review Board.
“While foreign investment in agriculture provides important economic benefits, we have acted to improve scrutiny and transparency around foreign ownership of Australia’s agricultural production,” said Morrison.
AEC to propel region’s commercial property market
Market experts believe that the creation of the ASEAN Economic Community (AEC) in 2015 will propel the demand for commercial properties, particularly in the office and retail leasing market in the region.
CBRE Research Head Desmond Sim revealed that the AEC is expected to play a significant role in liberalising the investment markets of Southeast Asian countries, allowing the region to attract more capital from foreign investors.
The recent CBRE report entitled AEC – A boost to South East Asia’s Real Estate Market also stated that the formation of a unified, intra-regional market would stimulate appetite for industrial properties. In turn, this positive effect would spread to the office and retail markets as more companies seek to enter the region, while existing ones seek to expand.
Additionally, the AEC would greatly benefit hospitality properties like hotels and resorts, as the paradigm’s blueprint will focus on improving air and land transport infrastructure, as well as foster intra-regional cooperation to attract more tourists to the region, noted the report.
Dat Lanh Real Estate Company Director Nguyen Van Duc said the AEC could increase appetite for office and retail space in Vietnam, as more companies are expected to venture into the country after it integrates with its neighbours in 2015.
Meanwhile, a recent study by property consultancy firm Alternaty claims that Vietnam’s real estate market offers the best investment opportunity in Southeast Asia. The country’s economy has made solid recovery, while its legal system governing investments and the property sector has improved.
Furthermore, the latest data from Vietnam’s Foreign Investment Agency revealed that its ASEAN neighbours had invested over US$16.9 billion in 97 property developments nationwide as of 20 October.
 |
|||
 |
This article was first published in the print version The PropertyGuru News & Views. Download PDF of full print issues or read more stories now! |
||