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ByKALPANA RASHIWALA[SINGAPORE] Three classicsigns of a recovery
haveemerged in the Singaporehousing market.
Subsalesandforeignbuyinghave ac-celerated while the share of HDB
upgraders in the pri-vate home buying pie hasdeclined.
The number of subsaledeals for private homes hasmore than
doubled from414in Q1 this year to 1,041in Q2 and the median
sub-sale price has also risen18.1per cent overthe sameperiod to
$959 psf, basedon Jones Lang LaSallesanalysis of caveats lodgedfor
private homes capturedby URAs Realis system asat July 17.
HDB upgraders shareof total caveats, which hadbeen increasing
for six con-
secutive quarters since Q42007, slipped in Q2 thisyear as
purchases by thosewith private addresses roseat a faster clip. This
couldbe because Q2 saw morem i d a n d m i d -u p pe rprojects
launched, com-pared with predominantlymass-market launches
ca-tering to upgraders in Q1,says Knight Frank chair-man Tan Tiong
Cheng.
The number of caveatsfor private homes lodgedby foreigners,
includingPRs, nearly tripled from496 in Q1 to 1,418 in Q2.The
increase outpaced a103.9 percentrise in Singa-porean buying. As a
result,foreigners share of privatehome buying rose from15.5 per
cent in Q1 to 20.5per cent in Q2. The mostpopular districts
amongthese buyers were Districts9, 10 and 15 while themore
sought-after projectsincludedRivergateand Mar-tin Place Residences
(dis-trict 9), The Arte (district11), The Lakeshore in Ju-rong and
Mi Casa in ChoaChu Kang.
Singapore propertiesare more affordable todaythan they were
during thepeak. Foreigners, like localbuyers, are finding value
inthe local property marketand looking at the upsidepotential, says
JLLs headof South-east Asia and Sin-gaporeresearch Chua YangLiang,
adding that the posi-
tive economic growth inChina, India and Indonesiahad nudged
their citizensinto investing here. He alsoobserved a rise in
purchas-es by Myanmar buyers.
Malaysians were the topbuyers of homes in Singa-pore in Q2,
making up 29.3per cent of total caveatslodged by foreigners,
fol-lowed by Indonesians (20.3per cent share), mainlandChinese
(14.9 per cent) andIndians (12.1 per cent).
Foreigners were drawnto prime district projectslike Martin Place
Residenc-es in the primary marketand Rivergate and Seaviewin the
secondary market in
Q2,saidCB RichardEllisex-ecutive director (residen-tial) Joseph
Tan.
JLLs head of residentialJacqueline Wong has seenmorehigh
networthindivid-uals from India, Hong Kongand China looking to
maketheir maiden property in-vestments here. They arenot PRs and
are looking atapartments 3,000 sq ft andabove in the Orchard
Roadbelt. Theyre drawn by val-ue; prices in the luxury sec-torare
today about 15 to25per cent below the 2007peak levels, she
said.
Going ahead, foreignbuying is expected to gainmomentum, if the
property
recovery and regional eco-nomic upturn continue.
In the subsale market,
the most popular projectstransacted in Q2 were Riv-ergate (95
units), The Cen-tris (46 units) and CitySquare Residences
(45units). Rivergate and Phase2 of City Square Residencesobtained
Temporary Occu-pation Permit (TOP) inMarch, and Centris,
thismonth.
The median subsaleprice in Rivergate has risenfrom $1,200 psf in
Q1 to$1,400 psf in Q2 and thatfor The Centris increasedfrom $587.50
psf to $625psf. City Square Residenc-es median subsale price
rose from $791 psf to $893psf and that for The Sail @Marina
Bay,from $1,321 to$1,623 psf.
Subsales are secondarymarket deals in projectsthat have yet to
obtain Cer-tificateof Statutory Comple-tion. This could be three
to12 months after the projectgets TOP. Market watchersnote that
theres typicallymore sales activity aroundthe time that projects
re-ceive TOP.
There are buyers wholike to have the finishedproduct because its
readyfor immediate occupationor renting out, says KnightFrank
chairman Tan TiongCheng. Sellers who boughtfor investment,
especiallyon Deferred PaymentScheme, can also cash out.
Analysts reckon thatwith a significant number
of private homes headingfor completion in the next18 months,
more subsaletransactions can be expect-ed.
Buyers with HDB ad-dresses accounted for 44per cent of total
caveatslodged for private homes inQ2, down from the 56 percent
share in the precedingquarter.
The fall in proportion of purchases by HDB ugprad-ers was due to
a biggerQ-on-Q jump of 174 percentin Q2in caveats lodgedby those
with private ad-dresses, compared with a70.8percent increasein
ca-veats lodged by those withHDB addresses.
T h e m o st p o pu l arprojects among HDB up-graders in Q2 were
Mi Ca-sa, with 145 caveats at amedian price of $630 psf,followed
byDoubleBay Res-idences (106 units changedhands at a median price
of $665 psf) and The Arte, (87units transacted at $899psf median
price).
The share of HDB up-graders may slip further incoming months as
the pro-portion of mass-market de-velopments among
projectlauncheslessens as develop-ersrelease
moreupper-endcondos.
ByPAULINE NGin Kuala LumpurTHE Malaysian stock ex-change does no
t haveenough large companiesand the problem is com-pounded by the
govern-ments huge shareholdingin many of these entities.
Reducing the govern-ments stake in these firmswould improve
trading li-quidity and velocity, saidBursaMalaysiachief execu-tive
Yusli Mohamed Yusoff.The bourse has a mid-termgoal of achieving an
aver-age velocity of 60 per centfrom just over 30 per centat
present.
The reality is a lot of small to medium compa-nies are trading
at veryhigh velocity. What is drag-ging our average down isthe low
velocity in the big-gercompanies, he toldBT.
Given tha t govern-ment-linked corporations(GLCs) account for
about athird ofthe exchangesmar-ketcapitalisation,
theirper-formance has a marked ef-fect on the market.
Former prime minister Abdullah Ahmad Badawihad announced plans
to re-duce the governmentsstake in GLCs but there hasbeen little
change. Thestate holds huge stakes inGLCs as much as 70 percent in
the case of nationalutility Tenaga Nasional.
Bursa Malaysia wants toraise the bar on higher freefloats,
liquidity and govern-ance for the exchange,which has 1,000-odd
com-panies.
In many instances, it be-ginswiththe boardof direc-tors, Mr
Yusli said. Weneedthe board totake own-ership because the
boardreally sets the tone.
He believes the reluc-tance to sell down has to dowith control
but pointedout there are many otherways the government canexert its
influence. If thegovernment says it is goingto sell down, then what
isthe board doing about it?
The right people shouldbe appointed to the board,which should be
given thenecessary powers to runthe company, he said. If ithas to
then report to anoth-er level of authority, whyhave the board in
the firstplace? The board cannotrun the company just forthe
interests of a certain
group of shareholders.They represent all share-
holders.Owned 20 per cent bythe Ministry of Finance andan equal
amount by theCapital Market Develop-ment Fund (a public fund),Bursa
Malaysias free floatis about 60 per cent.
Mr Yusli agrees there isexcessivegovernment own-ership in the
market. Per-haps it was necessary inthe past, but it should beeased
now for reinvest-ment in new economic ac-tivities.
Recent attempts by Ma-laysiato liberalise itsecono-my by easing
equity owner-ship rules notwithstanding,MrYusliconcedes
thatcom-petition is ferocious.
In the early days, wehad a very high weightageon these (emerging
market)indices because there wasno China, India or Brazil.
Wehavelost a lotofgroundbecausetheseare much big-ger economies. We
have tofight on the basis of qualityas we can never win onsize.
More synergistic merg-ers and acquisitions toboost entity size
such asSimeDarby,the worldsbig-gestpalmoil planter,areal-so
necessary.
Attracting new listingsis another challenge. Bursaclinchedits
firstforeign list-ing in the form of XingquanInternational Sports
Hold-ings, but the Chinese shoe-makers initial public offer-ing was
small, raising justRM200million (S$42.3 mil-lion).
There are some more inthe pipeline including one
from the Middle East, ac-cording to news reports butMr
Yusliknowsmultina-tionals will often put inter-national financial
centresfirst.
Even Malaysian compa-nies and local investors canopt for more
dynamic mar-kets. Thats the challengefor us: to make sure we
canretain investors as well asattract new investors.
That less developed ri-val bourses are catching upis evident.
Although stillsmaller in market capitali-sation, Indonesias
averagedaily value has been steadi-ly growing to some US$465million
or RM1.65 billion.In comparison, Bursas isabout RM1 billion
current-ly.
In the bullish year of 2007, Bursas average dai-ly trading value
was RM2.7billion.Singaporean partici-pation was significant,
ac-counting for about a fifth of the total foreign trade valueof
RM84.6 billion.
Inpercentageterms, Sin-gaporean participation wasbigger in
2005,reaching 37per cent or RM55 billion.Up to June this year,
itamounted to RM12 billionor 16 per cent of the totalforeign trade
value.
Mr Yusli said the boursewants more direct partici-pation from
Singapore re-tail investors but acknowl-edges it will have to
bebased on good fundamen-tals as people have choic-es.
Bursa Msia chiefwants govt to cutits stakes in GLCsto improve
tradingSubsales and foreigner purchases up in Q2; HDB upgraders
share falls
The stakes are too high,so pare them down
FILE PHOTOMr Yusli: What is dragging down the average
tradingvalue is the low velocity in the bigger companies
Tell-tale numbersNumber of caveats lodged for private homes
0
2,000
4,000
6,000
8,000
10,000
Subsale caveats lodged for private homes2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
Singaporeans
Total foreigners (PR +non-PR)
Q1
Q195
Q3 Q3Q1 Q1 Q3 Q3Q1 Q1 Q3 Q3Q1 Q1 Q3 Q3Q1 Q1 Q3 Q3Q1 Q1 Q3 Q3Q1
Q3Q1 Q3Q1 Q1
Q2 Q3 Q42005
Q1 Q2 Q3 Q42006
Q1 Q2 Q3 Q42007
Q1 Q2 Q1 Q2Q3 Q42008 2009
96 97 98 99 00 01 02 03 04 05 06 07 08 09
1,745
808
1,868
1,041
Source:URA Realis,July 17, Jones Lang LaSalle Research
Going ahead, foreign buying is expected togain momentum, if the
property recoveryand regional economic upturn continue.
Housing market showsclassic recovery signs
THE BUSINESS TIMESS$1.00 online at h
ttp://www.businesstimes.com.sg MICA (P) 197/08/2008CO REGN NO
198402868E Thursday, July 23, 2009
BizITDigital media getsmillion-dollar boostPAGE 23
US CORPORATERESULTS
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TEMASEKMr Goodyearsunusual goodbyePAGE 3
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