Property Market News

Hi valued clients,

- Many home sellers are thinking if they are making the right decision to sell, and when should they sell?
- Many home buyers are thinking if they should be buying their dream homes now or wait? Where should they be buying into?
- Many investors are asking what type of property should they buy buy into?

I wish to have all the answers.  What I could not do is to predict the impossibilities, but I could do is to compile hereafter information from various channels for reference. 
Please note information provided are not my opinion, and my clients should exercise their own discretion processing these information while making their decision.

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Circle Line's new stations to benefit
property owners

Apr 21, 2010 -
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Both big and small property owners are on track to reap big benefits from the opening of 11 new stations on the Circle Line, according to a Credit Suisse report.

Credit Suisse said that industrial landlords like Mapletree Logistics Trust (MapletreeLog), Ascendas REIT (A-REIT) and Suntec REIT own large properties around these stations and will expect gains from the new transport route.

The report also showed that property values of homes close to these MRT stations, which opened on Saturday, have fared better than the overall property market.

The proximity of such homes to the MRT stations has been gradually factored in over recent years.

Prices of private homes like Springbloom and Chiltern Park around Lorong Chuan station have risen 27 percent to 40 percent since June 2008.

According to Credit Suisse, they outperformed the overall market during the period in anticipation of the opening of the Circle Line.

Properties near MRT stations fetch a 15 percent to 20 percent premium to similar properties that are not close to them, according to the report.

When the North-East Line’s opening coincided with the Sars-related economic downturn in June 2003, projects such as Sunglade near the Serangoon station and Compass Heights at Sengkang MRT station managed to hold up.

This was despite a drop of 12 percent in the property price index between 2001 and 2004, the report said.

It added that property firms A-Reit and MapletreeLog, which owns industrial assets near the new MacPherson and Tai Seng stations, will benefit from the Circle Line opening.

Credit Suisse is positive on both MapletreeLog and A-Reit stakes. It has a target price of $2.24 on A-Reit, which ended at $1.98 yesterday.

It tips 98 cents for MapletreeLog, which closed at 85.5 cents yesterday.

Suntec REIT and its manager ARA were singled out for the offices and malls in Suntec City, which will enjoy a greater footfall due to its proximity to the Promenade and Esplanade stations.

Similar increases in traffic could also be enjoyed by property developer Hongkong Land’s One Raffles Link and CityLink Mall, and the mega City Developments South Beach mixed project because of the Esplanade station.

Office workers and patrons at The Concourse, The Furniture Mall, Keypoint and The Plaza will also benefit from the new Nicoll Highway station, added the report.

However, as the new line changes the traffic patterns, “shops lining the different routes will swop fortunes – more pedestrian traffic for some and less for others,” said Mr. Colin Tan, research and consultancy director of Chesterton Suntec International.

“For malls, the competition level is raised. If you’re better, you will grab a large market share, but if your mall is not as appealing, you will lose more traffic from your own surrounding catchment than you gain from others,” he added.

The report also noted that new residential developments like Dakota Residences by Ho Bee and Waterbank @Dakota by UOL near the new Dakota station, with a range of $900 psf to $1,400 psf, have received overwhelming response from buyers.

Mr. Nicholas Mak, a real estate lecturer from Ngee Ann Polytechnic, said that properties near stations are not immune to rental pressures and economic downturns, although they tend to be more resilient.

He added that developers and sellers of homes near such stations can ask for a 10 percent to 20 percent premium, but might not necessarily get it, depending on the other attributes of the property.

Property agent jailed for targeting
foreigners in rental scam

Mar 15, 2010 -
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Razieya Mohamed Ali, a part-time real estate agent fooled eight foreigners in a rental scam and collected almost $22,000 for herself and her accomplices. She was jailed for 11 months by a district court.

From November 2008 to February 2009, the 34-year-old divorcee posted flats-for-rent advertisements on the Internet and invited foreigners working in the country to view the premises.

To lure foreigners to sign the tenancy agreement after viewing the flats, she would lease them at a very low price. She knew all along that the flats were occupied and by the time her victims learned about it, she and her accomplices were nowhere to be found.

However, the police tracked her down.

Initially, she denied the allegations and on the first day of the trial on Nov 30, her friend showed up instead, claiming that Razieya had been raped by her ex-husband and was not in condition to attend court proceedings.

However, there was no medical certificate or police report that was offered.

According to Santhra Aiyyasamy, the Assistant Public Prosecutor, Razieya did not attend any police interview to substantiate the accusation.

As Razieya had targeted foreigners, who were susceptible to such scams, the prosecutor asked for a deterrent sentence.

Two of her accomplices were dealt with last year. Letchimi Kasinathan, 52, was sentenced to 2 1/2 years’ jail, while Axley Alexander Ryan Shah, 40, a serial offender, was sentenced for six years.

The third accomplice remains at large -- Arul Rajoo Michael Rajoo, 39.

The court heard that in January 2009, he hatched a plan with Ryan and Razieya to offer his leased flat for rent to foreigners and to deceive them of the deposit and rental. Their victims included Filipino, Chinese, Myanmar and Indian nationals.

Razieya also conspired with Letchimi, whose son stayed in a leased flat located in Lengkok Bahru, near Jalan Bukit Merah. Without his son’s knowledge, they offered the flat to Mr. Jun Ojima, a 43-year-old Japanese, who is working in Singapore as a golf coach, for $1,000 per month on January 1, 2009.

A deposit of $1,000 was handed over by Mr. Jun but after two days, he complained that the rent was too high and the two women reduced it to $700 on the condition that he pay-up six months in advance.

Payment was made but Razieya cancelled the agreement just before he could move in.

HDB takes legal action against
errant flat owners for illegal sub-letting

Mar 15, 2010 -
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HDB has taken action against errant flat owners for illegal sub-letting of their government-subsidised flats. The move comes several weeks after HDB revealed changes in the policy that was designed to discourage speculators, including increasing the minimum occupation period (MOP).

According to HDB, it took enforcement action against 56 flat owners from January 2008 to December 2009. They faced penalties ranging from repossession of their flats to fines of $1,000 to $21,000.

HDB shared details of a particular case in which Poh Boon Kay and his wife Khoo Kim Cheng’s flat in Bukit Batok was repossessed after a 'blatant flouting of sub-letting rules' was found out.

Mr. Poh, a registered property agent, and his wife own five private properties. The couple failed to fulfill the three-year MOP, which is required under the rules of HDB before they can sublet their entire flat. They claimed that they were not aware of the policy. Based on further investigations, Mr. Poh was linked to two other unauthorised sub-letting cases at Telok Blangah and Bukit Batok. HDB will also take enforcement action to compulsorily get hold of those two flats.

HDB emphasized that those flat owners who wish to sub-let their whole flats must first fulfill the MOP and obtain approval from HDB. The current MOP for subletting resale flats bought with any CPF housing grant and flats purchased directly from HDB is now increased to five years, and three years for resale flats acquired with no CPF housing grant.

In addition, flat owners must comply with the rules of HDB regarding the maximum number of sub-tenants permitted for a particular flat's size.

100 units sold out at The Vision's
phase one launch

Mar 15, 2010 -
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Property developer Cheung Kong has set another record selling price for a residential project located in the West Coast area.

The HK developer was able to sell the entire 100 released units in the first phase of sale for the 99-year leasehold project – The Vision. Out of the total number of units sold, two penthouses went for about $3.6 million each, which works out to around $1,332 psf.

Buyers of two- to four-room units, which start from 818 sq ft in size, paid about $1,000-$1,200 psf. It also sold several strata terrace units with the highest price fetched at nearly $3.2 million.

According to Cannas Ho, the company’s sales manager, about 60 percent of the buyers noted were upgraders, while the remaining 40 percent were investors.

The Vision project will have a total of 14 strata terrace units and 281 apartment units.

With a strong demand in the market, Cheung Kong will put additional 20 units of two- to four-room units on sale this coming weekend, and it plans to begin the second phase of sale by the fourth quarter. Ms. Ho noted that the company’s decision to forward releases will depend on the market response.

Several market watchers were caught up in surprised, given that the project’s asking price were higher compared to other residential projects nearby.

One of the newer launches in the proximity was the Hundred Trees of City Developments. It has achieved an asking price of more than $1,100 psf in the recent months. However, the transaction for this project mostly involved smaller units of about 484 sq ft with a 956-year lease.

The strong take-up of units for the project “shows the strong underlying demand for mass-market homes,” said Tay Huey Ying, research and advisory director at Colliers International. She added that the prices achieved in The Vision project could increase home value in the area and provide guides for home launches.

Ms. Ho pointed out that The Vision's attractiveness is due to its “good location and first-class amenities.” The project is located across the sea and the road from West Coast Park.

One developer also felt that The Vision’s prices are not that surprising, considering its location where West Coast area is home to some private housing estates.

Nevertheless, several observers will keep an eye on the prices of upcoming launches in the proximity, including the FEO’s 72-unit Horizon Residences freehold project in the Pasir Panjang area.

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TC Tan
Associate Division Director
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L3002382K / R018953J
+(65) 9876 5130