Property Update (6 March 2015)

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S’pore remains a haven for ultra-rich | asiaone.com

The ranks of Singapore’s ultra-wealthy are set to grow by more than 1,700 by 2024 – the strongest growth among 108 cities in a new global survey.

In the survey, an ultra-wealthy person is defined as having a net worth of US$30 million (S$41 million), not counting their main home.

The Wealth Report 2015 by Knight Frank predicts a 54.3 per cent jump in the number of these ultra cashed-up types from 3,227 last year to 4,979 in 2024.

The report uses the term “ultra high net worth individual”.

Singapore is ranked third among cities where the ultra-wealthy live, behind Tokyo with 3,575 and London with 4,364.

The next biggest projected jump by 2024 after Singapore was Hong Kong with 1,251 more such individuals.

The Republic’s population of “centa-millionaires” – those with net worth of US$100 million or more – is set to rise 53 per cent in the next 10 years to 1,177 in 2024.

The population of United States dollar billionaires here – currently 24, the ninth most among the cities surveyed – is also set to rise 50 per cent to 36 billionaires in 2024. Read more here >>

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Weak demand, looming glut weigh on housing market | todayonline.com

SINGAPORE : Housing data released in recent weeks have revealed further weakness in real demand, while the oversupply situation is set to worsen. The figures are also raising more questions about Singapore’s public housing policies and whether grants supported by taxpayer funds may be subsidising declining home values.

First, it was disclosed in Parliament on Feb 12 that about 10,000 new Housing and Development Board (HDB) flats were still available under the Sale of Balance Flats scheme. This comes after all the roughly 100,000 Build-to-Order (BTO) flats launched in the past four years were oversubscribed and sold, with the exception of a small number of units that may not have been sold because of ethnic ratio quotas.

It could be that “returned goods” make up about 10 per cent of total supply, accounting for these 10,000 balance flats. Successful BTO applicants who had selected their flat but subsequently backed out of their purchase contribute to the stock of these balance flats. Such buyers, who have to forfeit 5 per cent of the purchase price, back out for various reasons: Some couples decide not to get married, while the financial situation of others could have deteriorated.

There could be other reasons. We do not know from the brief announcement in Parliament whether the pace of buyers backing out of BTO units has increased over the past year. Read more here >>

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Singapore still cheaper than Hong Kong in office space rental | asiaone.com

SINGAPORE – Singapore may be one of the most expensive countries in Asia for expatriates and locals alike, but office space rental is still significantly cheaper than Hong Kong’s.

Singapore’s overall occupancy cost rose by 9.8 per cent last year but remains as one of the most competitive cities in Asia in terms of office space rentals.

Total occupancy costs take into account rents, service charges and local taxes as payable by the tenant to allow direct comparison between countries.

The findings were revealed by property advisory firm Cushman & Wakefield in their annual Office Space Across the World global ranking research.

The study revealed that while Singapore moved up from 13th to 12th spot in global rankings, the city’s overall occupancy cost is 49 per cent lower than that of Hong Kong. Singapore is ranked seventh most expensive in the regional list.

Rents are expected to move up by another 5-6 per cent in 2015, supported by broad-based leasing demand and few completions of new projects. Read more here >>

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Singaporeans financially ‘insecure’ as living costs soar | cnbc.com

SINGAPORE : News this week that Singapore is ranked as the world’s most expensive city for a second year come as little comfort to its working population, who are becoming increasingly insecure financially and hankering for fatter pay packages, recent surveys show.

Only 38 percent of Singaporeans are satisfied with their current financial situation, a Manulife study which interviewed 500 people above the age of 25 living in Singapore showed. A similar percentage of respondents also believed that the generation following theirs will be worse off financially.

“Singaporeans are a practical bunch so we tend to worry a lot. But with costs in food and housing rising so rapidly, it’s hard not to,” 33-year old operations manager Kelvin Wong told CNBC. “Apart from my mortgage payments, I have to make sure I have enough to take care of my parents, pay for my child’s future expenses and be able to retire.”

Earlier this week, the city-state was named the most costly city to live in by the Economist Intelligence Unit (EIU), due to higher grocery, utility and transport prices compared with New York.

Transport costs, for example, are triple those of New York, largely due to the requirement of a Certificate of Entitlement (COE) – the 10-year license that drivers must purchase to use a private vehicle. The nation’s property market is also among the world’s most expensive, with tight supply leading to a 60 percent spike in residential property prices since 2009, according to PricewaterhouseCoopers. Read more here >>

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Layoffs and empty streets as Australia’s boom towns go bust | reuters.com

AUSTRALIA : When Probo Junio got a visa to work in Australia, he thought he had won a ticket to the good life.

In 2013, the 45-year-old boilermaker left his hometown of Cebu in the Philippines, where he was getting paid about $10 a day, to work in Karratha in Western Australia for $30 an hour. Enough to support his relatives and build a new life Down Under.

What Junio didn’t expect was that Australia’s booming resources industry would go bust less than two years later, taking his job, and leaving him just 60 days to find work or go home.

“It’s very difficult because most of the companies don’t want 457 visa holders,” he said, referring to temporary permits for skilled workers.

Across the country, people like Junio are falling victim to downsizing. Jobs, once plentiful and well paid, are scarce. Real estate prices in boom towns are sinking and even the notoriously high coffee prices in mining capital Perth have levelled off at under $4. Read more here >>

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