Property Update (8 April 2015)

OCBC looks to sell over 30 shophouses and shop units | businesstimes.com.sg

SINGAPORE : Oversea-Chinese Banking Corporation (OCBC) is poised to divest a portfolio of more than 30 shophouses and strata shop units across Singapore which market watchers estimate could be worth around S$150-200 million.

The shophouses are in locations such as Havelock, Geylang, Upper Thomson and Upper Serangoon roads, while the strata shop units are in places such as Jalan Besar Plaza, Hoa Nam Building along Foch Road, Balestier Point, Sixth Avenue Centre and Upper Serangoon Shopping Centre.

Also for sale are shops in HDB estates such as Ang Mo Kio and Bukit Batok as well as HDB shophouses in locations such as Bishan, Aljunied, Jurong Gateway Road and Yishun Ring Road.

OCBC is believed to have arranged the properties in several bundles to be marketed by property agencies.

Some of these properties were previously used for bank operations but the majority are investment properties held for rental income. Read more here >>

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Using property prices to guide climate change policies | straitstimes.com

SINGAPORE : IN 2013, the Intergovernmental Panel on Climate Change reported that warming of the earth’s atmosphere and oceans is “unequivocal” and the dominant cause is human influence.

Among the expected effects of rising atmospheric concentrations of greenhouse gases are heat waves, rising sea levels and coastal flooding and droughts, among other extreme phenomena. Influential reviews such as the one headed by British economist Nick Stern described climate change as “the greatest and widest-ranging market failure ever seen”.

In response to such views, governments are considering investments in carbon abatement strategies. These are designed to reduce greenhouse gas emissions, such as by increasing petrol taxes and switching from coal to cleaner but more expensive fuels.

A government’s decision to invest in such carbon abatement strategies depends heavily on a cost-benefit analysis. If the benefits of greenhouse gas reduction outweigh the costs, then investment makes financial sense. But abatement strategies have costs and benefits that occur over many decades, centuries even.

Since a dollar today is worth more than a dollar in the future, a cost-benefit study requires all future dollars to be converted into today’s equivalent dollars. The rate of conversion used is called the discount rate. Read more here >>

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Property Zooms Ahead in Philippines | wsj.com

PHILIPPINES : Neighborhoods inspired by Beverly Hills, fast-rising office towers and swanky malls resembling landmarks like St. Mark’s Square in Venice: It might sound like China circa 2005, but this is the Philippines in 2015.

The real-estate sector here is enjoying a boom as new property floods a market usually stifled by low prices and developers notorious for completing projects years behind schedule.

Now, supply and demand are rising fast as the national economy grows reliably at 6% to 8% per year. Property values are increasing steadily, drawing investors. And cash-rich developers, backed by some of the country’s biggest conglomerates, are having an easier time delivering on their promises.

In a metropolis clogged with traffic and where millions still live in slums, Manila’s affluent buyers particularly favor newly built “townships”—self-contained districts where homes, offices, shops and schools are packaged together in tidy, linked communities, said Jericho Go, senior vice president at Megaworld Corp., the real-estate subsidiary of the Alliance Global Group. Read more here >>

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Homes Prices in U.S. Rise 5.6 Percent Year Over Year in February | worldpropertyjournal.com

According to CoreLogic’s February 2015 CoreLogic Home Price Index (HPI), U.S. home prices nationwide, including distressed sales, increased by 5.6 percent in February 2015 compared to February 2014. This change represents three years of consecutive year-over-year increases in home prices nationally. On a month-over-month basis, home prices nationwide, including distressed sales, increased by 1.1 percent in February 2015 compared to January 2015.

Including distressed sales, 26 states and the District of Columbia were at or within 10 percent of their peak prices. Six states, including Colorado (+9.8 percent), New York (+8.2 percent), North Dakota (+7.7 percent), Texas (+8.5 percent), Wyoming (+8.4 percent) and Oklahoma (+5.2 percent), reached new home price highs since January 1976 when the CoreLogic HPI started.

Excluding distressed sales, home prices increased by 5.8 percent in February 2015 compared to February 2014 and increased by 1.5 percent month over month compared to January 2015. Also excluding distressed sales, all states and the District of Columbia showed year-over-year home price appreciation in February. Distressed sales include short sales and real estate owned (REO) transactions. Read more here >>

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Property Update (26 March 2015)

The political and economic legacy of Lee Kuan Yew | cnn.com

Jamie Metzl of the Atlantic Council explains Singapore’s political closure and economic success under Lee Kuan Yew to CNN’s Richard Quest.
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Mortgage rates expected to climb further due to rise in SIBOR | channelnewsasia.com

SINGAPORE : Singapore mortgage rates have risen on average by at least a third within the past month, amid an increase in Singapore’s benchmark interest rate.

Market analysts have said mortgage rates are expected to climb further in the coming months and more home owners are reviewing their financial position.

Mortgage rates for home owners on floating rate loan packages are estimated to have risen on average from about 1.5 per cent a month ago, to 2 per cent now, according to mortgage broker FindAHomeLoan. This comes amid a steady increase in the Singapore Interbank Offered Rate (SIBOR).

The benchmark lending rate was at 1.00529 per cent on Wednesday (Mar 25). This is more than double the figure at end-December, when it was around 0.45 per cent. According to market watchers, it could rise further to about 1.5 per cent this year.

Mortgage brokers said that in anticipation of further increases in SIBOR, more home owners are refinancing or repricing to fixed rate loan packages. They said about eight in 10 now opt for fixed rates, compared to just over half of home owners, two months ago. Read more here >>

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Shophouses sizzle amid cool Singapore property market | straitstimes.com

SINGAPORE – Shophouses in Singapore are seeing a surge in investor interest.

Their median price has more than doubled from $1,455 psf in the fourth quarter of 2009 to a record of $3,772 psf in the fourth quarter of last year, said real estate consultancy Colliers.

Median rents have also risen over the last five years, said Ms Chia Siew Chuin, Colliers’ director of research and advisory. Quarterly median rents generally remained below $4 psf per month before 2012, but they hit a record $5.42 psf per month in the fourth quarter of last year

Here’s a look at the prices reached when some shophouses recently changed hands. Read more here >>

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Inbound Investment Into Asian Real Estate Set to Double in 2015 | newsmaker.com.au

HONG KONG, CHINA : (Marketwired – Mar 25, 2015) – While the flow of outbound capital from Asia will accelerate this year, it is inbound capital that will take a “quantum leap” in 2015, according to a new white paper from Colliers International.

“Inbound investment into real estate in the region will increase by 102% this calendar year”, Terence Tang, Managing Director of Capital Markets & Investment Services, Asia, predicts, “more than three times the rate of growth in 2014. The office market Asia-wide is at a stage in the cycle where new supply will rise 152% to about 100 million square feet, presenting significantly more opportunities. Shanghai, Hong Kong and Singapore remain the best target destinations, but structural change in markets such as India is making them more attractive.”

Outbound flows into real estate will increase 61% in 2015 from a record US$46 billion last year, Colliers predicts, thanks to continued appetite from traditional investors and relaxation measures on the policy front. For instance, China has streamlined the approval process for mainland companies that are investing outside the mainland. In Japan, the US$1.1 trillion Government Pension Investment Fund is considering allocating 3 to 5% of funds to global real estate, which would make it the world’s largest real-estate allocation.

In terms of volume, mainland China (31.0%), Singapore (27.2%) and Hong Kong (12.9%) have been the top three sources of outbound real estate capital, accounting for 71.1% of the total outbound capital the region invested in 2014. Read more here >>

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California Pending Sales Spike in February, Highest in 6 Years | worldpropertyjournal.com

US : According to the California Association of Realtors, pending home sales in California soared in February 2015 to record the first double-digit annual gain in nearly three years, the third straight year-to-year increase, and post the biggest annual increase in nearly six years. The California Association of Realtors also reported the following data:

California pending home sales

• California pending home sales jumped in February, with the Pending Home Sales Index (PHSI) increasing 24.8 percent from a revised 89.9 in January to 112.2, based on signed contracts. The month-to-month increase easily topped the long-run average increase of 17.9 percent observed in the last seven years.
• Statewide pending home sales were up 15.6 percent on an annual basis from the 97.1 index recorded in February 2014. The yearly increase was the largest since April 2009 and was the first double-digit gain since April 2012.
• San Francisco Bay Area’s PHSI stood at 124.8 in February, up 23.3 percent from 101.2 in January and 13.1 percent from 110.3 percent in February 2014.
• Pending home sales in Southern California jumped 25 percent in February to reach an index of 98.9, up 15.2 percent from 85.8 in February 2014.
• Central Valley pending sales soared 57.1 percent from January to reach an index of 83.7 in February, up 15 percent from 72.8 in February 2014. Read more here >>

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